PERTH (miningweekly.com) – The Australian resources sector has welcomed the Federal Opposition’s about-turn over the Chinese Free Trade Agreement (FTA).

Australia in June inked an FTA with China, securing better market access for Australia to the world’s second-largest economy, improving the country’s competitive position in a rapidly growing market and promoting increased two-way investment and reduced import costs.

The Australian resources sector is expected to benefit significantly from the FTA, as tariffs will be removed from nearly all Australian resources and energy products, including an 8% tariff on aluminium oxide.

A 3% tariff on coking coal will be removed on the first day the FTA becomes effective and the 6% tariff on thermal coal will be phased out over the next two years.

The agreement will eliminate tariffs that add nearly A$600-million a year in costs to the bilateral minerals and energy trade.

The Australian Labor party had been hesitant to support the FTA with China and had wanted amendments to the Migration Act. Opposition leader Bill Shorten this week said the Labor party had negotiated “significant concessions” and legal safeguards that would benefit Australian workers.

With Labor’s backing, the China FTA could be finalised before Christmas.

The Minerals Council of Australia (MCA) has welcomed Shorten’s support of the FTA.

“The trade agreement is a watershed moment in Australia’s economic history. Together with the trade agreements with Japan and Korea, the China FTA will anchor the Australian economy in East Asia for many decades to come and will provide increased opportunity and prosperity for future generations of Australians,” MCA CEO Brendan Pearson said.

The Association of Mining & Exploration Companies (Amec) has also welcomed the new support, with CEO Simon Bennison saying that the mineral exploration and mining sector was pleased that common sense had prevailed.

“The Federal Labor party’s support ended the uncertainty that has been surrounding the agreement.”

“This is an extremely positive outcome for the minerals sector and Australia as a whole,” said Bennison.

He noted that, on full implementation of the China FTA, almost all of Australia’s current resources exports would receive duty-free entry into China. The FTA would also increase Australia’s international competitiveness and support the country’s resources exports to China that were worth over A$74-billion in 2013/14.