Piracy Threat to China FTA
The Age, Melbourne
Piracy Threat to China FTA
By Tim Colebatch
20 March 2005
Australian Industry Group chief executive Heather Ridout has warned Chinese officials that intellectual piracy could be a critical block to plans for a free trade agreement, with international agencies estimating that 90 per cent of copyright goods sold in China are counterfeit.
In a speech to a symposium in Beijing on the proposed trade deal, Ms Ridout said manufacturers were not just worried about protection against dumping of Chinese goods, but also widespread counterfeiting and non-tariff barriers - many suggestive of corruption.
She highlighted concerns about the lack of transparency in China’s administrative systems, raising issues such as inconsistent interpretation of laws and application of taxes, difficulties in repatriating profits, and inconsistencies in bureaucratic rulings, customs requirements, enforcement of import duties, standards across provinces, quarantine controls and "unique technical standards".
"In some areas of post-border barriers, we have even gone backwards," Ms Ridout said.
"For example, our wine industry is now facing onerous labelling and packaging restrictions on exports to China, as well as excessive and expensive bureaucratic approval processes. These are real issues that need to be urgently addressed."
Ms Ridout did not use the word "corruption", but in a blunt speech to the Chinese officials she made it clear that Australian manufacturers had concerns about the free trade agreement that went beyond protection from dumping to include inconsistent and unpredictable Chinese administrative requirements and the widespread piracy of intellectual property.
Prime Minister John Howard is expected to announce a start to negotiations when he visits China next month. He will also declare that Australia recognises China as a market economy, which manufacturers fear will make it harder to prove dumping by Chinese firms.
The AIG’s support will be critical for the Government to convince Australians that a deal is in our interests. China is likely to follow the example of the US, and demand that Australia end all barriers to Chinese exports while its own door stays closed on sensitive products.
Ms Ridout highlighted the issue of piracy. "AI Group member companies in the auto and electrical products sectors have identified numerous small factories (in China) copying their products," she said. "When challenged, many of these factories were shut down and the moulds and products destroyed, but this did not stop others springing up in their place."
Innovative products were critical to Australia’s manufacturing future, Ms Ridout said. "AI Group research shows that more than 30 per cent of all sales from the transport equipment sector comes from products introduced over the past three years."
She said a survey of Australian manufacturers found 55 per cent saw Chinese imports as a competitive threat.
"We have minimal tariffs, on average 3.9 per cent, no non-tariff barriers and the force of China’s massive production volumes, coupled with its managed currency regime, renders our 3 to 4 per cent tariff levels virtually meaningless."
