Free trade agreements are a concern for local industry: Poll
Manufacturers’ Monthly, Australia
Free Trade Agreements are a concern for local industry: Poll
12 November 2013
By Kevin Gomez
The third Cirrus Media Industrials poll reveals that industry is concerned about the impact of Free Trade Agreements (FTAs) which the Government is attempting to forge with China, South Korea and Japan.
The total annual trade with these countries is worth more than $250 billion and the stakes are high as the Australian government manoeuvres around the negotiating tables in Beijing, Seoul and Tokyo.
Over 42 percent of the respondents to our poll believe the FTAs will flood Australia with cheap goods against which, local companies can’t possibly compete.
Although only 14.2 percent of the respondents believe the FTAs will provide opportunities for local manufacturers and growers, they could well be on to something as the deals may offer local companies access to key export markets.
And some experts concur.
Chief executive of Australian Made, Ian Harrison, notes: "It is important that Australia enjoys the same access to markets, such as China, Japan and South Korea, as is enjoyed by other countries which already have FTAs in place with those three economies – so it is important that FTAs are concluded with them as quickly as possible."
It all comes down to the implementation and what’s in the fine print. For instance, China is unlikely to lift the many restrictions it has placed on wool, sugar and wheat. Nor will it open up the financial services and resources investments sectors.
Over 13.7 percent of the respondents believe that more open FTAs will better link us to the rapidly growing Asian middle class. And they may have a point, especially in the food sector.
An interesting survey conducted recently in China indicated that 41 percent of Chinese consumers think the safety of their food is a big problem. And this number has risen more than three times in the past four years.
Australia has a unique opportunity to meet this demand. As reported in the Australian Financial Review, KPMG Asia business group leader Doug Ferguson said: “Consumers [in China] have choice and are concerned about the safety of their food. They prefer foreign-produced and imported processed food., due to low levels of trust in locally grown and made products.”
The Australian-made "brand" does carry weight.
Harrison explains: "A crucial element of all of Australia’s trading relationships must be the recognition and protection of intellectual property, so that country-of-origin branding is regulated and able to provide a framework within which Australian exporters can benefit from this country’s very strong nation brand."
However industry isn’t exactly brimming with optimism and confidence. Only 16.2 percent of the respondents believe, "FTAs will help encourage Australia to export things other than iron ore and coal."
The votes were registered at the Ferret Group of Sites which include Manufacturers’ Monthly, PACE, Ferret, Food Magazine, Logistics & Materials Handling and Factory Equipment News websites.
