China seeks to “accelerate” free trade agreement with Australia

A free trade agreement between Australia and China appears to be a step closer, after Chinese Premier Li Keqiang said his government would seek to “accelerate” an agreement with the Australian government.

Li made the comments during a speech to the Chinese parliament this week, in which he said the Chinese economy will grow at around 7.5% this year, according to reports in Fairfax.  

He also said China will look to speed up free trade agreements with South Korea and the Gulf states.

However, Li give no timeframe for the signing of an agreement, which would allow imports and exports to enter each country without paying duties.

An Australia-China free trade agreement has been in the works for more than nine years and Prime Minister Tony Abbott has previously said he is aiming to secure a free trade agreement with China and Japan by the end of 2014.

Peter Mace from the Australian Institute of Export told SmartCompany Li’s comments are a “positive sign” ahead of Abbott’s scheduled visit the China in April.

But he says “there is still some water to go under the bridge” before the parties can reach an agreement and it is unlikely that an agreement will be secured anytime soon.

Nevertheless, Mace is “hopeful” a deal can be nutted out by the end of the year.

Mace warns there are “still some sticking points” that will be need to be addressed for an Australia-China free trade agreement to proceed, including improved access to investment in Australian firms for Chinese companies and access to the Chinese agricultural market for Australian exporters.

He says based on the New Zealand experience, where agricultural exports to China rose “exponentially” after the country signed a free trade agreement with China, an Australian agreement presents significant opportunities for Australian companies.

University of New South Wales economics professor Tim Harcourt previously told SmartCompany a free trade deal would make trading with China easier for Australian SMEs.

“Small and medium-sized enterprises are now more likely to go to China and south-east Asia than anywhere else in the North Atlantic,” said Harcourt.

“Opportunities exist particularly in regards to the urbanisation in China, which is opening up opportunities for architects and construction and services firms.”