Chinese Australian Free Trade Agreement

Before entering the Chinese business market, there are a number of factors to consider, including culture, politics and business etiquette. Austrade can help Australian companies become familiar with local market conditions and help develop export opportunities through a number of market and Australian services. In accordance with Australia`s other bilateral trade agreements, the remaining Australian tariffs on Chinese imports will be phased out. These include removing 5% tariffs on Chinese exports, electronics and white goods, consumers and businesses benefiting from lower prices and greater availability of Chinese products. But of course, the reward is worth the challenge. These trade policy developments will improve market access and help Australian exporters fully exploit the potential of the world`s next largest economy. ChAFTA will strengthen export momentum and give Australia`s exports an advantage over major competitors from the United States, Canada and the EU. In addition, Australia is likened to competitors from countries such as New Zealand and Chile, which have already negotiated trade agreements with China. Once the agreement is fully implemented, 95% of Australia`s exports to China will be tariff-free. These include many agricultural products, including beef and dairy products. In addition, market access for the Australian services sector will be liberalised and investment by Chinese companies of less than AUD 1,078 million will not be subject to FIRB approval. In addition, an investor-state dispute settlement mechanism will be put in place as part of the contract.

[2] Others who have successfully signed free trade agreements with China have benefited from a sharp increase in trade flows. For example, China`s imports from New Zealand have increased by more than 450% since the China-New Zealand Free Trade Agreement came into force in October 2008. China`s total imports increased by only 50% over the same period (Chart 6). After nearly a decade and 21 rounds of intense negotiations, Australian Prime Minister Tony Abbott and Chinese President Xi Jinping this week launched a sweeping free trade agreement. ChAFTA exports 85% of Australia`s exports to China duty-free after entry into force, with an increase of 93% in four years and 95% if fully implemented. Although many details are not yet complete (official documents will be signed in 2015), the government estimates that the agreement will generate $18 billion in economic benefits (1.1% of GDP) over a decade. ChAFTA will enhance trade and investment between countries by reducing barriers to labour mobility and improving temporary access to temporary access within the existing immigration and employment safeguards of each country. There will be a labour and leave agreement in which Australia will grant up to 5,000 visas to Chinese nationals for work and vacationers. [7] The free trade agreement between the two countries was signed on June 17, 2015 in Canberra, Australia. [4] The agreement will follow the usual contracting process, during which it will enter into force when China completes its domestic legal and legislative procedures and in Australia, the review by the Standing Committee on the Treaties of the Australian Parliament and the Committee on Foreign Affairs, Defence and Trade of the Senate. [4] The creation of the China-Australia Free Trade Area facilitates not only trade and investment between the two countries, but also the stable development of the Asia-Pacific region and the liberalization of world trade.