Is There A Free Trade Agreement Between Australia And China

China is expected to reach nearly half of a 75% increase in global food demand between 2007 and 2050. While resource restrictions will limit Australia`s ability to become an “Asian Food Bowl,” there could be a competitive position for Australia as an “Asian delicatessen.” Australian companies are already earning niche sales in high-end markets by selling the clean, green image of the “Made in Australia” label. Indeed, Australia`s agricultural exports to China have nearly tripled over the past five years to a record $8.7 billion (Figure 4). China is now our main agricultural export market. After nearly a decade and 21 rounds of intense negotiations, Australian Prime Minister Tony Abbott and Chinese President Xi Jinping shook hands this week on a comprehensive free trade agreement. The ChAFTA allows 85% of Australia`s merchandise exports to enter China duty-free after they come into force, which rises to 93% in four years and 95% if fully implemented. While many of the details are not yet complete (official documents will be signed in 2015), the government estimates that the deal will generate economic benefits of $18 billion (1.1% of GDP) over a decade. Others, which successfully guarantee free trade agreements with China, have benefited from a sharp increase in trade flows. For example, Chinese imports from New Zealand have increased by more than 450% since the entry into force of the China-New Zealand Free Trade Agreement in October 2008. China`s total imports increased by only 50% over the same period (Chart 6). Existing tariffs on Australian beef imports into China range from 12% to 25% and our modelling is based on a complete elimination of tariffs within a decade.

There is also an existing customs duty of 10% on live cattle. However, according to the Department of Foreign Affairs and Trade, many of Australia`s imports of live cattle into China are purebred and this type of live cattle import does not currently incur any tariffs. It is therefore the removal of tariffs on beef (unlike live cattle) that has the most direct impact on the Australian beef and veal industry. The China-Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. This first free trade agreement (FTA) gives Australia a considerable advantage in its trade relations with China, now the world`s largest economy. The potential benefits to Queensland will be significant in key industries of agriculture, agriculture, mining, manufacturing and a wide range of services. While modelling such complex systems is a danger, our models, based simply on the abolition of Chinese tariffs on Australian beef, have yielded some interesting results, of which Australia cannot give up its free trade agreement with China, as it tries to repair the “broken” relationship, said the Shadow Trade Minister, accusing the coalition government of failing to establish deep relations on the ground. “I don`t think we should abandon it,” she said. “It`s a whole series of products that go to China, and we wouldn`t want to put that at risk, even though many of them are clearly part of China`s trade movements right now.” ChAFTA also means that 95% of Chinese products imported into Australia will be duty-free after four years, resulting in considerable savings on entry components. .

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