The New Daily

What you don’t know about the China FTA

ANALYSIS: Voters deserve to know what the government is agreeing to – before they sign on the dotted line.

Getty, China, Xi Jinping, Tony Abbott

Done deal: China's President Xi Jinping with Prime Minister Tony Abbott.

The China free trade agreement is another example of how all politics is local.

The Abbott government has been spruiking the importance of the “ChAFTA” for the Australian economy without gaining much interest from voters, apart from a kind of instinctive worry.

But then it emerged that a “side letter” to the FTA meant that Australia would remove the requirement for mandatory skills assessment for a range of Chinese tradies, including electricians.

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This is no longer hypothetical geopolitics. It’s on home turf, even tabloid territory. Do Aussie homeowners and businesses want a Chinese sparkie up in the roof of their home, or their shop/factory/mine site, working with live wires?

To be clear, the aim of this column is not to encourage xenophobia – there’s enough of that polluting our public debate already.

But Australian authorities previously thought it best to test the skills of tradespeople from some countries, including China. Now, they have changed that view without explanation.

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Checks and balances are needed on foreign tradespeople to ensure they meet Australian standards. Photo: Shutterstock

The Abbott government should explain the change, given that it established a royal commission into the former Labor government’s home insulation scheme, in which four young men died in 2009 and 2010.

My main point is that the federal parliament and Australian voters have a right to know what is being negotiated in free trade agreements before they are signed.

In the China FTA, the “side letter” on skills assessment and training only surfaced after the deal was signed. The treaty documents are available here.

A broader propaganda war is now underway between the union movement and the government over the FTA allowing new Chinese-owned projects worth more than $150 million to bring in their own workers under temporary visa programs.

This concession appears to be broad – covering new infrastructure in food and agribusiness; resources and energy; transport; telecommunications; power supply and generation; environment; or tourism.

One part of the FTA says that Chinese project developers will be able to strike an Investment Facilitation Arrangement (IFA) with the government and “there will be no requirement for labour market testing to enter into an IFA”.

That is, there will be no requirement for the project to test whether there are local workers to do the work.

But another part of the China FTA says the labour agreement will set out the number, occupations and terms and conditions under which temporary skilled workers can be nominated, including any “requirements for labour market testing”.

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Unions are pushing fears about an influx of temporary Chinese workers under the FTA, prompting allegations of racism from Coalition MPs.

So perhaps Trade Minister Andrew Robb can defuse the row by stating whether labour market testing will be needed?

In the meantime, a fact check by The Conversation website has concluded that, overall, the union claim that the China FTA could lock out Australian workers does stack up.

But could these disputes have been lessened if the process was more transparent from the start?

The process needs to change

The Senate’s committee on foreign affairs, defence and trade last week tabled a report which argued that Australia’s treaty-making process needed to be overhauled.

The report concluded that the Commonwealth government’s treaty-making process was unnecessarily secretive, ignores the public and has a poor level of independent analysis before treaties are signed.

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Trade Minister Andrew Robb was the architect of the Australia-China Free Trade deal. Photo: AAP

It recommended that trade agreements be subject to an independent cost-benefit analysis prepared at the start of negotiations.

Furthermore, it argued that a model clause be developed to deal with complex issues such as investor-state dispute settlement, intellectual property and copyright which are being negotiated in secret for the Transpacific Pacific Partnership, or TPP.

“All treaties, including complex free-trade agreements, are only presented to the parliament and subject to scrutiny after they are signed by the government,” the report says.

“That parliament is faced with an all-or-nothing choice when considering legislation to bring an agreement into force prevents it from pursuing a key scrutiny and accountability responsibility.

“It is no longer satisfactory for parliamentarians and other stakeholders to be kept in the dark during negotiations when Australia’s trading partners, including their industry stakeholders, have access under long-established and sensible arrangements.”

The majority report argued that complex free trade agreements like those with Korea, Japan and China and the proposed TPP were “encroaching on the Australian domestic sphere without an adequate level of stakeholder engagement, public consultation, parliamentary oversight and executive accountability”.

Are FTAs really worthwhile?

Nearly all witnesses challenged DFAT’s two major claims – that Australia’s current treaty-making process is effective, workable and carefully balanced competing interests; and that the parliament played a significant role in scrutinising treaties.

The government committee members reckon the treaty process is working well, as does the Department of Foreign Affairs and Trade.

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There are broad gains in the FTA for Australia’s farm exports. Photo: AAP

But Labor, the Greens and crossbench Senators hold sway on that committee.

Another parliamentary committee, the Joint Standing Committee On Treaties (JSCOT), will examine the China FTA, but the government has the numbers there and the outcome will be positive.

DFAT has a “Yes, Minister” argument on all this, noting that treaty-making is the formal responsibility of the executive rather than the parliament, under the Australian Constitution.

The department reckons it is parliament that decides whether to pass the legislation needed to bring treaties into law, which is technically correct but more of a formality in practice.

Yet it’s not only protectionists and lefties who question the worth of FTAs.

The Productivity Commission is comprised of free-market purists, but it argues there is a “growing and compelling case” for the negotiated text of an agreement to be comprehensively analysed before signing.

Finally, many of the gains in the China FTA’s National Interest Assessment are hard to quantify, even though one can see broad gains for many Australian farm exports.

The Financial Review‘s China correspondent, Angus Grigg, has argued that the FTA is already “looking dated“, as other countries are given similar access to that granted to Australia under the treaty, including in service industries such as telecommunication and financial services.

In short, don’t believe the hype about the China FTA. It deserves closer scrutiny, even though it is now a done deal.

  • Cheryl T

    So the motive for this governments obsession and hyper active pursuits of all these FTA’s is ????????

    • Fitzroy Jim

      To lower the standards of the working class, Cheryl.

  • Billi2

    I have not read any racist based comments from unions or Labor. They referring Chinese as they would refer to British or French.
    Their and my concern is not race but untested skills and the giving away of Australian jobs with nothing in return

  • Malcolm

    Now we can get even more shopping centres full of cheaper Chinese products and our new infrastructure projects can be built by them. All the costs will come down in industry and even agriculture . Maybe in ten years time the Aussies who still have a ” Hockey Good Job” will be able to live here while the rest of us climb onto boats and go off as economic refugees in search of a better life….

    • Brendan Gaffer

      Full of cheap $2 junk

  • mike flanagan

    Not only should we be deeply concerned about the extended use of the ‘free trade’ mantra to contain wage and salary rises and the Abbott government’s use of the FTA’s as an Industrial Relations policy tool, we maybe seeing the foundations of Abbott’s re-election themes and forthcoming election campaign. This FTA opens the way for Abbott to invite the Chinese to propose and finance infrastructure programs of the like of the High Speed Rail along the eastern seaboard proposal, with Chinese labour and finance, to become a major plank of the L-NP’s next election policies to befuddle and amaze the electorate. with economic and socially destroying policies that befits his hatred of all workers and their representatives.

  • fluffylucy

    The workings of government should be transparent unless there are clear and demonstrable reasons for secrecy, as in some military and security areas. I am so sick of this, and previous governments,. hiding the facts from the citizens of this country. This isn’t just about how we negotiate treaties with other countries, but about the infantilising of the population. Its the “don’t worry your pretty little head about it” approach that I find insulting, and which makes me suspicious about the bastards’ motives.

  • ozzy girl

    So who do i sue for a shoddy job ….our govt..or the chinese company who will up and run

  • Geoff S

    You mean this whole deal was overhyped and its downsides underplayed?

    Oh still my beating heart!

  • Crystal Keeper

    Statistics show an ever increasing number of unemployed: are the Feds prepared to turn their back and just hitch up the welfare payments. We need jobs for the people of Australia. How many road projects have we seen swamped with immigrant visa holders? What is it with our politicians that they cannot comprehend the need for work within our own country by our own citizens so that the money generated actually works for the benefit of Australia. The global trend is dumbing down our industries, primary production, agriculture and manufacturing. Why is the betrayal of Australians actually happening from within? We need to be looking at getting our independence back and stop kowtowing to the overseas interests who will suck us dry and then walk away. When there are no Australian owned farms and industries, who do we turn to? We are being sold down the river and someone is taking away the paddles.

  • So the traitors in the Liberal Party are calling us racist for pointing out that this FTA will lead to 85% or higher unemployment for Australians because it allows millions upon millions of Chinese workers to be brought here with no checks and balances.
    I can’t help but wonder how the 100,000 or more sparkies soon to be unemployed will feel about this along with the rest of us. Eventually the only jobs in Australia available to Australians will be those considered below them by the Chinese, jobs at “coolie” rates.
    Abbott and the LNP are now the biggest traitors this country has ever had, there is a reason niether Labor nor Howard/Costello reached FTA with China and the selling of Australia and Australians dreams is the reason.

    • Fitzroy Jim

      As you suggested in a previous post, Colin, the workers of the future will be living in tents.

  • Time for the WA LNP to man up and put some teeth in the legislation, but then the LNP are the lackeys of big business and the Federal LNP traitors to Australia and its people.

  • Nick

    It may be time to go off the grid. I can say that I have experience working with Chinese, Malaysian and Irish contractors. They are all very nice people trying to make a dollar just like most of us. Unfortunately they don’t know, understand or maybe just don’t care about the rules and regulations of the industry they work in. I am (was) in the telecommunications industry and when I am able to get work it is mainly fixing up the mess that these contractors have done. The main reason for employing these people is to “get the job done” at the fastest and cheapest way possible. Economically it is sound way of doing it but it always comes at a cost to Australians. I was contracted by a major Chinese telecommunications company to ‘fault find’ the problem with the installations as they either didn’t work or were performing poorly. On several occasions (more often than not) we were exposed to high levels of RF radiation. When I asked for a radiation detector (which is mandatory when working on live equipment) they refused to supply one as they are around . I purchased a cheapie from, yes, China as I was getting headaches whilst working on some sights. The monitor was not able to show the amount of radiation as it was off the scale (too much radiation). The point being if the general public or other technicians were to be in the vicinity of this radiation they would not know they were being exposed to such dangerous levels.
    My next question is, will the insurance companies cover damage to your property or injury to people caused by installations done by unqualified workers? If so this is great! you can now do your own electrical installations, to any standard you like and when (not if) someone is killed you will be covered by your insurance!
    When is it that our governments react? When something goes seriously wrong, then why do we get fined for not wearing seatbelts?
    Xenophobia is rife in this country but not against foreigner but against the people of this country.

    • Billi2

      I agree this is not a people thing, they are all people just like us they just don’t have the same training or requirements

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