Industry rejoices as China-Australia free-trade agreement begins

EXPORTERS to China will get the first in a double-hit of tariff cuts this weekend when the China-Australia free trade agreement comes into force.

Lachie Sutherland Dairy Farmer at Larpent. The China free trade deal commence thes 20th December and will benefit his business.

EXPORTERS to China will get the first in a double-hit of tariff cuts this weekend when the China-Australia free trade agreement comes into force.

The historic deal — set to save Australian agriculture $300 million a year — kicks off on Sunday, more than a year after it was negotiated and ­almost six months after it was signed.

With dairy hailed as the biggest winner from the agreement, Larpent dairy farmer Lachie Sutherland was among those welcoming its arrival.

“It’s great to see something implemented actually starting to take effect,” Mr Sutherland said.

Victoria’s dairy exports to China have grown more than 70 per cent in the past four years and more growth is ­expected under the free trade agreement.

The deal will see tariffs on most milk products eliminated in nine years and is expected to create 600 new jobs in the ­industry in the first year alone.

Mr Sutherland, who milks 370 cows and supplies Bulla Dairy Foods, anticipated prod­ucers would benefit from the flow-on effects of the cuts.

“It should enhance the ­demand for a lot of Australian products and we need to be ready to fill that demand — otherwise if we don’t, they may look elsewhere and that def­eats the purpose,” he said.

Sunday will see immediate tariff cuts to all commodities including dairy, red meat and citrus, while tariffs on grains — including barley, oats, and ­quinoa — will be completely eliminated.

A second round of cuts kicks in on January 1.

The Australian Horticultural Exporters Association hoped the deal would give horticulture a boost, as high tariffs and strict quarantine protocols meant Aussie produce still struggled to crack the Chinese market.

“All focus may be on China for long-term growth ... but Australia’s share of this trade (in horticulture) is negligible,” AHEA chairman David Minnis said.

“China is seen as Australia’s No. 1 growth opportunity and doubled in value in 2014-15 ... however, China applies some of its highest tariffs on hort­icultural products.”

Those tariffs will be ­removed within four to eight years, presenting a chance for Australia’s industry to “flourish and grow”, Mr Minnis said.