Customs Amendment (ChAFTA Implementation) Bill 2015

On the back of the previous speaker, the comments I frequently hear from farmers, in my part of the world, are that they look for market access and, so often, I hear the term ‘level playing field’. That can be farmers or anyone else in business and industry. The future prosperity of Australia relies on bilateral trade agreements, which is why I support this Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015. The coalition government has secured a landmark deal for Australia with the China free trade agreement. No-one could dispute this fact. It is an historic agreement, without any question. It is an outstanding achievement of this government coming on the back of successive free trade agreements with Japan and Korea.

I want to acknowledge and congratulate the Minister for Trade and Investment and his very hard-working team of negotiators and thank them for their efforts. I have no doubt there were some very robust discussions in the process of all of these free trade agreements. They will look back and know that they were part of a critical agreement between Australia and China. Why? We know that China is both Australia’s largest export market and source of imports. We export $107.6 billion worth of goods and services to China or 32 per cent of our total exports. This is divided into goods exports worth $100.1 billion and services exports worth $7.5 billion. In return, we import $52.1 billion worth of product from China, or 15 per cent of total imports. The trade advantage is heavily weighted in Australia’s favour.

As I have said, the China free trade agreement builds on agreements already concluded with Korea and Japan. It will give Australian businesses unprecedented levels of access—and they will work on this themselves—to a market of more than 1.3 billion people which includes a rapidly rising middle class. That is an extraordinary opportunity for business. That is what they tell us that it is for them. I can see many Australian businesses fitting into the high-quality niche product areas in these markets, because that is what we produce.

It is all part of a powerful trifecta of agreements with Australia’s three largest export markets, accounting for more than 61 per cent of our export of goods. Of course, the key booster for access to trade is both access to markets and the removal of tariffs on products and merchandise exports. Most importantly, tariffs will come down on a range of Australian products—especially agricultural ones.

Some of our goods are subject to tariffs in China of up to 40 per cent. And if you are the producer back in Australia, that 40 per cent is a huge advantage to others in the market. More than 85 per cent of all Australia’s goods exports will be tariff free when the China free trade agreement comes into force. On full implementation, 95 per cent of our goods will be tariff free. Importantly for the electorate of Forrest and the south-west of Western Australia, tariffs will be abolished for Australia’s $13 billion dairy industry—and I recently read of a deal being done on milk and honey in Western Australia.

Australia’s beef and sheep farmers will also gain from the abolition of tariffs of from 12 to 25 per cent. By 2030, the total benefits for beef production are expected to approach around $3.3 billion. All tariffs on Australian horticulture will be eliminated, which is great news for the fruit and vegetable growers in the south-west. The dairy industry says an agreement will lead to the creation of new jobs in the dairy industry in the first year alone. And tariffs on products such as barley, oats, sorghum and millet; certain wood and paper products; and certain base metal ores and their concentrates will be eliminated on entry into force of the agreement.

I note that the National Farmers’ Federation president, Brent Finlay, said:

This agreement is a game-changer for Australian agriculture … Common sense has prevailed – there was always too much riding on this agreement for it to be sidelined.

Ratification will mean Australian farmers and agribusinesses can take advantage of the reduced tariffs on Australian food and fibre products as soon as possible. This presents huge opportunities for Australian farmers, boosting economic growth and farm-gate returns.

That is where we want to see it—at the farm gate. The NFF went on to say:

The NFF has maintained the position that the China FTA will create more jobs for Australians on the back of increased food and fibre exports and the positive flow-on effects to our rural and regional communities.

That is something that is very dear to my own heart—two phrases in there: ‘returns at the farm gate’ and ‘benefits to rural and regional Australia.

It is not just for agricultural products: 75 per cent of our national GDP is derived from services, and we export only 17 per cent of these. There are enormous opportunities for our service providers, especially in education and financial services. In fact, the Financial Services Council says that the increased access that will be given to financial services alone will create perhaps an additional 10,000 jobs between now and 2030 in that sector.

Resources, energy and manufacturing will benefit. We will see tariffs on coal exports to China eliminated within two years of implementation, helping Australian exporters of coal to compete with Indonesian firms that already benefit from preferential access to China.

Alumina is produced in the south-west and shipped out of the port of Bunbury, and we see that alumina is included in the free trade agreement. Cristal Global produces titanium dioxide at Kemerton, and this is also included in the free trade agreement. So I am looking at companies and individual businesses getting particularly busy in these markets. Recipients of preferential status in China have received either immediate tariff elimination or phased reductions over several years for key products, and there has been a tariff disadvantage in favour of Australia’s competitors over time.

So we can see that there will be genuine benefits for business and industry. I could look at the beef sector, perhaps, and at a box-meat deal between processor V&V Walsh, based in Bunbury in my electorate, and China’s Grand Farm. The potential is huge, with thousands of extra lamb and beef numbers needed for this deal alone.

Everyone is aware of the internationally-known, quality Margaret River wines and their opportunity in this market. Perhaps not as many people are aware of the Geographe Wine Region in the south-west, that also produces some fine wines. I would like to see both of these regions benefit by their work in China through this deal. I am sure that local producers will see it as an opportunity and will be working hard on getting into or expanding their access in China

Timing has been all important. Scheduled tariff cuts are based on the calendar year, which will see an immediate round of tariff cuts, followed by a second round of cuts on 1 January 2016. This will be a real boost to our exporters. They will benefit enormously from two rounds of tariff cuts over, really, a three-week period at the end of this year and in early 2016.

On that basis, there are a lot of reasons to support this deal and I am particularly pleased to support this bill in the House this evening.