Australia and China have today signed a historic free-trade agreement that will see tariffs slowly phased out for major farming sectors including dairy, beef, sheep and horticulture.
The deal was sealed in Canberra today by trade minister Andrew Robb and Chinese commerce minister Gao Hucheng after a decade of negotiations.
According to the agreement, tariffs will be progressively abolished for Australia’s $13 billion dairy industry.
Beef and sheep farmers are also expected to benefit from the phased abolishment of tariffs ranging from 12-25 per cent in the livestock industry.
All tariffs on Australian wine and horticulture will also be eliminated.
Australia’s peak farming body, the National Farmers Federation (NFF) welcomes the agreement and sees it as a huge step forward to improving international market access to Australian agricultural goods.
“It’s an enormous achievement that will deliver increased options and improved returns for Australian farmers,” says NFF president Brent Finlay.
“While the agreement is a major step forward in reducing tariffs for animal proteins and horticulture products down to zero, as it currently stands it does not deliver outcomes for all agricultural industries.
“This agreement must provide a platform to continue development of trade in these products which we all know will be in demand in China in coming years.”
Over time, the agreement will ensure that 95 per cent of Australian goods exports will be tariff free.
In addition to agricultural products, tariffs will also be removed on almost all Australian resources and energy products, including the eight per cent tariff on aluminium oxide. Tariffs on cooking coal and thermal coal will also be removed.
Australian businesses and consumers also stand to benefit from tariff removals on Chinese exports including white goods and electronics, meaning lower prices and greater availability of Chinese products.
China is currently Australia’s largest trading partner, with total trade worth almost $160 billion in 2013-14.
Both parties are currently working to complete legal and parliamentary processes in the respective countries to bring the agreement into force as soon as possible.