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Why a China FTA isn’t all it’s cracked up to be

AAP

AAP

The economists down at the Productivity Commission are about as dry as an all-gin martini.

It’s interesting, then, that a 2010 research report by the Commission struck a sober note on the impact of bilateral trade agreements.

The report said the Commission had received “little evidence from business to indicate that bilateral agreements to date have provided substantial commercial benefits”.

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It said that while bilateral trade agreements could “reduce trade barriers and help meet other objectives, their potential impact is limited and other options often may be more cost-effective”.

Furthermore, it argued Australia’s current processes for assessing and prioritising bilateral trade agreements “lack transparency and tend to oversell the likely benefits” and that “pre-negotiation modelling should include realistic scenarios and be overseen by an independent body”.

With that caveat in mind, what does the proposed China free trade agreement say about making it easier for Chinese nationals to work in Australia?

The Abbott government says the section agreement on labour access will offer better access to “contractual service suppliers” for up to four years and for “installers and servicers” for up to three months.

AAP

What does the proposed China FTA say about making it easier for Chinese nationals to work in Australia? Photo: AAP

The contractors’ clause includes “guaranteed access” for up to 1800 workers in four occupations (Chinese chefs, martial arts coaches, traditional Chinese medicine practitioners and Mandarin language tutors).

But the government has yet to say whether the number of other contractors is capped or unlimited.

Labor struck FTAs with Malaysia and ASEAN, but these required labour market testing for bringing in contractors. The Coalition struck an FTA with Korea which did not require labour market testing for contractors.

Meanwhile, on projects costing more than $150 million, the proposed China FTA will allow Chinese-owned companies to get “increased labour flexibilities” under so-called Investment Facilitation Arrangements (IFAs).

Trade Minister Andrew Rodd has said these IFAs will operate within the framework of Australia’s existing s457 visa system and will not allow Australian employment laws or wages and conditions to be undermined.

His colleague, Immigration Minister Scott Morrison, has said sponsoring employers would “need to demonstrate a labour market need, pay the Australian market salary rate and comply with all Australian laws, including those relating to employment and licensing”.

But the government has yet to provide details on how this “streamlined” system will work for contractors and IFAs. Specifically, will the government require labour market testing to ensure that no locals are able to fill these jobs?

It’s true that the former Labor government had a similar scheme – which were called enterprise migration agreements, or EMAs. But these related to projects worth more than $2 billion and a peak workforce of more than 1500 workers.

The EMA process got bogged down after a backlash from unions (and the public) over a deal to import workers for Gina Rinehart’s Roy Hill mine. Now the Abbott government plans to lower the threshold for bringing in Chinese workers, meaning many more projects will meet the criteria.

If the Abbott government wants to ease concerns about foreign workers, it can spell out the details of the China FTA – rather than keep on proposing toasts for having got an agreement in the first place.

Mark Skulley is a freelance journalist who is based in Melbourne. He was a reporter for The Australian Financial Review for almost 19 years, which included a decade covering national industrial relations and the world of work. He has since written for The New Daily and other outlets. View all of his columns here.

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