Aussies claim their China FTA is better than ours

Australia and China have completed free-trade agreement negotiations, in a deal which Australian government sources say secures better access for the country's dairy exports than New Zealand's.

Australian trade and investment minister Andrew Robb and Chinese commerce minister Gao Hucheng will sign a declaration of intent this afternoon, after Prime Minister Tony Abbott and President Xi Jinping concluded talks in Canberra, the Australian leader said in a statement. The deal comes some six years after New Zealand inked a free-trade deal with Asia's largest economy, the first western developed nation to do so, leading to an explosion of two-way trade to make China New Zealand's largest market.

Australian media reports quote unnamed government officials claiming Australia gets a better deal than New Zealand, with dairy exports not subjected to the same protective safeguards that apply to Kiwi dairy exports. New Zealand has some tariffs on its dairy exports, which can be reinstated if volumes breach a certain quota. Australia expects to only have this quota on whole milk powder, according to ABC. 

Mr Abbott said the deal was "at least as good" as New Zealand's FTA which China and this country's previous Labour-led government signed in 2008.

Tariffs on New Zealand infant milk formula, casein, yoghurt and whey have been gradually phased out, with tariffs remaining longer on more sensitive products like cheese, butter and liquid milk, where they are being phased out over 10 years, and tariffs on whole and skim milk powders phased out over 12 years.

Australia and China inked their deal following New Zealand and South Korea last weekend securing a free-trade deal  that's expected to cut $65 million in tariffs immediately from the $230 million currently annually levied by New Zealand's sixth-largest export market. The deal, which was announced on the sidelines of the G20 Leaders' Summit in Brisbane, will initially eliminate tariffs on 48% of current New Zealand exports, with duties largely eliminated within 15 years. Two-way trade between the countries is worth about $4 billion.

The deal, for which negotiations began in 2009, has had a mixed reception from the New Zealand agricultural lobby, with Federated Farmers calling it "better than nothing" and "the absolute bottom line for the quality of future agreements."

“We appreciate how difficult it has been to reach an agreement with Korea, and are pleased to now be on a level playing field with our trade competitors in that market,” William Rolleston, Federated Farmers president said in a statement. “While we weren’t the first cab off the rank, and not everything has been included in this agreement, a $65 million reduction in tariffs in the first year is meaningful to our primary industries."

In social media postings, a former diplomat and trade negotiator, Charles Finny, praised the deal but noted that there were “quite a few exclusions and the milk powder outcome is far from free trade.” Full detail of the text is months away as it has yet to be translated into Korean.

(BusinessDesk)