//
you're reading...
Australian Current Affairs

Australia and China resume free trade talks


China - Australia

China – Australia

Australia will undertake a major rethink of its investment stance towards China, with the Rudd government now prepared to discuss reducing hurdles to Chinese investment as it strives to conclude a free trade agreement with Beijing.

New Trade Minister Richard Marles is preparing to fly to China for talks on the FTA and has signalled that the government is now prepared to discuss concessions in this politically explosive area.

It marks a radical departure from the policy under Julia Gillard, where the government pursued a trimmed down agricultural FTA with China and refused to consider changes to Chinese investment access.

A comprehensive Australia-China FTA rocketed back on to the political radar after Kevin Rudd and Chinese President Xi Jinping pledged to revive the talks in a phone discussion shortly after Mr Rudd’s return to the leadership last month.

But any move on increasing Chinese investment access amounts to a calculated political risk. As beneficial as such a move might be to the Australian economy, it is hotly opposed among parts of the community.

In an interview with The Australian yesterday, Mr Marles said China wanted an increase to the threshold at which non-state investments were referred to the Foreign Investment Review Board.

Under the current rules, companies or individuals from China and most other countries are subjected to FIRB approval for investments of $248 million or more. It’s believed China wants this increased to the $1 billion threshold that applies to US and New Zealand investors. China is also believed to be seeking an end to the automatic referral of all state-owned entity investments to the FIRB regardless of value.

Mr Marles said he would not discuss exactly what Australia might offer but that it was prepared to look at the FTA “in a fresh light” and negotiate in a “practical and pragmatic” way. He said Australia had had concerns about making any changes in this area “up until now” but was now willing to consider the “totality of all of this”. “To make progress we do have to look at the positions that both sides have taken in a pragmatic way,” he said.

“To state the obvious you need to advance those positions – and that means change – in order to make progress. We are willing to look at this afresh and see how we can do that.”

Negotiations on an FTA began in 2005 in the hope that Australia’s exporters could break free from the quotas, tariffs and red tape imposed by Beijing, but the talks have failed to result in a deal. The original feasibility study found an FTA could boost gross domestic product in Australia by $US18bnover 10 years and GDP in China by $US64bn over that period.

Since then, China has become Australia’s largest trading partner with two-way trade totalling almost $128bn in 2011-12 on Austrade figures.

Chinese investment has been increasing in Australia and hit $23bn last year on Department of Foreign Affairs figures, but it still trails investment from the US, Britain and Japan.

Mr Marles said a China FTA would be a boost to agricultural exporters, but also to services industries and even manufacturers as Australia’s trade with China shifted from resources to supplying a growing middle class.

“The future of our economic relationships with China is going to shift from being one based on resources – although it will obviously still have a very large resources component to it – to one that has a much bigger goods and services component,” he said. “If we were able to make progress on an FTA with China that would be a very significant contribution to the Australian economy given how important providing goods and services to the growing Chinese middle class is going to be for the future of the Australian economy and future prosperity in Australia.”

New Zealand’s dairy sector has been revitalised by the New Zealand-China FTA and Australian exporters hope that a similarly advantageous deal can be struck between Australia and China.

Along with the change to the investment threshold and an end to the automatic referral of all state-owned entity investments to the FIRB regardless of value, China may seek access to visas for Chinese managers and staff in niche areas.

These requests for visa changes and changes to the automatic FIRB referral of state-owned enterprises appear far more politically sensitive and harder for the Australian government to push through than increasing the private investment threshold, which has the backing of a senior conservative in the form of Western Australian Premier Colin Barnett.

Mr Marles said he remained confident that the Australia-Japan FTA and the Australia-Korea FTA remained “on the cusp” of being agreed, even though delays have cropped up in both negotiations.

Despite reports of an imminent breakthrough, the Japan deal has hit problems over Tokyo’s refusal to give much ground on beef imports and Australia’s reluctance to cut auto import tariffs.

The Korea deal has been held up on Australia’s insistence that it not contain an investor state dispute settlement provision, which former trade minister Craig Emerson had warned would expose Australia to litigation from foreign firms.

Mr Marles confirmed the government’s policy on this issue remained the same.

Source: The Australian – Free-trade push may open door to China
 

About Craig Hill

Teacher and Writer. Writing has been cited in New York Times, BBC, Fox News, Aljazeera, Philippines Star, South China Morning Post, National Interest, news.com.au, Wikipedia and others.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

If you liked what you just read, click "Subscribe" to become a follower of the Craig Hill site. You will receive an email each time a new post is published.

Join 17,663 other followers

An archive of all my old posts

Follow me on Twitter

Most Recent Posts Post on My Blog About China: China News

Chinese drones now almost a daily appearance over Taiwan

Chinese drones now almost a daily appearance over Taiwan

The Chinese military has intensified its drone incursions into the skies above Taiwan with almost daily flights of combat and reconnaissance unmanned aerial vehicles (UAVs). Taiwan’s Defense Ministry said a People’s Liberation Army (PLA) TB-001 drone was spotted crossing the median line of the Taiwan Strait, the de facto boundary between the island and China’s […]

India says disengagement along disputed area with China to be completed by September 12

India says disengagement along disputed area with China to be completed by September 12

India’s foreign ministry said on Friday that disengagement along a disputed border area with China will be completed by Sept. 12. Both countries began disengaging from the Gogra-Hot Springs border area in the western Himalayas on Thursday, over two years after clashes at the frontier strained diplomatic ties. The disengagement comes ahead of a meeting […]

How to make EVs without China’s supply chain

How to make EVs without China’s supply chain

Two electrifying moves in recent weeks have the potential to ignite electric vehicle demand in the United States. First, Congress passed the Inflation Reduction Act, expanding federal tax rebates for EV purchases. Then California approved rules to ban the sale of new gasoline-powered cars by 2035. The Inflation Reduction Act extends the Obama-era EV tax […]

Anti-India forces: Techniques and agendas exposed

Anti-India forces: Techniques and agendas exposed

In the post-cold war era, India has moved from a policy of non-alignment to a policy of multi-alignment. This means that India has friendly relations with almost all-powerful and developing nations. Today India is carving out a unique path for itself. Such an approach provides prominence and exposes India to the harmful behind-curtain activities by […]

Taiwan’s Kinmen serves as a reminder of China’s aggression

Taiwan’s Kinmen serves as a reminder of China’s aggression

Taiwan’s frontline island of Kinmen was once again in the headlines when President Tsai Ing-wen paid tribute this week to the soldiers and civilians who “operated in solidarity and safeguarded Taiwan” 64 years ago. On Aug. 23, 1958 mainland Chinese troops attacked Kinmen in a key battle that marked the beginning of the Second Taiwan […]

Terrorism: The glue that holds China and Pakistan together 

Terrorism: The glue that holds China and Pakistan together 

The father of communism, Karl Marx, once famously said — “We have no compassion, and we ask no compassion from you. When our turn comes, we shall not make excuses for the terror”. This statement summarises how terrorism and communism go hand in hand. Maoist China alone destroyed between 44.5 to 72 million lives. During […]

‘New normal’ across the Taiwan Strait as China threat looms ever closer

‘New normal’ across the Taiwan Strait as China threat looms ever closer

China is attempting to establish a “new normal” across the Taiwan Strait, eroding self-ruled Taiwan’s territorial control and increasing the threat of a strike with each military sortie, officials and analysts say. Beijing has ramped up military maneuvers in the 110-mile (180-kilometer) wide stretch of water that separates Taiwan from mainland China — and the […]

When Beijing was burning, Xi was playing personal games 

When Beijing was burning, Xi was playing personal games 

A great fire destroyed Rome for six days in the summer of AD 64. Famous Roman historian of that time, Tacitus, recorded that 70 percent of the city was destroyed and half of the city’s residents were displaced. Roman ruler Nero was accused of being indifferent, ineffective, and careless. The end result of this neglect […]

China would re-educate Taiwan in event of reunification

China would re-educate Taiwan in event of reunification

Once China achieves its professed goal of establishing control over Taiwan, a process of “re-education” of the island’s population would follow, according to China’s Ambassador to France Lu Shaye. The ambassador was speaking on French television channel BFM TV on Wednesday night, when he said a majority of the Taiwanese population actually wanted to be […]

Sri Lanka’s economic crisis is a political sabotage

Sri Lanka’s economic crisis is a political sabotage

Sri Lanka’s present state confirms the famous statement: “Insanity is doing the same thing repeatedly and expecting different results.” Sri Lankans have been repeating the mistakes of choosing the politicians Rajapaksas again and again. It is confirmed that there were unaccounted payments that the Chinese were liberal with during project negotiations with the island nation. They were paid […]

%d bloggers like this: