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Australia, China sign ‘momentous’ free trade deal

ANdrew Robb has been previously praised for bilateral trade agreements. Photo: AAP

ANdrew Robb has been previously praised for bilateral trade agreements. Photo: AAP

Australia and China have signed a long-awaited free trade agreement in Canberra on Wednesday after more than a decade of negotiations.

Prime Minister Tony Abbott and China’s commerce minister Gao Hucheng signed the deal following a decade of negotiations. The deal will begin to free up trade between the two countries, removing tariff barriers faced by Australian companies.

The move could mean the average Australian household will have an extra $4,500 at its disposal annually by 2035, due to cheaper imports stemming from FTAs with South Korea, China and Japan, The Australian reported.

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Trade Minister Andrew Robb said the FTA would open the vast Chinese market for Australian investment, primary products and services.

“The landmark agreement will lock in our existing trade relationship with our largest trading partner, and will be a catalyst for future growth across goods, services and investment,” Mr Robb said.

Trade Minister Andrew Robb welcomes the move.

Trade Minister Andrew Robb welcomes the move. Photo: AAP

Australian businesses currently face tariffs of up to 40 per cent on goods exported to China.

Peter Arkell, Chairman of the Australian Chamber of Commerce in Shanghai, Peter Arkell told the ABC: “I think it’s a momentous thing that’s happened.”

“This has been pretty landmark stuff that’s been negotiated,” Mr Arkell said.

“I hope there’s going to be a lot of Australian business now that maybe had been reluctant about entering into China, worried about some of the so-called barriers, that they can now feel confident this is a place that they can do business.”

Opposition Trade spokeswoman Penny Wong recognised China’s importance to Australia’s future but said Labor will scrutinise the detail of the new deal.

It is worried that temporary work visas will be used to bypass local workers and also about possible clauses the allowed companies to sue the government over laws which hit their profits.

“We look forward to considering the text through the parliamentary processes now that the government’s finally seen fit to release it to the Australian people,” Senator Wong said.

The agreement would ensure 85 per cent of all Australian exports entered China tariff-free, rising to 95 per cent when it was in full force.

Mr Abbott said the China FTA, plus similar agreements with Japan and South Korea, meant 95 per cent of Australian exports would soon be tariff-free.

China is Australia’s top trading partner, with the two-way flow of goods and services exceeding $160 billion in 2014.

The FTA would bolster Australia’s market access for agriculture and processed foods.

Australia would also remove the existing five per cent tariff on Chinese electronics and whitegoods, meaning cheaper goods for Australian consumers but some reduction in revenue.

with AAP

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