The first round of historic trade negotiations between Australia and China is under way in Sydney.

A free trade agreement between the two countries would boost China's effort to be accepted as a full market economy and would provide Australia with access to the world's largest marketplace.

The chairman of China's National People's Congress told trade forum members Monday that relations between the two countries have never been better.

China is Australia's third-largest trading partner. China supplies consumer goods and clothing while key Australian exports include iron ore, wheat, petroleum and coal.

Australia already has negotiated free trade agreements with the United States, Thailand, Singapore and New Zealand. China is mired in increasingly bitter trade disputes with the United States and the European Union.

Some information for this report provided by AFP and Reuters.