Australia to negotiate China FTA

The latest Australian delegation to Beijing will start talks on Thursday.

Australia and China will continue talks about the establishment of a Free Trade Agreement (FTA) on Thursday marking the 22nd round of negotiations, according to local reports.

There is widespread hope that this latest round will result in an FTA being signed after a nine-and-a-half year process. The negotiations also follow a visit to China by Australia’s agriculture minister Barnaby Joyce in September to develop agricultural connections between the two countries.

“Any agreement which is brokered between China and Australia with regards to trade generally, and agriculture specifically, can only lead to a greater demand tailwind for Australian agriculture producers,” noted Daniel Hough, managing partner at Gunn Agri Partners.

An FTA with China would improve the flow of produce out of Australia into China and the Australian Bureau of Agricultural Resources Economics and Science predicts China’s global beef imports will grow by 1000 percent over the next four decades. Australia is favourably located, both geographically and economically, to benefit from this trend, according to commentators.

“Australia, being one of the global low-cost beef producers via a grass based production system, coupled with a free trade relationship which China, is in great shape to capture a big piece of this demand. We have already seen Australia beef and veal exports to China grow at a very fast pace the past few years,” added Hough.

Joyce’s visit in September was marred by some resistance from China over certain agricultural products, however. During these earlier negotiations, China’s quality inspection rules appeared to be a barrier to further Australian imports as the testing and quarantine process was expected to take up to 21 days for products such as milk. This timing has since reduced making it more viable for Australian milk and dairy to be exported but as of May this year, Australian dairy and infant formula producers are now subject to registration by the Certification and Accreditation Administration of the People’s Republic of China (CNCA). This listing process has been slow, according to local reports.

In addition, kangaroo meat has until recently been prohibited from being exported to China due to Chinese concerns about animal welfare in kangaroo meat production.

Australia has made progress with other East Asian nations. It signed an FTA with South Korea in April this year and in the same month established the Japan-Australia Economic Partnership Agreement. This agreement agreed reduced tariffs for Australia’s key agriculture export sectors including beef, dairy, wine, horticulture and seafood.