Australia-China FTA Negotiations

Abstract

In contrast to the China-ASEAN Free Trade Agreement (FTA), the progress of negotiations between China and Australia on an FTA has been painfully slow. It has been more than ten years since the two countries looked into the possibility of an FTA, and more than seven years since formal negotiations started. Is this simply because Beijing does not attach much strategic importance to Canberra? But Chinese Premier Wen Jiabao said upon his visit to Australia in April 2006 that he hoped the negotiations could achieve an important breakthrough in. the next one or two years. Vice President and President-in-waiting Xi Jinping also said in June 2010 that the two countries should push for a free trade agreement at an ‘early date’, because this would be of ‘strategic interest to both countries’. If face value is important to the Chinese, why have the words of those two Chinese leaders not become a reality? This chapter explains the slow progress of the AUCFTA negotiations by looking into the policymaking process in China. It first provides a brief background of AUCFTA, and then depicts the policymaking process at three stages, namely, proposal and initial assessment, the feasibility study and formal negotiations. The first stage included the Chinese central government ‘s assessment of its national political and economic interests in this FTA.