Trade deals need more debate

23 Jul, 2015 08:40 AM
It is hard to assess public support for diverse trade deals

BILL Shorten has misrepresented the nature of the labour market deregulation in the China trade deal with his claim the agreement does not impose any restrictions on the entry of Chinese workers.

But, despite this, the debate on the agreement at this weekend's Labor conference should be a useful contribution to the need for more public discussion about the increasingly complex portfolio of trade deals that exists now.

The recent bitter debate about trade in the US Congress has underlined how the broad late-20th century support for trade liberalisation as a way to boost economic growth is in danger of breaking down at a time when trade growth is particularly weak.

Australia has been largely unscathed by this as the Howard, Rudd/Gillard and Abbott governments have mostly grabbed whatever deal has been on offer under the cover of a two-decade run of unbroken economic growth.

It is hard to assess public support for diverse trade deals, but the only recent comparable cross-border opinion polling by the US Pew Research Centre on the Trans-Pacific Partnership shows that the support level in Australia of 52 per cent is lower than the 59 per cent average for the member countries.

This is a small straw in the wind but an indication that despite Andrew Robb's personal triumph in cutting deals with South Korea, Japan and China in a year, the tide can turn.

Complex landscape

This is particularly the case as the landscape gets more complex with the TPP, which might reach a conclusion at a trade ministers' meeting next week.

The essence of traditional trade deal negotiation always requires a large degree of trust in the negotiators to extract the best balance from trade-offs that can never be perfect and do require some long-term perspective beyond the headline wins and losses.

The Japan deal contained some long-term perspective on services, but the basic common sense of the core trade-off between more Australian beef for more Japanese cars was easy for an ordinary person to understand, despite the loss of car worker jobs in Australia.

The TPP is more complex. There is good reason to wonder how a skilled negotiator can really make a judgment about whether Australia paying more for US intellectual property is offset by arguably the main gain for Australia - of being part of the first big step towards a regional free market.

The China deal fits in between with big basic traditional trade-offs, but then steps into new territory in the Investment Facilitation Agreement (IFA) annex to the main agreement, which enables Chinese workers on $150 million projects.

Shorten has misrepresented the agreement because Chapter 10 - the section he quotes as preventing labour testing and allowing unlimited visas - actually applies to the entry of Chinese executives and specialists and parallels the other Asian texts.

It would be astounding if Labor, with its pro-China heritage and support for the new $1 billion foreign investment threshold, wants to restrict these normal Chinese business visitors in some way.

This is especially since the agreement has standard visa requirements about a bona fide connection with the company.

The memorandum that facilitates the IFAs is a little more internally contradictory on the controversial issue of what requirements will be imposed on Chinese workers.

The net result seems to be no requirement for testing whether these workers are really needed when it comes to setting up the actual IFA, which would typically last four years.

But then when it comes to actually issuing visas to the project developer or subcontracting companies there is reference to the possibility of labour testing.

There is room for gaps, with the Department of Foreign Affairs and Trade signing off on the IFAs and the Department of Immigration and Border Protection signing off on the visas. But there are also clear requirements for Australian work safety law, licensing, regulation and certification standards to apply.

Labor should be publicly facing up to the trade-offs required in getting needed infrastructure built in Australia with foreign investment and allowing in skilled foreign workers.

This is just as the government should be taking more seriously the concerns about how the TPP subtly shifts the legal goalposts on issues such as intellectual property and investor protection under the guise of trade.

In the end the China trade deal contains provisions for a review after three years and specifically two years for the IFAs, which provides a good measure of reassurance about how it will all work.

We don't know - because of all the secrecy - but it seems less likely such a review mechanism will apply to controversial parts of the TPP.

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23/07/2015 10:10:19 AM

Bill Shorten is dead right about the lax importation of foreign workers. There should be rigorous labour testing before a foreign worker is given preference over a local one. Why are we supporting our children through university to find that there jobs are taken by foreign workers and particularly workers from State owned Chinese corporations who are completely controlled by their employer and wouldn't dare complain? Such workers include IT and engineering graduates and skilled tradesman. Get on you Bill for opposing this scam and shame on the Coalition.
23/07/2015 11:17:32 AM

How can we be agreeing to things when there has been none of our own economic assessment as to the likely impacts? how can our sovereignty be washed away with ISDS agreements (don't use the excuse these are already happening, the public don't see the text of these agreements). I saw Genghis saying anyone who questions these are fear mongers, how we can we not fear something if we aren't allowed to see it and u sign our autonomy away? these are beyond belief and are not democratic, I question if it is really a free market if u agree to sign our name to more regulation and liability.
Jock Munro
23/07/2015 11:33:56 AM

This issue has the potential to cause the coalition to be swept from office at the next election as did the Work Choices IR laws that were cooked up by the Liberal zealots under John Howard.
23/07/2015 12:45:49 PM

As Victor points out we are living right next door to several hundred million people, who can and will do any job we can for 1/10 the price. Fools paradise.


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