The Australian | November 17, 2008
Australia and China to speed up free trade deal talks
Matthew Franklin, Chief political correspondent
AUSTRALIA and China will accelerate negotiations to clinch a free trade agreement to stimulate their economies in the face of the global economic crisis.
And Kevin Rudd has urged four million pensioners, carers and families, set to receive one-off cash payments from December 8 under his $10.4 billion economic stimulus package, to spend the money quickly to fight the economic slowdown.
Speaking in Washington after a meeting with Chinese president Hu Jintao, Mr Rudd nominated increased trade and fiscal stimulation as key weapons in the fight against the crisis, which began on credit and stock markets but now threatens jobs and has plunged much of the world into, or near to, recession.
The agreement to work harder on an FTA came a day after leaders of G-20 nations agreed to reopen talks on the Doha Round of trade liberalisation talks, which only three months ago were abandoned.
Mr Rudd said he could not set a deadline for the completion of an FTA with China, but that the depth of the financial crisis had hardened their mutual determination to seal a deal.
“We agreed that we should hasten the conclusion of our Free Trade Agreement while recognising the obstacles which still lie in the path,” Mr Rudd said.
“We are confident that we can get real progress in the period ahead.”
The Howard government began the negotiations for an FTA, but progress has been very slow as the Chinese seek greater freedom to invest in Australia, particularly its mining sector, while Australia wants free access to consumer markets for its goods and services.
When Mr Rudd visited Beijing in April the two leaders agreed to work harder at forging an agreement and this latest pact will take the negotiations to a new level.
“I don’t wish to mislead people by giving a completion date, but there is political will on both of our parts to get this thing done,” Mr Rudd said.
The fluent Mandarin speaker said China’s economic significance to Australia and the world was great and would continue to grow.
“China has great interest in the Australian market in terms of long-term access to energy and raw materials,” he said.
“We have great interest to greater access to China’s market in goods and in services.”
The Prime Minister said Mr Hu gave no indication the financial crisis was sapping China’s strong economic growth _ a crucial factor for Australia given its status as a supplier of raw materials, particularly iron ore.
“But the Chinese, like the Australian Government, is very mindful of the impact of the global financial crisis over the last couple of months, and into next year as well,” Mr Rudd said.
“We agreed this will be a tough time for all of us, but it therefore means it’s an important time for governments like China and Australia to work very closely together. And we intend to do that.”
Mr Rudd also made clear he wanted recipients of cash payments to be paid on December 8 under his $10.4 billion economic stimulation package, to spend the money to drive consumption and economic activity.
Under the plans, pensioners and carers will receive as much as $2100, while low and middle-income families will receive $1000 for each child.
“That’s out there, or it’s about to be out there, and there’s one clear, stated policy objective - to boost domestic consumption - now,” Mr Rudd said.
“Not in six months’ time, not in 12 months’ time _ now.
“We have needed to do that, to take that decisive action, in order to support positive growth into the future.”
While the weekend’s G-20 meeting focused on reforms in the finance sector, Mr Rudd said average Australians were under threat from the crisis, which had affected their superannuation, the availability of finance and the value of their shares.
His meeting with Mr Hu got off to a dramatic start when Secret Service officers providing security for the Chinese leader scuffled with a Chinese cameraman who attempted to enter the meeting room at Washington’s Marriott Hotel.
Mr Rudd’s spokeswoman said later the cameraman had been overenthusiastic and that no Australian Federal Police were involved in the incident.
The spokeswoman also said Mr Rudd met US Federal Reserve chairman Ben Bernanke to discuss the financial crisis before departing for Australia.
Both men agreed on the need for coordinated, cooperative action by all governments to address the crisis, the spokeswoman said.