Australia-China FTA Negotiations

Subscriber Update

Fourth round of negotiations

3 March 2006

The fourth round Australia-China FTA negotiations took place in Canberra from 27 February to 2 March 2006. This was the first substantive negotiating meeting to be held in Australia.

The Chinese delegation consisted of 29 representatives from a wide range of key agencies of interest to us, including the Ministry of Commerce (lead agency), National Development and Reform Commission (an important central agency with broad economic responsibilities), Ministry of Agriculture, Ministry of Construction, Ministry of Education, Ministry of Finance, Ministry of Information Industry, Ministry of Labour and Social Security, General Administration of Customs, General Administration of Quality Supervision, Inspection and Quarantine, China Banking Regulatory Commission, China Insurance Regulatory Commission, State Administration of Foreign Exchange, and the State Intellectual Property Office. The Australian delegation also included representatives from a wide range of relevant agencies.

The fourth meeting followed three earlier meetings covering the information exchange phase of the negotiations. Discussions at this meeting covered a range of areas including agriculture, SPS, trade in goods, rules of origin, customs procedures, government procurement, technical barriers to trade, services and investment including education, financial services, telecommunications, e-commerce and movement of people, intellectual property, transparency, competition policy, dispute settlement and other institutional provisions.

Our aim for this meeting was to obtain agreement on how both sides would approach negotiation of the provisions of the FTA (that is, the text of the agreement) and of the market access concessions we will be asking of each other in areas such as tariffs on goods and market access for services and investment (that is, the market access negotiations).

Overall, progress was reasonable but mixed. The fourth meeting has provided a solid basis for substantive discussions to begin at the fifth meeting on virtually all possible provisions of the text of the FTA. 

Some areas of importance to Australia, such as investment and government procurement, remain sensitive for China and more work will be needed to develop an approach for negotiations that is satisfactory to both sides. In some areas, Australia needs more information on China's policies (for example, industrial subsidies and agricultural domestic support).

Australia continues to put forward specific industry concerns that illustrate our real commercial interests in the FTA negotiations.

At the next meeting, discussion of draft texts of most parts of an agreement should begin. Of course, as this negotiation is proceeding as a single undertaking, nothing will be agreed until everything is agreed. That is, all discussions will be without prejudice to final decisions on what will or won't be included in the agreement.

The commencement of the market access negotiations in goods, agriculture and services will be somewhat slower than Australia had hoped. Nevertheless, it remains the aim of both sides to begin negotiations on goods and agriculture around the middle of the year.

In services, a key area for Australia, there are significant differences between the approaches of Australia and China. Further discussion is required to reach agreement on how to approach the market access negotiations in a way that is likely to produce the best outcomes. Australia's aim is to begin market access negotiations as quickly as possible, and to proceed more or less in step with the negotiations in other areas.

The Chinese side noted that the negotiations with Australia are complex and represent a level of ambition in an FTA that is unprecedented for China. The Chinese side reaffirmed China's strong, political-level commitment to the negotiations and to produce mutually satisfactory outcomes.

The Australian side noted that the negotiations would be complex and challenging but Australia would approach them constructively. The Australian side confirmed our willingness to negotiate for as long as it took to achieve high-quality, commercially valuable outcomes in the form of a single undertaking.

Both sides confirmed that negotiating rounds will take place roughly every three months. They agreed that the next round of negotiations will take place in Beijing, tentatively scheduled for late May

For more information, contact the China FTA Task Force:

For information on Australia's existing FTAs.