WT/REG369/M/1  
 
24 November 2016 
(16-6451) Page: 1/4 
Committee on Regional Trade Agreements  
Eighty -third Session   
 
 FREE TRADE AGREEMENT  BETWEEN AUSTRALIA AN D CHINA  
(GOODS AND SERVICES)  
NOTE ON THE MEETING OF 7-8 NOVEMBER 2016  
Chairman: Ambassador Daniel BLOCKERT (Sweden)  
1.1.  The 83rd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committ ee') was convened in Airgram WTO/AIR/RTA/8 /Rev.1  dated 2 8 October 2016.  
1.2.  Under Agenda Item D.II of the session, the CRTA considered the Free Trade Agreement (FTA) 
between Australia and China, goods and services, (hereinafter "the Agreement").  
1.3.  The Chairman  said that the Agreement had entered into force on 20 December 2015. It had 
been notified to the WTO by the Parties on 26  January  2016 under Article  XXIV:7(a) of the 
GATT  1994 and the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an 
Agreement establishing a free trade area (document  WT/REG369/N/1) and under 
GATS  Article  V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of Article V of the GATS (document S/C/N/858). The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites.  The Factual Presentation on the goods 
and services aspects (document  WT/REG369/1 dated 30 August 2016) and questions and replies 
on the Agreement (document WT/REG369/2 dated 27 Oct ober 2016) ha d been distributed.  
1.4.  The representative  of China  thank ed the Secretariat for its work, Members for their interest 
and questions , and her Australia n colleagues  for their efforts  during th e process. China welcome d 
the consideration of the Agreeme nt by the CRTA  and regarded  it as an effective approach to 
ensure the transparency  and consistency of RTAs with WTO rules.  
1.5.  FTAs were a new platform for China to promote  further opening  up, domestic reform s, and 
integration into the global economy  and were an important supplement to the multilateral trading 
system. The 1973 Trade Agreement between Australia and China ha d served as the basis for the 
China -Australia trade and economic relationship. Since then, thanks to economic 
complementarities, strong inves tment ties and close bilateral cooperation, bilateral trade ha d 
grown significantly.  
1.6.  The China -Australia FTA negotiations had started in April 2005  and had been  substantively 
compl eted in November 2014 . The Agreement , signed on 17 June 2015 , cover ed over ten areas 
including goods, service s and investment, with the goal of comprehensive ness, high -quality and 
balanced interest s. It was one of  the FTAs with the highest level of liberalization in trade and 
investment that China had signed.  
1.7.  In trade in goods, China had liberalized  85.4% of Australia's imports by trade value 
immediately after the FTA came  into effect. After the transitional period, Australia would liberalize  
100%  of tariff lines and trade for imports from China , while China  would liberalize  96.8%  of tariff 
lines, corresponding to 95% of the trade value  of products from Australia , which greatly exceed ed 
the 90% average level of FTAs.  
1.8.  In trade in service s, China ha d offered Australia its best ever commitments in an FTA. Th is 
include d new market acc ess opportunities for Australia 's services suppliers in sectors such as legal 
services , education, financial  services , telecommunication s, construction, maritime transportation WT/REG369/M/1  
 
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  and many others. Australia had substantially open ed its services market to Chin a in the same 
spirit. In addition, the two sides had introduced creative arrangements , such as an Investment 
Facilitation Arrangement (IFA), a Work and Holiday Visa Arrangement  (WHA) and so on.  
1.9.  In the investment area, the Agreement would  create a more conv enient, transparent and fair 
investment climate for investors from both sides. China and Australia had granted each other  MFN 
treatment immediately after the Agreement had come  into effect.  
1.10.   The Agreement was  comprehensive . In addition to the above mention ed areas, some ten 
areas such as e-commerce, government procurement, and intellectual property rights were 
included.  The Agreement  was an important milestone for bilateral trade and economic co-operation 
and would  vigorously promote the flow of capital, re source s and personnel, continuously provid ing 
an engine  for economic growth, and benefit ing enterprises and people from both Parties . 
1.11.   She thanked the S ecretariat for preparing the consideration of the Agreement  and Members 
for their questions . She hoped th at Members'  questions ha d been properly addressed in the 
Parties'  written responses.  
1.12.   The representative  of Australia  welcomed the  Committee's review of the Agreement . 
Australia valued t he Committee's work to ensure transparency of RTAs and evaluate the 
Agreement's consistency with WTO rules.  On a personal note , it was pleasing to see his colleagues 
from Beijing as he had been involved in the first and last rounds of negotiations of the Agreement, 
a rewarding experience over a ten year period. On 26 January 2016, Australia and China had 
notified the Agreement to the Committee , following its  signature on 17 June 2015 and entry into 
force on 20 December 2015.   
1.13.   The China -Australia FTA was  a high -quality, comprehensive Agreement that buil t on 
Australia's  and Chin a's significant and highly complementary economic relationship . China was 
Australia's largest export market , its largest two -way trading partner  and an important source of 
investment.  The Agreement was already delivering new opportunities for Australian bu siness, and 
its institutional framework was the basis for an ambitious forward work program me of benefit to 
both countries . It met all of the criteria of a high -quality Agreement that promote d growth in 
goods and services trade:  it was fully consistent wit h WTO principles and rules;  it deliver ed WTO-
plus outcomes; it was comprehensive and high -quality; and  it had a clear roadmap for further 
discussions on deepening liberalisation and further expanding market access.  
1.14.   The Agreement met  the WTO threshold requi rement cover ing "substantially all trade" 
between the Parties . Australia would eliminate 100% of its tariffs on Chinese goods . More than 
85% of Australia's goods exports to China (by value in 2015) were now able to enter duty free . 
97.9 % of trade in 2015 terms  would  enter duty free or have access to preferential tariff quotas by 
1 January 2029.  
1.15.   The Agreement contained  WTO-plus outcomes on services . China had offered Australia its 
best-ever services commitments in an FTA (other than China's agreements with  Hong Kong , China  
and Macau , China ), including MFN outcomes in relation to ten services sectors.  In addition, the 
Parties  had agreed to a future work program me to progressively liberalise measures affecting 
trade in services, ensuring that both sides conti nued to work to improve market access over time.  
1.16.   The Agreement support ed investment flows in both directions through increased certainty to 
investors and by improving market access ; and include d a commitment on future negotiations to 
expand market access a nd further develop investment protection.  The Agreement  also support ed 
increased trade and investment between the two countries by reducing barriers to labour mobility 
and improving temporary entry access within the context of each country's existing immig ration 
and employment frameworks and safeguards.  
1.17.   He drew  Members' attention to the Australian Department of Foreign Affairs and Trade 
website (www.dfat.gov.au/chafta ) which contain ed extensive explanatory infor mation  to support 
business and develop community understanding of the Agreement as an important transparency 
measure to build confidence in its outcomes . There was also an innovative FTA trade portal  
indicating the benefits available to Australian business es in Australia's FTAs , which Members might 
find of interest . WT/REG369/M/1  
 
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  1.18.   Before concluding, he drew  Members' attention to the Agreement 's provisions for duty - and 
tax-free temporary admission of containers, pallets and packing material used in the 
transportation of g oods.  Given the absence of WTO rules covering the duty -free movement of 
shipping containers, pallets and/or packing materials, the treatment in the Agreement  provide d an 
example for the implementation of a positive WTO -plus trade facilitation measure.  He indicate d 
that Members would hear more about  this from Australia in the period ahead.  
1.19.   He thank ed the WTO Secretariat for compiling the Factual Presentation and his Chinese 
colleagues for their cooperation in preparing for th e review . He thank ed Members for their 
questions, both in writing and those Australia  anticipate d receiving during th e meeting . 
1.20.   The representative of Japan  commended the Parties for the high level of liberalization in 
terms of goods trade. With regard to trade in services, it was commenda ble that both Parties had 
made a wider range of commitments than those in the  GATS. However , Japan found it regrettable 
that China's commitments were based on a positive -list approach despite the fact that Australia 
had used a negative -list approach. Japan  commended the inclusion of a chapter on investment in 
the Agreement. However , the obligations of the Parties appeared to differ. For example, the scope 
of the national treatment obligation for Australia included the establishment and acquisition of 
invest ment, while for China the scope did not include the same terms. Japan was interested to see 
that the scope of ISDS was limited to the national treatment obligation. Japan looked forward to 
seeing an improvement in the provisions as a result of the bill und er negotiation. With regard to 
the scope of the investment chapter, according to  Article s 9.2.2 and 8.1 .1 of the Agreement, 
investment related to service s sectors seemed to be excluded from the scope of the investment 
chapter. Japan would ask an additional  question on this aspect . Finally, he noted that the 
Agreement had a chapter on electronic commerce but not one  on competition as in the  China -
Iceland FTA. As mentioned, Japan was interested in disciplines in RTAs that were not addressed in 
the WTO framewo rk or those  that complemented the WTO Agreements  and wanted to look closely 
at how to implement such disciplines in individual RTAs.  
1.21.   The representative of the European Union  had noted in the Factual Presentation and in the 
presentations made by the Parties  that China was Australia's largest trading partner, while 
Austral ia was China's seventh largest source of imports and 12th largest export destination. These 
figures clearly demonstrated the commercial significance of the Agreement. The EU had noted that 
the regulatory provisions on trade in goods built upon the TBT Agreement with strengthened 
cooperation, particularly on transparency. The EU considered such provisions an important step 
and a good example for enhancing transparency at the bilateral level wh ile at the same time 
having a positive impact at the multilateral level. It was worth highlighting that the Agreement had 
provisions on ecommerce, as mention ed by Japan. The EU had submitted some advance questions 
on SPS, investment and ISDS and thanked th e Parties for the replies. She had two follow -up 
questions on investment and one on financial services. On investment, she asked if the Parties 
could indicate when negotiations on a comprehensive investment chapter would start (as also 
mentioned by Japan),  and when China expect ed to adopt investment commitments based on a 
negative list. On financial services, the EU had noted that improved commitments had been 
exchanged, notably establishment commitments for Australian banks in China,  and the EU was 
interes ted in having  more information on this.  
1.22.   The representative of the United States  referred to  the strong commitments in the 
Agreement : as mentioned by others, it was a significant Agreement. With respect to goods , the 
coverage was strong, as was services, th ough he echoed Japan's  comments with respect to the 
services commitments and the EU 's questions on investment. He noted  like others the importance 
of the electronic commerce chapter and , in particular , provisions on the non -discrimination of 
trade through ecommerce means, the customs duty moratorium extension , and other areas that 
the United States considered important and that ought to be looked at carefully for their value in 
setting the course forward.  
1.23.    The representative of Canada  said that his delegati on had received responses to its  
questions and had no further questions.  
1.24.   The representative of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
(Chinese Taipei)  thanked the Parties for their response  to its question and would come back in  
writing if necessary.  WT/REG369/M/1  
 
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  1.25.   The representative of Mexico  thanked the Parties for the replies to its questions  which were 
being examined.  
1.26.   In response to Japan's question on competition cooperation, t he representative of China  
drew Members' attention to Article 7  of Chapter 16 of the Agreement . In financial services, the 
market access conditions for Australian banks in China in terms of banking and other services had 
been substantially improved. For example, the re was no longer a requirement for being profitable 
for two years prior to application. In addition  the business scope had been extended for Australian 
banks in China. China viewed the combination of a positive and negative list as a creati ve 
approach that  provide d a good ex ample  for developing countries lik e China and developed 
countr ies like Australia. For the content itself, Members could see that besides th e trade in services 
commitments , there were five additional side letters and two Memoranda of Understanding  which 
China believed were high quality and comprehensive commitments.  
1.27.   The representative of Australia , in response to the EU 's question on investment, said that 
the Agreement made provision for the commencement of negotiations on a comprehensive 
investment chapter and clearly specified the timefram es. The question of when  China might start 
on a negative list was an issue for China to consider. He imagined it would need to take into 
account other negotiations that were underway. He added that Australia would be happy to follow 
up on more detailed que stions in writing, if necessary.  
1.28.   The Chairman  said that the  consideration of the goods and services aspects of the FTA 
between Australia and China ha d allowed it to clarify a number of questions and it could  now 
conclude oral discussion of th e RTA in accor dance with paragraph 11 of the Transparency 
Mechanism. If any delegations wish ed to ask follow -up questions they were invited to forward 
submissions in writing to the Secretariat by 14 November 2016 and Parties are asked to submit 
replies in writing by no later than 28  November 2016. In  accordance with paragraph  13 of the 
Transparency Mechanism all written submissions, as well as minutes of th e meeting would  be 
circulated promptly, in all WTO  official languages, and would be made available on the WTO 
websit e. 
1.29.   The Committee took note  of the comments made.  
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