Negotiations on an FTA began in 2005 in the hope that Australia’s exporters could break free from the quotas, tariffs and red tape imposed by Beijing, but the talks have failed to result in a deal. The original feasibility study found an FTA could boost gross domestic product in Australia by $US18bnover 10 years and GDP in China by $US64bn over that period.
Since then, China has become Australia’s largest trading partner with two-way trade totalling almost $128bn in 2011-12 on Austrade figures.
Chinese investment has been increasing in Australia and hit $23bn last year on Department of Foreign Affairs figures, but it still trails investment from the US, Britain and Japan.
Mr Marles said a China FTA would be a boost to agricultural exporters, but also to services industries and even manufacturers as Australia’s trade with China shifted from resources to supplying a growing middle class.
“The future of our economic relationships with China is going to shift from being one based on resources – although it will obviously still have a very large resources component to it – to one that has a much bigger goods and services component,” he said. “If we were able to make progress on an FTA with China that would be a very significant contribution to the Australian economy given how important providing goods and services to the growing Chinese middle class is going to be for the future of the Australian economy and future prosperity in Australia.”
New Zealand’s dairy sector has been revitalised by the New Zealand-China FTA and Australian exporters hope that a similarly advantageous deal can be struck between Australia and China.