China, Australia agree on FTA
November 24, 2014 Category Foreign trade, Weekly
China and Australia finalized negotiations on a landmark free trade agreement (FTA) after nearly a decade of talks. The deal comes on the heels of the China-South Korean FTA agreement, boosting China’s regional economic integration. The deal is one of 23 agreed upon by the two countries during Chinese President Xi Jinping’s state visit to Australia. Australian Prime Minister Tony Abbott hailed November 17 as a “historic day” for the country. Chinese Commerce Minister Gao Hucheng said that Australia would eventually reduce tariffs to zero on all goods imported from China, and China will remove tariffs on a vast majority of Australian goods. The FTA would cover more than 10 areas, including a simplified review procedure for investments, most-favored-nation treatment, favorable market access rules and market transparency. China is Australia’s largest trading partner, with two-way trade of USD130 billion in 2013. Australia is China’s eighth-largest trading partner and an important source of the raw resources that China needs to sustain its development. Australia has been keen to switch from a reliance on exports of minerals such as iron ore to expanding its food and agricultural exports, the China Daily reports. The free trade agreement will be formally signed next year. Trade between the two countries stood at USD132 billion last year, according to the Australian Department of Foreign Affairs and Trade. Of Australia’s total exports to China of AUD94.7 billion last year, iron ore accounted for AUD52.7 billion, according to Australia’s Department of Foreign Affairs and Trade. Wool, the top agricultural export, made up just AUD1.9 billion.
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