What Is The China Australia Free Trade Agreement
Australia and China signed the China Australia Free Trade Agreement (ChAFTA) on June 17, 2015, which came into force on December 20, 2015. Trade negotiations have secured many future benefits to Australia with Australia`s largest trading partner, China. The largest beneficiaries are those working in agriculture, manufacturing, services, investment, resources and energy. China also accepted a special clause recognizing Australia as the “most favoured nation” (MFN). This allows Australian companies to access the same agreements that China has in the area of free trade agreements with other nations (such as the United States) that could provide better access to the Chinese market. 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.  The benefits for Australians exporting goods to China are significant and extend to the removal or reduction of tariffs, larger quotas for certain limited products, and streamlined custom procedures. A total of 98% of Australian products exported to China are admitted tax-free or at preferential prices. Essentially, the negotiated terms have given Australia a significant competitive advantage in the Chinese market over some of our major competitors such as the United States, Canada, the EU and New Zealand, particularly in our agri-food and processing sector. Among the main results, ChAFTA concludes the government`s “Trifecta of Trade” with Australia`s three main export markets, after concluding similar agreements with Japan and South Korea earlier this year.
Last year, these three North Asian markets together accounted for more than half of Australia`s exports. At ChAFTA, China offered Australia its best service obligations to date in a free trade agreement (with agreements with Hong Kong and Macao with China). 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. The agreement – known as Chafta – eliminated tariffs on Australian barley and sorghum when it came into force in December 2015, while cutting out posts for Australian seafood, sheep meat and horticulture. In the 2020s, tariffs on milk and beef will be abolished. 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. The China-Australia Free Trade Agreement (ChAFTA) came into force on December 20, 2015. Australian Trade and Investment Minister Andrew Robb, a signatory to ChAFTA, said: “This historic agreement with our largest trading partner will support future economic growth, job creation and a higher standard of living by increasing trade in goods and services and investment. China, with its 1.4 billion people and rapidly growing middle class, offers Australian businesses huge opportunities for the future. If fully implemented, 99.9% of Australia`s resource, energy and production exports will be dumped in China duty-free.
Madeleine King, Labour`s trade policy critic, also strongly supported the Morrison government`s plan to bring the Ch