Australian raw leather exports to the Chinese market will be exempt from tariffs for several years

China Leather Network News: After China and Australia jointly announced the substantive end of the China Australia Free Trade Negotiation Agreement, the two sides signed a letter of intent for the free trade agreement yesterday. According to BBC reports, Canberra has stated that the China Australia Free Trade Agreement has come to fruition after several rounds of negotiations, opening up the Chinese market with a total value of approximately tens of billions of dollars for Australia. In 2013, the total trade volume between China and Australia was AUD 150 billion (approximately USD 130 billion), and the Australian government believes that the implementation of the free trade agreement will add AUD 20 billion (approximately USD 17.5 billion) to the bilateral trade volume between the two countries.

Over the past two decades, trade between China and Australia has steadily increased, and currently China has become a bilateral trading partner of Australia. According to data released by the Ministry of Commerce, as of September this year, China has continued to be Australia's major trading partner, export destination, and import source country.

The BBC report specifically mentioned that 85% of Australian products exported to China will not be subject to tariffs, including raw leather and other products. After the agreement is fully implemented, duty-free products will increase to over 95%. The Australian Broadcasting Corporation website reported that Australian farmers and leather industry exporters welcome the signing of the China Australia Free Trade Agreement, as it means that Australian beef and raw leather products can achieve duty-free entry into the huge Chinese market in the coming years.

According to a reporter from China Leather Network, the current annual total value of raw and finished leather exports from the Australian leather industry to China is approximately 896 million US dollars. The tariff rate required for exporting raw and finished leather from Australia to China is between 5% and 14%. The Australian Broadcasting Corporation reported that these tariff rates will be reduced to zero in the next 2 to 7 years. After the formal implementation of the China Australia Free Trade Agreement, by 2030, the total benefits that the agreement can bring to the Australian leather industry may reach 6 billion US dollars.

According to the recent trade data released by the Ministry of Commerce between China and Australia, the reporter found that in the first three quarters of this year, Australia exported a total of 832 million US dollars of raw leather (excluding fur) and leather, of which approximately 597 million US dollars were exported to China, accounting for over 70%, confirming the report in the news that China is the main consumer market for Australian raw leather. David Larkin, a member of the FTA Red Meat Trade Negotiations, stated that the gradual elimination of tariff costs will have a positive impact on Australian cattle and sheep farmers, processors, and exporters, and Chinese customers and consumers will no longer have to pay premiums due to tariffs.

Shoes, bags, and other products are also the main trade products between China and Australia. According to data from the Ministry of Commerce, in the first three quarters of this year, the total amount of footwear products imported from Australia was 1.217 billion US dollars, while the total amount imported from China was 769 million US dollars, accounting for about 60%; In addition, the total amount of leather products and luggage imported from China by Australia was 516 million US dollars, a year-on-year increase of 0.4%. According to BBC news, another key point of the China Australia Free Trade Agreement is that Chinese exporters will be exempt from tariffs on clothing, shoes, cars, and electronic products exported to Australia.