Crean looks for new way as China trade negotiator quits
The Australian, Canberra
Crean looks for new way as China trade negotiator quits
By Michael Sainsbury and Rowan Callick
11 May 2009
Canberra has executed a major shift on strategy with Beijing after Australia’s senior negotiator quit stalled free trade agreement talks with China.
After four years and 13 rounds of largely fruitless talks, Ric Wells has left the Department of Foreign Affairs and Trade.
Mr Wells has been replaced by former ambassador for climate change Jan Adams, but no further FTA discussions are scheduled with Beijing since the talks stalled five months ago.
Predicting China’s trade growth will hit or surpass its 8 per cent growth target this year, Trade Minister Simon Crean outlined a new strategy focused on building links sector by sector and business by business, rather than insisting on a truly comprehensive, catch-all agreement.
Mr Crean said there was frustration at the stalled FTA discussions at a technical level and said it would take political will on both sides to finalise a deal.
A year after Kevin Rudd declared FTA discussions thawed after meeting leaders in Beijing, Australia’s relationship with China has become increasingly complex amid a raft of difficult mining investment deals and concerns over China’s defence build-up. "Our engagement with China isn’t just about concluding an FTA," Mr Crean said. "But the second track is the need not to see China as just Beijing, but to see it for all its complexity and opportunity. Go to the regions and reconcile all the commercial arrangements already there and try to build on them."
He said the FTA was still important because it would provide a better framework for improved trade relations as a whole.
Mr Crean is convinced Beijing’s $850 billion stimulus package delivered last November has halted China’s sliding growth, which hit a 17-year low of 6.1 per cent in the first quarter of the year. "I think China will get its gross domestic product growth target of 8 per cent or do even better," Mr Crean said on his fifth visit to China in 18 months.
His comments come ahead of tomorrow’s federal budget where trade with China has major implications in terms of tax revenues from mining giants and jobs, as well as royalties to the states.
Banks have upgraded their China growth targets and one of the country’s main think tanks last week forecast it would rise to 7 per cent between April and June.
Despite this optimism, China’s official economic data has provided mixed signals with electricity usage - a proxy for industrial output - falling by 4 per cent in April.
China has signed 11 FTAs, including one a year ago with New Zealand, since it began negotiations four years ago with Australia. Mr Wells was outspoken on the issue and this may have led to his departure.
"The Chinese Government does not want the FTA; they have no interest in doing that. We do want the FTA, so we have an interest in doing it," he told a Senate committee last year.
Peter Gallagher, managing director of consultancy Inquit, said there was no reason to think China would readily embrace a free trade deal with a major producer of grains, meat and pulses such as Australia.
"It was apparent that China wanted an agreement that would confirm and maybe consolidate overall good relations: a foreign policy objective with obvious benefits for resource supply security," he said. "But there are few other market gains for China in this agreement."
