China Australia Investment Agreement

In order to assess the impact of these rules and material exemptions on Chinese investment in Australia, it should first be noted that they are below Australia`s commitments under its recent free trade agreements with major trading partners. Japan and Korea, for example, are the fourth and eighteenth investors in Australia, respectively. [40] Under both the Korea-Australia Free Trade Agreement (2014) (`KAFTA`) and the Japan-Australia Economic Partnership Agreement (2015) (`JAEPA`), Australia`s investment and investor protection obligations go beyond non-discrimination requirements; to ensure minimum standards of treatment (fair, fair treatment, expropriation and compensation, transfers of investment returns and restrictions on benefit requirements for foreign investors). [41] These additional commitments also existed in Australia`s former free trade agreements with major trading partners such as the United States[42] (Australia`s largest investor) and Singapore[43] (the fifth largest investor in Australia). ChAFTA`s limited coverage also does not reflect good Chinese practices. For example, the recently concluded free trade agreement between China and Korea[44] (which comes into force at the same time as ChAFTA) and the China-New Zealand Free Trade Agreement[45] (the first free trade agreement with a Chinese-developed economy) cover these additional obligations. [46] An explanation of the limited scope of ChAFTA could be related to the bilateral investment agreement between China and Australia (ILO), which came into force on 11 July 1988 and remains in force. [47] Given that the ILO had already covered most of these obligations (transfer, expropriation and fair and equitable treatment), it may be unnecessary for ChAFTA to reiterate these obligations. This observation is supported by Article 1.2.2 of the ChAFTA, which states that ”[d] in this agreement the existing rights and obligations of a contracting party, in accordance with … All the others …

bilateral agreement between the two parties.” This can be interpreted in such a way that ChAFTA does not stop the operation of the ILO. [48] It should be noted, however, that these additional commitments should be the subject of further negotiations under the ChAFTA. In addition, under ChAFTA Article 1.2.3, any contradictions between CHAFTA and the ILO must be resolved by consultation from consultation between the two parties ”with a view to finding a satisfactory solution for both parties”. Disagreements between CHAFTA and the ILO over the extent of the parties` commitments – where and how they should apply – are likely that the parties must decide on a case-by-case basis until negotiations in the future work programme are completed and changes are made. This consultation mechanism therefore confirms the intention of the parties to defer additional commitments for future negotiations and creates uncertainty about the extent of investor protection. Given the intent of the parties, it is likely that Chinese investments and investors in Australia may not enjoy the same level of protection as Australia`s other major trading partners. The full text of the agreement, as well as useful information and information sheets from the ACF, are available on the website of the Ministry of Foreign Affairs and Trade. For any specific questions regarding the agreement, e-mail ChinaFTA@dfat.gov.au or DFAT phone on 02 6261 1111. Importers can contact the Ministry of the Interior. As a result of chAFTA, notification thresholds for Chinese private investors have been raised in some investment sectors, which should reduce screening. The three main changes to notification thresholds include: (1) private investment in non-sensitive sectors, raising the threshold from AUD 252 million to AUD 1094 million; (2) increase from AUD 252 million to AUD 1094 million for private investments in open commercial spaces such as hotels, commercial offices, all-out premises

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