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China and Australia intend to lower trade barriers

China and Australia have signed a “declaration of intent” for a free trade agreement under which China will remove barriers on Australian dairy, beef, sheep and wine. In return, Australia will immediately remove tariffs on most Chinese goods with a phased-reduction of tariffs on textiles, car components and steel.

All dairy tariffs, which can be as high as 20 percent, will be removed within four to 11 years. A 15 percent tariff on infant formula will be phased-out in four years. Duties of 12 percent to 25 percent on beef will be removed over nine years and tariffs of 10 percent on live animal exports will be eliminated within four years.

The dairy deal is similar to one signed between China and New Zealand in 2008 although tariffs can be reinstated on some New Zealand dairy products should shipments exceed certain limits. The Australian deal has no-such provision.  New Zealand Trade Minister Tim Grosner said in a radio interview that if the Australian deal is the same length as New Zealand’s but without the possible reinstatement clause, they would “start to raise the issue” with Chinese authorities.  China’s president is scheduled to visit New Zealand this week.