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17 November 2014
The Australian government is set to sign a free trade deal with their Chinese counterparts which will see the mutually beneficial relationship between the two countries develop further. The agreement, which will focus predominantly on the agriculture sector, is predicted to offer billions of dollars worth of trade and investment to the Australian economy.
After nearly a decade of talks and negotiations, the landmark deal is due to be signed during the week commencing 17th November.
Parliamentary Secretary Josh Frydenberg told Reuters: "When you consider China is Australia's major trading partner, $150 billion worth of two-way trade, this is great news for the Australian cultural sector [and] the services sector."
Whilst this particular trading agreement is set to increase the ease of negotiations between the two countries, there have long been trade links binding them together. However - on the Australian side of things - there is an ongoing aim to switch the reliance on trade from natural minerals to offerings from the agriculture sector - such as dairy produce - as this is what the ever increasing Chinese middle class craves.
Switching from the 'mining boom' to the 'dining boom' is no easy process, particularly when the historic trade to China has been centred on the former. According to the Department of Foreign Affairs and Trade, 7 out of the 10 of the most traded items with China were natural resources and minerals, as of 2011.
This latest agreement will hopefully get rid of some of the red tape and allow different sectors to thrive. For example the Australian wine industry currently engages in around $200 million worth of trade with China, every single year. The import tariff of between 14 to 30 per cent currently eats into the overall value of that figure. However, this agreement aims to remove surplus fees such as those within four years.
If that is indeed the case, the Australian agriculture sector could see exponential profits available via trade with China over the coming months. Elders Insurance can offer you a specifically tailored policy which will cover your farm or business even if you become part of the boom and have to expand due to Australia's new and exciting trade relationships.
