ChAFTA to bring good tidings for Australian importers and exporters starting December 2015

ChAFTA – With Labor giving the nod for the China-Australia Free Trade Agreement (ChAFTA), Australian importers and exporters can experience tariff relief starting December 2015.

This graph shows the Australia-China trade from 2013 to 2014

ChAFTA  brings lower duty rates for Australian importers

Tariffs will be lifted on 80% of all imported goods from China to Australia upon effect of the agreement, which should be around December 22nd.

Perry Hill of the Mildura Fruit Company has already expressed his excitement over the benefits their company will reap with ChAFTA in effect:

“ChAFTA means that tariffs of up to 12% across oranges and mandarins will be eliminated over the next 8 years.”

The remaining 20% of tariffs are said to be removed in stages during ChAFTA’s first two years on products such as textiles, plastics, aluminium and nuts. Meanwhile, tariff abolishment on glass, car parts, and electronic components is expected within four years.

“This is great news for our business,” remarked Managing Director Mark Albert from MtM Automotives.

Read the ChAFTA fact sheets, today.

Claiming of preferential rates

Once ChAFTA comes into force, the following changes in normal customs clearance documents and declarations processes will take into effect:

With Certificate of Origin (COO) or Declaration of Origin (DOO)

If the importer has either the Certificate of Origin (COO) or Declaration of Origin (DOO), then preferential rates can be claimed only on imports. However, it is very important that the COO be issued by an approved authority in China for it to be accepted.

On the other hand, the DOO can be prepared by an Exporter or a Supplier, but can only be used if an Origin Ruling Advice has been processed. The Australian Border Force will only accept Origin Ruling Advice requests from December 1st 2015.

If you need advice on this, then feel free to contact us.

Goods in transit

Preferential rates for goods in transit will also be applied if the import customs declaration is lodged after the date ChAFTA comes into force.

Goods transhipped through Hong Kong

Consignments made in China that are transhipped through Hong Kong will lose eligibility for preferential duty rates under the current legislation. The Australian Government is currently working on a solution to avoid this issue.

Questions about ChAFTA? Let our experts help you. Call us at 1300651233.

Duty-free exported goods

Australian exporters also have a reason to rejoice once ChAFTA comes into effect with 85% of all exported goods to enter duty-free into China.

From hearing aids to sea cucumbers, ChAFTA brings good news for Australian exporters of the following products:

Implantable medical devices

The Chinese market will now have wider access to Australia’s highly advanced implantable medical devices and hearing aids under ChAFTA.

With over $45 million-worth of exports to China in 2014, the immediate removal of the 4% tariff upon effect of the agreement is said to bolster its market share in the country.

Learn more about smart implants.

Kangaroo skins

ChAFTA is also expected to give the already large demand for Australian leather products a boost with the abolishment of the 9% tariff on kangaroo skins and the 14% tariff on kangaroo leather.

The much-awaited duty-free entry of Australia’s $910-million agricultural export in 2014 will be eliminated in the first four years of the agreement. On a broader scale, the 14% tariffs on other Australian hides and skins will be removed within two to seven years of ChAFTA.

Kangaroo skin tariffs to be removed within two to seven years of ChAFTA

Sea Cucumbers

The 10-14% tariff on one of Australia’s oldest international trade commodity will be removed within the first four years of ChAFTA.

In 2014, sea cucumber exports to China amounted to $23,000. With the tariff removal, Australia is hopeful that it will get a larger share of China’s sea cucumber market whose imports reached nearly $10 million in the said year.

Sea cucumber is included in the list of exports that will have removed tariffs

ChaFTA and other Australian export items

The China-Australia FTA will also make Australian exporters in the following sectors more competitive in the Chinese market:

• Coal
• Dairy
• Clean, safe beef
• Fresh seafood
• Pearls
• Hair and makeup products
• Horticultural products, including fresh fruit
• Quality wine

Freight Forwarder Quote Online Australia preparations for ChAFTA

In anticipation of more import and export transactions with Australia’s leading trade partner since 2009 (total trade worth: $150 AUD billion), Freight Forwarder Quote Online Australia has been making the necessary arrangements to ensure that its clients will reap the full advantage of ChAFTA’s yields.

“Apart from being aware and informed of the changes in documents and declarations once ChAFTA comes into force and effectively communicating this to our clients, we have thought of ways on how to make the transition easier for them and make sure they get the benefits they deserve,” said the managing director of Freight Forwarder Quote Online Australia Brokers and Freight Forwarding.

He added that with ChAFTA he has never seen such duty-free exports and tariff-rate cuts with China in all his 30 years of experience in the field.

“I am one of the many people who are hopeful that this agreement will truly bode well for our relationship with our neighboring region, and not only with regards to trade,” he added.

For further advice or consultancy about the China Australia Free Trade Agreement, just call us at 1300651233.

For Australia’s sake: Labor and Trade met ways

While the deal had met opposition from Labor at first, Trade Minister Andrew Robb and Federal Opposition Leader Bill Shorten finally came to terms for the ChAFTA to push through as scheduled.

In a press statement reported by the Australian Financial Review, Bill expressed his contentment of the changes to the agreement.

“Through the hard work of Penny Wong, working with Minister Andrew Robb, the Labor now has achieved what we believe to be satisfactory legal protections that weren’t previously proposed,” said Bill.

Prime Minister Malcolm Turnbull commended Bill Shorten for prioritizing national interest over the demands of the Construction, Forestry, Mining and Energy Union.

The Minister also congratulated Andrew Robb and Senator Wong on the deal, calling it a “great achievement”.

“It’s a very positive development for the country,” said Andrew. “This deal with China is the biggest series of concessions they have made with any other developed country in the world.”

ChAFTA: More than just free trade

The country will also profit from the wider avenue that ChAFTA will open for Australian services in China.

The Asian nation is said to be the largest services market of Australia, reportedly valued at $8.2 billion in 2014. Greater market access include the following services:

• Insurance
• Banks
• Securities
• Law
• Education
• Health
• Elderly care
• Construction
• Manufacturing
• Telecommunication

Apart however from the aforementioned benefits in import and export of both commodities and services, Georgina Downer of The Age shows another significant ChAFTA outcome.

“In the end, though, this agreement is not just about economics — it’s about Australia and Asia.”

Downer said in her article that China is the greatest among the “emerging powers” of the world. Thus, it will help shape the development of the global economy and play a crucial role in the political and security stability of the Asia-Pacific region — which Australia has supported for two decades now.

Australia means peaceful business, dealings with its neighbors. As a standing reminder to this virtue, Downer stressed the country’s Lombok Treaty with Indonesia and its membership of the East Asia Summit.

Bearing these in mind, one important consideration that Australians must remember about the ChAFTA, she points out, is that it is “one of the most important developments in our campaign to engage meaningfully with our region.”

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