Seize his­toric chance in China-Aus­tralia FTA

China Daily (Canada) - - FRONT PAGE -

On June 17, 2015, the much-an­tic­i­pated China-Aus­tralia Free Trade Agree­ment was for­mally signed in Can­berra, Aus­tralia. It is a sig­nif­i­cant event in China-Aus­tralia re­la­tions. Chi­nese and Aus­tralian lead­ers were fully com­mit­ted to the FTA ne­go­ti­a­tions. Pres­i­dent Xi Jin­ping reached an im­por­tant con­sen­sus with his Aus­tralian coun­ter­part on speed­ing up the ne­go­ti­a­tions and sign­ing the FTA agree­ment at an early date. Premier Li Ke­qiang per­son­ally pushed the ne­go­ti­a­tion process for­ward.

As Chi­nese and Aus­tralian lead­ers pointed out in their con­grat­u­la­tory mes­sages, China-Aus­tralia Free Trade Agree­ment, once signed, will pro­vide a higher plat­form and stronger in­sti­tu­tional safe­guards for closer, com­ple­men­tary and win-win co­op­er­a­tion. It will help pro­mote the eco­nomic in­te­gra­tion process in the Asia-Pa­cific re­gion as well as deeper in­te­gra­tion and com­mon de­vel­op­ment of the Asia-Pa­cific economies.

China-Aus­tralia Free Trade Agree­ment is one of the most pro­gres­sive FTAs in trade and in­vest­ment lib­er­al­iza­tion ei­ther has ever signed. China and Aus­tralia have made high-level com­mit­ments to each other on trade in goods, trade in ser­vices, in­vest­ment and rules, meet­ing the ob­jec­tive pro­posed by Chi­nese and Aus­tralian lead­ers for a com­pre­hen­sive and high-stan­dard agree­ment with bal­anced in­ter­ests.

A more open en­vi­ron­ment for mar­ket ac­cess. Com­pared with the lib­er­al­iza­tion level of around 90 per­cent in FTAs in gen­eral, China-Aus­tralia FTA shows a sub­stan­tially higher level of open­ness in trade in goods. At the end of the stag­ing pe­riod, 100 per­cent of Aus­tralian prod­ucts to China in terms of both tar­iff lines and trade vol­ume will en­joy duty-free treat­ment, and close to 97 per­cent of Chi­nese prod­ucts to Aus­tralia in terms of tar­iff lines and 97 per­cent of trade vol­ume will be duty-free.

This means that con­sumers will have ac­cess to more high-qual­ity agri­cul­tural, energy, min­eral and fin­ished in­dus­trial goods im­ported from the other coun­try at lower prices. On the in­vest­ment front, the two coun­tries will ac­cord MFN treat­ment to each other, open wider the ser­vices sec­tor, and sig­nif­i­cantly lower the thresh­old for in­vest­ment re­view. Such sub­stan­tive mea­sures will boost bi­lat­eral co­op­er­a­tion in a wide range of sec­tors, from in­fra­struc­ture, energy and re­sources, to fi­nance, tourism and agri­cul­ture.

A more en­abling busi­ness en­vi­ron­ment. In the agree­ment, China and Aus­tralia have ex­plored in a prag­matic way fur­ther open­ing in mul­ti­ple sec­tors, in­clud­ing e-com­merce, in­tel­lec­tual prop­erty, gov­ern­ment pro­cure­ment and trade fa­cil­i­ta­tion, some of which have reached the high­est level of lib­er­al­iza­tion so far.

Take e-com­merce as an ex­am­ple. The agree­ment pro­vides for duty-free e-com­merce trans­ac­tions, pro­tects online con­sumers and data, and en­cour­ages the use of dig­i­tal cer­tifi­cates, which will make online trad­ing eas­ier for both busi­nesses and con­sumers from the two coun­tries. Aus­tralia will set up a new fa­cil­i­ta­tion scheme for Chi­nese engi­neers and tech­ni­cians to work in Chi­nese in­vested projects in Aus­tralia, which is the first time that such a spe­cial ar­range­ment is of­fered by a de­vel­oped coun­try to China. These sub­stan­tive fa­cil­i­ta­tion mea­sures are sure to fur­ther im­prove the busi­ness en­vi­ron­ment and in­cen­tivize mu­tu­ally ben­e­fi­cial co­op­er­a­tion be­tween the two coun­tries.

Closer peo­ple-to-peo­ple and cul­tural ex­changes. While boost­ing the com­mer­cial ties, the FTA will also deepen peo­ple-to-peo­ple and cul­tural ex­changes at var­i­ous lev­els. Aus­tralia will pro­vide work­ing hol­i­day visas to 5,000 young peo­ple from China ev­ery year, which will al­low the hold­ers to stay in Aus­tralia for up to 12 months. Be­sides, Aus­tralia will of­fer an an­nual en­try quota of 1,800 peo­ple for oc­cu­pa­tions with Chi­nese char­ac­ter­is­tic, in­clud­ing TCM prac­ti­tion­ers, Chi­nese lan­guage teach­ers, Chi­nese chefs and mar­tial arts coaches, who can stay in Aus­tralia for up to 4 years. This will fur­ther boost peo­ple-to-peo­ple ex­changes.

China-Aus­tralia FTA has set a suc­cess­ful ex­am­ple for co­op­er­a­tion in the Asia-Pa­cific re­gion. Though both are ma­jor economies in the world, China is the largest de­vel­op­ing coun­try whereas Aus­tralia is a ma­ture de­vel­oped econ­omy. The two coun­tries have distinc­tively dif­fer­ent cul­tural back­grounds, dif­fer­ent lev­els of de­vel­op­ment, com­ple­men­tary in­dus­trial struc­tures and some dif­fer­ences in val­ues. Af­ter a decade of ne­go­ti­a­tions, China and Aus­tralia have even­tu­ally reached a com­pre­hen­sive and high-stan­dard Free Trade Agree­ment with bal­anced in­ter­ests. The agree­ment is not only an em­bod­i­ment of the bright prospects of com­ple­men­tary and win-win co­op­er­a­tion be­tween the two coun­tries, but also, in it­self, a step for­ward to­wards more in­clu­sive and diver­si­fied global eco­nomic gov­er­nance.

China-Aus­tralia FTA has made prag­matic ex­plo­rations in many ar­eas of open­ing-up. Take trade in ser­vices for ex­am­ple, which is a stum­bling block in in­ter­na­tional trade ne­go­ti­a­tions. The two coun­tries have vastly dif­fer­ent ad­min­is­tra­tive regimes and core con­cerns. But through can­did and prac­ti­cal con­sul­ta­tions, Aus­tralia fi­nally agreed to open its ser­vices sec­tor in a neg­a­tive-list ap­proach, while China, based on it­sWTO ac­ces­sion com­mit­ments, will open part of its ser­vices sec­tor in a pos­i­tive- list ap­proach and com­mit to adopt­ing a neg­a­tive-list ap­proach in fu­ture ne­go­ti­a­tions with Aus­tralia in this area.

China-Aus­tralia FTA is a ma­jor step to­wards Asia-Pa­cific eco­nomic in­te­gra­tion. The 22nd APEC Eco­nomic Lead­ers Meet­ing in 2014 de­cided to launch the process of build­ing the Asia-Pa­cific Free Trade Area (APFTA). It re­quires the con­certed ef­forts of all par­ties to ful­fill this vi­sion. Nowa free trade agree­ment has been signed be­tween two ma­jor economies— China and Aus­tralia, and the two sides have agreed to jointly ex­plore the fur­ther open­ing of the ser­vices sec­tor by adopt­ing a neg­a­tive- list ap­proach. It is the shared belief of the two coun­tries that China-Aus­tralia FTA, once up­graded, will be a strong boost to the de­vel­op­ment of high-level eco­nomic and trade ar­range­ment in the Asia-Pa­cific re­gion, and play a lead­ing and demon­stra­tion role in the fur­ther open­ing up of the re­gion.

The au­thor is Min­is­ter of Com­merce of China.

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