As Prime Minister Tony Abbott prepares to visit China next month, business groups are calling on him to use the trip to finalise a major trade agreement with Australia’s largest partner.
They say a free-trade deal would greatly boost opportunities for Australian exporters in the lucrative Chinese market, especially in the beef and dairy industries.
However, critics believe Australia should be wary of signing any agreement unless China agrees to improve its human-rights record and environmental standards.
At a recent annual gathering of China’s parliament, Premier Li Kequiang called for accelerating negotiations towards a free-trade agreement between China and Australia.
The Australian government welcomed the comments as it tries to finalise a free-trade deal seven years after talks began under the former Howard Government.
The Department of Foreign Affairs and Trade estimates China’s trade with Australia totalled $125-billion in 2012, making China Australia’s largest trading partner.
Prime Minister Tony Abbott has told an Asia Society Luncheon in Canberra an agreement would mark another step forward for already strong diplomatic ties between the two.
“It’s hard to overstate the importance and the strength of Australia’s relationship with China. China is now, by far, our largest trading partner. In some years, it’s our largest source of immigrants. And in most years, it’s our largest source of foreign tourists and students.”
Mr Abbott says he wants to use his visit to China to make substantial progress towards finalising an agreement.
The Prime Minister concedes more progress has been made towards finalising a similar deal with Japan, while an agreement with South Korea will be formally signed in April.
But the Australia China Business Council says it remains optimistic about a breakthrough on a free-trade deal with China in the near future.
The council’s national president, Duncan Calder, says there will be numerous opportunities for Australian and Chinese political leaders to meet this year.
And he says both governments have shown strong signs that they want to reach an agreement soon.
“And what we’ve seen most recently is Premier Li Kequiang echoing the importance of free-trade agreements. So we have the right tone from the top. And I think, when you add to that the opportunities for engagement at a higher level, not only from the Prime Minister’s visit, but subsequently at the APEC visit and then later in the year in Brisbane, when President Xi Jinping will be visiting for the G20, I really do think that, by the end of this year, there is an extremely good opportunity for Australia to have agreed and negotiated with China a win-win free-trade agreement.”
However, some critics believe Australia should not sign a free-trade agreement with a country like China, given its poor record on labour rights and environmental standards.
As part of a feasibility study under the former Howard Government, a number of activist groups questioned whether it was ethical to back such close economic ties with China.
The Falun Gong Movement and the Australia-Tibet Council both argued signing a deal would amount to condoning human-rights abuses in China.
The Australian Fair Trade and Investment Network agrees.
Its convener, Dr Patricia Ranald, says Australia should not compromise its own principles to reach a deal with China.
“If you look at it from China’s point of view, they already have very good access for their goods into Australian markets because we have very low tariffs. In order to get better agricultural access to Australian products, I think that things may have to be offered or trade-offs may have to be done. I would be very concerned if Australia, for instance, didn’t insist on workers’ rights and environmental standards as part of its negotiating position. I fear that that might be negotiated away.”
Dr Ranald says she worries Australia could follow New Zealand and sign an agreement with China which makes no reference to labour or environmental standards.
The New Zealand agreement was signed in 2008, and New Zealand officials claim it has greatly improved dairy and meat exporters’ access to the Chinese market.
Associate Professor Len Perry, from the University of Technology in Sydney, specialises in Australia’s economic relations with Asia.
He has done extensive research on free-trade pacts.
He believes one of the biggest obstacles in the negotiations between Australia and China has been Australian concerns over Chinese state-owned companies investing in Australia.
Dr Perry believes some concessions are likely to be made in this area over coming months to ensure a deal is reached.
“I think that there will be a bit of bending, with respect to the Chinese investment in Australian firms. I’m not sure about the extent to which it will bend on state-owned enterprises. Perhaps there will be some limitations placed there. And I think China will give easier access to Australian agricultural products, dairy products and lamb and such like.”
Tony Abbott says Australian businesses need to capitalise on the opportunities flowing on from a growing middle class in China.
He says a free-trade agreement should be a key part of a broader diplomatic effort to forge closer ties between Australia and its Asian neighbours over coming decades.
“Free-trade agreements mean little without businesses willing to make the most of them. Of course, for millions of Australians, the countries of Asia are family, through ties of ancestry, marriage and migration. These bonds are to be nurtured as much as the bonds of trade and commerce.”