Chafta... Good for Business
It’s been 100 days since the Free Trade Agreement with China was signed. It’s a deal that’s been 10-years in the making, and now that it’s been done, there appears to be mixed views on it. Politics and media aside, this is our stripped back overview of the pros on what the China-Australia Free Trade Agreement (ChAFTA) means for business.
Broadly speaking, the ChAFTA covers three elements: elimination/reduction in trade tariffs, easing of regulatory obstacles and promoting foreign investment, and provides a win-win scenario for both Countries.
Some key points for Australia:
For agriculture exports, the Australian Government has secured elimination or reduced tariffs. On full implementation of the Agreement, 99.9 per cent of Australia’s resources, energy and manufacturing exports will enjoy duty free entry into China.
China buys more of Australia’s agricultural produce than any other country. For a market worth $9 billion to Australian farmers^, the ChAFTA should provide Australia with an advantage over major agricultural competitors, specifically the benefits already enjoyed by New Zealand and Chile through their FTAs with China.
The majority of Resources, Energy and Manufactured products will enter China duty free, with most of the remaining tariffs removed within four years. Upon full implementation of the Agreement, 99.9 per cent of Australia’s resources, energy and manufacturing exports will enjoy duty free entry into China.*
For businesses that deliver services, the ChAFTA provides for better market access. This can create new or improved opportunities for businesses like banks, insurers, law firms and professional services suppliers. It also provides for significant opportunities for health, aged care, tourism and telecommunications services businesses in China.
From an imports perspective, with similar tariff reductions into Australia, should mean cheaper prices for Australians at the checkout.
There are also improved opportunities for investors in both Countries.
As a recruitment business that has been helping Australians into work for over 16-years, we see lots of positives for the Western Australian economy. It is hard to see through the complex and opposing points of view on “whether Investment Facilitation Agreements enable an increased level of access for Chinese workers” to find the reality. All we can say is that in our experience our clients seek the best qualified and suited candidates, and it is up to Australian workers to continue to prove their value to any employer.
Australia’s continued prosperity is contingent on access to foreign trade for goods, services and capital investment. The ChAFTA provides significant opportunities to create jobs, lift productivity and compete on the international stage across many industries, not just resources.
