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China Free Trade Agreement With Australia

Australia and China signed the China-Australia Free Trade Agreement (ChAFTA) on 17 June 2015, which will enter into force on 20 December 2015. Trade negotiations have secured many future benefits for Australian business with Australia`s largest trading partner, China. It is mainly those who work in the agriculture, manufacturing, services, investment, resources and energy sectors who benefit. China has also agreed to a special clause that recognizes Australia as a “most-favoured-nation” (MFN). This allows Australian companies to access the same agreements that China refuses to enter into in free trade agreements with other nations (such as the United States) that could offer better access to the Chinese market. Australia`s food and fibre exports to China have increased significantly in recent years and there is great optimism that they will continue to do so. Indeed, the increase in demand from China has been one of the main reasons why the agricultural industry has recently been identified by Deloitte as an important growth sector of the Australian economy in the coming decades. So far, however, Australian producers and exporters have had competitive disadvantages in penetrating the Chinese market compared to countries that already have a free trade agreement with China, such as ASEAN, New Zealand and Chile. A bilateral free trade agreement (FTA) with China will not only put Australia on an equal footing with these nations, but will also give Australia an advantage over some of the other major food and fibrous competitors in the Chinese market, such as the United States, the European Union and Canada. But obviously, the payment is worth it. These trade policy developments will improve market access and help Australian exporters harness the full potential of the world`s largest economy. King argued, however, that the coalition had a “set-and-forget” attitude to free trade agreements, where agreements would not be accompanied by adequate monitoring and relationship building. CHAFTA will encourage trade and investment between countries by reducing barriers to labour mobility and improving access to temporary entry within the framework and immigration and employment guarantees in place in each country.

In an interview with Guardian Australia, the opposition leader set out some markers of how Australia should deal with escalating tensions with its main trading partner and found that while diversification into other markets is important, it cannot happen overnight. Apart from this, Australia and China also signed a Memorandum of Understanding this week to set up official renminbi clearing (RMB) agreements in Australia. This will make it easier for Australian exporters to carry out RMB`s cross-border transactions, with the potential to reduce the cost of these transactions by 2-3% by reducing the need for hedging against forex risks. These measures are an additional asset to Australia`s export competitiveness. The full text of the agreement as well as useful information and fact sheets on free trade agreements are available on the website of the Ministry of Foreign Affairs and Trade. For any specific questions regarding the agreement, email ChinaFTA@dfat.gov.au or call DFAT on 02 6261 1111. Importers can contact the Ministry of the Interior. There will be a work and holiday agreement in which Australia will grant Chinese nationals up to 5,000 visas for work and holidaymakers. [7] The free trade agreement was signed between the two countries on June 17, 2015 in Canberra, Australia. [4] The agreement will follow the usual treaty-making process, where it will enter into force when China reviews its domestic legal and legislative procedures and, in Australia, through the inter-two-three treaties of the Australian Parliament and the Senate Committee on Foreign Affairs, Defence and Trade References. [4] Australia cannot move away from its free trade agreement with China, as it tries to repair “broken” relations, the Shadow Trade Minister said, accusing the coalition government of failing to establish deep relations on the ground. .

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