The Victorian economy is set to enjoy significant gains from the China-Australia Free Trade Agreement (ChAFTA), concluded by the Australian Government today.
“ChAFTA will give Victorian exporters levels of access into China that they have never previously enjoyed,” Trade and Investment Minister Andrew Robb said.
“ChAFTA secures Australia’s position in a market where some key competitors already have preferential access. A broad range of Victoria’s industries will benefit, from beef, dairy, wine, horticulture and seafood, right through to our world-class services sector,” he said.
China is already Victoria's largest goods export market, taking 19 per cent of exports in 2013, worth over $4 billion.
ChAFTA will mean increasingly more profitable exports for Victorian farmers, and more high quality Victorian produce on the plates of the emerging Chinese middle class.
The Agreement signals a bright future for Victorian dairy farmers, who last year produced 85 per cent of Australia’s dairy exports; worth $2.3 billion, which included exports to China worth $369 million. Tariffs of up to 19 per cent on all dairy products will be phased out completely on things like infant formula, liquid milk and manufactured products. Tariffs on beef and lamb of up to 25 per cent will also be progressively eliminated.
Wool producers will be able to access an Australia-only duty-free quota in addition to the existing WTO quota.
All vegetable, fruit and nut tariffs will go, which is good news for Victoria’s horticulture industry – Australia’s largest exporter of horticultural goods in 2013-14. And Victorian wine will be an even better buy with tariffs ranging from 14-30 per cent eliminated over four years.
The elimination of tariffs on beef imports within 9 years presents a fantastic opportunity for Victoria’s beef farmers who are already making the most of export markets, ranking second behind Queensland as the largest meat exporter in 2013-14.
Results for manufactured goods are equally exciting. For example as a national leader in health and medical technologies, Victoria is well positioned to meet the healthcare demands of China’s rapidly growing middle class.
“Victorian producers and exporters of vitamins and sophisticated orthopaedic devices to China will have a real advantage over European and North American competitors,” Mr Robb said.
ChAFTA will also provide Victoria’s resource and energy sector with significant opportunities by removing tariffs or the locking-in of zero tariffs on Victorian resources exports, such as coal, gold and mineral sands.
“I am fully aware of the sensitivities of some Victorian manufacturers,” Mr Robb said, noting that Australian tariffs on many Chinese products will be phased out to allow industry to adjust. Importantly, Australian producers will continue to have full access to trade remedies available under the WTO including anti-dumping and countervailing measures.
Victorian small and medium sized businesses will benefit from cheaper inputs due to the elimination of Australia’s remaining tariffs on a range of goods including light trucks and vans. Similarly, Victorian consumers will benefit when purchasing Chinese manufactured goods, including textiles, clothing, footwear and furniture.
Mr Robb said ChAFTA provided China’s best-ever trade deal on services.
“It will be of enduring benefit to Victorian services suppliers, creating new opportunities in financial services, legal, engineering, architecture and a range of other professional services, where Victorian suppliers will now be even more competitive.”
“Last year there were more than 44,000 international student enrolments from China in Victoria, so China’s commitment to list all Australian private higher education institutions on the Ministry of Education website will only serve to bolster Victoria’s world-class education sector,” Mr Robb said.
“At least 16 Victorian private sector institutions will lift their profile and endorsement in Australia’s largest student market.”
Investment commitments should provide a tremendous boost to Victoria. The increased investment threshold for Chinese investors will help create jobs and support growth in the state, and at the same time Australian businesses will have greater opportunities to invest in China.
Mr Robb said, “Victoria already has a very strong reputation in China for quality, innovation and world-leading expertise. ChAFTA gives Victorian businesses an additional edge in China, and it opens the door for greater engagement at home. It’s a great deal overall.”
- Trade Minister's Office: (02) 6277 7420
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