Australia ready to sign free-trade agreement with China
Updated: 2014-09-15 10:26
CANBERRA - Australia looks set to sign a free-trade agreement with China, the deal expected to be clinched by the end of the year.
The Australian newspaper reported on Monday that the agreement could be finalized around the time of the G20 meeting in Brisbane in November when Prime Minister Tony Abbott and President Xi Jinping are due to meet twice that month.
They are scheduled to meet at the Asia-Pacific Economic Cooperation Forum in Beijing and later in Australia, where Xi will attend the G20 and address parliament.
Trade Minister Andrew Robb told The Australian that after almost a decade of negotiations he believed there was sufficient political will on both sides to finally conclude a free-trade agreement. But there were no guarantees and he described the final stages of any trade negotiation as always the toughest.
Robb said Monday that "solid progress" had been made at formal negotiations at the start of this month when Xi visited Australia.
Further delays to an FTA with China would result in Australian dairy exports losing more vital ground to key competitor New Zealand, said Robb.
Australia continues to push to cut barriers to entry to the Chinese market for agriculture and services. China wants improved investment access, tariff reductions on household items such as electronics, and gains on people movements to Australia.
Australia will offer China the same $970-million foreign-investment screening threshold for private investment as that given to South Korea, Japan, the US and New Zealand.
The Australian reported that the same $13.5-million threshold will apply to investment in agricultural land, and $48 million for agribusiness, as was included in the Japanese and South Korean deals.
However, one of Australia's most senior bankers, Westpac's Rob Whitfield, warned on Monday that Australia could lose some of its competitive advantages over the rest of the world if it made too many concessions to China in any free-trade agreement.
Whitfield, who was in China for the World Economic Forum, said the Coalition government should be flexible in its negotiations over the deal because of its size and complexity, despite setting an election promise to speed up the signing of the agreement.
"I think we should compromise and recognize our place in the larger sphere, but we should not do it to the point to just get a deal done," Whitfield said. "It has taken nine years; you don't need to give away the farm."
With the New Zealand dairy industry increasing its revenue by $3.3 billion to the end of last year, since completing its free-trade agreement and improving dairy access, compared with a $156-million increase for Australian dairy farmers, the government has been facing calls from the National Farmers Federation, and other groups, to secure significant gains in agricultural access.
"If the government is serious about agriculture being a pillar of the economy, and if in fact agriculture is a core reason why governments complete trade agreements, then the results will be in the China pudding," National Farmers Federation President Brent Finlay said.
Robb is expected to tell the Dairy Australian Investment Forum in Melbourne on Monday that Australian dairy exports are approaching a value of $450 million and dairy is Australia's strongest growth market in China.