Survey shows concern from industry around China FTA

There is
some concern among local manufacturers about a Free Trade Agreement with China, which could be signed at the G20 meeting in Brisbane next month.

An Ai Group submission to the Department of Foreign Affairs and Trade included a survey of
160 Australian manufacturers, finding that just over half of them believed a removal
of tariffs on Chinese goods would be a negative.

Just over 11
per cent believed they would benefit, and about a fifth were uncertain, which
the AiG said reflected a lack of transparency around negotiations.

“The study also highlights
that the Australia-China FTA has the potential to bring enormous benefits to
Australian industry through greater access to the world’s second-largest
economy,” said the Ai Group’s chief executive Innes Willox in a statement.

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

The group recommended a
phasing out period of tariff cuts to help local manufacturers adjust, as well
as addressing concerns around anti-dumping, IP, and safety standards.

“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,” said Willox.

China-Australia two-way
trade worth was $150 billion last year, nearly double the value of Australia’s trade partnership with Japan, Bloomberg notes.

A China FTA would follow free trade deals reached this year with Japan and South Korea, both of which have been signed but are not yet in force.

To read the Ai Group’s
submission, click here.

Image: Tomohiro Ohsumi/Bloomberg