THE signing of the China-Australia free trade agreement (ChAFTA) marks a significant milestone in the history of this country; it heralds the start of a new era of opportunity that will benefit all Australians for generations to come.
Chief among the beneficiaries are the rural and regional communities around the nation – many of which are heavily reliant on the farming sector to keep local economies strong and townships thriving.
Along with being our biggest two-way trading partner overall, China is Australia’s largest agriculture and fisheries market, worth around $9 billion in 2013.
Given China’s rapidly expanding middle class, this market will inevitably grow, with China projected to account for nearly half of global growth in food demand to 2050.
Thanks to the ChAFTA, Australia is now in prime position to take full advantage of China’s demand for premium products, with the removal of tariffs on key agricultural products like dairy, beef, lamb, wine, fruit, vegetables, nuts and barley.
The National Farmers’ Federation, for instance, believes a tripling of agricultural exports to China is conceivable over the next decade.
In relation to those products highly sensitive to China, namely sugar, rice, wheat and cotton, we did not secure gains at this time, while we do have market access under global quotas. The door on preferential gains in the future certainly has not been closed.
ChAFTA has been very deliberately structured as a ‘live agreement’ which enables difficult outstanding issues for both sides to be revisited in just three years’ time with the prospect of further gains.
In the meantime, it is important to note that China has excluded sugar, rice, wheat and cotton from all of its other free trade agreements, so Australian farmers have not lost any ground against their competitors.
In terms of foreign ownership, I know there are some concerned about the impact of foreign investment, but it’s important to put this into some perspective. ABS data shows that 99 per cent of Australian farm businesses are fully Australian owned, while just under 90pc of farmland is fully Australian owned.
Under ChAFTA – and in keeping with the Coalition’s election promise – the Government will be able to screen investment proposals by private investors from China in agricultural land valued from $15 million, and agribusiness from $53 million.
The Foreign Investment Review Board will continue to screen all investment by Chinese State-Owned Enterprises, regardless of the transaction size. ChAFTA does not change this.
Since the First Fleet, Australia has relied heavily on foreign investment to drive growth and jobs; we’ve developed agriculture and we’ve developed the rest of the country on the back of waves of foreign investment from different sources.
Having spent 30 years in and around the rural sector, I’ve seen the benefits of this kind of investment first-hand.
The United States remains by far the biggest foreign investor, and these investments vary between foreign partnerships and full ownership.
But regardless of the type of investment – or where it comes from – investment equals growth, jobs and higher living standards.
Make no mistake, our free trade agreement with China will be transformational for the economies of rural and regional Australia.
Andrew Robb is federal Trade and Investment Minister.