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Conclusions of China Australia Free Trade Agreement announced

Yesterday, Prime Minister Tony Abbott and Chinese President Xi Jinping announced the conclusion of negotiations on the China Australia Free Trade Agreement (ChAFTA).

According to the Australian Food and Grocery Council (AFGC), the trade deal will see improvements in market access for a wide range of Australian processed food exports into China.

At present, Australia sends more than $9 billion in agri-food exports to China, and the AFGC say that the ChAFTA will give Australia a significant advantage over large competitors including the US, EU and Canada, as well as help to reel in the advantages enjoyed by New Zealand, Chile and ASEAN as a result of their respective FTAs with China.

Key outcomes of the agreement include:

• 7.5 to 30 per cent tariff on orange juice removed within 7 years, and tariffs of up to 30 per cent on other fruit juices removed within 4 years,
• 15 per cent tariff on natural honey, and the up to 25 per cent tariff on honey-related products removed within 5 years,
• 15 per cent tariff on pasta removed within 4 years,
• 8 to 10 per cent tariff on chocolate removed within 4 years,
• 15 to 25 per cent tariff on canned tomatoes, peaches, pears and apricots removed within 4 years,
• 15 to 20 per cent tariff on biscuits and cakes removed within 4 years, and
• 20 per cent tariff on soft drinks removed within 4 years.

Broader tariff eliminations include:

Red Meat

• 12-25 per cent tariff on beef imports removed within 9 years,
• 12 per cent tariff on beef offal removed within 4-7 years,
• 12-23 per cent tariff on sheepmeat removed within 8 years,

Dairy

• 15 per cent tariff on infant formula removed within 4 years,
• 10 – 19 per cent tariff on ice cream, lactose, casein and milk albumins removed within 4 years,
• 15 per cent tariff on liquid milk removed within 9 years,
• 10 to 15 per cent tariff on cheese, butter and yogurt removed within 9 years,
• 10 per cent tariff on milk powders removed within 11 years,

Horticulture

• 10 to 25 per cent tariff on macadamia nuts, almonds, walnuts, pistachios and all other nuts removed within 4 years,
• 11 to 30 per cent tariff on oranges, mandarins, lemons and all other citrus fruits removed within 8 years,
• 10 to 30 per cent tariff on all other fruit removed within 4 years, and
• 10 to 13 per cent tariff on all fresh vegetables removed within 4 years.

Although market access arrangements for commodities such as rice, wheat, cotton, maize, sugar and vegetable oils will remain unchanged under China’s current World Trade Organisation commitments, the AFGC understands that processed food products containing rice, wheat, maize, sugar and vegetable oils will receive significant tariff reductions.

The agreement is inclusive of a three year review process for the agreement, enabling a thorough review of progress, as well as the creation of a platform for further liberalisation.
 

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