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Australia Trade Blows with China

By Tony Eleninovski
Created 09/04/2008 - 13:12

Tony Eleninovski, an independent journalist and author of Diary of a Mad Chaos, is new to Webdiary; this is his debut piece and we thank him for it.

Update: At Tony's request we have deleted the phone interview transcripts. We are happy to advise, however, that he has supplied us with audiofiles of the interviews which has allowed us to verify his quotations.   


Australia Trade Blows with China
by Tony Eleninovski

Days after New Zealand became the first developed country to sign a free-trade agreement with China [1], Prime Minister Kevin Rudd expects to revive talks on an Australia-China free trade agreement [2] with Premier Wen Jiabao when he arrives in Beijing tomorrow.

"For Australia, it is crucial that the Asia-Pacific region remains open to trade and investment," Rudd said in his keynote address to the East Asia Forum [3]. He believes global economic and financial stability is a "first priority" but admitted that progress on free trade agreement negotiations with China to date, "has been slow".

"It was like pulling teeth," a Coalition spokesperson who attended said of the tentative talks. "Our view was getting the best possible and most open access to Chinese markets for Australian exporters. We were certainly disappointed with what was put on the table."

In the 10 rounds over three years of negotiations the Coalition held with China, nothing substantial was achieved. China offered few concessions and stalled on requests to improve offers. Conversely, New Zealand secured a deal over three years and 15 rounds of intense negotiations.

"We are pleased," a spokesperson for Simon Crean Minister for Trade clarified. "The Minister has said that's a good agreement for those two countries. But New Zealand is a different economy to Australia. For instance we have a very large services sector, and we want to see services (included) as part of a comprehensive approach to the trade agreement with China. And we believe that discussions over capital flow are also extremely important."

The Minister was unable to respond on whether markets or investments accounted for in the feasibility study still exist in Tibetan autonomous areas today.

Rudd's challenge as new custodians of the FTA negotiations will be to breathe life back into a process that has stagnated over the years. But unlike Premier Wen Jiabao's visit to Australia in April 2006 [4] who proposed both sides should aim to achieve breakthroughs in the next two years, any impetus Kevin Rudd hopes to generate securing an FTA with China was greatly diminished by his foreign policy approach.

"It's absolutely clear that there are human rights abuses [5] in Tibet," he told reporters. "Violence has occurred. It is plain that it has occurred. Restraint is necessary and I repeat what I said most recently in Washington, it is time for dialogue between representatives of the Chinese Government and representatives of the Dalai Lama [6]."

In his bid to engage the world, he has also weighed into American politics by endorsing Democratic nominee Hillary Clinton [7], bid for a temporary seat on the UN council [8] in 2013-14, and reignited the Republican debate [9]. His comments on Tibet however threaten to overshadow his stay and offend the sensibilities of Chinese economic policymakers he hopes to woo.

Rudd will have to navigate through tense diplomatic issues like human rights abuses, calls for boycotts [10] of the Olympic Games, as well as security measures [11] for the Australian torch relay before he can exercise his political will on economics.

If mishandled, his failure to capitalize on the policies of his predecessors to secure a positive outcome in Australia's national interest could be the first of his leadership's many blunders.

Simon Crean is scheduled to visit China on the 16th April pending discussions on the FTA Kevin Rudd is likely to explore.

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