logo logo

China FTA needed: Crean

The Age, Melbourne

China FTA needed: Crean

By Katharine Murphy

20 February 2009

China needs to come back to the table on a free trade agreement with Australia to improve the investment climate between the two countries, says Trade Minister Simon Crean.

Mr Crean has used the growing political storm over the proposed alliance between Chinalco and Rio Tinto - and other minerals developments - to argue the case for a speedy resolution to the Australia-China FTA.

An FTA would create a new investment framework between Australia and China.

It required concessions on both sides, Mr Crean told BusinessDay, but it would also lead to a more conducive climate for politically sensitive transactions, like the $30 billion Rio deal.

"It highlights the need to try and expedite the FTA," he said.

"This is a two-way street."

Mr Crean declined to say whether he favoured the Rio-Chinalco deal, but other senior sources say that the companies will need to give strong and binding commitments on jobs and transparency in order to meet the national interest test under foreign investment rules.

The political temperature is rising, with unions firming their opposition to the deal. The Australian Workers Union and the Construction, Forestry, Mining and Energy Union said yesterday that the Government should consider imposing export licences to protect Australian interests.

"Companies with strong relationships with foreign governments may seek to unfairly influence iron ore and coal pricing as well as aluminum pricing - using the present global financial crisis to warp markets to ensure their interests are primary," said AWU national secretary Paul Howes.