Impact Of China-Australia Free Trade Agreement

April 10th, 2021 by

Subscribe to this free magazine for more articles on this topic Many other sectors of Australian agriculture will also benefit from the free trade period. However, not everything is good news for Australian agriculture. Agricultural industries that do not export to China or contract tariff reductions may result in a minimal decline in production. This reflects both the currency effects (the overall effects of the free trade agreement on Australia are dominated by benefits to the coal industry) and the general conversion of activity, including the conversion of land use, to sectors that have become relatively more profitable as a result of the removal of tariffs. Deloitte Access Economics has modelled the economic impact of the China-Australia Free Trade Agreement on the Australian economy, including on different parts of agriculture. As one of the sectors of Australian agriculture that is expected to benefit most from the free trade agreement, this article takes a closer look at the impact on the beef and beef industry. The current tariffs on Australian beef imports into China is between 12 and 25 per cent, and our modelling is based on a total removal of duties within a decade. There is also a 10% tariff for live cattle. However, according to the Department of Foreign Affairs and Trade, many of Australia`s livestock imports to China are purely high and this type of import of live cattle currently does not attract any tariffs. Therefore, the removal of the tariff on beef (unlike live cattle) has the greatest direct impact on the Australian beef and beef industry. The China-Australia Free Trade Agreement (“ChAFTA”) marks a milestone in the development of bilateral economic relations between China and Australia in relation to China`s commitments under the World Trade Organization and its other free trade agreements. However, ChAFTA is failing to ease key regulatory barriers in China, which will remain the main barriers to Australia`s exports of educational services to China.

Through a preliminary study and regression analysis of ChAFTA`s impact on Australia`s education exports to China based on available data, we show that ChAFTA has not played an important role in promoting the application and approval of Sino-Australian programs, but has contributed to the growth of international student enrolments from China. The effect of ChAFTA is secondary to national regulations at best and tends to be greater in less regulated sectors. These results quantify the impact on two parts of the beef supply chain: the farm and the processing plant. How the impact crosses the supply chain will be an interesting point to observe. Given the recent challenges in Australia`s beef sector, there may well be a chance to reduce debt, invest in innovation, accelerate land legacy plans and give a welcome boost to those who wish to expand their businesses. While there is a risk of modeling such complex systems, our modeling, based simply on the removal of Chinese tariffs on Australian beef, presents some interesting results, including: International Political Economy: Trade Policy eJournal Learn more about the solutions we offer to the consumer industry.

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