Andrew Robb describes the China free trade deal as the completion of a “powerful trifecta”, even though the trade minister can’t put a dollar figure on the final leg.
But it looks like being huge.
The FTA broken down
Mr Robb revealed the agreement with Beijing – coming hot on the heels of FTAs with Japan and South Korea – was concluded at “five minutes to midnight” and, as a result, there was no time to do the modelling.
A figure of $18 billion is frequently banded around, but that’s from modelling done 10 years ago and does not include benefits to the services sector.
And services are the breakthrough of this deal with greater access to China for Australia’s banking, insurance and securities firms.
“China realises if it is to become a domestically focused economy it will be a service-based economy overwhelmingly,” Mr Robb told reporters in Canberra before he signed a declaration of intent with his Chinese counterpart.
Asian middle-classes are expected to grow from 600 million to three billion over the next 30 years.
“They will need our services,” he said.
Services make up one of the five pillars of the agreement, the others being agriculture, resources and energy, manufacturing exports and investment.
On agriculture, Mr Robb believes Australia has in every respect the equivalent of what New Zealand scored in its successful FTA with China, apart from dairy, which he described as “New Zealand-plus”.
However, he failed to gain a deal for cotton, wheat, sugar, rice and oilseed farmers after the two sides could not agree on China’s demand for greater investment access for its state-owned enterprises.
“We weren’t going to hold back 98 per cent of the content (of the agreement) for the two per cent,” Mr Robb said.
But all is not lost, because the outstanding issues will be revisited in three years.
Aside from the direct trade impact from goods and services and investment, the FTA would also build trust and confidence between the two nations, Mr Robb said.
“I do think it is going to provide the impetus for taking our relationships in the Asian region …. to a whole new level,” he said.