China and Australia have signed a declaration of intent on a landmark free trade deal that took more than a decade in the making, opening up markets worth billions to Australia and loosening restrictions on Chinese investment.
The deal will open up Chinese markets to Australian farm exporters and the services sector while easing curbs on Chinese investment in resource-rich Australia.
Australia is attempting to transition from a reliance on exports of minerals such as coal and iron ore to expanding its food and agricultural exports to a growing Asian middle class, moving from a “mining boom” to a “dining boom”.
China is already Australia’s top trading partner, with two-way trade of around $130 billion in 2013.
Once the agreement is fully implemented, 99.9 percent of Australia’s current resource, energy and manufacturing exports will enjoy duty free entry into China.
The agreement also gives Australian dairy farmers tariff-free access within four years to China’s lucrative infant formula market, minus any of the “safeguard” caps that currently restrict competitors from New Zealand.
Wine makers, currently selling more than A$200 million worth of goods to China each year despite tariffs of between 14 and 20 percent, will also see tariffs eliminated over four years.
Tariffs on horticultural products, seafood and other goods accounting for 93 per cent of Australian exports by value will also be reduced to zero by 2019.
The deal also capped a year of trade achievements for Prime Minister Abbott, following free trade agreements with Japan and South Korea.