Australia's free trade agreement with China would see wine tariffs gone by 2019

By Erin Smith

Published: 17 November, 2014

Australia has signed a declaration of intent for a free trade agreement with China today after 10 years of talks between the two countries which is set to benefit Australian farm exporters, including wine producers.

Australia AustraliaAustralia has sealed the deal with China and will have a signed a free trade agreement in 2015 with its largest trading partner.

The China-Australia Free Trade Agreement (ChAFTA) is set to be signed in 2015 once the final draft of the agreement is legally approved and translated, according to a statement from Australia's department of foreign affairs and trade.

"This is a very good day for both our countries. In particular it is a very good day for Australia," said Australia's Prime Minister, Tony Abbott.

Wine exports, which currently move more than AUD$200 million worth of wine to China each year, are currently paying between 14% and 30%. With the new free trade agreement, the tariffs would be eliminated by 2019. According to a statement released by the minster for trade and investment, Andrew Robb, "tariffs on Australian wine of 14% to 30% will go within four years."

"It opens the doors to Australia and it opens the doors to China. Obviously what this agreement means is more jobs. Already two way trade between Australia and China stands at $150 billion a year. China is the largest goods export destination at $95 billion in 2013. China is Australia's largest service market at $7 billion in 2013," said Abbott.

The deal which was signed today in Australia will open the Chinese market to Australian agricultural produce and provide opportunities for up to 40 Australian services sectors while making it easier for Chinese investment in Australia.

The trade deal is part of an on-going effort for Australia to continue to diversify its economy and become less reliant on mineral exports and grow its exports of food, agricultural and services industries.

This is the third free trade agreement this year for Australia, which signed an agreement with Japan and South Korea earlier in 2014. Robb said the three free trade agreements signed in 2014 will now promise free trade for the three largest export markets for Australian goods.

Robb said: "Building on trade deals already concluded with Korea and Japan, ChAFTA forms part of a powerful trifecta of agreements with Australia's three largest export markets that account for more than 61% of our exports of goods. More than 85% of Australian goods exports will be tariff free upon entry into force, rising to 93% in four years. Some of these goods are currently subject to tariffs of up to 40%."

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