(1)   What additional resources have been provided to the Department to enable it to negotiate the Australia-China Free Trade Agreement (FTA).

(2)   How are Australia-China FTA negotiations proceeding.

(3)   What are the major issues arising in the Australia-China FTA negotiations.

(4)   What are China’s main defensive interests in the FTA negotiations.

(5)   What are Australia’s main defensive interests in the FTA negotiations.

(6)   What is the timeline for the Australia China FTA negotiations.

(1)   The Government has announced that it will allocate $11 million at additional estimates to a range of government agencies, including DFAT, to assist with the costs associated with progressing the free trade agreements agenda.

(2)   Prime Minister John Howard, together with China’s Premier Wen Jiabao, agreed on 18 April in Beijing to launch negotiations on a free trade agreement (FTA) between Australia and China. An introductory meeting between the two governments was held on 23 May in Sydney and reached agreement on a number of procedural issues, including the initial establishment of four negotiating groups covering agriculture and sanitary and phytosanitary measures; non-agricultural goods; services and investment; and other issues. The first substantive meeting of the negotiations took place in Beijing 22-24 August and focussed on an in-depth exchange of information on each other’s trade and investment regimes building on the joint FTA feasibility study. The next meeting is tentatively scheduled to take place in early November in Beijing to continue the information exchange. This phase of the negotiations with the Chinese government is aimed at gaining a clear understanding of how China’s trading system works, and how to address the areas of concern for Australian exporters.

(3)   The FTA negotiations will cover all sectors, involving liberalisation and facilitation across trade in goods, services and investment. The negotiation will be conducted as a single undertaking - that is, nothing will be agreed until everything is agreed. Preliminary consultation and the work done for the joint FTA feasibility study have pointed to a wide range of barriers to trade and investment that will need to be addressed in the negotiations. As well as tariff and non-tariff trade restrictions, Australian business has also raised a variety of ‘behind the border barriers’ including regulatory barriers, such as problems with enforcement of intellectual property rights and restrictions on foreign ownership in certain areas, unpredictability of recourse to legal and administrative remedy, discrepancy of interpretation of regulations between provincial governments and central government, and different understandings of contractual obligations.

(4)   We are still in an exploratory phase in the negotiations but China has indicated generally that it has sensitivities about agriculture and services.

(5)   Australian producers, particularly in the areas of textiles, clothing, footwear, and auto parts have expressed concerns about the impact on Australian production of an FTA with China.

(6)   The Australian Government is not putting a timeframe on the negotiations - it will spend as much time as is required to negotiate a high-quality agreement that contains commercially meaningful outcomes for Australian businesses and is consistent with the rules of the World Trade Organization (WTO).