Media release
Australian Minister for Trade, Mark Vaile
Monday May 22, 2000
MVT52/2000
Australia Signs Big Trade Deal with China
Trade Minister, Mark Vaile, announced today that Australia and China had formally signed an agreement that will liberalise access to the Chinese market when China joins the World Trade Organization (WTO).
"This deal will guarantee secure trading conditions for billions of dollars of Australian exports and will help to expand these as China progressively reduces trade barriers," Mr Vaile said at a signing ceremony in Beijing with China's Minister for Foreign Trade and Economic Cooperation, Mr Shi Guangsheng.
"The deal cements in place the understandings that were reached between Australia and China when Tim Fischer visited China last year. When implemented, it will boost significantly our trade and investment profile in China".
"Along with the recent settlement between the EU and China, and the hoped for passage of Permanent Normal Trade Relations for China by the US Congress, the Australian deal helps to maintain the international momentum behind China's WTO accession".
"The deal signed today covers more than 1000 product categories across our agricultural and manufacturing exports, as well as key service sectors. It will lead to significantly improved and more predictable access to the large Chinese market, with in-built growth, when China joins the WTO".
"We are also looking to China to implement a range of other trade reforms in areas such as standards, quarantine, tariff quota administration and import licensing. These and other matters continue to be discussed bilaterally and in the WTO in Geneva, and I am keen to see these negotiations move forward quickly so that China can enter the WTO at the earliest opportunity this year."
Mr Vaile paid a special tribute to the Australian trade officials who helped secure this deal, in particular DFAT Principal Adviser Graeme Thomson. "Along with others, Mr Thomson's knowledge and negotiating skills have been instrumental in bringing this deal to fruition over many years to the great benefit of Australian exporters," Mr Vaile said. For more detail on improved market access outcomes see www.dfat.gov.au
Contact: Bruce Mills 0418 273 475; in Beijing: John Kunkel
86-10-13701121400
CHINA'S ACCESSION TO THE WTO MAIN OUTCOMES FOR AUSTRALIA
The bilateral settlement will result in more secure and improved market access conditions of benefit to a wide range of Australian industry sectors when China joins the WTO, which hopefully will be later this year. Through the operation of the Most Favoured Nation principle, Australia will also benefit from concessions negotiated by the United States, the European Union and other WTO members. There will be further outcomes with direct market impact from ongoing multilateral negotiations in Geneva on issues such as tariff quota administration guidelines, standards, inspection and subsidies.
Improved and WTO-Bound Market Access for Agricultural Products
- Wool - China will open global tariff-rate quotas of 242,000
tonnes of wool and 65,000 tonnes
of wool tops, at tariff levels of 1% and 3% respectively, with this access to grow with annual
increments to 287,000 tonnes and 80,000 tonnes respectively by 2004. - Sugar - China will open a global tariff-rate quota of 1.6
million tonnes at a tariff of 20%,
growing with annual increments to 1.945 million tonnes by 2004, with consultative
arrangements on re-exports to provide some security of access to China's domestic market. - Wheat - China will open a global tariff-rate quota of 7.3
million tonnes, growing with annual
increments to 9.6 million tonnes by 2004, at a tariff of I%. - Rice - China will open a global tariff-rate quota of 2.66
million tonnes, growing with annual
increments to 5.32 million tonnes by 2004, at a tariff of I%. - Cotton - China will open a global tariff-rate quota of 743,000
tonnes, at a tariff level of 1%,
growing with annual increments to 894,000 tonnes by 2004. - Canola - China has agreed to reduce the tariff on canola
seed to 9% in 2000, and to provide
global access for canola oil of 600,000 tonnes at a tariff level of 9%, with this level of access to
grow with annual increments to 1. 105 million tonnes by 2005. - Barley will be subject only to a tariff at a tariff level of 3% bound, although China had earlier been seeking agreement to a tariff quota regime which would have been much more restrictive.
- Tariffs on Other Products - China will bind and reduce its agricultural tariffs significantly. Tariffs will be cut on accession and fully phased in by 2004. For example, tariffs will be reduced on:
| Product | Reduced Tariff | Current Tariff |
| Chilled boneless beef | 15% | 45% |
| Other chilled beef | 20% | 45% |
| Frozen beef | 12% | 45% |
| Frozen unboned meat of sheep | 12% | 23% |
| Other meat of lamb and sheep | 15% | 23% |
| Frozen pork, cuts | 12% | 20% |
| Cheese, fresh, grated, processed etc | 12% | 50% |
| Cheese, other | 15% | 50% |
| Yoghurt | 10% | 50% |
| Milk powder etc (not exceeding 1. 5 % fat) | 15% | 25% |
| Milk powder etc (exceeding 1.5% fat) | 20% | 25% |
| Butter & other fats and oils derived from milk | 25% | 50% |
| Cabbage, cauliflowers, lettuce, celery | 10% | 13-16% |
| Other vegetables | 13% | variously higher |
| Apples | 10% | 30% |
| Pears, other than Ya, Hseuh etc | 10% | 30% |
| Cherries, peaches, nectarines, plums, fresh | 10% | 30% |
| Oranges | 12% | 40% |
| Mandarins | 30% | 40% |
| Grapes, fresh | 13% | 40% |
| Wheat gluten | 18% | 30% |
| Canola seed | 9% | currently TRQ |
| Lupins | 9% | 15% |
| Sugar confectionary, not containing cocoa nes | 12% | 15% |
| Wine including sparkling | 20% | 65% |
| Dog and cat food, for retail sale | 15% | 30% |
| Raw skins of sheep or lambs, wool on | 7% | 9% |
| Skins of sheep or lambs, without wool | 7% | 9% |
| Lobsters, rock lobsters & other sea crawfish | 15% | 30-35% |
| Prawns, shrimps frozen | 10% | 30% |
Improved and WTO-Bound Market Access for Industrial Products
Tariffs - tariffs will be bound and generally reduced on a broad basis, with many tariffs falling to 10% or lower levels. Tariffs will be cut on accession and further cuts will be phased in by 2005 with some exceptions. For example, bound tariffs will be:
| Product | Reduced Tariff | Current Tariff |
| Coking coal | 3% | 3% |
| Steaming coal | 6% | 6% |
| Liquefied natural gas | 6% | 6% |
| Mineral ores and concentrates | 0% | 0% |
| Alumina | 8% | 18% |
| Pigments & preparations of titanium dioxide | 6.5% | 14% |
| Various chemicals | 5.5-6.5% | 8-16% |
| Various pharmaceuticals | 4-6% | 9-14% |
| Various medicaments | 4-6% | 9-14% |
| Gold, semi-manufactured, non-monetary | 7% | 9% |
| Steel, semi-finished | 2% | 3% |
| Steel, flat rolled | 3-8% | 3-10% |
| Steel, flat rolled, stainless | 10% | 15-20% |
| Aluminium, unwrought, bars, rods etc | 5-8% | 9-12% |
| Motor vehicle engines, > 1,000cc | 10% | 25-45% |
| Various other motor vehicle parts | 10% | 20-50% |
| Motor vehicles | 25% | 80100% |
| Optical fibre cables | 0% | 12% |
| Optical fibres | 5% | 15% |
| Co-axial cable | 10% | 12% |
| Ultrasonic diagnostic apparatus etc | 47% | 11-15% |
- Non-Tariff Measures - China will reduce significantly its non-tariff measures and eliminate all quotas, tendering and import licensing by no later than 2005. Quotas on Chinese imports of automobiles and parts will grow by 15% annually from a level of around US$6 billion in 2000, and these quotas will be eliminated by 2005;
- Information Technology - China will participate in the WTO Information Technology Agreement, which will result in the elimination of tariffs on a range of computer and other hightechnology products.
Improved Market Access in the Services Sector
China has agreed to make substantial market access commitments in the services sector, including to adopt WTO rules on trade in services and undertake significant liberalisation in the key sectors of interest to Australian services exporters. Australia has been assured that China sees no substantive difficulties in granting additional licences to Australian firms in the near term in the insurance and banking sectors, and for legal and accountancy practices.
China will significantly open its market to services trade by substantially deregulating both the conditions of entry and the scope of operation for businesses in China. Key market access commitments in sectors of particular interest to Australian exporters include:
- Telecommunications - adoption of WTO regulatory principles;
and commitment to phase out
geographic and foreign equity restrictions. For mobile telephony, China will allow foreign
operators 25% equity upon accession, moving to 49% three years after accession. - Insurance - commitment to phase out geographic, foreign equity
and business operating
restrictions on life and non-life insurance operations; and remove limitations on choice of
operating partner. Foreign firms will be able to provide health, pension, and group insurance
in life, and all non-life activities except for mandatory third party liability auto insurance. - Banking - commitment to phase in RMB, lending and deposit
taking by foreign firms to
Chinese firms (within 2 years of accession) and individuals (within 5 years); and phase out
geographic restrictions. Also, non-financial institutions will be able to give credit facilities
for the purchase of all motor vehicles. - Accountancy - commitment to reduce limitations on forms of
establishment and operations;
and provide national treatment for foreigners who have passed the Chinese CPA examination. - Legal - commitment to phase out numerical and geographic
restrictions. Foreign law firms
will be able to provide information to their clients on the Chinese legal environment. The
prior experience requirements for foreign lawyers, other than the chief representative, has
been reduced to 2 years. - Education - commitment to bind the provision of English language
training by foreigners,
and the operation of joint venture schools. - Architecture - commitment to bind foreign majority ownership
in joint venture operations;
and allow foreign architects to provide scheme design services.