Australia’s leading companies have listed looser capital controls, eliminating restrictions on particular services and greater tax and decision-making transparency among priorities to be addressed in any free trade agreement (FTA) with China.
BCA Member companies have identified these interests as among the key priorities to be negotiated in the Australia–China FTA for Australian business to be able to compete effectively within China.
The priorities have been identified in a paper provided to officials in Canberra who are due to continue discussions on the FTA between the two countries in Australia in December.
Specifically, BCA Member companies believe a FTA with China should include:
- Looser ownership controls and capital requirements;
- Raising the project value limit above which central government approval is currently required;
- Eliminating restrictions on the type of services that can be delivered by Australian companies;
- Making all regulations for investment and supply of services public;
- Greater regulatory and decision-making transparency;
- A more transparent tax system;
- Mutual recognition of professional qualifications; and,
- Freer movement of skilled business personnel between the two countries.
“The BCA and its members support a stronger political and social relationship between Australia and China,” the Chairman of the BCA’s Trade and International Relations Task Force, John Denton, said today.
“But this needs to be underpinned by deeper economic relations and improved market access in areas in which Australia and China can mutually benefit,” Mr Denton said.
“In 2004–05 China was Australia’s second largest trading partner for trade in goods and Australia’s sixth largest trading partner in services. This reflects the dominance of goods in the trading relationship between the two countries and the strength of education and tourism in the services sector.
“However, the flow of professional services, which is one of the BCA Members’ priorities for expanded trade, is relatively small compared to our export of education services and tourism,” he said.
Australian service exports to China are currently worth $2.3 billion, or 6.6 per cent of our services exports, with tourism and education making up 85 per cent or $1.9 billion worth.
BCA Members also believe an FTA must aim to address domestic barriers to trade, ensure a level playing field for Australian companies to compete within China, and establish robust dispute resolution processes as well as mechanisms for ongoing consultation on services issues.
China’s full and ongoing participation in the World Trade Organization should also be supported.
“China is an increasingly large source of trade and investment for Australia, is a significant player in regional trade and is increasingly important geostrategically,” Mr Denton said.
“The ability of Australian businesses to compete within China on services and investment will be a key to how much we benefit from China’s sustained economic growth and activity over the coming years.”