After a long gestation, China and Australia are expected
sign a free trade agreement (FTA) this afternoon. For Australia,
this agreement holds the promise of securing a greater share of the
world's largest market as well as deepening bilateral
Reports suggest China is agreeing to a broad range of
concessions that will exceed the estimated A$18 billion of benefits
to Australia over 10 years.
But what does the FTA mean for Australian businesses on
the ground? While "$A18 billion over 10 years" sounds
impressive, the key question is how will that benefit be realised
Australian agriculture, horticulture and services industries are
likely to be the big local winners from the FTA - reaping the
benefits of lower tariffs and more open access to China's
Improved access for health, education and financial services, as
well as lower tariffs for dairy, beef and wine are particularly
encouraging. Over time, it's expected up to 95% of
Australia's exports will enter the Chinese market tariff
But while the FTA is a giant step forward in trade relations
between China and Australia, it is not an end in itself. The FTA is
a platform that gets us an entry into the most promising market in
the world. But it doesn't guarantee China's consumers or
businesses will be interested in buying what we have to offer.
"Brand Australia" needs to emerge. In a crowded global
market of producers looking to engage with the world's fastest
growing market Australia needs a focused strategy with long and
medium term objectives that are realistic, achievable but not easy.
It requires the coming together of the best brains in government
and industry and a shared understanding of who we are, what we want
to be famous for and how that fits with the "Chinese
Can we build out products like wine (now worth some $200
million) and other horticultural products, seafood and other goods
to include health and aged care service providers or even financial
What should our marketing pitch be to China and how can we
leverage off our strengths? How can we use the FTA as a platform to
build another robust, substantial and enduring export market?
In building a strategy, Australia can take lessons from New
Zealand which has had an FTA with China since 2008. For New
Zealand, the FTA has been a remarkable success, with the Kiwi dairy
industry being the primary beneficiary. Exports to China quadrupled
in the four years between 2008 and 2012 and China has already
overtaken Australia as New Zealand's largest export market.
Behind this export growth is, "NZ Inc.," the brand
that markets New Zealand's export product. It's a clean,
green image that holds real currency in China.
So, now after 10 long years Australia will have a China FTA too.
What will Brand Australia mean to China's rising middle class?
By 2015, more than one quarter of the Chinese population is
expected to earn between 100,000 and 200,000 RMB ($A19,000 to
$38,000). Will Australian-branded products and services feature in
In order to fully capitalise on the opportunity that an FTA with
China represents, the hard work must now begin. In coming articles
we will explore the detail of what the proposed FTA means and how
Australian business can capitalise on this historic initiative.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The TPP could have a significant positive impact on the investment and financial services of Australia and Singapore.
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