FTA ’can’t be relaxed’ for China
Stock & Land | 26 Jul, 2012
FTA ’can’t be relaxed’ for China
GEOFF KITNEY, AFR
THE Gillard government has warned China that there is little prospect of a free-trade agreement (FTA) being approved by federal Parliament if it includes more liberal rules for Chinese investment in Australia.
As new attempts are made to accelerate the pace of the FTA talks, Trade Minister Craig Emerson has told his Chinese counterparts that any easing of Australia’s foreign investment limits is "not politically possible", reports the Australian Financial Review.
Mr Emerson warned that more liberal investment rules would certainly be opposed by the federal opposition and the Greens and would be rejected by Parliament.
The warning was given before this week’s comments by Opposition Leader Tony Abbott that the Coalition would take a hard line on investments by China’s state-owned enterprises.
But his warning raises the stakes in the FTA negotiations.
China has been pushing to accelerate negotiations on an FTA with Australia, and has recently indicated it would want more liberal rules to apply to state-owned enterprises.
Under existing foreign investment rules – introduced by the Gillard government – all investment proposals from state-owned enterprises must go to the Foreign Investment Review Board (FIRB) to be subjected to a national interest test.
Proposals by private foreign businesses don’t require approval until the value exceeds $244 million.
But there are more generous limits for companies from countries with which Australia has negotiated FTAs. Under the FTA with the United States, the threshold for FIRB approval is $1 billion.
Federal Treasurer Wayne Swan warned that any attempt to re-negotiate the rules on investment by SOEs would create unhelpful uncertainty. He said investment flowing into Australia and creating jobs and wealth was coming in under clearly established rules "which have been bedded down and work for Australia".
"Now Mr Abbott wanders off overseas and puts a very big question mark over all of that because he wants to play politics."
