Australia's status quo depends on China's policy, FTAs finalised

By @preciousvsilva on
Malcolm Turnbull
Malcolm Turnbull, former Liberal Party leader and the communications spokesman for the Liberal-led coalition, smiles as he answers questions during a news conference in Sydney September 3, 2013. Reuters/David Gray

China's free trade agreements (FTA) with Australia have been put in place in an attempt to support trade for the nations involved. A similar trade agreement has been in effect with South Korea, but analysts claim that in the future, it will be China's decisions which will shape the decisions and status quo in Australia.

The trade agreements have been signed months prior. They are subject for parliamentary ratifications -- the conclusions of which will be crucial to Australia and Korea. Both countries have experienced a dip in exports because of China's economic slowdown.  

Around a third of Australian exports can be attributed to China. Although there have been economic challenges in China, Australian businesses have been hoping for things to resume. Around 85 percent of Australia's exports will be tariff-free once The China Australia Free Trade Agreement (ChAFTA) is put in place. The figure can go up to 96 percent should the countries implement the agreement fully. In exchange, Australia will grant duty free up 100 percent of China's exports.

“The successful conclusion of negotiations for the ChAFTA is another positive step forward and we are looking forward to seeing this translate into further opportunities,” Nussara Smith told GTR. Smith is the CEO of the Australia-China Business Council in Queensland. 

“Over the past 40 years, the Australia-China relationship has developed and diversified. China is now Australia’s largest two-way trading partner. China is Australia’s largest goods export destination and largest services market with exports in services," she added.

In a report by The Australian, the publication claims that Australia is not faced with a "China choice." Rather, whatever China decides will determine Australia's responses in the future. The interests of the countries are closely related to the values and norms of the existing order. Australia is a middle power in the Asia Pacific much like the United States and other allied countries. In order to promote stability, countries have to be committed to inclusive regional trade and institutions.

Contact the writer at feedback@ibtimes.com.au, or let us know what you think below.