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Australia’s New Free Trade Agreements

March 22, 2015

Marco Deutsch

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By: John Kim and Jennifer Kim

What exactly is a free trade agreement?
 
In simple terms, a free trade agreement (FTA) is a treaty that removes barriers to trade between two or more countries, which contributes to increased economic integration by allowing stronger trade and commercial ties to develop.
 
Australia has a number of such landmark agreements in force, including:
  • Korea-Australia Free Trade Agreement (KAFTA)­ --commenced 12 December 2014
  • Japan-Australia Economic Partnership Agreement (JAEPA) --­commenced 15 January 2015
  • China-Australia Free Trade Agreement (ChAFTA) --­negotiations completed 17 November 2014, expected to commence later in 2015
 
How do FTAs benefit Australian businesses?
 
One of the biggest benefits of FTAs is that they substantially liberalise Australia’s trade with its major trading partners.
Agreements such as those Australia currently holds with South Korea, Japan, and China not only protect and strengthen the competitive position of Australian businesses in those countries but also enhance investment in both directions. Australian exporters gain significantly improved market access for their goods, with tariff elimination on nearly all Australia’s current exports by value through the full implementation of the FTA.
 
The commitments on movement of natural persons under FTAs build upon those made by Korea, Japan and China in the World Trade Organization, guaranteeing access for skilled service suppliers, investors and business visitors to enter and stay in each country. Agreements also allow for prompt processing of immigration applications, timely information on visa application progress, and the simplifying of procedures and requirements relating to the movement of employees and their families.
 
KAFTA
 
Under KAFTA, Australia provides access for:
  • Korean intra-corporate transferees
    1. up to two years for specialists
    2. up to four years for an executive or a senior manager;
  • Korean independent executives for up to two years;
  • Korean contractual service suppliers for up to one year; and
  • Korean business visitors for up to 90 days.
 
KAFTA has removed labour market testing for Korean nationals as part of the 457 visa program.
 
JAEPA
 
Under JAEPA, Australia provides entry and temporary stay for:
  • Japanese intra-corporate transferees
  1. up to two years for specialists
  2. up to four years for an executive or a senior manager;
  • Japanese investors for up to two years;
  • Japanese contractual service providers for up to one year; and
  • Japanese business visitors for up to 90 days.
 
JAEPA has removed labour market testing for Japanese nationals as part of the 457 visa program.
 
ChAFTA
 
Details of the program are expected to be announced following the completion of the related treaty, which should also provide and streamline the following entry programs:
  • Work and Holiday Visa to allow entry to 5,000 skilled Chinese work and holiday travelers per year who can
  1. visit for up to twelve months
  2. work for one employer for up to six months;
  • Chinese intra-corporate transferees and independent executives traveling to Australia;
  • Chinese business visitors to Australia;
  • Chinese contractual service suppliers traveling to and from each country; and
  • Installers and servicers traveling to and from each country.
 
A new Investment Facilitation Arrangement would also allow Chinese companies undertaking infrastructure projects in Australia, and which are valued in excess of $150 million, to sponsor subclass 457 visas for a wider range of occupations than those currently allowed under the standard subclass 457 sponsorship. The streamlining of hiring processes is also anticipated to be announced under the new arrangement.
 
If you believe your business could benefit from these changes, please do not hesitate to get in touch with your local Fragomen contact for further information and advice.
 
MARN 0849269 / MARN 1275981
 

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