Australian exporters welcome news trade pact with China will commence before Christmas
A wish, following news that the China-Australia Free Trade Agreement (ChAFTA) will enter force on 20 December.
The timing of the ratification will deliver a rapid double tariff cut – the first upon ChAFTA’s implementation and another on 1 January 2016.
David Minnis, chairman of the Australian Horticultural Exporters Association (AHEA), said the move would bring immediate and long-term benefits to trade into the People’s Republic.
“Australian fresh horticulture exporters welcome ChAFTA as low cost labour countries such as New Zealand, Peru and Chile have had existing FTAs with zero duties for some time hindering our competitiveness,” Minnis explained. With ChAFTA in place, exporters’ hands are no longer tied and the Australian horticultural industry will able to flourish and grow.”
China’s proximity and growing middle class make it a major focus market for Australian exporters, however, direct fresh produce shipments into the Asian nation have been limited by high tariffs and difficult quarantine protocols.
AHEA data suggests Australian shipments accounted for 0.2 per cent of China’s citrus trade in 2015, excluding volumes sent to Hong Kong, while direct programmes for Australian grapes (27 per cent tariff) and apples (22 per cent tariff) continue to develop off low bases. Mangoes, Tasmanian cherries and plums remain small niche products relative to the market size.
ChAFTA will go some way to boosting Australia’s presence in the market, with 10 to 30 per cent tariffs on most fruit, vegetable and nut products set to be eliminated over the next four years. Citrus is one of the exceptions, with 11 to 30 per cent tariffs on various lines to be eliminated within the next eight years.
ChAFTA does not take into consideration that Australia does not have direct access into the Chinese market for a number of products including avocados, blueberries and lychees. AHEA executive director, Michelle Christoe, hoped ChAFTA would provide a platform for further market access and protocol discussions.
“FTA’s are critical to the future of horticultural exports,” Christoe explained. “They enable the industry to be on an equal playing field with competing countries and encourage two way trade between nations.”