Australia's new Free Trade Agreements are a powerful trifecta of agreements with Australia’s three largest export markets that account for more than 61 per cent of our exports of goods.
More than 85 per cent of Australian goods exports will be tariff free upon entry into force, rising to 93 per cent in four years. Some of these goods are currently subject to tariffs of up to 40 per cent.
For Australian workers on the average wage, around $9,000 a year of their wage comes from export income - about 15% of their wage.
If we can increase our exports, if we can increase the dollars that we earn out of China, out of India, out of Korea and out of Japan, it is going to increase the wealth of our nation.
The Free Trade Agreements will add billions to the economy, create jobs and drive higher living standards for Australians.
The Coalition government has secured access to Australia’s third-largest export market and Asia’s fourth-largest economy.
This means real economic benefits to Australian exporters, and will help underwrite our prosperity for decades.
South Korea is a regional powerhouse with a population of 48 million middle-class consumers. It is already our third-largest beef market, and biggest market for sugar. The Australia-Korea Free Trade Agreement will build on this competitive position.
Independent economic modelling estimates that, under the FTA, exports of agricultural goods to South Korea would be 73 per cent higher than otherwise by 2030, contributing to a total 5 per cent increase in Australia’s total agricultural exports.
Mining exports would be 17 per cent higher and manufacturing exports would be 53 per cent higher.
If the government did not conclude this FTA, modelling predicts that by 2030 our agricultural exports to Korea would have declined by 29 per cent.
This is a great outcome for agriculture. When implemented our beef, wheat, sugar, dairy, wine, horticulture and seafood industries will see 99 per cent of all tariffs eliminated for Australian exports.
The agreement will create new opportunities for Australian automotive suppliers into Korea, our third-largest export market for automotive components, with gearbox exports valued at $122 million in 2012. Under the FTA, Korean tariffs as high as 8 per cent on automotive exports, including gearboxes and engines, will be eliminated, some immediately.
The FTA is the most ambitious trade deal Japan has concluded with anyone.
When fully implemented, more than 97 per cent of Australian exports will enter Japan, the world’s third-largest economy, duty free or with preferential access. We will also gain new levels of access to the Japanese market for a range of services where Australia has an enviable reputation.
In agriculture, we have secured rapid upfront reductions and an ultimate halving of the prohibitive 38.5 per cent tariff on beef, our biggest agricultural export to Japan, worth about $1.4 billion last year.
Modelling shows that this will deliver gains to the industry of between about $300 million and $400m a year while giving us a major advantage over our fiercest competitor in the US.
Tariffs will also be eliminated on Australian wine (15 per cent), a range of seafoods, on processed foods and across a wide variety of fruits, vegetables and nuts.
On the resources, energy and manufacturing exports fronts, currently worth $42bn to Australia, we will benefit from tariff-free entry into Japan for effectively 100 per cent of items as soon the agreement comes into force.
Australian consumers will also benefit from cheaper Japanese cars and parts, and a range of household items including whitegoods and electronics through the elimination of tariffs.
Australians will benefit from the China - Australia Free Trade Agreement:
- through greater market access for Australian goods and services;
- through increased investment in Australian industry, businesses and infrastructure;
- through easier entry into China for Australian workers and executives and for Chinese workers and executives for designated purposes;
- through cheaper Chinese goods in Australia.
Most years we export some $100 billion worth of goods to China, and 95% of our exports to China will be tariff free once this agreement is fully in effect. Dairy tariffs of up to 20% will be gone. Beef tariffs of up to 25% will be gone. Lamb tariffs of up to 23% will be gone. Wine tariffs of up to 30% will be gone.
Horticulture tariffs of up to 30% will be gone. Seafood tariffs of up to 15% will be gone. And pharmaceutical tariffs of up to 10% will be gone.
Our aged-care companies will be able to establish one or many aged-care homes, own 100% of these profit-making facilities and take key members of staff with them under reciprocal labour arrangements.
Our private hospital owners will be able to construct, fully own and operate hospitals across China.
Wholly owned Australian telecoms companies will be able to supply Chinese domestic multiparty services as well as participate in joint ventures with up to 55% equity to supply online data and transaction processing services. And there’s much more.
This is the first comprehensive free trade agreement that China has done with a major economy.
It will be good for jobs, for consumers, for exports, for our growth; it sets up our country for the future.