On June 17, the Australian Minister for Trade and Investment Andrew Robb and Chinese Minister of Commerce Gao Hucheng signed the final text of the China-Australia Free Trade Agreement (ChAFTA), precisely seven months after negotiations were concluded in November 2014. The agreement will undergo Parliamentary review prior to being entered into force.
The ChAFTA will eliminate Chinese tariffs on 85% of Australian goods exports to China on initial implementation, rising to 95% on full implementation. Reportedly, Australia will gradually eliminate tariffs on all Chinese imports. Currently, two-way trade between China and Australia is worth AU$160 billion (C$152.6 billion). Major benefits touted by the Australian government include the eventual elimination of Chinese tariffs for Australian dairy and coal exports, as well as enhanced market access for Australian legal, financial, tourism, and health services providers.
Notably, the ChAFTA includes an MOU for Investment Facilitation Arrangements (IFA), which will allow Chinese-owned companies registered in Australia to negotiate for temporary skilled visas for Chinese workers for infrastructure projects over AU$150 million (C$143 million). A 2014 report on Chinese FDI in the United Kingdom, prepared for the All-Party Parliamentary Group on East Asian Business, identified a “restrictive visa regime” and a shortage of labour with the required skills and qualifications as barriers to investment. The IFA that will be implemented may be a response to similar issues in Australia.