China, Australia to agree staged FTA

Next week's deal structured to enable future additions

A staged free trade agreement (FTA) between China and Australia is to be signed in Canberra on Monday, in a move analysts said Wednesday will help boost the bilateral trade between the two countries even if the staged agreement may not cover all issues as exactly as the expected way.

The deal would be structured to enable additions over the years as the relationship and economies of the two countries evolve, according to the Australian Financial Review newspaper on Tuesday, citing unnamed senior sources.

The initial agreement, which is to be signed on Monday, would cover services and agriculture and some aspects of foreign investment while being less accommodating of Chinese labor demands, a source said in the report.

The deal, if completed, will add to a dozen similar deals signed between China and its partners. China currently has 20 FTAs under deliberation, among which 12 agreements have been signed and implemented already, according to China FTA Network under the Ministry of Commerce.

The China-Australia FTA would be a high-level free trade agreement, under which a majority of import and export goods will be exempted from tariffs, Zhang Jianping, a research fellow with the Academy of Macroeconomic Research under the National Development and Reform Commission, told the Global Times on Wednesday.

The Chinese and Australian economies are quite complementary, with Australia having advantages in mining, agriculture and services and China excelling in manufacturing, Zhang said.

In the first 10 months of this year, the exports and imports between China and Australia reached $115.3 billion, up 3.8 percent year-on-year, customs data showed.

China is Australia's largest trade partner and biggest export market, while Australia is China's largest overseas investment destination, Xinhua News Agency reported in October.

According to the Australian newspaper's report, under the initial agreement of the staged FTA, Australia is willing to agree to extend the threshold of investment made by Chinese State-owned enterprises. But Australia could not agree to China's other major demands such as greater access for Chinese laborers to projects in Australia that Chinese firms have invested in, the report said.

The staged FTA will leave time for the two countries to resolve disputed issues and impose lower tariffs for the majority of goods, and it is a common practice for China and its partners to sign initial FTAs and improve it later, Zhang said.

China has accelerated the pace of FTA negotiations with other economies in recent years, Li Chunding, a research fellow at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

On Monday, China and South Korea concluded negotiations on a FTA which covered 17 fields including e-commerce.