SA manufacturers look to make up lost ground through China trade agreement


South Australia Minister for Manufacturing and Industry Susan Close encouraged State’s exporters to look at ways to benefit from improved access to China’s market following the signing of the Free Trade Agreement (FTA) between the two countries on Monday.

Image credit: flickr user: Tristan Taussac
Image credit: flickr user: Tristan Taussac

“The South Australian Government will be looking to support manufacturing exporters to seize greater opportunities created by the China-Australia FTA. Understandably, our manufacturers will be looking to make up some of the ground lost by the Commonwealth’s decision to abandon the Automotive Transformation Scheme,” Dr Close said.

“The State Government stands shoulder-to-shoulder with this State’s manufacturers through our Manufacturing Works strategy and our ongoing support for automotive suppliers and their workers through the $60 million Our Jobs Plan.”

Dr Close said due to the sensitivity of industries such as automotive, steel, aluminium, plastics, canned fruit, carpets, clothing and footwear sectors, the agreement allows for the 5% tariff imposed on Chinese imports to be phased-out over two or four years.

“While the agreement improves the access to South Australian exports, I also appreciate that trade exposed sectors of our economy will face some challenges from increased competition from imports. By phasing in the tariff reductions for imports from China, local manufacturers will have some time to adjust to the new trade environment and this is welcomed,” she said.

“These phase-in arrangements underscore the importance of ensuring local companies are given adequate time and support to transition to a new competitive market. The South Australian Government urged the Commonwealth to show similar support for the automotive industry after its withdrawal of industry assistance led to the decision by Holden and Toyota to cease vehicle production in Australia. Unfortunately, the Abbott Government has short changed the automotive industry by $900 million when it comes to supporting a transition toward new markets and diversifying products.”

The terms of the FTA dictate that China winds back its tariffs of up to 47% applied to Australia’s manufactured products such as pharmaceuticals, mining machinery, medical equipment, paper products, automotive parts, clothing and film.

In addition, the FTA envisages zero tariffs for a range of other manufactures such as wood chips, radiate pine products, some electrical and communications equipment and some paper-related products.

The South Australian Government, through the Department of State Development, provides assistance to South Australian companies exporting overseas through its partnership with Austrade to deliver the TradeStart Program.

Moreover, funding is available for eligible companies to prepare for export, with eligible activities including market intelligence, in-market support, participation in trade exhibitions and marketing material.

Companies are encouraged to visit and discuss their individual needs with a TradeStart adviser in their region.