The Australian, Canberra
China’s free trade team comes to table with no cards
Rowan Callick, China correspondent
8 September 2006
The latest round of free trade agreement talks in Beijing failed to make its expected start on the crucial issue of market access for goods, because China was unable to provide sufficient information.
It is unclear whether this was because the Commerce Ministry is overloaded with trade negotiations, or because there were disagreements between Chinese agencies about how much the negotiators could offer.
Each side was to have told the other what access they were prepared to concede. The Australian team, headed by Ric Wells, was ready but the Chinese team was not. Both sides agreed more work was needed before this negotiation - at the heart of the FTA process - could start. But Australian officials are optimistic that when the negotiations resume for the seventh time, in the first week in December in Canberra, talks will be able to proceed about market access for goods, including agricultural goods, as well as services and investors.
Their Chinese counterparts reacted positively to this proposal but have yet to give their final answer.
The Australians maintain theirs will remain a high-quality market access offer - one that is ambitious and would require a similar response.
Although China has agreed FTAs with the 10 members of the Association of South-East Asian Nations, and Chile, Hong Kong and Macau, these have been FTA "lite" deals.
Australia continues to seek a more detailed, comprehensive package, despite the recent disagreements within cabinet about the need to quarantine sectors such as car making and textiles, clothing and footwear, which have their own industry plans, from being subject to fresh concessions to Chinese competitors.
This debate is being closely observed by the Chinese negotiators.
But the Australian team believes it is helpful, to the extent that China can see that there are influential lobbies within Australia which have diverging views, and that Australian politicians will also have to take hard decisions to make progress.
The complexity of this negotiation makes it a ground-breaking challenge for the Chinese - another likely contributing factor to their inability to present their market opening package in the last few days.
By comparison, China’s chief negotiator, Zhang Xiangchen, also the country’s World Trade Organisation chief negotiator, says that concurrent FTA talks with New Zealand are "less complicated and less difficult. They have a narrow area of discussion, so maybe they can be finalised in one or two years".
China is also negotiating FTAs with members of the Gulf Co-operation Council and of the Southern African Customs Union and with Singapore, and is exploring the possibility of deals with Japan, South Korea and India.
On Wednesday, World Trade Organisation head Pascal Lamy, while visiting Shanghai, warned China that FTAs "may serve China’s geopolitical interests or short-term commercial interests, but not China’s systemic interests in the long run".
He said: "If FTAs continue to proliferate worldwide, as China would not be able to be involved in most of the FTAs in the world, the environment for China’s exports will deteriorate, not improve."