China FTA needs more work

It's now time to quickly fix the problem and to bed-down the China FTA

THE China free trade agreement will bring significant benefits for Australia and Labor wants it finalised. But it's not yet the best agreement it can be because for some strange reason, the government has not insisted that foreign workers are only used when it is clear Australians are not available for the job.

We've always ensured this by insisting companies, foreign and local, test the local labour market by advertising (and using other modern recruitment methods) the jobs in question.

It is entirety possible for the Parliament to put mandatory labour market testing in place without offending the China agreement. I just don't understand the government's reluctance because I don't believe the Chinese will have a problem with it. They understand that it's natural that every country wants to give local workers priority.

It's now time to quickly fix the problem and to bed-down the China FTA. Having said that, we must be careful not to see the implementation of preferential trade agreements as the end of our work in agriculture policy.

Accessing China and other markets under the same tariff regime as farmers from other countries is important because it improves our competitiveness. For example, if a South American country is sending the same product to Asia produced at exactly the same cost as Australia's product but it faces a zero tariff while Australia faces a 10 per cent tariff then Australia can't compete.

But there are two important points to be made about this scenario.

First, we still need to improve our cost competitiveness and while proximity gives a freight-cost advantage over our competitors in some Asian markets, it's not true for all Asian markets. Much work still needs to be done to reduce our production and supply chain costs here in Australia.

Second, Australian growers and producers need to increasingly focus their product choices in areas that offer something special rather than in commodity markets where they are price takers and subject to the whims of world markets. Australia's greatest competitive advantage lies in its reputation as a producer of clean, green, safe and high quality product. Building on that will represent the most efficient allocation of our natural, human and financial resources.

These are the products which will secure large price premiums amongst the growing middle classes in Asia. Products like:

  • marbled Wagyu beef in which the fat is of the healthier kind.
  • wheat which is specifically designed as an ingredient for Japan's Udon noodle market.
  • a range of value-added products that make their way from the paddock in Australia to the Beijing kitchen - packed in Australia's clean, safe environment.
  • products that satisfy the new-age consumer who is looking to buy food which has been grown in an environmentally sustainable way or in a manner respectful of animal welfare.
  • Of course, being more competitive in China thanks to reduced tariff barriers should lift profitability and therefore, allow farmers to invest more in innovation, more sustainable farming practices and other productivity enhancing initiatives. This should be a virtuous circle.

    The missing piece in this loop is government. The Abbott government is one without a plan for Australian agriculture. Having failed to offer any plan, strategic guidance or goals, its agriculture White Paper has disappeared without trace.

    Better market access is crucially important to Australia's agriculture sector but we must be careful it doesn't encourage complacency. Sadly that is the only area in which the Abbott Government is leading the way.

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    FarmOnline
    Joel Fitzgibbon

    Joel Fitzgibbon

    is Shadow Minister for Agriculture, Fisheries & Forestry & Rural Affairs and the MP for Hunter
    Date: Newest first | Oldest first

    READER COMMENTS

    angry australian
    7/09/2015 9:01:01 AM

    Just what do you and the ALP stand for Joel? For about the last 30 years both sides of the political fence have been prepared to sacrifice rural Australia to appease inner urban elites but the ALP is by far the worst.You destroyed 10's of 1000's of jobs in the forestry & fishing industries, your economic vandalism on livex to Indonesia and in the MDB has severely impacted rural communities and you support the transfer of wealth from productive primary producers to prop up a huge bureaucracy in R&D of dubious benefit to those who foot the bill.Now you are trying to justify your position on this
    angry australian
    7/09/2015 11:34:18 AM

    And then Joel there are the constant secret "taxes" on Australian employers to help the ALP's union mates. These make us uncompetitive with our trading partners,which means "our"jobs go offshore. Secondary producers have gone offshore because they couldn't compete with nations that aren't paying our exorbitant level of wages, generous super, onerous OH&S and the worst of the lot, bogus training and accreditation schemes that seem to train no one, but create lots of bureaucratic jobs that need to be paid for! If we have all these "trained" people why do we need 457 visas?
    Mike Logan
    7/09/2015 1:54:29 PM

    You are proposing to fix a problem that does not exist. Dairy has been employing foreign workers on 457 visas for years. They have come from all over the world and they have never been a problem to the union. Now it is suddenly a problem to the union, and that is confusing and duplicitous.
    Steven Barlow
    8/09/2015 1:04:34 AM

    Great idea. Fix it now, I don't see why it matters who says what needs to be fixed. It either does or doesn't. Right?
    freetradeessential
    8/09/2015 4:07:56 PM

    There is absolutely no need to tinker with the agreement and hold it up. Ratify it and pull your head in Labor.
    Out of the shadowShadow Agriculture Minister Joel Fitzgibbon aims to put ag policy under the microscope. Based in the NSW Hunter Valley, Joel also has a unique perspective on the tensions between primary production and mining development.

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