Claim China-Aus FTA favours China

The China-Australia Free Trade Agreement (ChAFTA) which was signed last week includes provisions on investor rights and temporary labour that favour Chinese investors, says a lobby group.

According to the Australian Fair Trade and Investment Network (AFTINET), the agreement allows Chinese investors to bring in their own labour to work on significant projects, but does not allow Australian investors in China to do the same.

As the SMH reports, the provision applies to infrastructure development in food and agribusiness, resources and energy, transport, telecommunications, power supply and generation, environment or tourism.

In cases where a Chinese investor has 50 per cent equity in a Australian based project, or cases where no party has a 50 per cent stake but a single foreign person owns 15 per cent of a project or several foreign persons and associates own 40 per cent, foreign workers will be able to be employed.

In addition, those foreign workers will not have to be paid the Australian minimum wage. Their pay will be decided through negotiations between the project company and the immigration department.

In contrast, Australian companies investing in China can only employ senior managers and specifically skilled workers on their projects.

According to AFTINET, the other contentious part of ChAFTA is in the area of Investor-State Dispute Settlement (ISDS).

“The investment chapter of the China FTA commits China and Australia to detailed procedures for Investor-State Dispute Settlement (ISDS),” said Dr Patricia Ranald, Coordinator of AFTINET.

“This means that Chinese investors could sue the Australian government for damages in an international tribunal if they can argue that a change in domestic law or policy harms their investment.”

The SMH points to several overseas cases where corporations have sued governments and cautions that this could happen here too. For example, in Canada the fifth-largest pharmaceutical group in the US, Eli Lilly is suing the Canadian Government for attempting to make medicines cheaper and more accessible to Canadians.