AusRAIL, Market Sectors

Suppliers and manufacturers winners in China-Australia free trade deal

<span class="" id="parent-fieldname-description"> Australia’s new free trade agreement with China will see 95% of Australian exports to China gain a tariff exemption while all tariff barriers for manufactured imports from China to Australia will fall. </span> <p>Australia’s Federal trade and investment minister Andrew Robb and China’s commerce minister Gao Hucheng signed a declaration of intent on the afternoon of Monday November 17 to prepare the legal texts in both languages for signature.<br /><br />“The landmark China-Australia Free Trade Agreement will unlock substantial new benefits for Australians for years to come. ChAFTA will add billions to the economy, create jobs and drive higher living standards for Australians,” said prime minster Tony Abbot and the minister for trade Andrew Robb in a joint statement.<br /><br />“Australian businesses will have unprecedented access to the world’s second largest economy. It greatly enhances our competitive position in key areas such as agriculture, resources and energy, manufacturing exports, services and investment,” the statement added.<br /><br />Products from China to Australia will all be “tax-free” from April 2015 according to a translation from the Mandarin-language statement on China’s Ministry of Commerce website. There does not appear to be a similar statement on ministry’s English-language website.<br /><br />Lloyd’s List Australia further understands that ChAFTA will result in the full elimination of Australia’s tariffs on Chinese imports which is said to be consistent with all of Australia’s free trade agreements.<br /><br />Tariffs of about 80% by value of current Chinese exports to Australia will be eliminated on entry into force, scheduled for around mid-2015, which will account for about 90% of all tariff lines with the remainder phased out within four years.<br /><br />A statement from the Department for Foreign Affairs &amp Trade later provided to Lloyd’s List Australia confirmed tariffs imposed by Australia on some goods imported from China will be eliminated within two years of ChAFTA entering into force and these include 5% tariffs on ground nuts, canned fruit, chemicals, plastics, rubber, textiles, clothing and footwear, paper, some motor vehicles and automotive parts, steel and steel-related products, copper-related products, aluminium-related products and water heaters.<br /><br />Australian tariffs on other goods will be eliminated within four years of the FTA entering into force and these include 5% tariffs on some automotive parts, plastics, rubber, paper, carpets, textiles, clothing and footwear, glass, steel and steel-related products, aluminium-related products and electrical products.<br /><br />Exports from Australia to China will also be affected.<br /><br />More than 85% of Australian goods exports will be tariff free upon entry into force of the ChAFTA, rising to 93% in four years. Some of these goods are currently subject to tariffs of up to 40 per cent. On full implementation of ChAFTA, 95% of Australian goods exports to China will be tariff free, the DFAT stated.<br /><br />Meanwhile, an 8% tariff on Australian aluminium oxides will go on the first day as will tariffs on coking coal. Tariffs on thermal coal will phased out over two years.<br /><br />Tariffs will be also eliminated on a wide range of Australian manufactured goods, including engines. Mining and extractive industries, manufacturing services, architecture and urban planning, as well as transport will also be affected.<br /><br />This is an abridged version of an article that first appeared in our sister publication, Lloyd’s List Australia. <a href="">Click here to read the full story</a>.</p>