outcome is improved China market
access for Australian service suppliers
such as banks, insurers, securities and
futures companies, professional service
firms, educational service exporters,
telecommunication services, tourism,
travel-related services and health, as well
as aged care services.
China granted Australia "most favored
nation" status in the ChAFTA, which
enables Australia to receive certain
preferential treatment from China, similar
to other countries granted this much
sought after status.
To counteract the impact from the TPP
(that is, reduction of exports and Chinese
outbound investment), China has been
actively involved in trade negotiations for
the Regional Comprehensive Economic
Partnership (RCEP) since its launch
in November 2012. Fifteen countries,
namely the ten member countries of the
ASEAN nations plus India, Japan, South
Korea, Australia and New Zealand form
the RCEP countries. RCEP accounts
for approximately 30 percent of world
economic output.
the Japan-Australia Economic Partnership
Agreement (JAEPA) was signed in April
2014, and came into effect on January 15,
2015. This agreement is regarded as the
best trade agreement Japan has signed
with another country. Now, customs duty
free or preferential access will be granted
to 97 percent of Australian exports to
Japan and bilateral trade is likely to
surpass the A$72 billion achieved in
the 2013/2014 financial year. Benefits
include the elimination of tariffs on 99.7
percent of Australian resources, energy
and manufacturing exports. A range of
Australian agricultural exports can now
enter Japan duty free.
Agreement (KAFTA) was entered into on
December 12, 2014. Tariffs have already
undergone two cuts. A zero tariff now
applies to 84 percent of Australian exports
to Korea, and for 90 percent of Korean
between Australia and Korea stood at
AUD$35 billion in 2013/2014 and again,
the likely trajectory for this trade figure
is upwards, as the KAFTA progresses
through the implementation stages.
Board (FIRB)
by foreign persons (including foreign
governments) in land and commercial
enterprises in Australia.
All foreign governments must seek
and obtain prior FIRB approval before
making any direct investment in any
class of assets in Australia. New FIRB
Rules took effect December 1, 2015,
introducing application fees for real estate
property purchases and penalties for non-
compliance.
companies or investors can acquire a
business or a substantial interest in an
Australian business valued under $252
million without having to seek prior FIRB
approval. If the business value exceeds
$252 million, prior approval is required.
For agribusiness, the threshold is $55
million (including investors from China,
Japan and Korea).
A beneficial higher (non-prior
approval) threshold of $1,094 million
applies under the free trade agreements
with investors from the United States, New
Zealand, Japan, Chile and South Korea.
In prescribed sensitive business sectors,
like media, lower thresholds requiring
prior approval still apply. Only non-
government investors from United States,
New Zealand and Chile are subject to the
higher threshold at $1,094 million for
agribusiness.
and Korea) must seek prior approval for
a proposed acquisition of an interest in
rural land, where the foreign property
and the cumulative value of other rural
land interests already held by the investor
exceeds, or is likely to exceed, after the
acquisition, $15 million dollars. For
non-government investors from United
threshold of $1,094 million applies.
residency rights in Australia, foreign
investors usually cannot purchase
established residential housing interests
in Australia. Foreign non-residents,
including temporary residents, may
purchase new dwellings. There is no
limit on the number of new dwellings a
foreign investor may purchase, however
FIRB approval is required prior to each
acquisition. Temporary residents are
permitted to purchase one established
dwelling as for their principal place of
residence but must sell the property
within three months from the time the
property is no longer used as their
principal place of residence.
have to apply for prior approval to buy
developed commercial real estate valued
at less than $252 million in Australia. A
lower threshold of $55 million applies, if
investing in prescribed sensitive sectors
and heritage listed developed commercial
real estate. For non-government investors
from United States, New Zealand, Japan,
Chile and South Korea, a higher threshold
of $1,094 million applies. Developed
commercial property includes assets such
as shopping centres, hotels, motels and
other tourist accommodation.
Agreement came into effect on January 1,
2005, Australia has signed ten bilateral
agreements with New Zealand, Singapore,
ASEAN, Thailand, Chile, Malaysia and
most recently Korea, Japan and China.
To reap the benefit of the Free Trade
Agreements, investors need to explore
opportunities for business potential
in foreign markets. It's up to business
to take advantage of a less costly and
more favorable basis of trade to generate
new business in a low, or zero, tariff
environment created by the Free Trade
Agreements.