Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Cabinet Secretary representing the Minister for Trade and Investment. Will the cabinet secretary please tell the Senate why the China-Australia Free Trade Agreement is in Australia's national interest.

Arthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank Senator Bernardi for his question and for his ongoing interest in trade and investment globally. The China-Australia Free Trade Agreement is a big opportunity for jobs and exports in Australia. We all know that but we need to put this in an even bigger context—that is, the transformation of the Chinese economy over the last four or five decades. The biggest poverty reduction initiative in global history is the economic development of China. What we have done in this agreement, which was started 10 years ago and concluded under this government, is put ourselves on the ground floor of the next stage of the transformation of this great economy, which will dominate the Asia-Pacific in decades to come.

It is important for us to recognise under this agreement that 95 per cent of our exports to China will enter duty free and we will have opportunities for Australian business in a wide range of sectors—agriculture, processed foods, resources and energy. What is important here is, as they transform to greater reliance on domestic consumption as the incomes of Chinese people go up, their demand for processed foods, their demand for advanced manufacturing, their demand for advanced services will increase and Australia has a capacity across the board to service those needs. This agreement puts us in the box seat to meet those requirements.

It is estimated that ChAFTA will deliver more than $18 billion of benefits to Australia over the coming decade. So embracing free trade and modernising our economic relationship with China will be a pillar of our future prosperity in the region. By drawing China more and more into the global system of rules, we also encourage a much more peaceful Asia-Pacific.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I rise to ask a supplementary question. Is the cabinet secretary aware of negotiations between the government and the opposition in relation to the China-Australia Free Trade Agreement?

Arthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | Link to this | Hansard source

Yes, even the cabinet secretary is aware that the government and the opposition are now speaking on the matter of the China-Australia Free Trade Agreement. I welcome the fact that yesterday the Leader of the Opposition and the shadow minister for trade and investment tabled a series of detailed proposals, which now allow the government and the opposition to have a substantive discussion going forward about what needs to be done to finalise agreement on this very important trade arrangement.

I make the point: we accept at its word what the opposition has said—that it is not about impacting on the integrity of the agreement itself—and we understand that. We also understand, as I think the opposition does, that we must not be seen to discriminate against China in coming to some agreement on this matter. We will look in good faith at the arrangements that the opposition want to put in place. Many of them appear to be a codification of existing practice and we will look at them in that context. I thank the opposition that finally we have a commitment to getting the deal through. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a final supplementary question. Would the cabinet secretary be kind enough to advise the Senate why ratifying the China-Australia Free Trade Agreement is time critical?

Arthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | Link to this | Hansard source

We are very keen, on this side of the House, for the agreement to be ratified this year so we can experience the full benefits of the deal. As soon as the agreement has been ratified and the final exchange of letters has occurred between both countries' trade ministers, there is an immediate round of tariff cuts that will take effect and, after that, a second round of tariff cuts will automatically take effect from 1 January 2016. If the agreement is not ratified this year, the second round of tariff cuts will not take place. This will cost Australian exports and exporters hundreds of millions of dollars a year. The National Farmers' Federation has estimated that missing this round of tariff cuts will cost Australian farmers alone $300 million. The ChAFTA has taken more than 10 years to finalise. It is crucial for Australian industry we get the agreement finalised this year.