The Australian is today reporting that Australia is on track to sign free-trade agreement with China at about the time of the November G20 meeting in Brisbane, after the latest round of negotiations left senior ministers believing the deal can be clinched by the end of the year.
The Oz story hedges bets somewhat about where the expected signing will take place. Australian PM Tony Abbott and Chinese president Xi Jinping will meet twice in November (At the Beijing Apec and in Australia when Xi takes part in the G20 meeting)
Australia’s Trade Minister Andrew Robb is quoted as saying further delays would only exacerbate the advantages of competitors such as New Zealand.
“With the New Zealand dairy industry increasing its revenue by $A3.7bn to the end of last year, since completing its free-trade agreement and improving dairy access, compared with a $173m increase for Australian dairy farmers, the government is facing calls to secure significant gains in agricultural access. Robb was due to tell the Dairy Australian Investment Forum that Australian dairy exports are approaching a value of $A500m and dairy is Australia’s strongest growth market in China. But he will argue that dairy is much more dominant in the New Zealand economy and Australia’s export profile is more diverse.”
The Australian goes onto say, as with NZ which sealed its FTA with China in 2008, the Chinese have proven to be tough negotiators. Australia wants barriers but for entry to the Chinese market for agriculture and services. China wants improved investment access, tariff reductions on household items such as electronics, and gains on people movements to Australia. Australia’s existing most favoured nations agreements have underpinned why it is offering China the same $A1.078 billion foreign-investment screening threshold for private investment as that given to South Korea, Japan, the US and New Zealand. State-owned enterprises will all be subject to screening regardless of value.