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Labor urge caution on China FTA, Australia

Labor urge caution on China FTA

7 August 2006

(AAP) Federal Labor Leader Kim Beazley has urged caution in negotiating a free trade agreement with China, as federal cabinet shows signs of a split over parts of the proposed deal.

Industry Minister Ian Macfarlane and Finance Minister Nick Minchin are challenging Deputy Prime Minister and Trade Minister Mark Vaile’s plan for a broad agreement with China, The Australian newspaper reported today.

The ministers were nervous about abandoning tariffs to protect the automotive and clothing industries from cheap Chinese imports, the report said.

Mr Vaile has asked for all industry sectors to be part of the next round of negotiations with China.

Mr Beazley today urged slow and careful progress towards a deal, saying it should not jeopardise Australian manufacturing.

"We have a good relationship with China and an excellent trading relationship, and an FTA would not necessarily add that much to it," he told ABC radio.

"We must not do it in an environment in which there is wreckage in Australian manufacturing industry, and there is a very severe danger of that."

Mr Beazley said his preference was for multilateral rather than bilateral trade deals.

"I have supported one or two bilateral agreements in the past but I think it’s more important that we get the multilateral agenda up," he said.

"As far as China is concerned, we want to keep that good relationship with China but on that free trade agreement with them we should hasten very slowly."

The government maintains heavy protection for the motor vehicle and clothing sectors, although tariff rates are set to fall from 2010.