Free Trade Agreement announced

19 Nov 14

AUSTRALIA, CHINA

IMPACT – LOW

What is the change? Australia and China have completed negotiations for a China-Australia Free Trade Agreement.

What does the change mean? Although the “CHAFTA” will take some time to undergo domestic debate and legal approval, the trade agreement will provide greater access for nationals of each country for intracompany transfers, providers of contractual services, business visitors, and visas for investment projects.

  • Implementation timeframe: An implementation date has not been set.
  • Visas/permits affected: Subclass457 visas, business visas, investment visas, contractual services suppliers.
  • Who is affected: Australian and Chinese companies and employees working or investing in the other’s country, and their family members.
  • Impact on processing times: The agreement includes provisions to streamline processing.
  • Business impact: The agreementis intended to ease entry and immigration and labor procedures for workers and boost trade, investment and business travel.
  • Next steps: Each country must follow their protocols to implement the agreement within their domestic employment and immigration laws, which could take some time.

Background: On 17 November, the two countries signed a declaration of intent at Parliament House in Canberra, Australia, concluding negotiations and formalising their objectives to move forward to implement the agreement.

The agreement, nicknamed CHAFTA, will generally reduce barriers to workers moving between the two countries, increase investment and trade and facilitate temporary entry procedures. According to a fact sheet provided by the Australian Government, each side has made the following provisions.

China will provide guaranteed access to Australian citizens and permanent residents in the following categories:

  1. Intra-corporate transferees (including executives, managers and specialists) for up to three years.
  2. Contractual service suppliers in certain sectors for one year (or longer if stipulated under the contract).
  3. Installers and maintainers for up to 180 days.
  4. Business visitors for up to 180 days.
  5. Spouses and dependant family members of intra-corporate transferees and contractual service suppliers granted stays of longer than 12 months will receive the same entry and stay as the principal.

Australia will provide guaranteed access to Chinese citizens for the following categories:

  1. Intra-corporate transferees and independent executives for up to four years (including executives, managers and specialists).
  2. Contractual service suppliers for up to four years, including guaranteed access for up to a combined total of 1,800 per year in four occupations: Chinese chefs, WuShu martial arts coaches, Traditional Chinese Medicine practitioners and Mandarin language tutors (subject to meeting standard immigration requirements).
  3. Installers and servicers for up to three months.
  4. Business visitors for up to 90 days, or six months for business visitors who are service sellers.
  5. Spouses and dependants of Chinese citizens granted entry for longer than one year will be granted the same entry and stay as the principal.

The agreement also calls for expedited processing and transparency of the visa application requirements and procedures, and streamline licensing and skills recognition of workers.

A memorandum of understanding on Investment Facilitation Agreements will allow Chinese-owned companies to negotiate more flexible labour requirements for overseas workers for infrastructure projects of more than A$150 million. They will be negotiated on a case-by-case basis consistent with Australia’s 457 visa system.

BAL Analysis: The agreement will not take effect for some time, as each country must introduce legislation to implement it. In its current form, it represents liberalization 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@balglobal.com.

MARN: 9683856

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