The Abbott Government has concluded free trade negotiations with China, a move the Federal Government says will boost Australia’s economy by $18 billion.
Prime Minister Tony Abbott announced that Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng would sign a Declaration of Intent this afternoon.
“As a result of my meeting with His Excellency Xi Jinping, President of the People’s Republic of China, in Canberra this morning, I am pleased to announce the completion of negotiations for a China-Australia free trade agreement,” Mr Abbott said in a statement.
Fairfax reports that service providers are to benefit greatly from the FTA, with 90 per cent of exports expected to be removed from tariffs over the next four years.
Australian insurance providers are to have access to China’s third-party vehicle insurance scheme, and tourism and health providers will be able to build facilities in China.
The Foreign Investment Review Board is expected to raise the amount that can be invested by a private company before being scrutinised from $248 million to $1 billion.
The Australian red meat and livestock sectors are said to benefit by $11 billion with the FTA, which Chairman of the Australian Red Meat ChAFTA Taskforce David Larkin said would add significant value to the industry.
“The current tariffs imposed on Australian beef, sheepmeat and co-products exported to China represent an annual tax on the supply chain of around $826 million,” Mr Larkin said.
“The gradual removal of this cost burden will positively impact the profitability of Australian cattle and sheep producers, processors and exporters, not to mention alleviation of the inflated prices paid for Australian red meat and associated products by Chinese customers and consumers.”
While many different industry sectors are expecting to see the benefits of the trade agreement, not everyone is convinced.
The Australian Council of Trade Unions (ACTU) is worried Australian jobs may not be protected under the new agreement.
“Based on media reports, there are several provisions in the agreement that would deal a fatal blow to the manufacturing industry, wreak havoc on our labour market and threaten Australia’s sovereignty,” said ACTU President Ged Kearney.
Ms Kearney said if the trade agreement with China is anything like the recent Korea Free Trade Agreement, Chinese contractors might begin to affect Australia’s workforce.
“Similar provisions on labour mobility will allow Chinese contractors on Australian projects to bring in their own workforce. This removes any benefit of foreign investment since the profits and the jobs for large mining and infrastructure projects will go back to China.”
Addressing the House of Representatives this afternoon, Mr Abbott called the FTA a “significant” step, citing China’s investment in Australia as a sign of a beneficial relationship.
“Chinese direct investment in Australia (with just 23 million people) is only a little less (on some data) than Chinese direct investment in the United States (with more than 300 million).
“This is very significant: we trade with people when we need them; but we invest with people when we trust them,” Mr Abbott said.
“A relationship might begin with commerce but it rarely ends there, once trust has been established as I believe it has between Australia and China.”