Free Trade Agreement Update

By: AUSBUY

China
Our negotiations for a free trade agreement with China have now taken four years and 13 rounds and now Australia has decided on a major change in strategy with China after our senior negotiator quit the stalled free trade agreement talks. No further discussions have been planned. The agreement has become increasingly complex after China’s grab at Australia’s mining sector.

While China has surpassed its 8% growth target for this year, this does not lessen our need for “fair” free trade agreements.

China has recently signed an agreement with New Zealand that progressed much more quickly and successfully than the one with Australia opening up the country to many New Zealand agricultural imports. Mr Crean was reported in the press as putting China on notice that Australia would not agree to an outcome less favourable for agricultural products than the one finalised with New Zealand and our dairy industry has backed this position.

Japan
Negotiations for this agreement began in 2007 and seven rounds of talks have been held. Again there are serious debates over agriculture. Japan has been trying to exclude beef, sugar, dairy, wheat and barley from the deal to protect its farmers. Australia, however, wants market access for its farm products.

Also Japan is looking for safeguards in any potential agreement, against genetically modified foods, since Australia has recently done a back flip on its GE policy. Also a high priority for Japan is to provide secure access to resources. The next round is scheduled for July.

Gulf Cooperation Council
The third round of negotiations was held in February 2009 for this potential agreement. Despite this Australia’s Department of Foreign Affairs and Trade is still calling for submissions from stakeholders into an agreement between Australian and the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

There has been very little dialogue over a potential FTA with the GCC.

Malaysia
Australia and Malaysia have been in negotiation for an FTA since 2005 with the most recent round of talks being held in October 2008.

Of main concern in Australia is the textile and fashion industry which argues that our marketplace will be left open to cheaper fabrics and labour.

There are also concerns with regard to dumping of Malaysian product in the Australian marketplace. Dumping laws are similar to our Common Laws, the victim must prove guilt of the perpetrator and in the meantime the injuries have occurred, in these cases to our businesses.

Korea
Negotiations with Korea opened in May this year however DFAT are still accepting submissions from stakeholders. Australian beef farmers have been fighting to ensure Australia secures greater access to its markets, since Korea recently signed an FTA with the US reducing its 40% tariffs on beef over 15 years. This is of major concern to Australia since Korea is our third largest beef export market with 127,000 tonnes exported last year.

Motor vehicles and telecommunications equipment are a major import into Australia from Korea which has seriously eroded our local motor vehicle industry.  Korea will also be looking for greater access to Australian education exports.

As one Australian science teacher in Korea recently explained, Korean children know which Australians have won the Noble Peace Prizes in Science but not who Kylie Minogue is. What would our students answer? Are we exporting our knowledge at the long term expense of our own proven science capabilities? Does our education encourage and support excellence for the future benefit of Australia?

Current Free Trade Agreements in place: Chile 2009; USA 2005; Thailand 2005; Singapore 2003; New Zealand 1983.

Current Free Trade Agreement under negotiation: China; ASEAN - Malaysia; Japan; GCC; Korea.

Free Trade Agreements under consideration: Indonesia; India; Mexico.

Of concern to AUSBUY in relation to all agreements is that previous agreements, most importantly that with the US, has had a negative influence on Australia and that our negotiators signed a substandard agreement rather than no agreement at all.

Also of concern is that companies operating in countries with an FTA in place are not subject to the same government legislation in relation to environmental, human rights and labour standards and so who do not operate on a level playing field with Australian manufacturers.

Most importantly AUSBUY believe that our government should be focusing on multilateral agreements rather than bilateral ones, which the current government outlined as its focus at the past election.

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