Australian businesses are milking the China-Australia free-trade agreement

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Australian businesses are positioning to take advantage of the China-Australia free-trade agreement, cordoning off their own piece of the pie – some before they have the infrastructure to deliver any products.

The Australian reports that Camperdown Dairy International has secured a 15-year, $9 billion deal to supply powdered infant formula to China, despite still being in the process of buying grazing land and building factories.

Last week the company was granted Chinese accreditation for its tinned formula, which allows customers to trace the product back to the farm using their smartphones.

Now, thanks to the FTA, it could also benefit from the removal of an estimated 20% in tariffs on powdered formula, pending approval by the federal parliament.

Founder of Camperdown, coalmining and construction entrepreneur Bill McDonald, is one of the first to move on the bilateral agreement, taking advantage of concerns about the safety of food in China.

The deal is expected to ­triple Australia’s existing exports of infant formula to 15 million tins.

Following the 2008 “Chinese milk scandal”, which killed six children and hospitalised more than 50,000, there has been an explosion in Chinese demand for international dairy. (There’s more about the impact it’s had on local Agribusiness here.)

Following the ALP national conference over the weekend, the Abbott government has warned Labor that any changes to the free trade agreement could cost $300 million next year alone.

Yesterday the Opposition resolved to look at options to ensure local workers are not disadvantaged under the deal.

Also this week is the US-led Trans-Pacific Trade Deal which is expected to see breakthrough this week.

See more here.

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