Australia and China sign bumper trade deal after 10 years of talks
Australia and China signed a landmark trade deal Wednesday after a decade of talks, providing a boon for growth and jobs by abolishing tariffs across a raft of sectors.
Trade Minister Andrew Robb and visiting Chinese Commerce Minister Gao Hucheng formally inked the document in Canberra, ending years of often difficult and protracted negotiations.
Australian Prime Minister Tony Abbott called it “a momentous and historic day for our two countries”.
China is Australia’s biggest trading partner, with the two-way flow exceeding Aus$160 billion (US$123 billion) annually.
Under the deal more than 85 percent of Australian goods entering the country will carry no penalty, rising to 95 percent in coming years.
With Australia having already sealed similar pacts with Japan and South Korea, a large percentage of Australian exports will soon be tariff-free.
Australian businesses currently face charges of up to 40 percent on goods sent to China, but under the deal penalties on virtually all resources and energy products -- a key plank in the trade relationship and among Australia’s top exports -- will be abolished.
Duties will also be lifted on agricultural exports including wine, meat, seafood, and dairy products to feed China’s growing middle class.
In return, Australia will remove the existing five percent tariff on Chinese electronics and whitegoods, meaning cheaper goods for Australian consumers but some reduction in revenue.
China also won concessions on foreign investment, with the threshold for government review to be lifted in most areas apart from agricultural land and agribusiness.
In a statement, the Chinese commerce ministry said the pact would help facilitate the China- driven FTAAP, or Free Trade Area of the Asia-Pacific.
Beijing has embraced the broader FTAAP, which is seen as a rival to the proposed TransPacific Partnership pushed by the United States but which excludes China.
Robb said that, together with the Japanese and South Korean pacts, the Chinese deal would underpin Australia’s prosperity for years to come.
“Given what’s going on in the region, the extraordinary explosion of people going into the middle class, this is a landmark set of agreements,” he said.
One contentious outcome could be the temporary employment of Chinese people in Australia’s high-pay workforce, a move condemned by unions.
Electrical Trades Union national secretary Allen Hicks said there was concern that Chinese investors would be able to use Chinese workers on projects in Australia that involve an investment of more than US$150 million.