SYDNEY: Australia and China sealed a landmark trade deal hailed on Monday as a “game-changer,” abolishing tariffs in the lucrative resources and agricultural sectors as Canberra confronts a painful downturn in mining.
The pact, signed during a visit by Chinese President Xi Jinping, was lauded by Australian Prime Minister Tony Abbott as the first Beijing had reached with a major economy and “the most comprehensive agreement China has concluded with anyone.”
“It opens the doors to Australia and it opens the doors to China,” said Abbott, hailing “unprecedented” access to the world’s second-largest economy after a protracted decade of talks.
“This has been a 10-year journey but we have finally made it, and both our countries will see the benefits flow through in the years ahead.”
China is Australia’s biggest trading partner, with the two-way flow exceeding Aus$150 billion ($131 billion).
A dollar figure was not announced for the pact, which will see 95 percent of Australian goods exports to China become tariff-free, including the abolition of all charges on resources and energy products—a key plank in the trade relationship.
Duties will be lifted on agricultural exports including wine, meat and live animal shipments and dairy products to feed China’s growing middle class.
Agriculture Minister Barnaby Joyce said the boost to farming exports would help counter a downturn in mining and slumping commodity prices that are hurting the economy.
“If we can alleviate that in some way by exports in dairy and exports of beef and exports of wine, horticultural produce, fish, then that is a good outcome for us,” Joyce said.
Earlier this month, Canberra unveiled a deal to ship to China one million Australian cattle worth Aus$1 billion ($860 million) in an agreement that will double the size of the live export industry.
Australian Trade Minister Andrew Robb said Canberra had secured the “best ever access provided to a foreign country by China on services” including legal and financial, education, telecoms and health.
“China realises if it is to become a domestically focused economy it will be a service-based economy overwhelmingly,” he said. “They will need our services.”
Robb said the deal completed a “powerful trifecta” of Asian free-trade agreements with Japan and South Korea sealed in the past year.
Devil in the detail
China won concessions on foreign investment, with Abbott announcing that the threshold for government review would be lifted from Aus$248 million to more than $1 billion in “most areas” apart from agricultural land and agribusiness.
Xi said the agreement reflected a “new level” in bilateral ties, which Beijing had upgraded to “comprehensive strategic partnership” status.
“As the Chinese saying goes ‘it takes ten years to sharpen a sword’ so we are very glad to see that after nearly ten years of negotiation our two sides have announced the substantive conclusion to the bilateral FTA negotiation,” he said.