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Miners dig in against union critics of free-trade deals

The Australian, Canberra

Miners dig in against union critics of free-trade deals

8 July 2015

By Sid Maher, National Affairs Editor

The Minerals Council of Australia has dismissed critics of free-trade agreements, including unions and civil society groups, arguing that deals struck between Aus­tralia and other countries have brought substantial benefits.

In a submission to the Joint ­Select Committee on Trade and Investment Group, the MCA said FTAs were contributing to domestic economic reform, delivering consumer benefits and raising real incomes. “As a mid-sized export economy, more open channels of trade and investment are critical for the Australian economy in general, and the minerals sector in particular,’’ the MCA said.

Australia has struck deals with countries including the US and New Zealand, and last year struck deals with Japan, South Korea and China. The FTAs had driven domestic reform by focusing the trade debate towards liberalisation, rather than attempts to wind back tariff reform.

But despite a muted tariff protection debate, the net tariff assistance to the mining industry was still negative (at -$235 million in 2013-14) reflecting higher input prices paid for manufactured products as a result of substantial tariff assistance to that sector.

Trade agreements were also leading to reform in foreign ­investment, with higher Foreign Investment Review Board thresholds extended from the US and New Zealand to Japan, South Korea and prospectively China.

On the consumer front, the Japanese FTA would deliver gains in terms of cheaper televisions, whitegoods and cars.

“The Centre for International Economics estimates that Australia’s three northeast Asian FTAs (with China, South Korea and Japan) could, all things being equal, lift real wages by 0.4 to 0.5 per cent compared to a scenario in which Australia did not enter into the agreements,’’ the submission said.

For the minerals industry, the China-Australia FTA would eliminate tariffs which add nearly $600 million to bilateral minerals and energy trade, including about $380m for exporters of thermal and metallurgical coal.

The Japan Australia Economic Partnership Agreement would eliminate tariffs on a commodities which generated $310m in export income in 2013.

The MCA dismissed critics of FTAs, including unions and some civil society organisations. It said some critics argued that the FTAs were not being fully utilised and other groups attacked the impact on their constituencies on the basis of a fully utilised agreement.