Virginia, US

The China Australia Free Trade Agreement (ChAFTA) looks set to pass the Australian Parliament following months of negotiation among political parties over terms relating to the mobility of semi-skilled workers. The passage through the legislature will lead to Australia’s formal ratification of the treaty that was signed in June, meaning that the Agreement will come into force on schedule in December.

Australia’s work visa programme, the subclass 457 visa, includes thresholds for skill level, English language proficiency, and minimum salary. There are a number of pathways through which employers are able to negotiate an agreement with the Minister for Immigration and Border Protection, collectively known as 'work agreements', for certain limited concessions to those standard requirements.

The ChAFTA deliberations have focussed on the conditions placed on the ability of large infrastructure projects operated by Chinese enterprises to sponsor a semi-skilled Chinese workforce for 457 visas, by way of a new type of work agreement to be known as Investment Facilitation Agreements (IFA). Amendments to migration legislation were sought to install safeguards around the skill level and salary level of any IFA workforce entering Australia.

With negotiations concluded on 21 October, Parliament will pass legislation that will amend the Migration Act and Regulations to install labour market testing as a mandatory, and not discretionary, part of the approval process for lower-skilled occupations for all work agreements types, including IFAs.

At the same time, regulations will strengthen the requirements for all 457 visa holders to be paid at least the going market salary rate; and ensure that workers in restricted occupations such as electrician, nurse, welder and carpenter must have obtained the relevant Australian licence or registration within 90 days of entry to Australia.

With this tweaking to Australian domestic legislation, it is expected that the ChAFTA and the opportunities that it presents to both the Australian and Chinese economy across a broad range of sectors will be ‘go for launch’ on 1 December, heralding an exciting new era in international trade and investment.

Please take a look at our ChAFTA page for information about how Fragomen is supporting these initiatives.