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Historic China-Australia FTA enters into force, benefiting both countries

(Xinhua) Updated: 2015-12-21 07:46

Historic China-Australia FTA enters into force, benefiting both countries

Sydney Opera House in Sydney Nov 11, 2014.[Photo/IC]

CANBERRA -- The free trade agreement between China and Australia has officially entered into force on Sunday, giving competitive advantages for exporters and investors from both countries into each other's market.

Hailed as "historic" and "landmark" by the Australian Minister for Trade and Investment Andrew Robb, the China-Australia Free Trade Agreement (ChAFTA) enables more than 86 percent of Australia's goods exports to China duty free, worth more than 90 billion AU dollars ($65 billion).

Once the agreement is fully implemented, 96 percent of Australian goods will enter China duty free, while 100 percent of Chinese exports to Australia will enjoy zero-tariff treatment.

"The signing of the ChAFTA will provide a better platform and an improved institutional guarantee for the two countries to complement each other with advantages and conduct close win-win cooperation," Chinese President Xi Jinping said in a message to then Australian Prime Minister Tony Abbott when the deal was inked in Canberra in June.

While addressing the signing ceremony, Chinese Commerce Minister Gao Hucheng said the ChAFTA has "monumental significance" in bilateral relations and will "boost economic cooperation and provide strong impetus to the economic growth of the two countries."

Of all such agreements involving China, it contains "the highest level of overall trade and investment liberalization," Gao noted.

Iron ores and concentrates, coal, gold, education-related travel services and copper are China's top five imports from Australia, while clothing, telecom equipment and parts, computers, furniture, toys and sporting goods are the top five exports to Australia.

Chinese enterprises and consumers will have greater access to natural resources and finished products like high-quality food. Australians will also benefit from cheaper China-made garments and electronic gadgets.

Trade Minister Andrew Robb said tariffs have been cut on a range of important Australian exports including dairy, beef, lamb, wine, seafood, fruit and vegetables, processed foods, vitamins and health products.

Tariffs on coking coal (with exports worth 4.8 billion U.S. dollars in 2014-15) have been eliminated, while the phased elimination of tariffs on non-coking coal also starts on Sunday.

"This historic agreement with our biggest trading partner will support future economic growth, job creation and higher living standards through increased goods and services trade, and investment. China, with its population of 1.3 billion people and rapidly rising middle class, presents enormous opportunities for Australian businesses well into the future," Robb said.

"The government's determination to see ChAFTA's commencement before the end of this year will quickly produce a double benefit for our exporters, with another round of tariff cuts to follow on Jan 1, 2016. This will significantly enhance our competitive position in the Chinese market."

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