1 September 2005
A second negotiating meeting on the Australia-China Free Trade
Agreement (FTA) was held in Beijing from 22-24 August. This
was the first substantive meeting between officials on the FTA
negotiations (the first meeting, held in Sydney in May, covered
The Australian delegation was made up of officials from the
departments of: Foreign Affairs and Trade; Agriculture, Fisheries
and Forestry; Industry, Tourism and Resources; Treasury; Education,
Science and Training; Communications, Information Technology and
the Arts; Finance and Administration; Attorney-General's; as well
as from the Australian Customs Service, and IP Australia.
The Chinese side, led by their Ministry of Commerce, had
available a large number of officials from a wide range of
agencies, including the Ministries of Finance, Agriculture,
Communications, Information Industry, Education, Justice,
Construction, as well as from the National Development and Reform
Commission, General Administration of Customs, the General
Administration of Quality Supervision, Inspection and Quarantine
(AQSIQ), China Banking and Regulatory Commission, China Securities
Regulatory Commission, China Insurance Regulatory Commission,
General Administration of Civil Aviation, State Environment
Protection Administration, and China National Tourism
The meeting began a wide-ranging and comprehensive exchange of
information about each other's trade and investment regimes.
Each side put a range of detailed questions to the other.
Both sides agreed that all issues could be discussed, without
prejudice to the position that either might take in the negotiating
phase. At this stage, the focus is on information exchange;
there was no discussion of commitments which might be entered into
in the Agreement.
China's questions included areas that it identified as being of
particular interest to it (including quarantine, foreign direct
investment, movement of natural persons, and anti-dumping).
Australia, as well as asking questions, emphasised the need for
relevant and up-to-date information about China's policies and
administrative regimes in all sectors.
The substantive discussions took place within four working
groups covering agriculture and quarantine; trade in goods; trade
in services; investment and trade facilitation issues.
The Agriculture Working Group focused on each country's
respective agriculture and trade policies, sanitary and
phytosanitary regimes, as well as covering technical barriers to
Both the Chinese and Australian officials underscored that
agriculture is an important sector to each country but that each is
looking for a positive, liberalising, win-win outcome from these
negotiations. Each side asked detailed questions of the
other, and in some cases, further information has been
sought. We naturally took the opportunity to canvass the wide
range of concerns that Australian agricultural exporters have so
far raised with us.
The Trade in Goods Working Group focused on tariffs, non-tariff
barriers, industry assistance, customs administration, rules of
origin, trade remedies and government procurement.
We used the session on non-tariff barriers and industry
assistance to raise issues of concern to the Australian business
community, in particular in relation to the kinds of government
assistance and subsidies provided to domestic Chinese
industries. We explored in detail how each other's trade
remedies regime worked. We had a useful exchange on customs
facilitation, building on the cooperation that already exists
between our two customs organisations. Chinese officials were
interested in Australia's approach to rules of origin, particularly
the use of an approach based on change of tariff
classification. We explained in detail to the Chinese side
how government procurement works in Australia, and how we have
handled government procurement in our other FTAs.
The Trade in Services Working Group included representation from
a wide range of agencies from both countries. This allowed
in-depth discussion of a range of sectors, including education,
tourism, telecommunications, financial, transport, professional and
mining services, as well as the regulations affecting the temporary
entry of people. Again, both countries used the opportunity
to raise questions about each other's regimes in areas of interest
to them. The information exchange allowed us to clarify a
range of issues raised with us by industry including repatriation
of profits, project approval and licensing requirements, corporate
law and foreign investment regulation, high capitalisation
requirements, business scope restrictions, transparency,
accreditation and recognition of qualifications, lengthy approval
processes and national treatment issues. Australia also asked
a number of sector-specific questions directed towards developing a
clearer picture of regulatory and other market access barriers
facing Australian service providers. Since the Chinese
experience is particularly focused on its WTO accession
commitments, the Australian side explained how services are treated
in FTAs, and how this can differ from the form in which services
are handled in the World Trade Organization agreements.
Both countries sought information about our respective foreign
investment regimes and expressed an interest in facilitating
investment in each.
The fourth Working Group covered a set of issues including
intellectual property rights, competition policy, transparency and
dispute settlement. Both countries asked detailed questions
about each other's regulatory and enforcement regimes. On
intellectual property, the Chinese side was well prepared. We
had a robust exchange not only on technical issues but also on
broader issues, especially enforcement and concerns raised by
Australian industry. Importantly, China revealed that it is
undertaking several reviews of its intellectual property laws, and
accepted the Australian offer to provide detailed materials for
consideration in the reform of China's intellectual property
regime. We used the session on transparency to raise issues
of concern to the Australian business community, focusing at this
stage on the availability and publication of Chinese laws and
regulations and ongoing efforts by the Chinese government to
improve transparency in administrative decision making.
Chinese officials also expressed interest in finding out more about
Australian federal and state governments’ approaches in these
There was a general discussion about the structure of the
negotiations and the agreement. This laid the basis for
continuing discussion of these issues at the next negotiating
meeting. Both sides agreed that further information was
required in a range of areas. Some of this will be provided
inter-sessionally and discussed in more detail at the next
It was tentatively agreed that the next negotiating meeting will
take place in the week beginning 31 October in Beijing.
More information on Australia's existing FTAs.