Australia-China FTA Negotiations

Seventh round of negotiations

20 December 2006

The seventh round of the Australia-China FTA negotiations was held in Canberra from 11 to 15 December 2006. Australia and China tabled their requests and offers on market access for goods (including agriculture) and lists of barriers affecting market access requests on a range of services.

China and Australia also agreed that negotiations on barriers to investment would begin at the next round, tentatively scheduled for the last week of March in Beijing.

The details of the market access offers and requests made at the seventh round are government-to-government and therefore “in confidence”. But in broad terms, Australia tabled a high-quality offer on goods that puts Australia in a good position to insist on a liberalising response from China.

Australia’s offer took into account the pressures of Chinese competition on some Australian industries. For example, our offer did not include any acceleration of the tariff reductions in our existing industry plans for the textile, clothing and footwear sectors or for the passenger motor vehicle sector.

We believe China’s offer can be improved, particularly on agriculture. We have asked the Chinese to come back with a substantially improved offer before the next round so detailed line by line tariff negotiations can begin.

We also began detailed negotiations on specific non-tariff barriers such as standards and testing, trading rights and other matters. We have raised these measures on previous occasions but at this meeting we began a systematic approach of raising each measure as a specific request and seeking a particular outcome. We will continue to press our case on these and other non-tariff measures at subsequent meetings.

At the seventh round we also continued our discussion on text for the proposed free trade agreement covering sanitary and phytosanitary measures (SPS) and technical regulation and conformance assessment (TBT).

Work continued on goods-related issues. We made some suggestions to the Chinese on how we might address Australian concerns on import licensing and we will be following up with more detailed proposals at the next round. On rules of origin, we continued to encourage the Chinese to consider a change of tariff classification approach rather than an exclusive focus on a regional value-added method. We also discussed our proposed text for a chapter on customs procedures and e-commerce.

On services, Australia and China began market access negotiations by presenting lists of barriers they face in each other’s services sectors with requests on how to lower them.

Australia tabled lists of barriers affecting the following services sectors: legal, financial (including banking, insurance and securities/funds management), education, construction, engineering, architecture and urban planning.

At the next round in March, we plan to table barriers affecting the other sectors of interest to Australia including telecommunications, transport and logistics, accountancy; tourism; mining and environmental services.

Work on intellectual property focused on our respective draft texts for an IP chapter. While discussions were constructive, it is clear that Australia and China have very different visions for the content of an IP chapter. China has concerns about the strong commitments embodied in many of Australia’s draft provisions while China is seeking commitments that are more focused on best endeavours and cooperation. Much work remains to be done on this in future rounds.

Next steps

In 2006 we hosted visits of senior telecommunications officials from the Ministry of Information Industry and Ministry of Agriculture officials. In 2007, we will host a group of agriculture journalists and visits of senior officials, including in the areas of mining investment and vocational and technical education services.

We are also planning to continue the series of seminars which have been chaired by the Australian Ambassador in Beijing. The seminars to date have been useful in identifying how Australian industry could work with China through our free trade agreement commitments. These seminars have covered a range of agriculture and services industry sectors, both sensitive areas for China. We are proposing that the first 2007 seminar for March focus on accountancy services.

The Department of Foreign Affairs and Trade is continuing to consult with Australian industries on impediments to trade with China to ensure that we are focusing our efforts on the right issues.

For more information, contact the China FTA Taskforce: