The substantial benefits secured through the historic China Australia Free Trade Agreement (ChAFTA) are set to start flowing from 20 December, the Minister for Trade and Investment Andrew Robb has today announced.
This follows a critical ‘exchange of notes’ in Sydney between Australia’s Ambassador-designate to China Jan Adams and Chinese Ambassador Ma Zhaoxu which formally confirms that both Australia and China have now fulfilled their respective domestic requirements to enable ChAFTA to enter into force.
Mr Robb said this was a most significant moment as the government’s key objective – despite a very tight timeframe – was to see ChAFTA operational before the end of 2015.
“This will deliver a very material early harvest for our exporters in the form of two rounds of annual tariff cuts in quick succession. The first round of tariff cuts will occur on 20 December followed by a second round on 1 January 2016,” he said.
“This will save our exporters hundreds-of-millions-of-dollars in extra tariff payments next year alone compared to if entry into force had been delayed until sometime in 2016. The National Farmers’ Federation estimates our agriculture sector alone is set to save around $300 million.”
Mr Robb said this outcome would immediately enhance our competitive position in the world’s second biggest economy which will be good for growth and job creation. Our dairy industry for example expects ChAFTA to result in 600-700 extra dairy jobs in the first year alone.
“This is the most favourable trade deal that China has done with any developed economy and it will put us in the box seat to further capitalise on China’s rising middle class and increasing demand for the types of high quality goods and services that Australia can and does provide,” Mr Robb said.
On entry into force, more than 86 per cent of Australia’s goods exports to China (worth more than $86 billion in 2014) will enter duty free, rising to 96 per cent when ChAFTA is fully implemented.
Australian services suppliers and investors will also be able to reap the rewards of new and improved levels of access in China from 20 December. Consumers will also benefit from more affordable Chinese goods such as electronics, clothing and other household items as tariffs are eliminated.
ChAFTA’s entry into force rounds out a powerful trifecta of trade deals that the government has sealed with three of our four largest export markets – China, Japan and Korea – covering 49 per cent of our exports.
Together with the Trans-Pacific Partnership Agreement (TPP), these agreements will provide unprecedented access for innovative Australian enterprises to the world’s largest and most dynamic markets.
“In this critical post-mining boom period, the government has very deliberately pursued an aggressive trade and investment agenda to support the transition of our economy by adding diversity to what we do,” Mr Robb said.
Businesses can search for product-specific ChAFTA tariff information and guidance on rules of origin through an innovative new FTA Portal. A guide for exporting and importing goods, providing step-by-step advice ahead of entry into force, is also available.