China trade deal worth $250m for SA
The Advertiser
China trade deal worth $250m for SA
November 15, 2006
SOUTH Australia will earn at least $250 million annually from an Australia-China Free Trade Agreement. The benefits have been calculated in a Monash University Centre of Policy Studies report for the Department of Foreign Affairs and Trade. The forecast is based on an expansion in agriculture, food and services industries and investment.
The report shows that a trade pact would be worth $3.9 billion to Australia annually with its benefits coming once its impacts have worked their way through the system.
But the author of the report from Monash’s Centre of Policy Studies, Dr Yinhua Mai, said the South Australian forecast doesn’t include the rapid growth projected for the emerging mining sector.
"Potentially, the benefit is also even bigger than the modelling shows because as trade expands due to the FTA, it will act as a catalyst to further growth and business will snowball," Dr Mai said.
Negotiations on the Australia-China Free Trade Agreement resume next month with Australian and Chinese governments hopeful of an outcome in two years.
While China has brought economic problems for some sections of the economy such as the manufacturing sector, for other industries and for Australia as a whole, industry believes the advantages of a trade agreement far outweigh the downside.
The importance of a free trade agreement has also been supported by an Advertiser survey of Adelaide businesses and industry organisations.
An increasing number of South Australian businessmen and women are building links and trade with China, because of the opportunities provided by the world’s fastest-growing economy.
In a major change to where we do business, China has emerged as the country most likely to be our next major trading partner in 10 years.
It comes as a growing number of Chinese are living, studying, holidaying, investing and doing business in South Australia.
Business leaders yesterday cautioned that their support for an agreement is contingent on the removal of tariff and non-tariff barriers to allow trade to occur on a level playing field.
With exports growing dramatically in the past decade, China has become SA’s third largest trading partner after Japan and the U.S.
The state’s exports to China reached $674 million in 2005-06, while imports were worth $649 million.
China has emerged as Australia’s second largest market, with exports jumping from just $1.2 billion in 1989 to $11 billion in 2004-05 and $18 billion in 2005-06, while imports were worth $23.2 billion in the past financial year.
Department of Trade and Economic Development Office of Trade director, Wayne Parham, said China is providing great opportunities and prospects for SA companies.
It is focusing its efforts on specific sectors including education and training, food and beverages, tourism, mineral resources, automotive, creative industries and architectural services.
China Cluster chairman, Ted Byrt, believes the opportunities are virtually limitless with very few products the Chinese wouldn’t want.
"While an FTA is of questionable value to the manufacturing sector, the overall benefits are enormous," he said.
Business SA chief executive Peter Vaughan said a free trade agreement with China would provide the opportunity to grow the capacity of domestic business in South Australia and increase our global competitiveness.
