China - Australia Free Trade Agreement (ChAFTA)

The China-Australia Free Trade Agreement (ChAFTA) came into effect in December 2015. Goods subject to tariff reductions or exemptions mainly include textiles and leather, electronic and mechanical products, other manufactured products, steel and metals, and chemical products. 

For Chinese goods exported into Australia side:

• Tariff for Motor cars and other motor vehicles, principally designed for the transport of persons, has been decreased from 5% to 0%. 
• Tariff for Photosensitive semiconductor devices remains 0%. 
• Tariff for heat pumps other than air conditioning machines falling under HS code of heading 8415 has been decreased from 5% to 0%. 

For Australian goods exported into China:

• Tariff for motor cars and other motor vehicles, principally designed for the transport of persons, has been decreased gradually from 25% to 0% in 10 years. 
• Tariff for nickel oxides and hydroxides, carbonates, and lithium carbonate has been decreased from 5.5% to 0%. 

Eligibility for the free trade terms outlined above is contingent on the following rules of origin: 

• For motor vehicles, a regional value content of not less than 45%, as calculated under Article 3.5 on the Calculation of Regional Value Content, is required.
• For components of heat pumps a regional value content of not less than 40% is required.
• For machine-tools that remove material by laser or other light or photon beam; ultrasonic, electro-discharge, electro-chemical, electron beam, ionic-beam or plasma arc processes; or water-jet cutting a regional value content of not less than 40% is required. 

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