CANBERRA - Australia and China have signed a landmark trade deal after a decade of talks, providing a boon for growth and jobs by abolishing tariffs across a raft of sectors.
Trade Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng formally inked the document in Canberra yesterday, ending years of often difficult and protracted negotiations.
"The leaders of our two countries have attached great importance to the signing of this document," said Mr Gao. "It is a milestone in bilateral relations."
Australian Prime Minister Tony Abbott called it "a momentous and historic day for our two countries".
"It will change our countries for the better, it will change our region for the better, it will change our world for the better," he said. "This agreement will give our nations unprecedented access to each other's markets."
China is Australia's biggest trading partner, with the two-way flow exceeding A$160 billion (S$167 billion) annually.
Under the deal, more than 85 per cent of Australian goods entering the country will carry no penalty. With Australia having already sealed similar pacts with Japan and South Korea, a large percentage of Australian exports will soon be tariff-free.
Australian businesses currently face charges of up to 40 per cent on goods sent to China but, under the deal, penalties on virtually all resources and energy products - a key plank in the trade relationship - will be abolished. Duties will also be lifted on agricultural exports including wine, meat, seafood and dairy products.
In return, Australia will remove the existing 5 per cent tariff on Chinese electronics and white goods, meaning cheaper goods for Australian consumers but some reduction in revenue.
China also won concessions on foreign investment, with the threshold for government review to be lifted in most areas apart from agricultural land and agri-business.
"The landmark agreement will lock in our existing trade relationship with our largest trading partner, and will be a catalyst for future growth across goods, services and investment," said Mr Robb.
Together with the Japanese and South Korean pacts, it will underpin Australia's prosperity for years to come, he added.
"By itself it's hugely significant but put the three together and you really have got a set of trade agreements with over 50 per cent of our export markets," he said.
"Given what's going on in the region, the extraordinary explosion of people going into the middle class, this is a landmark set of agreements."
In a statement, the Chinese commerce ministry said the pact would help facilitate the China-driven FTAAP, or Free Trade Area of the Asia-Pacific.
Beijing has embraced the broader FTAAP, which is seen as a rival to the proposed Trans-Pacific Partnership pushed by the United States but which excludes China.
One contentious outcome could be the temporary employment of Chinese in Australia. Electrical Trades Union national secretary Allen Hicks said there was concern that Chinese investors would be able to use Chinese workers on projects in Australia that involve an investment of more than US$150 million.
"This agreement is an absolute disgrace and its signing marks a sad day in Australian history," he said.