China and Australia signed a free trade agreement on Wednesday [17 June 2015] after a decade of negotiations, covering areas including a simplified review procedure for investments, most-favored-nation status and easier market access to service sector. Under the agreement, 85.4 percent of goods traded between both sides will cut tariffs to zero immediately. About 97 percent of Australian exports to China will be tariff free following the designed timeline step by step. There will include many agricultural products such as beef, dairy and wine. Australia will eventually reduce tariffs to zero on all goods imported from China…Full Article: China Daily June 2015

Key Point

  • Chinese tariffs for Australian beef will be eliminated within nine years.

ChinaAg Comments

  • In November 2014, China and Australia signed a preliminary free trade deal.
  • In 2013, mainland China agricultural imports from Australia totaled US$8.3 billion and primarily consisted of fibers, raw hides, meat, oilseeds, cereals, and wine. In 2013, mainland China imported US$1.8 billion worth of Australian wool (not card/combed) and US$1.6 billion worth of cotton (not carded/combed). Combined, these two commodities accounted for 43% of all agricultural imports. After fibers, China imported US$607 million worth of rapeseed and colza seeds, and US$586 million worth of frozen beef.
  • In 2008, China and New Zealand signed a FTA that set in place the removal of tariffs on 96% of New Zealand exports. This removal has been staggered over time, with certain agricultural exports being tariff free by 2012-2013 (infant formula, wine, apples, etc.), 2016 (edible offal, oranges, beef, etc.), 2017 (butter, cheese, liquid milk), and 2019 (whole/skim powdered milk). New Zealander wheat, sugar, and rice will not have receive reduced tariffs.
  • In 1971 (a year before US President Nixon’s visit), Australia’s Prime Minister Edward Gough Whitlam visited China and met with Zhou Enlai (Premier of the People’s Republic of China). This meeting later resulted in Australia’s official recognition of the PRC.

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