MOSCOW, November 17 (Sputnik) — China and Australia have concluded talks on a landmark bilateral deal that will remove tariffs on goods imports and create stimulus for increased mutual investment, a statement on the Australian prime minister's official website said on Monday.
"The landmark China-Australia Free Trade Agreement (ChAFTA) will unlock substantial new benefits for Australians for years to come," the statement announced.
The parties signed a declaration of intent on Monday ending nine years of free trade talks between Beijing and Canberra. Australia agreed to reduce import tariffs on all goods from China to zero, while China pledged to make up to 95 percent of Australian imports tariff-free over the course of several years.
"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… On full implementation of ChAFTA, 95 per cent of Australian goods exports to China will be tariff-free," the announcement on Prime Minister Tony Abbott's page said.
According to the statement, the agreement is built on previous deals Australia had concluded with South Korea and Japan. Canberra hopes that this "powerful trifecta of agreements" will consolidate its ties with three large export markets that, combined, currently account for more than 61 percent of Australia's exported goods.
China is the world's second largest economy, with its total outbound investment estimated to reach $1.25 trillion over the next decade. Its business sector is actively searching for investment opportunities worldwide, and Australia's free trade deal with China will help the nation secure its share.
"ChAFTA will promote further Chinese investment in Australia by raising the Foreign Investment Review Board (FIRB) screening threshold for private companies from China in non-sensitive areas from $248 million to $1,078 million," the announcement stated.
A separate set of provisions in the ChAFTA will also provide security mechanisms, including a review of the agreement after three years, for Australian investors on the Chinese market.
Today China is Australia's largest two-way trading partner in both goods and services. In 2013, Australia exported to China $95 billion worth of goods and received $47 billion worth of goods.