WT/REG369/3  
 
16 February 2017 
(17-0923) Page: 1/2 
Committee on R egional Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT  BETWEEN AUSTRALIA AN D CHINA  
(GOODS AND SERVICES)  
QUESTIONS AND REPLIE S 
 The following communication, dated  15 February 2017, is being circulated at the request of 
the delegations of Australia and China.  
 
This document reproduces the follow-up question s addressed to the Parties following 
the 83rd Session of the CRTA and the responses submitted.  
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Questions  from the delegation of the European Union  
 
1.1.  When will negotiations on a comprehensive investment chapter start?  
Respon se from the delegations of Australia and China  
 
 Article 9.9 (Future Work Program) stipulates that, unless the Parties otherwise agree, the 
Parties shall conduct a review of the investment legal framework between them no later than three 
years after entry into force of the Agreement and shall commence negotiations on a 
comprehensive investment chapter immediately after the review is completed.  
 
 No decisions have been made at this time on the timing of future negotiations beyond that 
stipulated under the Fu ture Work Program.  
 
1.2.  When does China expect to start the adoption of investment commitments based on 
a negative list?  
Response from the delegation of China  
 
 Article 9.9 (Future Work Program) stipulates that, unless the Parties otherwise agree, the 
Parties shall conduct a review of the investment legal framework between them no later than three 
years after entry into force of the Agreement and shall commence negotiations on a 
comprehensive investment chapter immediately after the review is completed.  
 
 No de cisions have been made at this time on the timing of future negotiations beyond that 
stipulated under the Future Work Program.  
 
1.3.  With reference to financial services, the Factual Presentation mention improved 
commitments on establishment for Australia's ban ks in China. The EU would be 
interested in receiving further  details.  
Response from the delegations of Australia and China  
 
 China has removed the requirement that an Australian bank has to set up a representative 
office in China in order to set up operati onal foreign -funded banks, such as branches or 
subsidiaries.  Meanwhile, the requirements of qualifications for Australian financial institutions to 
engage in local currency business have been improved as well. Australian financial institutions with WT/REG369/3  
 
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  total a ssets of more than US$10 billion at the end of the year prior to filing the application are 
permitted to establish a subsidiary of a bank of Australia or a Chinese -foreign joint bank in China. 
Australian financial institutions with total assets of more tha n US$20 billion at the end of the year 
prior to filing the application are permitted to establish a branch of a bank of Australia  in China. 
Criteria for authorization to deal in China' s financial services sector are solely prudential 
(i.e., contain no econ omic needs test or quantitative limits on licences).  
 
 For details, please refer to CHAFTA,  China' s schedules of specific commitments.  
 
Question  from the delegation of Japan  
 
1.4.  While Article 9.2.2 stipulates "This Chapter shall not apply to measures adopted  or 
maintained by a Party to the extent that they are covered by Chapter 8 (Trade in 
Services)", Article 8.1.1 stipulates that the measures by a Party  which have influence on 
the trade in services are application items of chapter 8, and the third mode is i ncluded 
the trade in services (Article  8.2). Therefore, does the chapter of investment apply only 
to the investment which excludes trade in services  (ex. manufacturing industry) and not 
to those included in the third mode of trade in services?  
Response fro m the delegations of Australia and China  
 
 Yes, Mode 3 service supply is carved out of the Investment Chapter via Article 9.2.2 and 
carved into the Services Chapter via Article 8.2.  
 
Question  from the delegation of the Separate Customs Territory of Taiwan,  Penghu, 
Kinmen and Matsu  
 
Characteristic Elements of the Agreement  
 
1.5.  Paragraph 2.4: The Parties shall undertake a general review of the Agreement, with 
a view to furthering its objectives, within three years of the date of entry into force of 
the Agreemen t and at least every five years thereafter (Article 16.5).  
 We notice this Agreement contains 17 chapters, several side letters as well as 
Memoranda of understanding. Would it be possible for each party to specify the 
particular areas they would expect to prioritize in the general review which will be 
carried out within the three years of the date of entry into force of the Agreement and at 
least every five years thereafter?  
 
Response from the delegations of Australia and China  
 
 No. This is a matter for th e Parties.   
 
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