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Australia To Resume Bilateral FTA Negotiations With China

Wednesday, February 17, 2010

The Australian Minister for Trade, Simon Crean, in a speech to the Foreign Correspondents’ Association in Sydney, provided a review of Australia’s present and future free trade agreements (FTAs), during which he confirmed that the 14th round of negotiations with China on their bilateral agreement would be held this month, after being stalled since December 2008.

Crean disclosed that negotiations have been difficult in certain key market access areas, said to be agriculture and services, of a future Australia-China FTA, and that they have taken longer than the Australian government had hoped. However, he felt that the high-level political commitment to the FTA remains on both sides.

Crean had previously reflected on the importance to both China and Australia of concluding an FTA, given that China had gone back to being Australia’s largest trading partner.

He also confirmed that Australia is developing trade relationships on many fronts, believing that there is a complementary relationship between multilateral, regional and bilateral FTAs. Australia has six FTAs already in place, it is negotiating a further seven, and two more are under consideration.

He pointed to the current agreements with the United States, New Zealand and the Association of Southeast Asian Nations (ASEAN) as excellent models of the direction in which the government wants Australia to go in using trade liberalization to promote economic integration.

“Another key trade agreement that is driving the trade agenda forward, as well as strengthening our links with Latin America, is the Trans Pacific Partnership (TPP),” Crean said. “Australia, together with the US, New Zealand, Singapore, Chile, Brunei, Peru and Vietnam will begin negotiating this ambitious FTA in March in Melbourne.”

“The TPP represents an important basis for regional economic integration,” he added. “It can be a building block towards the goal of a free trade area spanning the Asia Pacific.”

Beyond regional trade agreements, the Australian government is also taking a strategic approach to bilateral FTAs. “Where we do not have FTAs with our top export markets,” Crean noted, “we are in the process of negotiating or discussing them.”

Apart from China, the government is committed to concluding a comprehensive FTA with Japan (where discussions on agriculture are still difficult); progress is being made in FTA negotiations with South Korea; and a feasibility study on an FTA with India is close to finalization.

Finally, other bilateral FTAs are under negotiation with Malaysia and the Gulf Cooperation Council. Negotiations began last year with Pacific nations and Australia and New Zealand on PACER Plus, and an FTA with Indonesia is also under consideration.

Crean pointed out, however, that there are two major “missing links” in Australia’s FTA network. “We have no FTAs with either Africa or Europe,” he disclosed, “and two of our top ten trading partners are the United Kingdom and Germany.”

He has seen that Australian mining companies have already signaled investment of more than AUD20bn (USD17.8bn) in projects in more than 35 African nations. The Australian resources sector, he said, is committed to Africa, and the government will work in tandem with it.

With regard to Europe, he noted that the European Union (EU), as a bloc, is Australia’s largest trade and investment partner. An FTA is not currently on the agenda as the EU had previously made a decision to complete FTAs only with developing countries. However, the EU has signaled its preparedness to do one with Canada, and Australia has sought clarification whether this heralds a different approach.

In conclusion, Crean stated that “the trade policy approach I have outlined underscores Australia’s ability to back multiple processes in support of free trade – multilaterally in the WTO through the Doha Round and regionally and bilaterally through FTAs. These are processes that complement each other, and they are all aimed at achieving trade liberalization and greater regional economic integration.”