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Steel boss sounds alarm on China FTA

Sydney Morning Herald, Australia

Steel boss sounds alarm on China FTA

By Alex Wilson

16 July 2006

The head of Australia’s biggest steel maker, BlueScope Steel, has questioned the value of a free-trade deal with China and urged the Federal Government to even up tariffs on steel traded between the countries.

BlueScope chief executive Kirby Adams on Friday made a passionate plea for the Government to act to halt the decline of the Australian manufacturing industry.

Mr Adams said the manufacturing sector had shrunk to 13 per cent of gross domestic product, behind New Zealand (19 per cent), the UK (17 per cent), US (14 per cent) and China (39 per cent).

"In our view, it is virtually unprecedented for an advanced OECD economy to have its manufacturing sector comprising less than 10 per cent of GDP," he told an American Chamber of Commerce function in Melbourne. "So we must ensure the sector does not get any smaller."

Mr Adams said Australian governments had been naive to cut all trade tariffs and had left the country’s manufacturers at the mercy of nations which protected their producers.

"We are caught up in ideology, in the fantasy that we can lead the world to a free-trade nirvana, by unilaterally dropping our tariffs," he said.

Meanwhile, oil hit a record high, the spot price of gold jumped sharply and sharemarkets tumbled as fighting between Israel and Hezbollah guerillas in Lebanon intensified.

Shares on the Australian Stock Exchange are expected to drop again tomorrow. Experts tip a 30-point fall, following Friday’s 118.5-point (2.3 per cent) rout.

The surging price of crude oil is expected to drive petrol to $1.50 a litre in cities and to $1.60 in regional areas.