After weeks of heated political noise, the China
Australia Free Trade Agreement (ChAFTA) is a step closer to being
implemented with the enabling legislation introduced into the
Australian Parliament on Wednesday 16 September.
The introduction of the suite of legislation was unexpected,
given the Joint Standing Committee on Treaties has not yet issued
its report in relation to the ChAFTA. The Committee is due to
report in mid-October.
However, the Minister stated that in view of the Parliamentary
sitting schedule, the benefits to Australian businesses of a double
cut to tariffs on exports to China should the Agreement enter into
force before the end of the year, and the importance to the
Parliament and the community of seeing the changes that are
required to be made under this Agreement, the Government decided to
introduce the implementing legislation now.
There was significant focus throughout the Explanatory
Memorandum (EM) on the benefits to Australian exporters.
The EM really makes the case for benefits to Australia's
exporters. It notes the significant tariff barriers and limitations
that Australian exporters face when seeking to take advantage of
the growing Chinese market.
China's average applied tariff in 2013 was 9.9%. However,
for agricultural products, this increases to an average tariff of
15.6%. In respect of pharmaceuticals, mining machinery and medical
equipment it increases to tariffs of up to 47%. The elimination of
the most tariffs will give a real opportunity to Australian
We also have a clear statement about the preferred timing of the
Government. The EM states that "in close consultation with the
Government of China, the Australian Government is working towards
entry into force of the Agreement before the end of 2015 in order
to maximise the business gains" for both countries. Unless
Labor and others in the Senate do move to block the ChAFTA, this
gives the first definitive statement that we can expect ChAFTA to
be in place by the end of this year.
The political issue of recent times has been the access of
Chinese citizens to jobs in Australia. The enabling legislation
will provide guaranteed access to Chinese citizens for the
intra-corporate transferees and independent executives for up
to four years (including executives, managers and
contractual service suppliers for up to four years; including
guaranteed access for up to a combined total of 1,800 per year in
four occupations: Chinese chefs, WuShu martial arts coaches, TCM
practitioners and Mandarin language tutors (subject to meeting
standard immigration requirements);
installers and servicers for up to 3 months; and
business visitors for up to 90 days, or 6 months for business
visitors who are service sellers.
Labour market testing will not apply to these categories only.
Otherwise, Australia's migration laws as they apply to Chinese
citizens remain unchanged, as do Australia's workplace laws and
health and safety obligations.
The pressure is now on the opposition and cross bench in the
Senate to decide whether they will indeed block this
The feedback we receive from the business and trading community
is overwhelmingly in favour of the ChAFTA.
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