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Australian firms raise concerns over FTA with China

Thursday August 18, 2005

Australian Firms Raise Concerns Over FTA With China

CANBERRA, Aug 18 Asia Pulse - Australian companies have raised serious concerns they may not be able to surmount Chinese regulations and restrictions ahead of the first in-depth free trade negotiations between the two countries.

From the policing of intellectual property piracy to the way provincial Chinese governments make their own interpretations of rulings made by Beijing, companies fear they may not make inroads into the Sino economy even with a free trade agreement (FTA).

Twenty-four Australian officials will spend three days in talks with their Chinese counterparts in Beijing next week, with most of the time to be spent on eliciting information about each others’ economy.

Four working groups, covering agriculture, goods, services and investment have been created to go through issues of interest to the two nations.

Ahead of the talks, the Department of Foreign Affairs and Trade released the results of its discussions with Australian industries and interest groups, and the concerns they have about the proposed FTA.

One of the biggest problems among Australian firms is not the threat posed by low-cost Chinese producers, but transparency and the enforcement of laws.

A departmental spokesman, on condition of anonymity, said the so-called beyond-the-border barriers were among the most difficult and pressing for industries.

He said in intellectual property Australia would be pushing for better enforcement of Chinese laws in a bid to crackdown on piracy.

Australian businesses were also concerned about getting contracts enforced in China, the lack of transparency about subsidies to government-owned firms, and general discrimination against non-Chinese firms.

The spokesman admitted many of the issues facing negotiators would not be easy because of the sheer size, and differences, of the Chinese market.

"The Chinese economy is more unique than others," he said.

China has also signalled its interest in the Foreign Investment Review Board (FIRB) which governs overseas takeovers and purchases in Australia.

It signals it may try to follow the lead of the US which won major concessions under the FIRB in its free trade deal with the Australia.

Investments in Australia, or takeovers of Australian firms, above a value of A$50 million (US$38 million) are reviewed by the FIRB, with the treasurer able to block on national interest grounds any investment.

However, under the Australia-US FTA, this cut-off has been raised to $800 million.

The spokesman said concerns from horticultural farmers were more related to competition in general from low cost Chinese producers than what could come out of an FTA.

Trade Minister Mark Vaile said although the government was keen for an FTA with China, it would not be rushed.

"As China negotiates preferential trade agreements with other countries where industries compete with ours, it is vital that we grasp this opportunity to stay ahead of the pack," he said.

"However we won’t be rushed.

"We want to sign a high-quality liberalising agreement with commercially meaningful outcomes for Australian business and industry across the board.

"The negotiations will be hard but the government is prepared to negotiate for as long as it takes to achieve real benefits for Australian business."

After next week’s talks, another round is likely to be held in three months’ time back in Australia.

Negotiators hope by then they will be able to put together a negotiating mandate that both countries can then work on.


 source: Asia Pulse