China-Australia Free Trade Agreement to enter into force
9 December 2015
Australian farmers will now benefit from the significant opportunities created by the China-Australia Free Trade Agreement (ChAFTA), with the landmark trade agreement entering into force on 20 December 2015.
Minister for Agriculture and Water Resources, Barnaby Joyce, said this entry into force before the end of 2015 means ChAFTA will deliver two tariff cuts in a row on agricultural exports to China, with the first round of tariff cuts to be made on 20 December, and a second cut to take effect on 1 January 2016.
“ChAFTA will deliver unprecedented opportunities to build our trading relationship with China,” Minister Joyce said.
“China has become the world’s second largest importer of agriculture, food and fishery products, worth almost US$120 billion in 2014, and has also become Australia’s biggest market for agricultural products—we exported around $9.7 billion in 2014-15, at tariffs up to 30 per cent, and ChAFTA will enable producers to build on this.
“ChAFTA will also close the gap between Australia and those countries that already have FTAs with China, such as New Zealand and Chile, and provides a significant advantage over other major competitors in the market which do not have FTAs with China.
“Now with the first round of tariff cuts to occur from 20 December 2015, benefits can start to flow through to the farmgate—and these benefits are significant.
“Tariffs on key grain exports of 3 per cent on barley and 2 per cent on sorghum will be eliminated on entry into force. Barley exports were valued at over $1.1 billion in 2014–15, while exports of sorghum were worth around $370 million in 2014–15.
“Tariffs on animal feed, oats and frozen prawns will also now be completely eliminated on 20 December.
“Tariffs on most seafood, wine, horticulture and livestock will be eliminated over 4 years. For example, the current 24 per cent tariff on our macadamia exports, worth $35.8 million in 2014–15, will be reduced to 19.2 per cent on 20 December, and further cut to 14.4 per cent on 1 January 2016.
“The 10 per cent tariff on live cattle exports will be cut to eight per cent on 20 December, and further cut to six per cent on 1 January 2016, helping exporters taking advantage of the recently negotiated feeder/slaughter cattle protocol with China.
“High tariffs on key growth commodities such as beef, sheepmeat, hides, skins and dairy will be eliminated over 7–11 years, providing a strong base to further grow what are already substantial trades.
“China is already Australia’s second largest market for dairy exports, worth $331 million in 2014–15, and the removal of tariffs of 10–20 per cent under ChAFTA will only further expand industry opportunities in this rapidly expanding market.
“For example, the 12–15 per cent tariff on Australia’s cheese export to China will be reduced to 10.8 per cent on 20 December, and further cut to 9.6 per cent on 1 January 2016. Australia’s cheese exports to China were worth $72.3 million in 2014-15, with tremendous potential to grow.
“I recently visited China with an industry delegation for the second time in two years to further exchange views with my counterpart Ministers and promote the opportunities for Australian agriculture under ChAFTA.
“The government is constantly working to improve and expand technical market access to China for Australian agricultural products in order to fully realise the benefits of ChAFTA.
“The recently concluded protocol on live feeder and slaughter cattle, and the updated wheat and barley protocol are significant examples of the government’s focus on these issues.”
Minister Joyce said the Australian Government continued to pursue the best market access opportunities to the benefit of Australian producers.
“After finalising FTAs with three of our biggest trading partners as well as with other Asia-Pacific nations, we’re now working hard on reaching an agreement with India, where demand for agrifood products continues to grow,” Minister Joyce said.
“Our work on trade is a testament to our commitment to better farmgate returns for Australian producers—and this is a huge step in boosting those returns.”