Free Trade Agreement History in the Making: Australia and China Collaborate
Free Trade Agreement History in the Making: Australia and China Collaborate
After more than a decade of ground work, China and Australia have signed a landmark FTA which has expanded ties between the Asian superpower and the Land Down Under. This deal termed by Australia as the best ever is a cooperation between Beijing and a Western nation which is unprecedented. This deal will open China’s markets to Australian farm exporters, says Reuters. Curbs on Chinese investments in resource rich Australia are another massive benefit of this FTA or free trade agreement.
The MoU for this agreement was signed by Australia’s PM Tony Abbot and Chinese premier Xi Jingping. The location of the signing was a ceremony at the Canberra parliament."This has been a 10-year journey, but we have finally made it," Abbott said, as per a Reuters report. His Chinese counterpart, President Xi also pledged to depend ties with Australia while stressing the use of diplomacy to resolve territorial disputed with neighbouring nations.
"As long as we have our long-term and the larger interests in mind, increase positive factors and remove obstacles we will certainly forge a closer and more comprehensive strategic partnership between us," Xi said.
China is currently the top trading partner of Australia. Two way trade between the nations amounts to USD 130 billion last year. Around 14 commercial agreements were signed between companies on the 17th of November by both the nations in a deal that amounted to USD 17.56 billion. What was extremely heartening was the leaders also aimed to combat climate change through technology.
As Reuters remarks, the aim of the Australian nation is to move from reliance on coal mining to expansion of food and agricultural exports to a growing Asian middle class. Reuters says the move is from a “mining boom” to a “dining boom”. Through this free trade agreement, Australian dairy farmers will have tariff free access within 4 years to the lucrative infant formula market in China minus the safeguard caps that are holding back competitors. Wine makers from Australia will also see elimination of tariff over the 4 year period.
In addition,a 3% coking coal tariff will be immediately removed and a 6% tariff on thermal coal will be removed within 2 years. This is a massive achievement for Australia’s PM Abbot as FTAs with Japan and South Korea were also gained this year. The Aussie resolve to work hard and build ties with neighbouring Asian nations is likely to play rich dividends, especially with China in the equation.
China has been developing close ties with Russia and the US alongside- a no mean feat considering the differences that have emerged between the two over the Ukraine issue. China has also emerged as a leader among the BRIC nations and it is closing in on status as not just an Asian, but also a global superpower. China’s strength is its manufacturing sector. To match this and exceed it, India’s manufacturing sector has to experience a similar boom. If the Make in India campaign succeeds in jumpstarting the manufacturing sector, India will have achieved economic prosperity.
