Australia's FTA with China hits a snag

Opposition Labor Party, unions demand job safeguards in legislation enabling the deal

Australia's landmark free trade agreement with China has hit a stumbling block over concerns that it could cost domestic jobs.

Igniting the fury of the government, the Labor opposition has expressed reservations about the deal, saying it wants the ruling Coalition to include safeguards for Australian workers. This could be done via the legislation enabling the deal, due to be passed by November, or in a separate accompanying Bill.

Labor leader Bill Shorten said he wanted to make the deal "a reality" but insisted it would not be at the expense of Australian jobs.

"Improving trade relations with China is a good idea - full stop - but what I am concerned about is the fine print," he told Radio 6PR yesterday. "Not every deal, not every contract, is automatically a good contract."

But Mr Shorten has come under heavy pressure from the government, business and farming groups, and state Labor leaders, who have all welcomed the deal and urged federal Labor to back it.


  • • Deal tipped to bring in extra A$18 billion (S$17.9 billion) to Australia over the next decade • Deal allows about 85 per cent of Australian exports to enter China tariff-free, rising to 95 per cent in a decade

    • China is already Australia's biggest trading partner, with two-way trade worth over A$150 billion a year

    • The deal, along with new deals with South Korea and Japan, is tipped to create almost 8,000 jobs by next year

The deal, signed in Canberra in June, has been feted as one of the best deals any country has secured with Beijing.

China is already Australia's biggest trading partner but the deal is expected to boost investment and exports of agricultural products, wine and resources.

Australian Prime Minister Tony Abbott urged Labor to back the deal, saying Mr Shorten's position posed a threat to the nation's economic future. The government has warned that China's patience was "wearing thin".

"Quite frankly, Bill Shorten is playing fast and loose with our future - this free trade agreement sets Australia up for decades to come," Mr Abbott said on Wednesday.

"This is a done deal. It is the best deal that China has done with any developed economy."

The head of the National Farmers' Federation, Mr Simon Talbot, warned that China would turn its attention to South America if Australia failed to back the deal.

"We've got three to five years' head start on the South Americans. If we go back on the agreement now, after nine years of negotiations, we go back to square one," he told The Weekly Times.

But the deal has been heavily criticised by unions, which say low-paid and under-skilled Chinese workers will steal Australian jobs.

A union campaign warns that the deal will allow Chinese firms to bring in workers without having to comply with laws requiring foreign workers to be brought in only where Australian workers are unavailable.

The Construction, Forestry, Mining and Energy Union, which has headed the campaign, said the deal was unprecedented and "sells out Australian workers".

"In a period of extreme unemployment in Australia, this agreement is unconscionable," said the union's national secretary, Mr Michael O'Connor.

Some analysts believe the deal could indeed allow Chinese firms to bring in lower-skilled workers for certain large-scale projects.

In her assessment published on The Conversation website in June, Dr Joanna Howe, a law lecturer at Adelaide University, said the deal allows firms registered in Australia but with 50 per cent Chinese ownership to bring in workers with lower levels of skills and English - compared with standard visa requirements -for infrastructure developments worth more than A$150 million (S$149 million).

But supporters of the deal say firms can already bypass labour laws for certain projects approved by the government and that the new arrangements will still give Australian workers priority.

Labor, which is closely aligned with the unions, could potentially try to block the laws enabling the deal in the Senate, or Upper House, where the ruling Coalition does not have a majority.

A version of this article appeared in the print edition of The Straits Times on September 04, 2015, with the headline 'Australia's FTA with China hits a snag'. Print Edition | Subscribe