Intense business and government preparation and negotiations with China over the previous three years have positioned South Australia to reap the benefits of the newly-signed China-Australia free trade agreement.
The FTA comes less than a month after South Australia’s largest trade delegation travelled to economic powerhouse Shandong province in China, targeting new relationships and business opportunities.
A sister state of South Australia since 1986, Shandong Province has the third largest GDP of all provinces in China, is one of the country’s top manufacturers and produces almost half of all wine in China. It has a population of around 100 million.
Sean Keenihan, the vice president of the Australia China Business Council said the FTA would see greater trade volumes for South Australia and strategic investment to scale up the state’s production to meet growth in Shandong as well as greater China.
Wine tastings are one way that South Australia has been raising awareness of its industries in China.
Chief Executive Officer of Food SA Catherine Barnett said the free trade agreement provided a “gift’’ for food industries in South Australia.
“It is now up to businesses to seize this opportunity to grow by being smart with their marketing, branding and positioning,’’ she said.
“This should provide a sense of urgency for local agriculture to act as there are other countries also looking for these types of opportunities.
“It provides a rare opportunity to increase market share and attract investment, ideally in partnership, with China.
“South Australia producers are predominantly small to medium enterprises and often family owned which means they are very nimble in the market place to seize opportunities, as opposed to large conglomerates.
“There is a lot of intellectual property in SA around agriculture and horticulture which really stands us in good stead.’’
Senior Trade Commissioner to Beijing for Austrade, Michael Clifton said beef, sheep, dairy and seafood industries should be very optimistic about achieving terrific outcomes as a result of the FTA.
“We are seeing already businesses jockeying for buying position with South Australian business following the announcement of Seppeltsfield signing a deal to export 1.5 million litres of premium wine to China every year and the Stehr Group signing its first deal to export 40 tonnes of tuna to China worth around $1 million.
“This is happening before all the benefits of the Free Trade Agreement come in to play because businesses want to secure their buying positions and relationships with South Australia companies.’’
South Australia’s beef and sheep farmers will also gain from the phased abolition of tariffs ranging from 12 to 25 per cent.
Darren Thomas, owner of South Australia’s largest meat exporter Thomas Foods International, said the tariff reduction would allow the meat industry to be more competitive, especially against the New Zealand market.
“We certainly have had a heightened focus on a China with the Free Trade Agreement in mind. We are working closely with our clients to ensure they are aware of the benefit of the FTA.
“One of the biggest benefits will be through direct investment to accelerate the opportunities for companies through either formal sales partnerships or equity investment. It will also perhaps allow Chinese companies to invest in their own right to capture opportunities.’’
Thomas Foods is South Australia's largest meat exporter.
Thomas is also the chairman of Brand South Australia, the entity tasked with building awareness of the opportunities within the state.
“There’s in no doubt that through the new brand of Brand South Australia we have been able to increase the awareness and geographic location of South Australia in a consistent and coordinated approach,’’ he said.
Next week delegates who attended the Shandong Forum will come together again with Premier Jay Weatherill who will outline the next steps in trade and investment outcomes.