Australia, China reach free trade deal, says PM Tony Abbott

China's President Xi Jinping (right) shakes hands with Australia's Prime Minister Tony Abbott in Canberra on Nov 17, 2014. Prime Minister Tony Abbott confirmed on Monday he had concluded negotiations on a free trade deal with China. -- PHOTO: REUTERS
China's President Xi Jinping (right) shakes hands with Australia's Prime Minister Tony Abbott in Canberra on Nov 17, 2014. Prime Minister Tony Abbott confirmed on Monday he had concluded negotiations on a free trade deal with China. -- PHOTO: REUTERS  

CANBERRA (Reuters) – China and Australia will on Monday sign a landmark free trade deal more than a decade in the making, Australian Prime Minister Tony Abbott said, opening up markets worth billions to Australia and loosening restrictions on Chinese investment.The deal, which Chinese President Xi Jinping is due to sign on a state visit to Canberra, will open up Chinese markets to Australian farm exporters and the services sector while easing curbs on Chinese investment in resource-rich Australia. “I look forward to making further announcements on this landmark agreement later today,” Mr Abbott said in a statement.Australia is attempting to transition from a reliance on exports of minerals such as coal and iron ore to expanding its food and agricultural exports to a growing Asian middle class, moving from a “mining boom” to a “dining boom”.Mr Paul Glasson, the National vice-president of the Australia China Business Council, hailed the much-improved access for up to 40 service industries including health, law and aged care, as well as for agricultural products such as dairy, rice, wheat, wool, and cotton. “Up to 95 per cent of our exports over time will enter the Chinese market tariff free,” parliamentary secretary Josh Frydenberg said in a television interview on Sunday. “When you consider China is Australia’s major trading partner, A$150 billion ($130 billion) worth of two-way trade, this is great news for the Australian cultural sector, the services sector.”

The agreement will give Australian dairy farmers tariff-free access within four years to China’s lucrative infant formula market, minus any of the “safeguard” caps that currently restrict competitors from New Zealand, the Sydney Morning Herald reported, citing sources.Wine makers, currently selling more than A$200 million (S$227 million) worth of goods to China each year despite tariffs of between 14 per cent and 30 per cent, will also see tariffs eliminated over four years, it reported.Tariffs on horticultural products, seafood and other goods accounting for 93 per cent of Australian exports by value will also be reduced to zero by 2019, according to the newspaper. Tariffs recently imposed on Australian coal will be removed over two years.The Minerals Council of Australia said it understood that the agreement would eliminate a 3 per cent coking coal tariff immediately and a 6 per cent tariff on thermal coal within two years.Hundreds of protesters gathered at Parliament House on Monday morning ahead of Mr Xi’s arrival. Huge banners in English and Chinese exhorted the leader to “Free Tibet” and end what they called the persecution of religious sects such as Falun Gong.In 1999, then President Jiang Zemin launched a campaign to crush the Falun Gong religious group. It was banned as an “evil cult” after thousands of practitioners staged a surprise but peaceful sit-in outside the leadership compound in Beijing to demand official recognition of their movement.Mr Xi was in Canberra on Monday after attending the G-20 leaders’ summit at the weekend in Brisbane. His visit was also scheduled to include stops in Sydney and Tasmanian state capital Hobart.The free trade agreement caps a string of breakthrough deals for Mr Xi.Last week he jointly announced with US President Barack Obama a groundbreaking plan to cap and eventually roll back carbon emissions, as well as reaching a “substantial conclusion”of a free trade deal with South Korea.