ChAFTA gives bright outlook to Aussie construction and manufacturing

The agreement was signed in the presence Prime Minister Tony Abbott and Chinese President Xi Jinping, formalising the conclusion of the China-Australia Free Trade Agreement (ChAFTA) negotiations. Both sides have undertaken to prepare legal texts of the Agreement for signature.

ChAFTA lays an historic foundation for the next phase of Australia’s successful economic relationship with China. Upon entry into force, the Agreement will unlock significant commercial opportunities for Australia.

China is Australia’s largest export market for both goods and services, accounting for nearly a third of total exports, and a growing source of foreign investment.

Construction and engineering services

Under the agreement, China will provide new market access to Australian companies undertaking joint construction projects with Chinese counterparts in Shanghai. Australian companies will be exempted from business scope restrictions, allowing them to undertake a wider range of commercially-meaningful projects.

Manufacturing services

China has made its first ever FTA commitment on manufacturing services, guaranteeing access for wholly Australian-owned companies to provide contract manufacturing services covering a wide range of manufactured products.

Speaking on the agreement, Mr Abbot said “As a result of my meeting with His Excellency Xi Jinping, President of the People’s Republic of China, in Canberra this morning, I am pleased to announce the completion of negotiations for a China-Australia Free Trade Agreement.”

Australian businesses will have unprecedented access to the world’s second largest economy. It greatly enhances Australia’s competitive position in key areas such as agriculture, resources and energy, manufacturing exports, services and investment.

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 per cent of Australia’s exports of goods.

More than 85 per cent of Australian goods exports will be tariff free upon entry into force, rising to 93 per cent in four years. Some of these goods are currently subject to tariffs of up to 40 per cent.

On full implementation of ChAFTA, 95 per cent of Australian goods exports to China will be tariff free.

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