The substantial benefits secured through the historic China Australia Free Trade Agreement (ChAFTA) will begin to flow from December 20, 2015.
This follows a critical “exchange of notes” in Sydney between Australia’s Ambassador-designate to China Jan Adams and Chinese Ambassador Ma Zhaoxu, confirming that both Australia and China have now fulfilled their respective domestic requirements to enable ChAFTA to enter into force.
Trade Minister Andrew Robb said the government’s key objective was to see ChAFTA operational before the end of 2015 – and this aim had been achieved.
“This will deliver a very material early harvest for our exporters in the form of two rounds of annual tariff cuts in quick succession,” Mr Robb said.
The first round of tariff cuts begin on December 20, followed by a second round on January 1, 2016.
“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,” Mr Robb said.
“The National Farmers’ Federation estimates our agriculture sector alone is set to save around $300 million.”
Good for growth and job creation
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.
The dairy industry 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 December 20.
And consumers will benefit from more affordable Chinese goods such as electronics, clothing and other household items as tariffs are eliminated.
Powerful trifecta of trade deals
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 total Australian 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.
These and other resources are available on the Department of Foreign Affairs and Trade website.