Article – Aus-China FTA ag outcomes at a glance

by 28 November 2014

18 November 2014
Queensland Country Life

CHINA buys more of Australia’s agricultural produce than any other market. In 2013, this market was worth around $9 billion to Australian farmers and the broader agricultural sector.

Trade is growing strongly, but there are opportunities for greater and more profitable trade. The Australian Bureau of Resource Economics and Sciences predicts China will account for 43 per cent of all growth world-wide in agricultural demand to 2050.

The China-Australia free trade agreement (ChAFTA) provides Australia with an advantage over our major agricultural competitors, including the United States, Canada and the European Union.

It also counters the advantages Chile and New Zealand currently enjoy through their FTAs with China reached in 2006 and 2008.

In agriculture and food, the Australian Government has secured:

• The removal of all tariffs on our dairy products (which can be as high as 20 per cent) within four to 11 years.

• The removal of tariffs of 12 to 25pc on beef over nine years.

• The removal of tariffs on live animal exports of 10pc within four years.

• The removal of tariffs on sheepmeat of 12 to 23pc over eight years.

• The removal of tariffs of 14 to 20pc on wine over four years.

• The removal of tariffs on all horticulture products, ranging up to 30pc, most within four years.

• The immediate elimination of the three per cent tariff on barley.

• An Australia-only duty free quota for wool in addition to continued access to China’s World Trade Organisation (WTO) wool quota.

• The removal of tariffs on seafood, including of 15 and 14pc respectively on rock lobster and abalone, over four years.

• The removal of tariffs across a range of processed foods including fruit juice and honey.

• The removal of tariffs of 5 to 14pc on hides, skins and leather over two to seven years.

• The removal of tariffs on all nuts over five years.

There are no changes to Australia’s risk-based quarantine measures as a result of ChAFTA.

As part of joining the WTO in 2001, China already allows generous imports of rice, wheat, cotton and sugar with generally low tariffs imposed within a quota.

Australian exporters have unrestricted access to these allowances (notwithstanding, Australia does not have technical quarantine market access for rice).

China has not provided further liberalisation of these products in any of its FTAs, on the basis they are significantly sensitive staples.

It has also not granted Australia, or any of our competitors, additional access for rapeseed and vegetable oils, on the same basis.

However, China has agreed to a built-in review process three years after entry into force to review the agreement, including market access.

Tony Abbott and Xi Jinping leave the House of Representatives on Monday. Photo: Andrew Meares

Courtesy of Queensland Country Life

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