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Fear not farmers in Australia, Asia told

The Age, Melbourne

Fear not farmers in Australia, Asia told

By Tim Colebatch

14 June 2007

Trade Minister Warren Truss has accused China and its neighbours of "unrealistic" fears that 140,000 farmers in Australia could wipe out a billion farmers in Asia if there were free trade in agriculture.

Delivering his annual trade statement at the National Press Club, Mr Truss also warned that there was no end in sight to Australia’s record run of 61 consecutive monthly trade deficits - despite the best terms of trade for 56 years.

Australia’s chief negotiator for a free trade agreement (FTA) with China, Ric Wells, told a Senate committee last month that negotiations on tariffs had stalled, adding: "The Chinese Government doesn’t want an FTA."

Prime Minister John Howard and Chinese Premier Wen Jiabao launched the talks in April 2005. But two years later, the two sides have yet to agree on what a deal might cover, while talks on the key issue of free trade in goods have stalled because China refuses to open its agricultural markets.

Mr Truss accused China, India, Japan and South Korea of having an "unrealistic" fear of farmers in Australia.

"So many of the biggest and most populous countries of the world, with hundreds of millions of farmers, seem to be terrified about the competition that they might face from just 140,000 Australian farmers," Mr Truss said.

"There’s 800 million farmers in China, 400 million in India, tens of millions in Japan and Korea - and all these countries have agricultural production way above levels in Australia. Yet all those countries are afraid of competition from 140,000 farmers in Australia."

Mr Truss said China’s anger over Mr Howard meeting the Dalai Lama would not affect the negotiations, adding: "I am confident that our relationship is firm and solid."

But he warned that the talks needed "demonstrable achievement" before President Hu Jintao’s visit in September for the Asia-Pacific Economic Co-operation forum to sustain confidence in their future.

The statement reveals that progress has been slow in all of Australia’s negotiations on free trade, while in the Doha Round, Mr Truss said negotiators veer "from periods of optimism to periods of pessimism".

He said Australia would not support a deal hammered out on a "lowest common denominator" basis - as some fear the European Union and developing countries led by India are planning.

Mr Truss said Australia would continue to run up trade deficits "for quite some time", because of the high dollar and "intense competition" from developing countries. But the Government’s infrastructure investment and free trade negotiations would eventually get trade back into surplus.

Opposition trade spokesman Simon Crean said the Government had axed some export programs and halved the real value of market development grants. "Labor can achieve better export performance by making multilateral trade agreement as a top priority, building on skills and infrastructure, and adequately funding export support programs," he said.