CHAFTA

Question 1

CHAFTA date, diplomatic process

Answer 1

-Following 21 rounds of negations over an eleven year period, the China-Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015

Question 2

FTAs

Answer 2

A free trade agreement (FTA) is an international treaty between two or more economies that reduces or eliminated certain barriers to trade in goods and services, as well as investment
-These are examples of soft power (soft monetary and economic power)

Question 3

CHAFTA key inclusions

Answer 3

-85% OF Australian goods entering the Chinese Market had tariffs immediately removed upon the deal entering into force (e.g., iron ore, gold, natural gas)
-Upon full implementation of the deal (1 January 2029), this proportion will increase to 98 per cent coverage
-In return, the Foreign Investment Review Board (FIRB) screening threshold for private Chinese investors in non-sensitive sectors will be lifted from around $250 million to $1.25 Billion

Question 4

Types of FPI and Power

Answer 4

-Trade FPI (and somewhat Diplomatic - see 21 rounds of negotiation)
-Economic power

Question 5

Pragmatism / Idealism and factors

Answer 5

-This is an example of pragmatism
-This as the main factor for the FTA on Australia’s behalf was that China represents Australia’s largest export market for g+s (over a quarter of total exports)
-Driven by coalition government. This was their 3rd completed FTA since coming into office in 2013, which included a commitment to ensuring a “fast track” for the conclusion of FTAs

Question 6

Effectiveness

Answer 6

-Extremely effective (prior to sanctions by China)
-Australian exports to China increased by $27 billion between 2014 and 2017
-Chinese investment in Australia has increased by over $6 billion between 2008 and 2017

Question 7

Links to national interests

Answer 7

-Large increase in economic prosperity (see statistics for export increases)