Don’t worry about FTA, says China
The Age, Melbourne
Don’t worry about FTA, says China
3 October 2006
Australian manufacturers should not be concerned about a proposed free trade agreement (FTA) with China, Chinese Commerce Minister Bo Xilai says.
Mr Bo and Australian Trade Minister Warren Truss, on just his third day on the job, met in Sydney on Tuesday to discuss progress on the agreement.
The two ministers committed themselves to a two-year deadline for talks on establishing an FTA, and to further talks in December.
Trade between the two countries has soared in the past few years, largely on the back of the commodities boom, rising 26 per cent last financial year to more than $41 billion.
But the proposed FTA has been met with suspicion in both countries.
Chinese farmers are wary about opening their markets to Australian produce, while Australian manufacturers are concerned about competing against cheap Chinese imports.
Speaking after the meeting, Mr Bo said China’s interest in the FTA was to demonstrate friendship between the two countries and facilitate cooperation in other areas, not to take up a large share of the Australian market.
"I think our courage to open up our market is rare, given the fact that we have a very large scale of farm households in China and since we have such a big population of impoverished farmers still," Mr Bo said.
Mr Truss said it would be difficult for Australian manufacturers to be internationally competitive while Australians benefited from imports of consumer goods from China.
But he conceded that China’s 740 million farmers would feel threatened by a deal which opened up their markets to competition from Australia’s 100,000 primary producers.
"Australia’s farmers are able to produce much more than we consume in our country and so our farming industry has become very much export focused, and this is seen as a threat by some of the farming interests in China," Mr Truss said.
Mr Bo said the high levels of tourist arrivals from China and Chinese students studying in Australia were a reflection of the goodwill and confidence in Australia.
"Although we have encountered certain difficulties in the negotiations for the FTA we both cherish confidence in being able to put in a joint effort to settle the difficulties experienced so far," he said.
"As far as I can tell, Minister Truss is a pragmatic person with whom we have made concrete progress."
Mr Truss described Tuesday’s discussions as frank, friendly, extensive and intensive.
Detailed negotiations about investment and market access for the trade of goods and services will begin in December.
"We also agreed that in December we would continue discussions on how to eliminate existing barriers on investment, and this will be done without prejudice to the continuing discussions on the trade of services and investment in the FTA," Mr Truss said.
