ChAFTA Must be Ratified as Soon as Possible
Written by John Miller
Following the signing of the Trans-Pacific Partnership (TPP) trade deal involving 12 nations and covering 40% of the global economy, Austmine says it is imperative that the China Australia Free Trade Agreement (ChAFTA) come into force as soon as possible.
The ChAFTA will enhance trade with Australia’s largest export market for goods and services, and unlock further significant opportunities for Australian companies. China accounts for nearly a third of total exports, and is a growing source of foreign investment.
While both nations have signed the ChAFTA, Australia and China must complete their domestic treaty-making processes before its entry into force and Austmine’s CEO Christine Gibbs Stewart urges the earliest ratification by the Australian Federal Government because the agreement is clearly in the national interest.
“Our industry supports swift finalisation of the ChAFTA as agreements such as this are key to maintaining and enhancing Australia’s global competitiveness. Time is of the essence -Australia needs to take advantage of this agreement before China moves to conclude other agreements with larger economies which are direct competitors.
“ChAFTA will facilitate a deeper commercial relationship between Australia and China, and in doing so, will be critical for Australia’s future prosperity, including in the Mining Equipment, Technology and Services (METS) sector,” Christine Gibbs Stewart says.
When Australia and China have completed their domestic processes, both countries will exchange diplomatic notes to certify that they are ready for ChAFTA to enter into force, which will occur 30 days after this exchange, or on a date otherwise agreed. The Australian Government is working to have this completed before the end of 2015.
The resources and energy sector is a key ChAFTA component. Australia exported more than $90 billion of such products in 2013-2014. Almost 93% of these products will be duty free from entry into force and most remaining tariffs will be removed within four years. On full implementation of the agreement, 99.9% of these exports will enter into China duty free.
Austrade’s Beijing representative Appy Gao says considering the compatability and strong trade relationship between Australia and China it is very important that business is strengthened. Compatability already exists in resources supply but there is plenty of scope for Australian expertise to be used more in the continuing development of China’s mining industry, particularly in environmental initiatives and mine safety.
“China’s mining machinery industry is already big but many manufacturers aren’t as smart or efficient as they can be, which is where Australia has a role to play.
“China’s central government has placed great emphasis on the internet of things and wants industry to use higher standards in going about business. Industry is also keen to upgrade by adapting smarter methods of increasing production while the mining industry is determined to improve efficiency. This process presents opportunities for Australia.
“ChAFTA is paramount for the relationship between Australia and China to continue to develop for the benefit of both countries. It is important for Australia’s manufacturers to grow exports to China and ChAFTA will facilitate this. It provides a platform for Australian companies to engage more with Chinese companies and also serves as a catalyst for conversation to take place,” Appy Gao adds.