Manufacturers await free trade decision
ABC Online, Australia
Manufacturers await free trade decision
AM - 14 August 2006 08:30:00
Reporter: Andrew Geoghegan
TONY EASTLEY: As free trade deals go, it’s got the potential to be a whopper.
The Australian manufacturing industry though, is nervously awaiting the outcome of a Federal Cabinet debate today on a free trade deal with China. Cabinet ministers will consider if it should offer to cut tariffs on Chinese imports in return for greater access to China’s services industry.
But Australian industry is warning that any further tariff reduction is likely to send many manufacturers here out of business.
Finance Correspondent Andrew Geoghegan reports.
ANDREW GEOGHEGAN: The Australian manufacturing industry is struggling. The relatively high Australian dollar and the influx of cheap imported goods are pricing many manufacturers out of the industry.
Therefore, the prospect of a free trade deal with the biggest source of Australia’s imports has manufacturers worried.
HEATHER RIDOUT: Well, we’ve been lobbying on this issue for some time and our view is that our members are quite sceptical of the Free Trade Agreement. They’re very worried that manufacturing, which is feeling the sharp end of Chinese competition, its interests need to be protected.
ANDREW GEOGHEGAN: Heather Ridout is the Chief Executive of the Australian Industry Group.
HEATHER RIDOUT: Well we really want a Free Trade Agreement with China, if it goes ahead, to be genuinely liberalising across all sectors, to consider tariffs as well as non-tariff barriers and we wanted to make sure that the carve-outs that exist at the moment in Australia for textiles, clothing and footwear and automotive, which are subject to specific programs of trade liberalisation, to be maintained.
MARK VAILE: The objective here is to encourage China to open their market up.
ANDREW GEOGHEGAN: Trade Minister Mark Vaile:
MARK VAILE: So we need to develop a negotiating position, if you like, that encourages China to come forward with a market access offer in agriculture and services that is credible, that is going to improve opportunities beyond what is already there through the WTO, and at the same time is able to preserve the integrity of our industry programs.
Just remember, our market is predominantly open. Product comes in, we compete in our market with the imported product. The objective of this exercise is to get others to open their markets.
ANDREW GEOGHEGAN: That obviously involves give and take. Does that mean we will be cutting tariffs?
MARK VAILE: It means that we’ll be putting forward proposals that encourage them to open their market and yet keeps the integrity of our programs. I’m not going to telegraph to anybody, particularly our negotiating partners, what might or might not be on the table. We’ll wait until we get to the negotiations to do that.
ANDREW GEOGHEGAN: But you’re obviously well aware of the manufacturing industry’s concerns that any...
MARK VAILE: Absolutely and we are, we’ve been engaged in full consultation with industry groups, those that have a defensive position and those that have an offensive position.
ANDREW GEOGHEGAN: Peter Hendy from the Chamber of Commerce and Industry thinks trade concessions made by manufacturers may help the industry in the long run.
PETER HENDY: The big game for Australia will be in the services and investment sectors. Investment will help also Australian manufacturers. It will help them and give them investment opportunities in China.
ANDREW GEOGHEGAN: And the Chamber of Commerce and Industry also wants to see a bilateral trade agreement with India.
PETER HENDY: India is also a coming economic giant and we think that there should be some serious thought going into a looking at a Free Trade Agreement with India as well.
TONY EASTLEY: Peter Hendy from the Chamber of Commerce and Industry ending that report from our Finance Correspondent Andrew Geoghegan.
