On Monday, Australia and China signed a bilateral free trade deal that was a decade in the making. New Zealand and South Korea also signed a bilateral trade deal on the same day. The deals will lower and eventually eliminate tariffs on goods and services traded between the countries, and loosen bilateral restrictions on investment.
The two British Commonwealth nations hope to increase exports of foodstuffs and services to the Asian dynamos. In exchange, China will face fewer restrictions on investing in Australia's resource sector, and South Koreans will more easily be able to work and study in New Zealand.
Australia and China get cozier
Australia is keen on reducing its nearly exclusive reliance on exports of minerals like coal and iron ore, and expanding its food exports to a growing Asian middle class - moving from a mining boom to a dining boom.
Under the pact, 93 percent of all Australian goods entering China will be tariff-free within three years, in a deal Prime Minister Tony Abbot said "will add billions to the economy, create jobs and drive higher living standards."
China is Australia's largest trading partner, with $130 billion (104 billion euros) of two-way trade. Paul Glasson, vice president of the Australia China Business Council, said that in addition to easing agricultural exports to China, the deal improves Australian business access in some 40 service industries, including health, law, and aged-care.
The two countries announced that China will establish an official currency clearing bank in Sydney to facilitate trade in Yuan, the Chinese currency, as part of the trade deal. That will enable more direct cross-border transactions between China and Australia and further ease the trading relationship.
New Zealand trades dairy, meat and logs for cars, fuel and appliances
"The FTA (free trade agreement) will put New Zealand exporters back on a level playing field with competitors from Korea's other FTA partners, such as the United States, Chile and the European Union," said New Zealand Prime Minister John Key.
New Zealand exported about $1.6 billion worth of farm products and industrial goods to South Korea last year - mostly logs, dairy, meat and other soft commodities.
Limited remaining tariffs will soon disappear on South Korea's main exports to New Zealand, including refined fuel, vehicles and machinery, iron and steel products and home appliances.
The deal comes just days after South Korea and China announced that they had reached an agreement to lower or remove tariffs on most goods traded between the two industrial powerhouses.
nz/hg (Reuters, AFP)