South Australia is set to reap significant benefits following the official signing of the China-Australia Free Trade Agreement (ChAFTA) in Canberra today.
The removal of tariffs in key industries and increased market access will create opportunities for local businesses.
Minister for Investment and Trade Martin Hamilton-Smith said the formal signing of the ChAFTA by Federal Trade Minister Andrew Robb and his Chinese counterpart, Gao Hucheng, sets in motion a full rollout of the agreement later this year.
“The signing of the China-Australia Free Trade Agreement is a historic moment and one that permits the detail of the Agreement to be released immediately,” Mr Hamilton-Smith said.
“This creates an understanding of how South Australian companies can benefit.”
Today’s signing comes less than a month after South Australia’s largest ever trade delegation travelled to China to develop new relationships and business opportunities and enhance existing ones.
“A strong signal has been sent that South Australia is serious about doing business across all sectors in China – the recent mission resulted in the signing of 25 memorandums of understanding,” Mr Hamilton-Smith said.
“This included Barossa Valley winemaker Seppeltsfield signing a deal to export 1.5 million litres of its premium wine to China every year, tripling the company’s sales to China.
“Once the ChAFTA comes into effect, tariffs on wine that range from 14% to 20% will be eliminated within four years giving local producers a level playing field with other ‘new world’ producers, such as Chile and New Zealand.
“Other agreements signed during the China trade mission involved the medical, primary production, service, and education industries, to just name a few.
“During the mission, the Stehr Group signed its first deal to export 40 tonnes of tuna to China, worth about $1 million.
“Another example is Elwa, which signed a $1.25 million contract to supply their advanced manufacturing products to Wanhua Modular Buildings,” Mr Hamilton-Smith said.
The ChAFTA will need to pass through the Chinese and Australian parliaments before coming into full effect, which the Department of Foreign Affairs expects to occur as early as October.
“It’s understood that the first year’s scheduled tariff reductions will come into effect immediately upon the Agreement coming into force, and the second year’s reductions on January 1, 2016, equating to a double dividend within a matter of months.
“China is by far South Australia’s largest and most important export market, making up almost a quarter of the value of all exports in the 12 months to April, and the ChAFTA will further consolidate this relationship into the future,” Mr Hamilton-Smith said.