AQSIQ CREATE CONFIDENCE !

China-Australia Free Trade Agreements

Frequently asked questions

What are the highlights of the China-Australia FTA and Australia's recent FTA with Japan and South Korea?

Compared with the Australian and South Australian Free Trade Agreement, Australia’s liberalization of Chinese products is better than Japan and South Korea’s products liberalization arrangements, mainly in Australia, China’s product tax reduction period of up to 5 years, While the Japanese and Korean products, the longest tax reduction period is 8 years.

In Australia, the proportion of tariff reductions for China for three years is higher than that of similar products in Australia, Japan and Australia and Korea.

China’s longest tax reduction period for Australian products is shorter than Japan and South Korea’s longest tax reduction period for Australian products. China’s tax cuts are up to 15 years, while Japan’s tax cuts are up to 16 years, The maximum period is 20 years.

In addition, all the products in China through the tariff reduction of the product to take a linear tax reduction of this simple and direct way of reducing tariffs, and Japan in addition to linear tax cuts, but also includes the way to push down taxes, South Korea, including part of the tax and Seasonal tariff reduction and other more complex way of reducing taxes.

China-Australia FTA issues in the tariff reduction period of specific arrangements made by what?

China-Australia FTA, the Australian tax reduction approach in three ways:

  1. Is that the tariff has been zero or immediately reduced to zero when the agreement is in force.
  2. Is the third year after the contract tariff reduced to zero.
  3. Is reduced to zero in the fifth year after the entry into force of the agreement.

The proportion of the total tax items of the three tariff reductions is 91.6%, 6.9% and 1.5% respectively. The proportion of Australia’s total imports from China is 81.5%, 16.9% and 1.6%.

China’s tax cuts can be divided into five categories:

  1. is that the tariff is zero or zero immediately when the agreement is in force. This part of the product tax account is 29.2%, and the share of total imports from Australia (85%) is the proportion of total imports from Australia (hereinafter referred to as imports)
  2. is the tariff reduction period is reduced to zero, the tax reduction period is divided into 3 years, 5 years, 6 years, 8 years, 9 years, 10 years, 12 years and 15 years, this part of the product tax accounted for 67.6% , Imports accounted for 8.7%;
  3. is reduced by tariff reduction period to zero, while the implementation of special safeguard measures, this part of the product tax accounted for 0.1% of the number of imports accounted for 0.9%;
  4. is the implementation of the national tariff quota products, this part of the product tax accounted for 0.1% of the number of imports accounted for 2.1%;
  5. is an exception, that is, do not participate in tariff concessions, this part of the product tax accounted for 3.1% of the number of imports accounted for 3%.


The China-Australian free trade agreement on the level of trade liberalization in industrial products on what is the specific situation?

In the China-Australia FTA, industrial trade liberalization reached a high level.

For China’s industrial products, the agreement is zero or immediately when the tariff is zero, the proportion of product tax and the proportion of imports from Australia were 32.4% and 92.9% respectively;

The proportion of industrial goods and the proportion of imports accounted for 65.1% and 7% respectively through the reduction period of zero;

Do not participate in the tariff reduction of industrial products involving 171 tax items, the proportion of tax items accounted for 2.5%, but the proportion of imports accounted for only 0.1%. After the implementation of the agreement, the average tariffs on Chinese industrial products will fall from 8.8% to 0.2%, the highest tariff will be reduced from 47% to 20%.

For Australian industrial products, the tariff ratio of zero or immediately reduced to zero when the agreement comes into effect is 89.9% and 81% respectively.

The proportion of industrial goods tax and the proportion of imports accounted for 8.2% and 17.3% respectively for the third year of the entry into force of the Agreement.

The proportion of industrial goods tax and imports accounted for 1.9% and 1.7% respectively for the fifth year of the entry into force of the Agreement.


Which industry sectors in China may benefit more from the China-Australia FTA?

China’s industrial sector can benefit from both the tariff reduction and trade creation in the China-Australia FTA.

In terms of tariff reductions, it is estimated that the implementation of the agreement will allow China to export US $ 1.66 billion in tariffs, the agreement will be available when the 1.02 billion US dollars relief (61.5% of the total relief), the agreement within three years $ 1.6 billion in relief (96.4% of total relief).

China’s major tariff reductions are clothing and leather, electronics and machinery products, other manufactured goods, steel and metals, and chemical products, the amount of relief of 1.53 billion US dollars (accounting for 91.9% of the total relief)

In terms of trade creation, the proportion of China’s total exports to Australia to China’s total exports is expected to increase from 1.7% to 2.1% after the implementation of the agreement. China’s exports increase the potential of the larger products mainly for textiles, clothing, leather products, electronic and mechanical equipment, steel and metal products, mineral products, chemical products and transportation equipment.


China-Australia FTA in agricultural products to achieve the level of trade liberalization is what?

According to the arrangement of the agreement, under the premise of moderate and reasonable protection, the agricultural products between China and Australia achieved a high level of liberalization.

After the end of the transition period, the average tariff of Chinese agricultural products will be reduced from 12.94% before implementation to 0.51%, accounting for 93.7% of agricultural products tariff will be zero.

99.4% of Australia’s agricultural products will be zero immediately after the entry into force of the agreement, involving 99% of the total agricultural imports from China, the remaining products will be completed within 3 years of all liberalization process.


China-Australia FTA How to deal with the two countries of their sensitive products, trade liberalization?

China and Australia have their own sensitive products, for China, due to strong agricultural competitiveness in Australia, the implementation of the agreement will give some of China’s agricultural products to bring some competitive pressure.

In this regard, China through the key agricultural products set a longer tax reduction period, supplemented by special safeguard measures and country quotas and other special arrangements to give some protection to the relevant industries, the implementation of appropriate opening.

In addition, China also made special arrangements for food, cotton, vegetable oil and sugar products, no tariff concessions.

For Australia, due to the relatively competitive nature of Chinese industrial products, Australia has set a three- or five-year reduction period for some sensitive industrial products, providing a certain buffer period for related industries.


China-Australia FTA may give China what industry and products to challenge?

Australia is a strong agricultural country, is the world’s major agricultural production and exporting countries.

There is a gap between China and Australia in the competitiveness of agricultural products. For the agricultural industry, the China-Australia Free Trade Agreement, through the exception of some products, arrange a long transition period, set up agricultural special safeguard measures and country quota measures, the key agricultural products were moderately protected.

In a longer period of time, to give the relevant domestic industry to adjust the time to deal with. At the same time, in the spirit of “open to reform”, to promote the development of domestic industries, and continuously improve their competitiveness.


Chinese people's life because of the China-Australia FTA will change?

With the implementation of the agreement, the broad masses of people in the beef and mutton, dairy products, wine, lobster, fruit and other consumer goods to obtain more high-quality imports of high-end products, the choice will be better meet.