China Australia Free Trade Agreement Officially Signed

On 17 Jun 2015, China and Australia officially signed a Free Trade Agreement (FTA) after 10 years of negotiation. It’s a historic agreement between the two nations that will see many of the most significant barriers to trade removed, allowing greater market access to both sides and exerting a positive impact on bilateral trade. Products accounting for 85.4% of the total export volume between the two countries will be exempt from tax after the FTA comes into force.

Tax reduction and exemptions of several food products

Beef	Australia was the first beef exporter to China, and now occupies 56.8% of the total share of the imported beef market in China. Upon signing the FTA, China sets a 10-year transitional period to phase out the tax on Australian beef from the current average 15.5% to 0. China will also establish a special safeguard mechanism to ensure the import of beef from Australia.
Dairy product	Australia is China’s fourth largest dairy exporter accounting for 4.4% of the total share of China’s imported milk products. For this sector China has set a 5, 10 and 12-year transitional periods for different product categories currently subject to the existing average 12.3% tax which after the transition period will drop to 0%. After 12 years the tariff levied on milk powders will be reduced from the current 10% to 0.
Wine	Australia is the second largest exporter of wine to China, accounting for a 15.2% share of the imported wine market. A 5 year transition period will be granted for wine. Tax will be reduced from the current 34.7% to 0.
Shrimp, crab and abalone	In 2013, China imported 220 tons of crabs and 314 tons of abalones from Australia. These products will be subject to a 5-year transition period.
Orange and orange juice	After a 9-year transition period, the tariffs levied on oranges will be reduced from 11% to 0. After an 8-year transition period, the tax on orange juice will drop from 22.5% to 0%.