THE Australia Arab Chamber of Commerce and Industry (AACCI) is urging the Australian Government to commence negotiations with Saudi Arabia on a Double Taxation Agreement.

“Bilateral investment between Saudi Arabia and Australia, particularly infrastructure, real estate and agriculture, is encumbered because the effective corporate tax rate is up to 50 percent (20% in Saudi Arabia plus up to 30% in Australia)” the AACCI CEO, Suzannah Moss-Wright said.

“As part of the Government’s on-going efforts to improve international competitiveness in Australian business, we encourage the Australian Government to commence negotiations on a double taxation agreement between the two countries.”

Ms Moss-Wright said Australian business would benefit from diversified funding sources. Saudi Arabia is abundant with private financial wealth in excess of US$1 trillion, and growing at a projected rate of 9.3 percent a year between 2014 and 2019, according to the Boston Consulting Group.

"Such monies remain distant whilst the Australian Government requires the Gulf Cooperation Council (GCC) (comprising Bahrain, Qatar, Oman, Kuwait, Saudi Arabia and the UAE) to recommence negotiations on a Free Trade Agreement (FTA), before Australia engages in negotiations on double taxation agreements with the Gulf States," Ms Moss-Wright said.

Australia’s trade in agricultural products with Saudi Arabia, in spite of positive progress in recent years, is lagging far behind its potential, according to the AACCI.

Australian market share of chilled beef imports to Saudi Arabia has increased from 3 percent in 2010 to 7 percent in 2015. Saudi Arabia’s population is expected to grow at 1.5 percent annually over the next decade. It has an expanding middle class demanding higher quality proteins and grains. This presents opportunities for Australian companies involved in dairy, animal feed, beef and sheep farming, said AACCI. 

“Australia could become a strategic partner for Saudi Arabia in its search for investment opportunities to develop greater food security. We anticipate increased investment in Australia from Saudi Arabia if a double taxation agreement were enacted,” the AACCI CEO said. “The Australian Government has developed a compelling value proposition for investment in Northern Australia that could be of interest to Arab investors if an attractive tax regime could be established.”

During the first half of 2015, Australia exported more chilled and frozen meat to countries of the Middle East and North Africa region (MENA) than to China, according to the Federal Department of Agriculture Comparison Table for Calendar YTD.

AACCI advocates broadening Australia’s trade focus, and intensifying attention on the Arab countries of the MENA region to safeguard long-term economic growth in Australia’s agriculture sector. Export market diversification is essential to buffer price variation and demand shocks in specific markets. China’s demand for Australian meat declined 11 percent in the past year.

FTA negotiations with the Gulf Cooperation Council commenced in 2007, and five rounds of discussions followed. No formal discussion has been had since 2009. Australia and the GCC are considering re-commencement of negotiations, however both parties are involved in discussions with other countries that could take precedence over a GCC-Australia Free Trade Agreement.

“It might be a number of years before negotiations on the GCC-Australia FTA formally recommence,” Ms Moss-Wright said.

"n the interim, AACCI urges the Australian Government to commence negotiations on a double taxation agreement with Saudi Arabia. Presently, Australia has 44 ratified double taxation agreements.

"To date, Australia has not commenced negotiations for a double taxation agreement with any Arab league states. Australia had a double taxation agreement with China for 26 years before concluding the FTA in 2014. Similarly a double taxation agreement preceded the FTA with Japan by 44 years and 31 years with Korea. This suggests that double taxation agreements pave the way for free trade agreements.

“A tax treaty with Saudi Arabia would reduce the incidence of double taxation, provide greater tax certainty for business, and increase appeal of each to the other as an investment destination," she said.

"It would also improve access of Australian firms to Saudi Arabia’s $1.2 trillion worth of infrastructure developments currently planned or underway. Saudi Arabia is also mineral rich with significant deposits of bauxite, copper, gold, iron ore, lead, silver, tin as well as non-metallic minerals. With the decline in oil revenues, Saudi Arabia now has an increasing push into precious and base metal mining, presenting an opportunity for Australian contractors and engineering firms to capitalise on our advanced mining service expertise in a growing market.”

AACCI has welcomed the Australian Government announcement on September 21 this year that it intended commencing negotiations on a double taxation agreement with Israel, to whom Australia exported $243 million of merchandise goods in 2014; and imported $710 million of goods.

“The Australian Government recognises that the absence of a double taxation agreement holds back closer bilateral economic and financial linkages, and we support initiatives to remedy this,” Ms Moss-Wright said.

AACCI is also encouraging the Australian Government to similarly commence negotiations on a double taxation agreement with Saudi Arabia, to whom Australia exported $2.26 billion of merchandise goods in 2014; and imported $426 million of mostly fertilisers and plastics.

AACCI also encourages the Australian Government to enter into negotiations for an investment protection agreement with Saudi Arabia.

Currently, Australia has 22 bilateral investment protection agreements. The only country with which both Saudi Arabia and Australia have investment protection agreements is China, the AACCI said.

"This means that to safeguard Saudi Arabia’s investment in Australia, the investor would incorporate a company in China, and use that Chinese company to invest in Australia," Ms Moss-Wright said. "This results in Australia losing the benefit of direct relationships with its investor, potentially limiting further investment in the future and impeding bilateral trade opportunities."

Saudi Arabia is the 19th largest economy in the world with a GDP of US$752 billion in 2014. It is the third-fastest growing economy in the world with an annual average growth rate of 5 percent over the past 10 years. This achievement is only preceded by China and India.

Fortunate to have 25 percent of the world’s proven oil reserves within its borders, and the fourth=largest natural gas reserve in the world, Saudi Arabia represents a compelling prospect for Australian business to develop a commercial relationship.

The Australia Arab Chamber of Commerce and Industry is hosting a seminar at the Four Seasons Hotel, Sydney, commencing at 5:30 pm on Tuesday, October 20, 2015 to discuss agribusiness opportunities for Australian companies in the Arab world, with a particular focus on Saudi Arabia.

“We are honoured that the Ambassador of the Royal Embassy of Saudi Arabia in Australia, His Excellency Nabil Al Saleh will be speaking at our seminar,” said Mohamed Hage, the AACCI (NSW) chairman.

“Following the Ambassador’s keynote address, international trade experts from Meat and Livestock Australia, Rabobank, Export Council of Australia and AACCI will discuss trends in trade of agricultural products between Australia and the Arab world.”

www.austarab.com.au

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THE opportunities created by the historic China–Australia Free Trade Agreement (ChAFTA) took another step towards reality on June 17 with the official signing of the agreement by trade ministers from both countries. 

Agriculture Minister, Barnaby Joyce, said the agreement would deliver significant benefits to Australian farmers upon entry into force later this year. 

“The China-Australia FTA eliminates tariffs on a wide range of key agricultural and fisheries products in Australia's largest agricultural export market,” Mr Joyce said. 

“We exported around $9 billion of agricultural products to China in 2014 at tariffs up to 30 percent — which makes Australian farmers less competitive and less profitable. 

“The tariff cuts under ChAFTA over the first year are estimated to provide tariff savings of up to $188 million across key growth commodities like beef, sheep meat, hides and skins, livestock, dairy, horticulture, wine and seafood. 

“Tariffs on barley, sorghum, oats, some animal feeds and frozen prawns, will be eliminated, that is to zero percent, upon entry into force and Australia has received a duty free Country-Specific Quota for wool,” Mr Joyce said.

“A number of tariffs will be eliminated over four years, including most seafood, fruits, nuts and vegetables, as well as wine and a number of processed foods including canned tomatoes, pasta, chocolate and biscuits to name a few. 

“Tariffs of 12 to 25 percent on some of Australia’s biggest exports to China — chilled or frozen beef and sheep meat — will be eliminated in stages over eight to nine years. There are also a number of tariff phase-outs for key dairy exports over four to 11 years. 

“These cuts will directly benefit our producers, and underline the commitment of this government to boosting returns at the farm gate.” 

Mr Joyce said the agreement closed the gap between Australia and international competitors that already have FTAs with China, such as New Zealand and Chile, and would provide a significant advantage over major competitors such as the United States and European Union, which do not have FTAs with China. 

“The Australian Government has a strong commitment to agriculture as a pillar of the national economy and we are consistently working towards the development of new markets for Australian produce,” Mr Joyce said.  

“To take full advantage of the outcomes of ChAFTA, the government is actively working to improve and expand technical market access to China for Australian agricultural products. 

“This agreement markets the beginning of a new relationship with China and one which we will use to continue to press for improved market access for our producers and exporters.” 

The China–Australia Free Trade Agreement was formally signed in Canberra by Australias Minister for Trade and Investment, Andrew Robb, and China’s Commerce Minister, Dr Gao Hucheng. 

The next step is ratification of the agreement by both countries, with a goal of entry into force before the end of 2015. 

Prime Minister Tony Abbott said Australia’s agriculture sector would be able to capitalise on its well-deserved reputation as a clean, green producer of premium food and beverage products.

“Tariffs will be progressively abolished for Australia’s $13 billion dairy industry,” Mr Abbott said. “Australia’s beef and sheep farmers will also gain from the phased abolition of tariffs ranging from 12-25 percent and all tariffs on Australian horticulture will be eliminated.”

http://www.agriculture.gov.au/market-access-trade/fta

http://dfat.gov.au/trade/agreements/chafta/Pages/australia-china-fta.aspx

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AUSTRALIAN electric vehicle fast-charge technology developer Tritium has won a major deal with ChargePoint to provide its Veefil system across the US.

ChargePoint is the world’s largest and most open electric vehicle (EV) charging network. ChargePoint will install Tritium’s award-winning Veefil DC fast charging stations, the Veefil across the country. 

Veefil stations have a power output of 50kW and can deliver up to 128km of driving range in just 20 minutes.  The Tritium stations are able to charge all cars equipped for DC fast charging, using the included SAE-Combo connector or a CHAdeMO connector. Tesla drivers will be able to use the CHAdeMO connector with an adapter slated to go on sale shortly. 

“ChargePoint approached us because it was attracted by both the design and unique technology of the Veefil, plus the fact that it is extremely simple for the EV owner to use,” Tritium CEO, David Finn said. 

“We were looking for a strong partner in the US which had excellent distribution and an established network throughout the country.  I’m excited by the rate and high volume at which ChargePoint will be able to deploy our product into this market and its commitment to establishing a major network of DC fast chargers.”

The stations will be installed on major routes across the country and will be part of the ChargePoint network of more than 21,000 EV charging stations. ChargePoint recently partnered with Volkswagen and BMW to build express charging corridors on both the east and west coasts of the US.

Mr Finn said the stations will be ChargePoint branded, clearly marked as DC Fast stations and the connectors will be labelled so drivers know which is compatible with their car.

“These stations can be used by any EV equipped with fast charging and will be installed in convenient locations where drivers need them most,” ChargePoint CEO Pasquale Romano said.

“With access to fast charging stations along major routes, drivers can depend on an EV as their only vehicle.”

The Veefil stations, developed by the Queensland-founded company, have the smallest footprint and lowest weight of all 50kW DC EV fast chargers, increasing location options and reducing shipping and installation costs. Veefil fits neatly at the end of a standard parking bay within existing infrastructure.

The units weigh only 165 kg and the polycarbonate and aluminium construction ensures long-term stability of the entire enclosure, leading to lower maintenance costs.

www.tritium.com.au

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A WORKING group has been established by German and Australian Government representatives to move towards a free trade agreement.

The move came after the G20 Leaders Summit in Brisbane in November, in discussions between Prime Minister Tony Abbott and German Chancellor Angela Merkel, and then was furthered at a business reception for Dr Merkel organised by the German-Australian Chamber of Commerce in Sydney. 

The reception, part of the first visit of a German Chancellor to Australia in more than 15 years, gave Dr Merkel a platform to raise the issue of a future EU-Australia Free Trade Agreement (FTA). She said in her speech at the event of “the importance to expand the already strong commercial ties”.

The FTA was also  one of the key topics of the bilateral working group announced by Dr Merkel and Mr Abbott the previous day

German-Australian Chamber president, Lucy Hughes Turnbull, welcomed the Chancellor and mentioned how important the influence of German companies in Australia is. There is $11 billion in annual trade between Germany and Australia and Dr Merkel said she would support a future FTA between the European Union and Australia that could further deepen the business relationship. The Chancellor also invited Australian businesses to invest more in Germany.

After the reception, Airbus, Froebel, SAP and Siemens briefed Dr Merkel on their bilateral highlight projects as examples of world-leading German-Australian collaboration.

Also at the event staged at Sergeants Mess in Mosman were the Prime Minister’s representative Josh Frydenberg, Australian Ambassador to Germany David Ritchie, German Ambassador to Australia Christoph Mueller, Austrian Ambassador to Australia Helmut Boeck and Australian B20 Sherpa Robert Milliner, along with 300 members of the German-Australian Chamber.

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