![]() 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. |