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AUSTRALIA-CHINA FREE TRADE AGREEMENT ‘MAY IMPACT ON MANUFACTURERS’

28-10-2014
by 
in 

The Australia-China Free Trade Agreement should only proceed after the full impact on the manufacturing sector has been considered, the Australian Industry Group has warned.

This follows a recent AiGroup survey of 160 local manufacturers that found that just over half (51.6%) expect that the removal of tariffs on Chinese manufactured goods will negatively affect their business.

“Reflecting the lack of transparency of the FTA negotiations with China, around a fifth of respondents are uncertain about how their business might be affected,” said AiGroup chief executive, Innes Willox.

The study forms the basis of an AiGroup submission made on behalf of its members to the Department of Foreign Affairs and Trade.

Mr Willox said the study also highlighted the potential benefits the FTA could bring to Australian industry through greater access to the world’s second-largest economy.

“However, realising this potential will require skillful and determined negotiation and close attention to the diversity of the Australian economy, Mr Willox said.

“The Australian-China FTA could, if delivered well, enable local manufacturers to source competitively-priced inputs and find more opportunities in global supply chains, yet only 11.2% of manufacturing respondents in the survey expect their business to benefit from an Australia-China FTA.”

Many of the concerns can be addressed and opportunities maximised for the benefit of the broader economy.

Mr Willox said government must ensure the FTA includes sufficient phase-out periods to give domestic manufacturers time to adjust to reductions in tariffs on goods imported from China.

Also:

·       Full consideration should be given to addressing restrictions on Australian investment in China and the full range of non-tariff barriers and domestic preferences at play in China.

·       Australia’s rights on anti-dumping must not be diminished by an Australia-China FTA.

·       The incorporation of effective commercial safeguards around intellectual property infringements is essential to Australia’s ongoing relationship with China.

·       Conformity with Australian safety and quality standards also needs to be strengthened and a process developed for legal enforcement of insurance claims and contract breaches.

“We have relayed all of these concerns in a submission to the Government and the Department of Foreign Affairs and Trade, and urge negotiators to take into account the considerations of local manufacturers as they work towards the finalisation of the Australia-China FTA,” Mr Willox said.

The submission can be read here: http://pdf.aigroup.asn.au/Submission_Australia-China_FTA.pdf

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