The Australian and Chinese governments have agreed to a free trade agreement after president Xi Jinping met with Australian Prime Minister Tony Abbott in Canberra on Monday.
The agreement, which will see Australian import tariffs on lamb, beef, horticulture and dairy products eliminated within 10 years, is “an outstanding achievement” for Australia’s agriculture industry, according to National Farmers’ Federation president Brent Finlay.
Current tariffs charge 10 to 19 percent on dairy products, 12 to 25 percent on boxed or frozen beef, 10 percent on live sheep and cattle, 12 to 23 percent on sheepmeat and 11 to 30 percent on citrus.
“Based on our own growth and the New Zealand experience we could conceivably see a tripling in agricultural exports to China within the decade,” said Finlay in a statement. “We must strive to take full advantage of the improved outcomes.”
The agreement will also incentivise further investment into the sector and puts Australia on a level playing field with its neighbour New Zealand when it comes to China exports, according to Finlay.
“After almost 10 years of negotiations, we are pleased that the Australian and Chinese Governments have reached an agreement largely equivalent to the outcomes New Zealand achieved with China,” he said. “This presents Australian farmers with not only a level playing field, but more opportunities to market product resulting in increased incentive to invest, innovate and grow.”
The sugar and rice sectors were unchanged, causing some complaints but Finlay thinks the agreements across other sectors will be a good jumping-off point for further negotiations later.
“While the agreement reduces tariffs across a number of sectors, it must provide a platform to improve outcomes for certain products like sugar, rice, cotton and some grains, which regrettably, were excluded from the agreement,” he said. “These products will be in high demand in China over coming years and must be included in the review arrangements after three years.”
In return, the threshold will increase before private, non-state-owned investments from China into non-sensitive sectors go to the Foreign Investment Review Board (FIRB) from A$248 million to A$1.08 billion. Sensitive sectors – telecommunications, media and defence – will still be screened, as well as agriculture land investments of over A$15 million and agribusiness investments of over A$53 million.