After a decade of negotiations, China and Australia will begin to implement a Free Trade Agreement on Sunday. Significant benefits to both economies are expected.
Under the Free Trade Agreement, or FTA, nearly 86 percent of the two countries' export products will see a tariff reduction to zero on Sunday. Starting January 1 next year, a second round of tariff reduction will take effect.
Member of Australia's House of Representatives David Coleman quite enthusiastically welcomed the FTA.
"It's actually very hard to say what's the No. 1 benefit, because there are so many benefits right across the Australian economy. It also means a close relationship and friendship with China, and that's really important too. It's incredibly important that we have a very strong friendship and a strong and mutually beneficial relationship. So the free trade agreement is great news for Australia. And certainly, [I'm] very pleased that it is now coming into force."
Analysts say the FTA will make Australian products more competitive in winning Chinese markets. Australian former foreign minister Bob Carr said it will help Australia gain benefit from the growth of the Chinese economy.
"It's very very important, a milestone in the relationship between Australia and China. It points to more economic integration between Australia and China. This is Australia having a stake in the nearly emerging, mature, modern, global Chinese economy."
Australians also expect more benefits in boosting its agriculture. According to official data, Australia's agricultural exports to China reached nearly 48 billion yuan, or around 7.5 billion USD, in the last fiscal year. China has become the largest export market for Australian agricultural products.
With the FTA taking effect, about 30 percent of tariffs on Australian agricultural exports will be exempted, worth nearly 1.5 billion yuan, or 230 million USD. The move is expected to significantly benefit Australian agricultural and animal husbandry companies.
China's Ministry of Commerce spokesperson Shen Danyang says the FTA is welcomed with equal anticipation by the Chinese side.
"The agreement taking effect will further expand trade and investment between China and Australia, promote trade facilitation, boost the free flow of goods, capital and people between the two countries, and bring benefits to the enterprises and peoples of the countries. The agreement will help maintain close bilateral trade relationship, push forward economic growth of the two countries, and provide important content to enrich all-round strategic partnership between China and Australia."
The China-Australia FTA talks began in April 2005, and the agreement was officially signed in June 2015.
