China and Australia have signed a landmark free trade agreement that follows about a decade of negotiations. The signing ceremony was attended by Australian Prime Minister Tony Abbott and Chinese Trade Minister Gao Hucheng in Canberra. Abbot called the deal as “a momentous and historic day” for the two nations. This deal will give Australian dairy farmers, winemakers and other sectors tariff-free access to the huge Chinese market within a few years. Meanwhile, China is seeking greater access for its investment projects.

In 2013, trade between the two countries was worth A$150bn. The government has said the deal could add A$20bn. Under the deal more than 85 per cent of Australian goods entering the country will carry no penalty, rising to 95 per cent on full implementation.

This is the third FTA signed by Canberra this year, following similar agreements with South Korea and Japan, as Australia looks to increase its exports of food and agricultural products to feed Asia’s growing middle class.

Key Points to Note

• Chinese exports to Australia such as clothes, shoes, vehicles and electronics will be tariff-free.
• Threshold for Chinese investment in Australia without need for a government review raised to A$1.078bn from A$248m.
• Service sectors in both countries will benefit with freer access to industries such as healthcare, tourism, construction, banking and insurance.