IMPACT – MEDIUM

What is the change? Australia and China have signed a landmark free-trade agreement.

What does the change mean? The China-Australia Free Trade Agreement, or ChAFTA, was crafted to provide greater access to Australia and China for business visitors, intra-company transferees, contractual service suppliers and company executives.

  • Implementation time frame: Ongoing. ChAFTA was signed Wednesday and the two countries are expected to work toward bringing the agreement into force as soon as possible.
  • Visas/permits affected: Subclass 457 visas, business visas, investment visas and contractual services suppliers.
  • Who is affected: Australian and Chinese companies and employees working or investing in each other’s country.
  • Business impact: The agreement is designed to increase trade between the two countries and lift barriers to entry for business people, workers and their families.
  • Next Steps: ChAFTA will enter into force following the completion of domestic political and legal processes in Australia and China. The countries have said they will work to complete these processes as soon as possible.

Background: Australian Minister for Trade and Investment Andrew Robb and Chinese Commerce Minister Gao Hucheng signed ChAFTA Wednesday after the deal was agreed to in principle in November 2014.

Australia’s commitments under the agreement include providing stays of four years, with possible extensions, for Chinese intra-corporate transferees and contractual service suppliers; stays of up to three months for Chinese installers and servicers; stays of 90 days for business visitors or six months, with possible extension, for business visitors who are service sellers; and stays for spouses and dependants equal to the stays provided to principals, provided that period is for at least 12 months.

China’s commitments under the agreement include providing initial stays of up to three years for intra-corporate transferees (including executives, managers and specialists); initial stays of up to one year or the duration of the contract for contractual service providers; stays of up to 180 days or the duration of the contract for installers and maintainers; stays of up to 180 days for business visitors; and stays for spouses and dependants equal to the stays provided to principals, provided that period is for at least 12 months.

ChAFTA follows similar agreements between Australia and Japan (JAEPA) and Australia and South Korea (KAFTA). The Australia-China agreement may be the most significant for Australia, however, as China is the country’s biggest trading partner.

BAL Analysis: It will still take some time for the agreement to enter into force; however, ChAFTA represents a liberalisation of barriers across many categories of workers, business visitors and investors.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

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