Chinese and Australian officials are expected to meet again in March for a new round of negotiations on the possibility of a Sino-Australian free trade agreement (FTA).

"It is scheduled that they will meet in March in Beijing to discuss the feasibility study," said an unnamed Ministry of Commerce official.

The planned meeting follows January talks between Chinese Vice-Minister of Commerce Ma Xiuhong and Geoff Raby, deputy secretary of Australia's Department of Foreign Affairs and Trade, he said.

A substantial framework was laid out as the agenda for FTA negotiations at the January meeting.

"Good progress has been made on the implementation of the Sino-Australian FTA Framework," he said.

The framework was signed by Australia's Trade Minister Mark Vaile and China's Vice-Minister of Commerce Yu Guangzhou in the presence of Australia's Prime Minister John Howard and Chinese President Hu Jintao on October 24, 2003.

The framework includes a commitment to undertake a joint feasibility study by October 2005 into a possible FTA between Australia and China.

"They will continue to talk about concrete ways of conducting the feasibility study and its stages," the official said.

The study will present a basis upon which both governments can consider the benefits and costs of such an agreement prior to any decision being taken on the commencement of negotiations, he said.

Australia's neighbour New Zealand is also negotiating with China about a trade and economic cooperation framework agreement, which might include a feasibility report for a China-New Zealand FTA.

The agreement, a follow-up document to President Hu's visit to New Zealand last October, is expected to be signed in the middle of this year and the feasibility report could be finished by the end of 2004.

A feasibility study is necessary before signing a free trade agreement or setting up a free trade area, explained Wang Youli, an expert at the Chinese Academy of International Trade and Economic Cooperation.

This type of study often explores the benefits for exporters and service suppliers when trade barriers are removed or reduced.

It also identifies the potential gains stemming from trade facilitation measures, such as cooperation in the flow of business people, customs procedures and technical standards.

She added that the study also examines any challenges or costs that a FTA might involve.

If the Sino-Australian and Sino-New Zealand FTA are signed, economic ties between China and Oceania will be more concrete and diversified, she said.

China currently is Australia's third-largest trading partner. Australia is China's ninth-largest trading partner.

The economies of China and Australia are complementary, Wang said.

For instance, Chinese demand is expected to grow for Australia's iron ore, natural gas, unwrought aluminium, copper, wool and wheat.

Meanwhile, Australian consumers will also benefit from inexpensive Chinese exports including computers, clothing, video and digital cameras, mobile phones and sporting items, she said.

The Australian Government has indicated it regards China as an important trade partner.

It disagreed with claims by some countries that China remains a "non-market economy country" and has revised its anti-dumping act to facilitate bilateral trade, Wang said.

Australia's actions have created a warm atmosphere for China to begin Sino-Australian FTA talks, Wang said.

The situation between China and New Zealand is similar, he added.

China needs forestry products, pulp, meat and other agricultural products from New Zealand and sells apparel, toys, machinery and furniture.

China is New Zealand's fourth-largest trade partner. Customs statistics show that trade between the two nations soared 30.5 percent year-on-year in 2003 with a deficit of US$200 million on the Chinese side.

(China Daily February 23, 2004)