Chinese and Australian officials are expected to meet again in March for a new round of negotiations on the possibility of a Sino-Australian free trade agreement (FTA).

"They plan to meet in March in Beijing to discuss a feasibility study," reports an unnamed Ministry of Commerce official.

The meeting will follow January talks between Chinese Vice Minister of Commerce Ma Xiuhong and Geoff Raby, deputy secretary of Australia's Department of Foreign Affairs and Trade, he says.

A substantial framework was laid out for FTA negotiations at the January meeting.

The ministry source said that solid progress had been made on implementing the Sino-Australian FTA framework.

The framework was endorsed by Australia's Trade Minister Mark Vaile and China's Vice Minister of Commerce Yu Guangzhou in the presence of Australia's Prime Minister John Howard and Chinese President Hu Jintao on October 24, 2003.

The agreement includes a commitment to conduct by October 2005 a joint feasibility study into a possible FTA between Australia and China.

"They will continue to talk about practical ways of conducting the feasibility study and its stages," the official says.

The study will present a basis upon which both governments can consider the benefits and costs of such an agreement prior to any decision being taken on the commencement of negotiations.

Australia's neighbor New Zealand is also talking with China about a trade and economic cooperation framework agreement. It might also include a feasibility study for a China-New Zealand FTA.

The framework agreement, a follow-up document to President Hu's visit to New Zealand last October, is expected to be signed in the middle of this year and the feasibility study could be finished by the end of 2004.

Such a study is necessary before signing a free trade agreement or setting up a free trade area, explained Wang Youli, an expert at the Chinese Academy of International Trade and Economic Cooperation.

This type of study explores the benefits for exporters and service suppliers when trade barriers are removed or reduced.

It also identifies the potential gains stemming from trade facilitation, such as cooperation in the flow of business people, customs procedures and technical standards.

She adds that the study also examines any challenges or costs that a FTA might involve.

The signing of Sino-Australian and Sino-New Zealand FTAs will solidify and diversify economic ties between China and Oceania.

China currently is Australia's third-largest trading partner. Australia is China's ninth-largest trading partner.

The economies of China and Australia are complementary, Wang says.

For instance, Chinese demand is expected to grow for Australia's iron ore, natural gas, aluminum, copper, wool and wheat.

Meanwhile, Australian consumers will also benefit from inexpensive Chinese exports including computers, clothing, video and digital cameras, mobile phones and sporting items.

The Australian government has indicated it regards China as an important trade partner.

It disagreed with claims by some countries that China remains a "non-market economy country" and has revised its anti-dumping act to facilitate bilateral trade, reports Wang.

Australia's actions have created a warm atmosphere for China to begin Sino-Australian FTA talks, Wang says.

The situation between China and New Zealand is similar, she added.

China needs forestry products, pulp, meat and other agricultural products from New Zealand and sells apparel, toys, machinery and furniture.

China is New Zealand's fourth-largest trade partner. Trade between the two nations soared 30.5 percent year-on-year in 2003, with a deficit of US$200 million on the Chinese side.  

(China Daily February 23, 2004)