Australia

Australia and China sign Free Trade Agreement


Published

Australia and China have signed a Free Trade Agreement (FTA) which is estimated to be worth around $17 billion to Australian exporters.

Prime Minister Tony Abbott was present at the signing ceremony and spoke about the relationship between the two countries. His remarks as published on the Prime Minister’s website are as follows:

“Address to the China-Australia Free Trade Agreement Signing Ceremony Luncheon, Canberra

17 June 2015

This is a momentous day – an absolutely momentous, historic day – for our two countries.

First, I want to thank Minister Robb and the negotiating team: Frances Adamson, our Ambassador; Jan Adams, our lead negotiator and everyone involved on the Australian side.

I also want to thank Minister Gao, Ambassador Maher and the negotiating team on the Chinese side and assure you that what you have collectively done is history-making for both our countries. It will change our countries for the better, it will change our region for the better, it will change our world for the better.

I particularly want to thank our Chinese friends for the obvious warmth that they have shown for Australia. And I want to state here what a good friend President Xi has been to this country. On his most recent visit to Australia he visited Tasmania because this was the only state of Australia that he had not actually visited.

In fact, the President of China is such a friend of Australia that he has seen more of our country than most Australians. He is a very shrewd man as well as being a very good friend of Australia and at their meeting before Minister Gao came to Australia for today’s ceremony, President Xi – being a shrewd and perceptive politician, as well as a great leader of his nation – said to Minister Gao, “Now just what’s in it for the people of China?” And Minister Gao, being likewise – a shrewd and perceptive politician, as well as a great leader of his country – said, “It’s very simple, Mr President. For Chinese people it means more beef and better wine.”

And I trust that today our Chinese friends will enjoy the fine beef and the good wine that will soon be more readily enjoyed by their countrymen.

As I said, this is a momentous day.

It’s a happy day between friends. It is the day that we seal the deal that was made during last year’s historic visit by China’s President Xi Jinping.

We seize this opportunity of more trade and more investment with China and we complete a trifecta of with trade with our major trading partners, not only China but also Japan and South Korea – markets which together account for more than 60 per cent of Australia’s export goods.

We again show that Australia is open for business and that we deliver more opportunities for Australian companies and the people they employ.

Today, we realise the vision of former prime minister John Howard who launched these negotiations a decade ago.

At that time, China was Australia’s third largest trading partner and the Asia region accounted for but 29 per cent of global trade.

Today, China is by far our largest trading partner and the Asia region accounts for 36 per cent of global trade.

When these negotiations were first launched, Prime Minister Howard said that they would be complicated, he said that they would be challenging, and he said that they would be difficult.

But he also said that they were worth persevering with.

He said that our shared optimism and enthusiasm meant that success would eventually be achieved and today we have realised that vision and achieved that success.

Again, I congratulate Chinese Commerce Minister, Gao Hucheng, and our own Trade and Investment Minister Andrew Robb for the extraordinary and historic work they’ve done and I was indeed truly delighted to today receive a letter from President Xi conveying his personal congratulations on the signing of the agreement.

And I have passed onto Minister Gao a letter to President Xi in response, conveying my great pleasure at what is the beginning of the next chapter in the relationship between our two countries.

This agreement will give our nations unprecedented access to each other’s markets.

It removes barriers to Australian agricultural exports across a range of products, including beef, dairy, lamb, wine, horticulture and seafood.

It means duty free entry for 99.9 per cent of our resources, energy and manufacturing exports within four years.

But it’s about so much more than just exporting more and reducing tariffs.

Australian services providers: financial, education, health and aged care, will have new access to China’s services sector – a sector that is already the largest contributor to China’s GDP and is set to drive economic growth in coming years.

For China, this agreement liberalises the screening threshold for Chinese private sector investment in Australia and it puts Chinese businesses in the same position as those of our other major trading partners.

And, of course, it means that Australian consumers will pay less for cars, for clothes, for electronics and for other goods imported from China.

We are a leading trading nation.

Our prosperity depends on trade and the jobs and economic growth it creates.

In only a few decades, China has emerged as a global economic leader – the world’s second largest economy, the second largest trading nation and now, of course, a major global investor.

But the rise of China is not just about economics – it’s about people.

The Chinese economic miracle is quite simply the greatest advance in prosperity ever seen in the history of mankind and the unprecedented agreement that we have signed today will not only enhance trade between our nations but also two-way investment.

Far more than trade, investment in another country is a sign of trust.

You don’t put your hard earned cash into another country unless you are absolutely certain that your investment will be respected, that you are likely to make a reliable profit and that you will be able to repatriate the money.

The fact that China has over the years directly invested almost as much in our economy as it has in the United States – an economy around 12 times our size – is a sign of trust in Australia.

And our investment of almost $58 billion in China, with its very different legal and political system, is much more than just a bet on the world’s coming economic superpower; it’s proof of our trust in China, because in our own lives, we know that it’s not money or goods that sustains a friendship, it’s trust.

So, this agreement is another giant step in the friendship between our two nations.

Our friendship will continue to grow.

We look forward to a shared future of prosperity based on trust and respect.

Today is a truly historic step forward in our comprehensive strategic partnership.

I hope all of you will remember today.

One day we will be able to say to our children and grandchildren, that yes, we were there the day this extraordinary agreement was signed between our two countries.”

More detailed briefing on the politics and risk of doing business in this country is available to clients and subscribers. If you would like to know more then please contact enquiries@tradebridgeconsultants.com