Market News & Headlines >> China, Australia Trade Pact
China and Australia on Monday signed a preliminary agreement on a landmark free trade pact more than a decade in the making, significantly expanding economic ties between the two countries.
The deal, which Australia touted as the best ever between Beijing and a Western country, will open up Chinese markets to Australia’s farm exporters and services sector while easing curbs on Chinese investment in resource-rich Australia.
Australian Prime Minister Tony Abbott and Chinese President Xi Jinping watched as officials from their governments signed a memorandum of understanding clinching the agreement during a ceremony in the Australian parliament in Canberra. "This has been a 10-year journey, but we have finally made it," Abbott said.
More than 85% of Australian goods exports will be tariff free upon once the trade pact, known as ChAFTA, goes into force, rising to 93% in four years, according to a statement from Prime Minister Abbott. On full implementation of ChAFTA, 95% of Australian goods exports to China will be tariff free.
Chinese tariffs on Australian dairy products, which can be as high as 20%, will be eliminated within 4 to 11 years; while duties of 12% to 25% on Australian beef will be phased out over 9 years; and duties of 10% on live animal exports will be removed within 4 years. Tariffs on Australian wine, which run 14% to 30% will also be phased out within four years, according to the statement.
China is already Australia's top trading partner, with two-way trade of around $130 billion (U.S.) in 2013. On Monday they witnessed 14 commercial agreements between companies worth potentially more than $17.56 billion.