A new free-trade agreement between Australia and its largest trading partner, China, will likely further accelerate containerized trade between the duo after their volume rose 14.6 percent in the last three years.
When the agreement initially takes effect, 85.4 percent of China and Australia’s products will be tariff-free. Once it is fully implemented, 95 percent of Australian exports will be tariff-free. Implementation of the agreement will not be fully completed for another 15 years, but most tariffs will be completely removed within the next five to six years.
Between 2011 and 2014, Australian containerized exports to China rose 81,325 to 302,774 twenty-foot-equivalent units, an increase of 7.3 percent, according to World Trade Service, a sister product of JOC.com within IHS Maritime & Trade. In that same time period, Australia’s containerized imports from China rose 84,175 to 829,965, an increase of 8.8 percent.
The top identified commodities China exports to Australia are furniture, glass and non-metallic products and machinery and electronics. IHS Economist Xu Yitang said that Australians will consume more white goods and electronics as a result of the agreement, suggesting machinery and electronics imports will only increase.
China’s top imports from Australia are vegetable products, wood and paper products, and textile, leather and apparel goods.
China made up nearly 25 percent, or $135 billion, of Australia’s international trade in 2014.
The agreement also makes it easier for Chinese investment in Australia, China’s second-largest target for foreign investment.