Australia-China FTA Negotiations

Subscriber update: Thirteenth round of negotiations

17 December 2008

The 13th round of negotiations on the Australia-China Free Trade Agreement (FTA) was held in Beijing from 1 to 5 December.

In regard to market access for goods, the two sides continued the discussion on their respective sensitivities to tariff liberalisation, as begun at the 12th negotiating round. We noted the constraints on agricultural production in Australia, including water shortages and a lack of suitable land. China reiterated its concerns about Australia’s export capacity, focusing on what it saw as the potential for imports to impact on domestic prices. Australia will continue to press China to show flexibility in this area.

The two sides also discussed Australia’s sensitivity about further tariff liberalisation of certain manufactured products. Australia explained the rationale for this sensitivity, and said that it could only consider making commitments on these products as part of an FTA that provided sufficient commercial gains for Australia.

The two sides made some further progress in the discussions on the trade in goods chapter text, including on a bilateral safeguards mechanism. Australia also made clear that it would not consider constraining WTO rights in relation to trade remedies. The two sides discussed approaches to addressing trade-restrictive non-tariff measures.

There was limited progress in discussions on the rules of origin chapter text, with China maintaining a conservative approach in relation to key provisions, such as certification and trans-shipment. Discussion of product-specific rules of origin on 8 and 9 December made reasonable progress. This resource intensive aspect of the negotiation will require further inter-sessional work.

After further discussions on customs procedures, work on this chapter is now virtually completed. The two sides also continued to make good progress on the chapters on sanitary and phytosanitary (SPS) issues and technical barriers to trade (TBT). As well as reaffirming WTO rights and obligations with respect to SPS and TBT measures, these chapters will provide additional opportunities for cooperation and consultations between the two sides on matters of mutual interest.

On services and investment, the overall atmospherics of the discussions on the various topics remain constructive.

Australia raised issues of commercial importance across a broad range of sectors. In addition to those that have been the topic of discussion at the last two rounds (e.g. financial services, education and training, mining services and investment, telecommunications and legal services sectors), Australia also tabled commercially-focused requests in accounting and environmental services, and discussed engineering, architecture and urban planning.

China’s own requests on services and investment issues remain ambitious. It continues to express an interest in traditional Chinese medicine, movement of natural persons (temporary entry) and education, as well as the telecommunications, investment and air transport services sectors.

We made some progress in the chapter on electronic commerce, although China is resisting WTO-plus commitments that we have sought to include in this chapter.

Government procurement remains a very difficult part of the negotiations given China’s reluctance to take on market access commitments in advance of its accession to the WTO Government Procurement Agreement. Nevertheless, discussion at the round explored ways in which government procurement could be covered by the FTA.

We had two useful days’ discussion on the combined draft text of the chapter on intellectual property. There remain areas where there is substantial distance between the positions of the two sides, but the chapter is taking shape.

For more information, contact the China FTA Task Force: