Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Hansard source

I rise to conclude the debate on the Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015. The bill contains amendments to the Customs Tariff Act 1995 that will implement Australia's tariff commitments in the agreement. These amendments are complementary to those contained in the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015.

Firstly, I would like to thank all of those who have contributed to this debate. This is a truly historic agreement for our country. I am pleased that so many members have highlighted in some detail the wide array of benefits on offer. I also again acknowledge those opposite for the bipartisan support they are providing both to these bills and to the free trade agreement. Given the bipartisan support that this agreement has secured in this place, any continuation of the hugely dishonest campaign that has been waged against the free trade agreement by the likes of the CFMEU and the ETU would expose just how totally disingenuous it is.

Negotiations on the China-Australia Free Trade Agreement began in 2005. It is worth reflecting on the significant changes that have occurred in both our economies in those 10 years. In 2005, Australia was at the start of the mining boom and the global financial crisis was beyond the horizon. China was our third largest merchandise export partner. Today, China is our largest export market and our largest trading partner overall, with our two-way trade now worth around a staggering $150 billion. Our trade with China accounts for around 23 per cent of all our trade. China's economy has also changed significantly since that time. During the course of these free trade agreement negotiations, China has become the world's second largest economy. Tens of millions of Chinese have been lifted out of poverty, and its middle class has expanded substantially. China has also embarked on significant reforms to its financial system. Its economy is in transition from a manufacturing and investment focus to a more consumer and services based focus. Just this week, we saw how retail consumption in China was up 10.9 per cent on the previous year, which is substantial given the Chinese retail market is worth around US$4 trillion.

This puts into some perspective the scale of new export opportunity that is opening up across a wide array of goods and services. Notwithstanding this record of extraordinary growth and activity over the last 10 years, the world knows that China still has a long way to go to reach its potential. That is why this free trade agreement is so important. The relationships, both ways, that we have struck to date are added enormously to by this free trade agreement. It does mark the beginning of a whole new phase of opportunity for Australia—and for China, for that matter.

For example, Australia is extremely well placed to help in some way to meet China's growing demand in areas such as premium food—whether it be dairy products, quality beef, fruit and vegetables, seafood, wine or processed food—and in value-adding manufacturing and across myriad services, including secondary school education, university and vocational training, financial services, health, hospital and aged care services, tourism and hospitality, construction, architecture and design, project management, water management, agricultural genetics, irrigation, environmental services and logistics—to name but a few.

This agreement positions Australia to take advantage of these emerging opportunities now and into the future. ChAFTA represents an agreement of outstanding quality between these two highly complementary economies. My Chinese counterpart, Minister Gao Hucheng, has described the deal as 'the most liberalising trade agreement China has ever signed'. This is an achievement that speaks volumes about the commitment of both sides to maximise the potential in the trade and investment relationship. China has recognised, as it moves to a consumer based economy, that it needs the expertise of countries like Australia, especially across services, food production, food processing and high-end manufacturing. Our brand in China—and in much of Asia, for that matter—is gold standard when it comes to our service offerings across literally hundreds of services. China needs that expertise to help bring its own population, in a comprehensive way, to the same level of world-class service provision across lots of areas. It also means that Australian businesses large and small have been given the opportunity for first-mover advantage because we have concessions that no other country is yet to receive. Notably, it also affords Australia most favoured nation status in services and investment, which means Australia is guaranteed to secure better concessions that China affords to any other country in the future in these areas of services and investment.

I have been pleased to hear the almost endless supportive comments from businesses and industry bodies regarding the free trade agreement. For example, Brendan Pearson, Chief Executive of the Minerals Council of Australia, said:

The trade agreement with China is an unambiguously good deal for Australia. It is a high quality agreement that will deliver stronger economic growth, more jobs and better living standards.

National Farmers' Federation President Brent Finlay said:

ChAFTA is a game-changer for Australian agriculture: providing unprecedented access to the world’s second largest economy and underpinning the competitiveness of many of our key agricultural exports.

Noel Campbell, President of Australian Dairy Farmers, said recently:

If the ChAFTA is ratified this year, the dairy industry alone will see a growth in job creation across the value chain. This means more jobs for farmers and more jobs in processing plants and logistics. We expect that around 600 to 700 jobs will be created within the first year of ratification. The flow-on effects of this growth would undoubtedly benefit the rural and regional communities where dairy plays an important role.

ChAFTA provides Australia with a competitive advantage over our major competitors, including the United States, Canada and the European Union. It also levels the playing field for Australia with regard to certain commodities, putting us on the same footing as or on an improved footing compared with New Zealand, Chile and South-East Asian nations that currently have free trade agreements in place with China. For our resources and energy sectors, ChAFTA eliminates all tariffs of up to eight per cent within four years, including for coal, worth around $8.3 billion within two years. ChAFTA provides greater certainty for our exporters by locking in current zero tariffs on major resources and energy products, including iron ore, gold, crude petroleum oils and LNG. Under ChAFTA, China will eliminate tariffs on 99.9 per cent of our resources, energy and manufacturing exports to China.

I particularly want to highlight the benefits of ChAFTA for Australia's services industry. We know services are an increasingly important part of our economy; 75 per cent of our GDP is derived from services, yet only 17 per cent of our exports. The opportunity gap is enormous. It is perhaps less well known that the Chinese services sector is now in fact larger than its manufacturing sector. But China has about 52 per cent of its GDP coming from services; the First World countries are up at around 75 per cent, as Australia is. And its services sector is already a major driver of GDP growth. China is already Australia's largest services export market, worth about $8.2 billion in 2014. And under this agreement we have the potential to very, very substantially grow our services trade with China, creating new jobs and prosperity for Australia and, in particular, new investment opportunities for our small and medium businesses to, again, properly develop their expertise and their service business into a market of 1.4 billion people.

Let's look at financial services, which present an enormous opportunity for Australia. The Financial Services Council estimates that this agreement could potentially add $4 billion to our economy and create 10,000 jobs in the financial services sector by 2030 in Australia—10,000 new jobs in one sector alone. With the advent of the digital age and much greater and cheaper airline connectivity, combined with the significant advantage associated with being in the same time zone, an opportunity for small and medium businesses to establish a presence in China is now highly feasible. In ChAFTA, China has offered Australia its best ever services commitments in a free trade agreement beyond greater China. Most valuably, this includes new or significantly improved market access for Australian banks, insurers, securities and futures companies, law firms, professional service suppliers and education service exporters, as well as in health, aged care, construction, manufacturing, telecommunications and so much more.

As Australia's first minister for investment I am pleased that this agreement improves opportunities for investors in both countries. Chinese investment in Australia has been growing strongly in recent years, up from $2 billion 10 years ago to around $65 billion at the end of 2014. ChAFTA will promote further growth of Chinese investment into Australia, in particular by liberalising the Foreign Investment Review Board screening threshold for private Chinese investors in non-sensitive sectors from $252 million to just over $1 billion.

We should not underestimate the importance of the headturning effect of this agreement in China. Since our governments announced the conclusion of ChAFTA negotiations in November last year we have seen increased interest from Chinese businesses and investors looking for partnerships and opportunities in Australia. Australian businesses, too, are looking to seize the opportunities on offer for partnerships and investments in China. And, as I mentioned earlier, the opportunity for small and medium businesses is profound. It is an enormous opportunity to grow so many areas of world-class expertise, to grow our market into a market of an extra 1.4 billion people, compared with trying to further develop opportunities or find opportunities in a market of 23 million people.

In August I led a delegation of 35 Australian CEOs to Beijing. They and their companies are hard at work driving business that will boost prosperity in Australia for years to come. On that trip, vitamin supplements manufacturer Blackmores and meat exporter Sanger Australia each signed agreements with JD.com to sell their products on China's largest online shopping website. I think something like 300 million people are currently signed up to JD.com. It is a massive worldwide online shopping website. Australian products and services are meeting the needs of China's middle class, enabled by e-commerce and other emerging technology, and ChAFTA will help our competitive edge. The sense of anticipation within the Chinese business community was palpable. In support of this observation, I acknowledge the many contributions to this debate by members in this chamber. Some typical examples include that of the member for Lyne, Dr David Gillespie, who said:

Even the announcement of the trade agreement … has led to hundreds and thousands more cases of wine leaving the Hastings valley on the mid-north coast in the north of the Lyne electorate and heading to China.

The member for Ryan, Jane Prentice, said:

With the slowdown in mining, the service economy share of exports to China will only grow further. For the service economy, this agreement is crucial.

The member for Longman, Wyatt Roy, said:

… when we look back in 20, 30, 40 or 50 years time—

and he may well be here in 50 years time, which is very good—

the idea of starting an Australia business with the intention to sell to a marketplace of just 23 million people will seem somewhat archaic and retro. The opportunities the China-Australia Free Trade Agreement will unlock mean … we will have access to billions of people …

The member for Eden-Monaro, Peter Hendy, talked about Australia's oyster coast in his electorate, which has 'expectations of sales tripling', as the existing tariffs on oysters will be eliminated under the China-Australia Free Trade Agreement. The member for Bass, Andrew Nikolic, noted the innumerable economic, social and cultural benefits of the FTA for both countries, adding:

Foremost among these will be its anticipated critical contribution to regional strategic security.

Finally, the member for Hume, Angus Taylor, said:

… I think history will see, in 20 years time, that these are the most profound changes of this era of Australian history, because trade integration is the beginning of a much deeper integration with countries that will shape the world in the coming years, and we absolutely must be part of it.

I thank those members and many others who made comments along those lines.

The customs legislation we have debated is the only legislative change that parliament needs to approve for ChAFTA to enter into force. The Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 contains amendments to the Customs Act 1901. These amendments implemented Australia's obligations under chapter 3 on rules of origin, as set out in the China-Australia Free Trade Agreement. These rules are essential for the purposes of determining whether goods imported from China are eligible for the preferential rates of customs duty under the free trade agreement. The bill also contains amendments to include relevant obligations on Australian exporters and producers who wish to access preferential treatment under the agreement when exported to China. Certain powers are also conferred on authorised officers to examine records and ask questions of exporters or producers of goods exported to China in order to verify the origin of such goods.

The Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 contains amendments to the Customs Tariffs Act 1995 that will implement Australia's tariff commitments set out in the China-Australia Free Trade Agreement. The amendments in the two bills are complementary. The associated Customs Regulations, the Foreign Acquisitions and Takeovers Regulations and Life Insurance Regulations will also require amendment in due course. A ministerial determination under the Migration Act is also required. Implementing this agreement will require only minimal changes to Australia's current policy settings. It is crucial that we pass these bills without delay so that this agreement can enter into force as soon as possible. Many business leaders have urged early entry into force to allow the benefits, amounting to hundreds of millions of dollars, to start to flow.

I would like to acknowledge the work of JSCOT in conducting its extensive inquiry into ChAFTA. I would particularly like to acknowledge the former chair of JSCOT, the member for Longman, in chairing this inquiry and congratulate the member for Hume on his election as chair of JSCOT and for tabling the committee's report earlier this week. Members of the committee held public hearings around the country, which allowed many organisations, companies and individuals in the community to have their say on this important treaty. I welcome JSCOT's majority recommendation that binding treaty action be taken to implement the China-Australia Free Trade Agreement. The committee made a number of other recommendations regarding implementation of ChAFTA after entry into force, which the government will consider closely in due course.

The China agreement rounds out the third in a trifecta of trade agreements the government has concluded with our three largest export markets. Already Australian businesses are seeing the benefits of our agreements with Korea and China. Together these agreements have the potential to transform our economy, and the Trans-Pacific Partnership, including 12 countries, covering 40 per cent of global GDP, promises to further enhance the competitiveness of our economy and deliver new markets and generate new jobs.

Finally, it is important to note that this outcome was the best part of a decade in the making. In this regard, I would like to acknowledge the contributions made by my predecessors on both sides of the House. Negotiations commenced under the Howard government, when Mark Vaile was Minister for Trade. Mark Vaile was followed by Warren Truss, Simon Crean, Craig Emerson and Richard Marles, all of whom share in this outcome. Pleasingly, this demonstrates bipartisan support across successive Australian governments for our relationship with China.

I would also like to acknowledge all of those officials and negotiators from my department who have dedicated so much time, effort and professionalism over a long period to help secure this outcome for Australia. After 10 years, it is rather a large alumni. It includes Jan Adams, who has provided outstanding leadership, along with her highly talented team. It includes our Ambassador to China, Frances Adamson, and her predecessors. I would also like to thank my own staff for their efforts, their great dedication and their great support.

It is with great pleasure that I commend these bills to the House.

Question agreed to.

Bill read a second time.

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