After more than a decade of negotiations, China and Australia have inked an ambitious free trade agreement to facilitate market access between the two countries.
Trade Minister Andrew Robb and his counterpart Chinese Commerce Minister Gao Hucheng formally signed the landmark document - China-Australia Free Trade Agreement (ChAFTA) at the National Gallery in Canberra.
The agreement, once in full force, will increase 85 per cent of all Australian exports entered China tariff-free to 95 per cent .
China is Australia's biggest trading partner and growing source of investment with the two-way flow exceeding $160 billion per annum.
Prime Minister Tony Abbott called the deal "a momentous and historic day for our two countries".
"It will change our countries for the better, it will change our region for the better, it will change our world for the better," Mr Abbott said.
"This agreement will give our nations unprecedented access to each other's markets."
The agreement completes a historic trifecta of trade agreements with Australia’s top three export markets – China, Korea and Japan, accounting for more than 55 per cent of the country’s total goods and services exports.
The only months old agreements with Korea and Japan are already seeing increased exports compared to a year ago –a 26 per cent increase in frozen beef prime cuts to Korea and a massive 84 per cent increase in the same product to Japan.
According to Mr Robb, the Agreement secures better market access for Australia to the world’s second largest economy, improves Australia’s competitive position in a rapidly growing market, promotes increased two-way investment and reduces import costs.
Tariffs will be also eliminated on a wide range of Australian manufactured goods, including pharmaceutical products and car engines.
The minister said Australia´s tourism industry is a big winner from the agreement.
"ChAFTA will grow our world-class tourism sector at home and increase opportunities in China, through high-quality services and investment outcomes,” Mr Robb said.
China is Australia’s second largest inbound market by arrivals – more than 750,000 last financial year - and largest source of tourism expenditure.
Gao said it was a “comprehensive, high-quality and balanced agreement” that was a milestone in relations between Australia and China.
The Agreement will enter into force after the completion of domestic legal and parliamentary processes in China and Australia, including review by the Australian Parliament’s Joint Standing Committee on Treaties, and the Senate Foreign Affairs, Defence and Trade References Committee.
