ChAFTA implementation and review process

Australia’s Free Trade Agreements (FTAs) are not static. They are implemented over time and subject to regular review to maximise the benefits they deliver.

Existing FTAs are further developed through committees and working groups established by the agreements, and formal review provisions. Collectively, these form the “built-in agenda” to an agreement.

The built-in agenda provides a platform for the parties to examine ways to build on outcomes where possible. Some benefits automatically deepen over time as mandated by an agreement, such as staged tariff cuts.

ChAFTA’s “built in agenda” comprises a range of reviews intended to deepen liberalisation and expand market access. For bilateral goods trade, China and Australia will review ChAFTA within three years of entry into force with a view to expanding market access, followed by a further reviews at least every five years. For services, Australian and China will consult within three years of entry into force, with a view to progressive liberalsation of measures affecting trade in services, followed by subsequent reviews. China and Australia have agreed to cooperate in a range of sectors including financial services, legal services, and Traditional Chinese Medicine. The Investment Chapter includes a commitment on future negotiations to expand market access and further develop investment projections. ChAFTA contains a commitment to negotiations a reciprocal agreement on government procurement after the completion of China’s negotiations to join the WTO Government Procurement Agreement.

ChAFTA — entry into force

The China–Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015.

The then-Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng signed the agreement and side letters in Canberra on 17 June 2015.

Mr Robb introduced customs-implementing legislation into Parliament on 16 September 2015. The legislation was passed by the House of Representatives on 22 October and by the Senate on 9 November 2015.

The Joint Standing Committee on Treaties (JSCOT) conducted a public inquiry into ChAFTA. On 19 October 2015, the Chair of JSCOT tabled the report of its inquiry into ChAFTA in parliament. The report included a number of recommendations, including that binding treaty action be taken. Two other parliamentary committees also reviewed ChAFTA and its implementing legislation. The Senate Foreign Affairs, Defence and Trade References Committee and the Senate Foreign Affairs, Defence and Trade Legislation Committee tabled their reports on 6 November 2015. Both supported binding treaty action.

Following the passage of customs legislation through Parliament, amendments were also made to the associated customs regulations, the Foreign Acquisitions and Takeovers Regulations 2015 and the Life Insurance Regulations 1995. A ministerial determination was also made under the Migration Act 1958.

On 9 December 2015, Australia and China exchanged diplomatic notes, confirming the completion of domestic processes in both countries.

Two memoranda of understanding (MOUs) on an investment facilitation arrangement and work and holiday visa arrangement, and a side letter on traditional Chinese medicine were also concluded as part of the overall ChAFTA package, but do not form part of the FTA.

After entry into force

On 24 March 2017, the Minister for Trade, Tourism and Investment, Steven Ciobo, and the Chinese Commerce Minister, Zhong Shan, signed a Declaration of Intent Regarding Review of Elements of the China-Australia Free Trade Agreement, signalling the beginning of reviews of ChAFTA’s trade in services and investment commitments, and a review of the investment facilitation arrangement MOU.

ChAFTA built-in review mechanisms

Dates relate to entry into force (20 December 2015)

  • General review of ChAFTA within three years, and then at least every five years, to including considering deepening liberalisation and further expanding market access.
  • Review of bilateral taxation arrangements to improve trade and investment.
  • Ongoing review of non-tariff barriers to trade in goods, with an initial progress report including any recommendations, within one year.
  • Review of origin documentary requirements to commence within three years, including consider developing of electronic origin data exchange system and introduction of additional trade facilitative measures.
  • Periodic review of customs procedures to explore options for simplification.
  • Review of agricultural safeguard measures including in the last stage of application of respective trigger levels, with a view to removing the measures.
  • Existing investment access is on a negative list basis.
  • MFN on investment - China to give Australia the same future treatment it gives to any other country on investment - e.g. if it concludes a BIT with the US.
  • Investment commitments to be reviewed within three years, with negotiations on comprehensive investment chapter to commence immediately after.
  • MFN on 10 services sectors – China to give Australia the same future treatment it gives to any other country in environmental, construction, engineering, computer and related, tourism and travel related, related scientific and technical consulting, securities services and education services.
  • Consultations within two years, and every two years after that, on progressive liberalisation of trade in services, including possibility for China to negotiate on a negative list basis.
  • Negotiations on government procurement to commence as soon as possible after China’s accession to WTO Government Procurement Agreement.
  • MOU on Investment Facilitation Arrangement to be reviewed within two years, and MOU on Work and Holiday Visa Arrangement, to be reviewed within three years of commencement.
  • Designated occupations and cooperation under the skills assessment and licensing side letter to be reviewed within two years.

ChAFTA review and implementation committees

  • FTA Joint Commission — to meet once a year and on request to review the overall implementation of ChAFTA and identify issues of concern.
  • Investment — to meet as necessary including to review implementation of investment chapter and to identify and recommend measures or initiatives to promote and increase investment flows.
  • Trade in Services — to meet within two years including to review implementation of services chapter and identify and recommend measures to promote increased services trade. Sectoral reps can attend meetings.
  • Financial Services — to meet every two years, broad mandate allows committee to develop possible amendments to ChAFTA reflecting developments in financial services markets. Membership includes Treasury, DFAT and as necessary APRA, RBA and ASIC.
  • Movement of Natural Persons — to meet at least every two years to review implementation of the MNP chapter and to identify and recommend measures to promote MNP and to improve commitments.
  • Trade in Goods — to meet as necessary including to review implementation of goods chapters, consult on accelerating tariff elimination and address tariff and non-tariff barriers.
  • Sanitary and Phytosanitary Measures — to meet at least every two years including to review implementation of SPS chapter, establish working groups and address issues that may arise. DAWR lead.
  • Technical Barriers to Trade — to meet at least every two years including to review implementation of TBT chapter, establish working groups to address issues and develop recommendations to supplement the chapter. DIIS lead.
  • Intellectual Property — to meet as necessary to review implementation of the IP chapter and discuss IP issues.

Other meetings

  • High-level Dialogue on Trade Remedies to be held regularly to exchange information on trade remedies/anti-dumping issues.
  • Meeting on legal services cooperation within 12 months or as agreed, under Side Letter on Legal Services.
Last Updated: 2 January 2018

Contacts

Email: chinafta@dfat.gov.au

Phone: +61 2 6261 1888 (within standard business hours)