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Australia adds deals with China to Korea and Japan – and eyes India

China and Australia announced  in mid-November that a free trade agreement  had been initialled. Negotiations started in May 2005. The Australian Prime Minster’s office said it expected the two countries’ heads of government to sign a formal agreement in 2015 – but gave no hint of the likely timeframe for ratification.

The agreement follows a July free trade agreement between Australia and Japan (still to be ratified) and October ratification of an Australia-Korea free trade agreement, which became law in December.  Outside reaction  to then China deal was intriguing: “Australia seems to have offered China far less access to its market than the other way round,” said Guy de Jonquieres, previously a specialist trade reporter with the Financial Times and now research fellow at the European Centre for International Political Economy. China wanted to “bring a staunch US ally closer to China” and offsetting the US-led Trans Pacific Partnership, he said.

De Jonquieres added that Australia’s approach reflected a conviction that Chinese leaders understand that they have no choice but to embrace the global markets, rules and institutions if they want China’s modernisation to succeed.  In negotiations it encouraged China to see Australia as a safe partner for demonstrating commitments necessary to participate in the next big round of World Trade Organisation talks, which the United States has been resisting.

Prime minister Tony Abbott told the Australian parliament in late November  he intended adding an agreement with India:  “If all goes to plan – and no one, if I may say so, has ever made the Indian bureaucracy perform as Prime Minister Modi did in Gujarat – by the end of next year, we will have a free trade deal with what is potentially the world’s largest market”