Australia And China Sign Historic Free Trade Deal

China and Australia significantly deepened trade ties Monday with the announcement of a landmark multi-billion dollar free trade agreement (FTA).



The agreement, more than a decade in the making, is expected to benefit Australia to the tune of more than AUD$20 billion ($17 billion) by removing tariff barriers in agriculture, resources and energy products and pharmaceuticals.



Since taking office 14 months ago the Australian government - under Prime Minister Tony Abbott - has struck free trade deals with Japan and Korea. Today, it is marking the end of negotiations with China.



Australian Trade Minister Andrew Robb described it as a historic day that "forms the conclusion of a powerful trifecta of trade agreements."



The deal will open up Chinese markets to Australian farm exporters and the services sector, while at the same time easing curbs on Chinese investment.



The deal is more wide-ranging than many industries had anticipated.



Big winners are the dairy industry, the wine industry, miners and the services sector.



Within four years, Australian dairy farmers will have tariff-free access to China's lucrative infant formula market, and most Australian dairy products won't be subjected to the protective safeguards that currently apply to New Zealand dairy exports to China.



Wine makers - currently selling more than AUD$200 million worth of goods to China each year (tariffs of between 14 and 20 percent) - will see all tariffs removed over a four year period.



In a statement, Robb said that once the agreement is fully implemented, 99.9 percent of Australia's current resource, energy and manufacturing exports would enjoy duty free entry into China.



For the mining industry, a 3 percent coking coal tariff will be removed immediately and a 6 percent tariff on thermal coal removed within two years.



Negotiations for a free trade agreement with China commenced in 2005 and languished between 2007 and 2013.



China is Australia's largest two-way trading partner in goods and services - valued at more than AUD$150 billion in 2013, its largest goods export destination - AUD$95 billion in 2013, and its largest source of goods imports (AUD$47 billion in 2013). China is also Australia's largest services export market (AUD$ billion in 2013).



The prime minister stated Monday that the 14 commercial agreements would give Australian businesses "unprecedented access to the world's second largest economy".



The G20 Summit brought dozens of world leaders to Australia over the weekend. But on Monday, China's President Xi Jinping was the key player.



Fresh from the G20 leaders' meeting, Xi was just the second Chinese leader to be accorded the rare honor of addressing the Australian federal parliament, in his speech, describing Australia as a country of dynamism and innovation.



He also sent a clear message about China's place in Asia-Pacific saying that it backs regional peace, but not at the expense of sovereignty.



Xi urged Australia and other countries to work with China to join forces against any threats that undermine peaceful development.



He said he believes the free trade agreement reached will be mutually beneficial for the ever-strengthening friendship between the two nations.



Prime Minister Abbott quickly congratulated Xi on "a speech of historical significance," which "will be studied and analyzed for weeks and months and years to come."



www.aa.com.tr/en - Melbourne