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Howard plays down China FTA talks

Australian Financial Review

Howard plays down China FTA talks

18 April 2005


Prime Minister John Howard has played down the significance of securing a free-trade agreement with China.

Mr Howard, who is due to arrive in China tonight, said there was a fixation on free-trade deals.

"I want to stress that whatever happens on the free-trade agreement front, Australia has a huge and positive and growing trade relationship with China," Mr Howard told reporters in Darwin before his visit.

"Whether or not we start free-trade negotiations, or whether they are brought to a satisfactory conclusion, I do not want to see that become the benchmark of whether or not we have a good relationship.

"There’s a danger in all of these things, there’s a fixation on the architecture, there’s a fixation on the formal agreements rather than looking at the way in which trade has expanded.

"I think that the figure is in the last 10 years our exports to China have close to quadrupled - that’s happened without a free-trade agreement.

"That sort of relationship can go on, but if we can improve it and make it even better by reaching a free-trade agreement well we certainly intend to do so."

Mr Howard will meet Chinese Premier Wen Jiabao and President Hu Jintao tonight, after which they are expected to announce the two countries will start talks to forge a free- trade agreement.

A report, which both countries have been working on in relation to the deal, is expected to show Australia will benefit by more than $20 billion over 10 years from the two opening their markets.

``I’m not ruling out making some progress,’’ Mr Howard said of the negotiations. ``I just don’t want the issue of whether or not you get a free-trade agreement to be seen as the benchmark for the relationship because that’s just a huge mistake.

``If we don’t have a free-trade agreement with China, China will still remain a massive market for our mineral resources, if we don’t have a free-trade agreement with Japan, or even a scoping study for a free-trade agreement with Japan, Japan will remain our best customer.

``I just think we get too hung up with the free trade.’’

Mr Howard, who will also visit Japan, said he hoped current tensions between Japan and China would abate.

Japan’s Foreign Minister Nobutaka Machimura has travelled to China, with relations between the two nations at their lowest point in decades.

China today said it had nothing to apologise for after rioters damaged the Japanese Embassy and a consulate there.

Japan blamed China for the aggression as authorities allowed new protests in at least six cities over Tokyo’s bid for a permanent UN Security Council seat.

Ill will has been brewing between the two countries over gas resources in disputed seas, and a new Japanese history textbook that China says whitewashes atrocities during Japan’s 1931-45 occupation of China.

Mr Howard said he did not intend to take sides, but he hoped the matter would be resolved.

He rejected suggestions the tension had anything to do with Japan’s close relationship with the United States.

``I don’t endorse that view, there are a whole range of historical reasons unrelated to Japan’s association with the United States which have been referred to in the current controversy,’’ he said.

``We live in a world where it should and must be possible for nations to have close relations with other nations without those relationship impairing their relationships with third countries.

``We don’t see, for example, our relationship with the United States as being anything other than a plus in our dealings with the countries in the region.’’

Mr Howard’s international tour also includes stops in Turkey and Greece.