Trade Minister Andrew Robb yesterday introduced into Parliament the implementing legislation for the landmark China-Australia Free Trade Agreement (ChAFTA).
Mr Robb told Parliament the FTA will create significant new commercial opportunities for Australian businesses, through increased trade in goods, services and investment.
It affords Australia unprecedented levels of access to a market of more than 1.35 billion people, which includes a rapidly rising middle class.
“This is an outstanding agreement – the highest quality and most liberalising trade deal that China – the world’s second biggest economy and our largest two-way trading partner – has done with any other developed country,” Mr Robb said.
“It is by far the best FTA Australia has done with any country – from the perspective of goods, services and investment. More than 85 per cent of Australian goods exports will be tariff free on entry into force and on full implementation 95 per cent of our goods will enter tariff free.”
Mr Robb said there is a significant economic imperative to bring the agreement into force before the end of the year.
“Scheduled tariff cuts are based on the calendar year,” Mr Robb explained.
This means entry into force this year will deliver an immediate round of tariff cuts, followed by a second round of cuts on January 1, next year.
A delay would cost Australian businesses hundreds-of-millions-of-dollars in extra tariff payments next year alone.
“Failure to implement the agreement at all would be a disastrous outcome for business, for job creation and for growth at a time when we are trying to aid the diversification of our economy in this post mining boom period,” said Mr Robb.
“Today, for instance, we see reports of National Farmers Federation (NFF) estimates, that if this deal does not proceed, Australian agriculture stands to lose a massive $18 billion over the next decade. The stakes are extremely high and the passage of this legislation is absolutely in the national interest. It should be above politics.”
Mr Robb said he was hopeful Australia’s proud tradition of bipartisan support for trade liberalisation will prevail, despite the “disgracefully dishonest” scare campaign by militant unions, led by the discredited CFMEU.
The Customs Amendment (China-Australia Free Trade Agreement) Bill 2015 and the complementary Customs Tariff Amendment (China-Australia Free Trade Agreement) Bill 2015 set out Australia’s tariff commitments under ChAFTA and will enable goods that satisfy the FTA’s rules of origin to enter Australia at preferential rates of customs duty.
Safeguards for workers
Mr Robb said there was no legislation required to amend the Migration Act because all labour provisions under ChAFTA, including safeguards for workers, operated within the existing migration system and were totally consistent with provisions in previous Free Trade Agreements.
ChAFTA has been the subject of an inquiry by the Joint Standing Committee on Treaties (JSCOT), chaired by federal coalition MP Wyatt Roy.
“While this legislation is being introduced this week to meet tight parliamentary deadlines, debate on the Bill won’t continue until after the release of the Joint (JSCOT) report on the Monday of the next sitting week,” said Mr Robb.
“ChAFTA builds on agreements already concluded by this government with Korea and Japan; it forms part of a powerful trifecta of deals with Australia’s three largest export markets that account for more than 61 per cent of our exports of goods.”
Tremendous business opportunities
Business Council of Australia (BCA) Chief Executive Jennifer Westacott said passage of the enabling legislation for ChAFTA will ensure Australia seizes the full opportunities from its biggest ever bilateral trade deal.
“There has never been a better trade agreement for creating Australian jobs, for opening up tremendous opportunities for our businesses to lift their exports and grow, and for investment from our biggest trading partner in our economy,” Ms Westacott said.
“All Australians who want a better future should call on the Labor Party to support the passage of this legislation and back the ChAFTA without amendment or delay.
“ChAFTA will drive the resilience and growth of the Australian economy for years to come. A range of tariffs relating to Australia’s key resources will be removed. The agreement will remove tariffs and other barriers to the services, manufacturing, finance, and agriculture sectors so that these industries can access China’s rapidly growing consumer class.
“Failure to ratify the agreement by 31 December 2015 will mean Australia misses out on an immediate double tariff cut next year.”
Dishonest union campaign
Ms Westacott said the costs of delay are not trivial.
“Around $300 million in benefits in 2016 for rural communities would be lost, and thermal and coking coal will face $4.6 million per week in extra tariff payments.
“Failure to ratify is estimated to cost $4 billion and almost 10,000 jobs in financial services alone, by 2030.”
Ms Westacott said the Labor Party should consider what is being risked by the dishonest campaign waged by the unions and the continued politicking around the ChAFTA.
“Failure to ratify the agreement would have serious ongoing ramifications for Australia’s economy, for Australian jobs, and for the bilateral relationship with our biggest trading partner well beyond the life of this parliament,” Ms Westacott said.
For the latest information on the BCA’s campaign in support of ChAFTA visit: http://www.bca.com.au/newsroom/australia-plus-trade-equals-opportunity