What’s Wrong With the China Free Trade Agreement?

1. We don't need it. China is already our largest trading partner. We didn't need a deal to do business up until now, and we won't need one in future. Australian agriculture exports to China have trebled in the past six years, from $3 billion in 2007/8 to $9 billion in 2013/14. They will continue to grow in future, deal or no deal.

China had $22.7 billion - $12 billion of it in Australian real estate - in investment proposals approved by the Foreign Investment Review Board in the 2014 financial year, more than from any other country. Chinese investors bought more real estate in Sydney and Melbourne combined – almost $3.5 U.S. billion) than in each of London, Paris, or New York.

Any China market access advantage for Australian exports will only be temporary. Nothing in the deal prevents China from giving the same access to other countries. But all Australian concessions will be permanent.

2. The deal weakens the rules about employing migrant workers from China. At present employers have to test the labour market – that is to say, advertise positions or vacancies in Australia and show no qualified locals are available - before they can bring in Chinese temporary migrant workers, or employ those already here.

But the China FTA puts an end permanently to labour market testing in the 457 visa program for all Chinese nationals in all skilled occupations. This includes engineers, nurses, electricians, motor mechanics and another 200 trades and occupations where testing currently applies, plus the 400 or so other mainly graduate-level occupations where there is no testing now simply by government policy. Employers will use this loophole to substitute easily exploited overseas labour for Australian workers and graduates.

3. It utterly fails to create a level playing field for Australian domestic industry facing competition from Chinese imports. There is no chapter on labour standards. There is no chapter on environment standards. There is no mechanism to ensure that imported products are of an appropriate standard. Alucoil Australia advises that the much publicised Docklands Fire in Melbourne was in a high rise apartment building cladded with non-compliant panels imported from China.

4. A Memorandum of Understanding establishes Investment Facilitation Arrangements. These will allow Chinese-owned companies registered in Australia undertaking infrastructure development projects of more than $150 million in specified sectors  (a very low threshold these days, which would cover most projects a Chinese-owned company would bother with) to negotiate bringing in semi-skilled temporary workers on 457 visas plus ‘concessional’ skilled workers. The Liberal Government says it will be the same as the Enterprise Migration Agreements proposed by Labor at the time of the Roy Hill Mining proposal.  But trade unions objected vehemently to Enterprise Migration Agreements for good reason and none of them ever happened – not at Roy Hill and not anywhere else. 

The Liberal Government says direct employers on these infrastructure projects must test the local labour market first. But the government’s labour market testing requirement allows employers to stop advertising jobs locally up to a year and a half before employing Chinese semi-skilled workers!

5. A side letter does away with mandatory skills testing by the Australian Government in a range of trades before Chinese-trained workers come to Australia. These include high risk trades like electrical work, which is inherently dangerous. We have stringent electrical training and safety standards in Australia, and eroding these standards could lead to accidents, injuries and deaths.

The Liberal Government says we shouldn't worry because the Immigration Department can still order a skills test ‘if needed’, and the States will step in and do assessments for licensed trades. Really?  And if they don't? I guess we can always have a Royal Commission.

Mandatory skills assessment for 457 visa applicants from high-risk countries including China was introduced in 2009 by the former Labor Government to help restore some integrity to the 457 program. Before that it was commonplace for employers to nominate Chinese and other workers for skilled 457 visas in trade occupations but work them as semi-skilled or unskilled workers. For example some Chinese workers granted 457 visas as professional engineers were found to be working as labourers on Australian construction sites! There was also concern about trade training standards and qualifications and document fraud in some countries. Authorities like the World Bank say those concerns are still valid.

6. The deal contains an Investor-State Dispute Settlement provision. The details of the provision haven't yet been finalised. In all seriousness, the details haven't been finalised, but the Liberal Government is demanding that Labor agrees to the deal. But Investor-State Dispute provisions allow overseas companies to sue the Australian Government for actions that disadvantage them. Phillip Morris is suing the Australian Government right now, using one of these clauses in a Hong Kong investment agreement, over the introduction of plain paper packaging for tobacco products. ISDS has mutated into a privatised system of 'justice', whereby three arbitrators are allowed to override national legislation and the judgments of the highest courts in the land, in secret and with no right of appeal. No governments should enter into treaties which could stop them carrying out their proper role of protecting public health, the environment, and basic human rights.

There’s a lot wrong with the China Australia Free Trade Agreement.

 

Statewide Fuel Reduction Target Unscientific

The damage done by the Lancefield fuel reduction burn again raises the issue of whether our fuel reduction burning is scientifically based.

It should be remembered that the Victorian Bushfires Royal Commission's recommendation to burn 390,000 hectares per year for fuel reduction was not supported by its own expert panel. The experts said a statewide target would encourage fuel reduction burns in the larger, more remote areas, which were not as important for public safety as smaller areas around towns.

I made two submissions to the 2009 Victorian Bushfires Royal Commission and I held a Public Forum in 2012 which provided an opportunity for fire management experts to discuss the fuel reduction issue in detail. These experts didn't support a statewide target – what they proposed were local, zone-based targets for fuel reduction burns, and local, science-based prescriptions for ecological burns.

I was pleased that the Inspector General for Emergency Management recommended earlier this year that the 5 per cent prescribed burn target be replaced by a risk reduction target. I hope that the Victorian Opposition in particular will get behind a change to what has been an unsuccessful and counterproductive approach.

I also hope there is full accountability from the Northern Territory uranium mine owners ERA who allowed a "controlled" burn to become uncontrolled and enter the Kakadu National Park, threatening indigenous rock art. The Northern Territory gets far too many hot, late dry season fires, and the traditional owners and the environment deserve better.

China Free Trade Agreement – Myths and Realities

MYTH 1:

The China FTA does not change existing protocols about labour market testing. (National Farmers Federation 16 September 2015).

REALITY:

There can be no doubt that the China FTA puts a permanent end to labour market testing for all Chinese nationals in all 651 skilled occupations in the standard or ‘non-concessional’ 457 visa program.  This includes over 200 occupations which are currently subject to the 457 Labor Market Testing obligation – engineers, nurses, and Skill Level 3 jobs like electricians, motor mechanics; plus  the 450 or so other mainly graduate-level occupations where there is no testing now simply by government policy.

The Government has expressly stated that in order to implement our obligations under ChAFTA, a Migration Act Determination is required in relation to labour market testing in the 457 visa program. Clearly if nothing was changing there would be no determination.

The definition of 'contractual service suppliers' of China, in combination  with other ChAFTA provisions, means that all standard business sponsors nominating Chinese citizens for non-concessional 457 visas will no longer have to labour market test.

The definition of 'contractual service suppliers of China' is identical to that of 'contractual service suppliers of Korea' in the Korea Free Trade Agreement. It is noteworthy that the Immigration Department has advised registered migration agents that "The effect of the obligations under the KAFTA is that labour market testing will NOT be applied to Korean nationals/permanent residents or to employees of businesses in Korea transferring to an Australian branch of that business being nominated under the 457 programme".

The China FTA also removes Australia’s right to apply labour market testing in the 400 visa program, for Chinese ‘installers and services’ of machinery and equipment.

At present there is no legislated requirement for labour market testing in the 400 visa.  But by policy 400 visas are only granted to foreign workers to do ‘highly specialised work – that is, it involves skills, knowledge or experience….which cannot reasonably be found in the Australian labour market.’

The China FTA will remove the Australian government’s ability to apply this current test or indeed any form of labour market testing to Chinese ‘installers and services’ in the 400 visa program.

MYTH 2:

We need a free trade agreement with China in order to do business with China. New Zealand etc will steal a march on us if we don't.

REALITY:

Australian agricultural exports to China have trebled in the past six years, rising from $3 billion in 2007/8 to $9 billion in 2013/14.

China had $27.7 billion - $12 billion of it in Australian real estate - in investment proposals approved by the Foreign Investment Review Board in the 2014 financial year, more than from any other country. Chinese investors bought more real estate in Sydney and Melbourne combined (almost $3.5 U.S. billion) than in each of London, Paris, and New York.

Any China market access advantage for Australian exporters will only be temporary.  Nothing in the deal prevents China from giving the same access to other countries. But all Australian concessions will be permanent.

MYTH 3:

This agreement is the same as others we've done. People who oppose it are being hypocritical at best and xenophobic or racist at worse.

REALITY:

Both the words and the meaning of the China deal are different from those of previous treaties.

The definition of "contractual service suppliers" in the Chile deal refers to persons with "high-level technical or professional qualifications, skills and experience". The definition for the China, Korea and Japan deals was watered down to persons with “trade, technical or professional skills and experience", with the words "high-level" and "qualifications" being omitted.

The Department provided unequivocal advice to the Treaties Committee in 2008 that the Chile deal was limited to professional skilled business people, and people with high-level qualifications who are already employed by an enterprise of the other country. The Department said the Chile FTA would not widen the capacity for people to apply for 457 visas, and was "not about nationals seeking access to the employment market; it is about service professionals coming temporarily to Australia to deliver their particular service and then leaving".

But with the China FTA there are over 650 trades and other occupations in the 457 program (including over 200 about which the Department has said that there is labour market testing now) which can never again be subject to labour market testing if this China deal comes into force.

The Department also said the Chile deal did not limit Australia's scope to change or abolish 457 visas. This is not true of the China deal.

The ASEAN and Malaysian FTAs, which Labor signed in government, provided labour market testing exemptions in the 457 visa program for very limited categories of foreign nationals. The China deal gives labour market testing exemptions to all Chinese nationals in the 457 program.

But wait, there's more. The initial period of entry for temporary contractual service suppliers in the Japan and Korea FTAs is one year. It is four years for the China FTA, four times as long.

The China Deal also differs from other trade deals in that it has:

• No labour market testing for Chinese ‘installers and servicers’ in the 400 visa program – other deals do not.

• A Memorandum of Understanding on Investment Facilitation Arrangements – other deals do not. Workers under IFAs will be semi-skilled or substandard skilled workers. Both can have lower English skills than under the standard 457 visa, which will hamper their ability to understand their rights or complain about violation of them. Lower English skills also have worrying implications for workplace safety.

• An Investor State Dispute Settlement provision – the Chile Deal does not, and the Japan deal does not.

• No labour rights chapter.

• No environment chapter.

• A side letter that removes mandatory skills assessment for ten skilled trades, including electricians, motor mechanics, and carpenters. Mandatory skills assessment for 457 visa applicants from high risk countries including China was introduced in 2009 by the former Labor Government as part of a series of reforms designed to restore some integrity to the 457 visa program. Prior to this it was all too common for employers to nominate Chinese and other overseas workers as skilled 457 workers in trade occupations but work them as semi-skilled or unskilled workers. Some Chinese workers granted 457 visas as professional engineers were found to be working as labourers on Australian construction sites. There were also well-founded concerns about the trade training standards and the extent of qualifications and document fraud in certain countries including China. Authorities like the World Bank say those concerns are still valid.

• A Memorandum of Understanding which provides young Chinese with 5000 work and holiday visas each year, with the right to work in Australia for the full 12 months of the year. There is no reciprocal arrangement for young Australians to work and holiday in China.

UN Expert Says Trade Agreements Need to Respect Human Rights

The first Independent Expert appointed by the UN to promote a democratic and equitable international order, Mr Alfred de Zayas, says that governments across the world need to put a stop to free trade and investment agreements that conflict with human rights treaty obligations.

He says "Over the past decades free trade and investment agreements have had adverse impacts on the enjoyment of human rights by interfering with the States's fundamental functions to legislate in the public interest and regulate fiscal, budgetary, labour, health, and environmental policies".

His report deplores the paradox resulting from assuming conflicting treaty obligations, where countries ratify human rights treaties, but then enter into agreements that prevent him from fulfilling their human rights obligations.

In particular he urges the abolition of the Investor-State Dispute Settlement mechanism in Trade and Investment Agreements. He says it "encroaches on the regulatory space of States and suffers from fundamental flaws including lack of independence, transparency, accountability and predictability".

"This dispute settlement mechanism has mutated into a privatised system of 'justice', incompatible with article 14(1) of the International Covenant on Civil and Political Rights, whereby three arbitrators are allowed to override national legislation and the judgments of the highest national tribunals, in secret and with no possibility of appeal. This constitutes a grave challenge to the very essence of he rule of law."

Voting in Melbourne City Council Elections

A report commissioned by the Electoral Regulation Research Network recommends that only residents be allowed to vote in Melbourne City Council elections, that is to say that businesses would be banned from voting in them. Presently businesses are required to vote, and corporations operating in Melbourne are allocated two votes.

The lead author of the report, Monash University Associate Professor Ken Coghill, said giving votes to corporate entities and non-resident property owners was not democratic. He rejected the idea businesses should have a vote because they pay rates.

"The cry of 'no taxation without representation' is false: it is not accepted for voting in state or Commonwealth elections or in other democracies", Professor Coghill said.

The Municipal Association of Victoria opposes the idea. They say "a dominance of residential voters could see more focus on the amenity of living in the city, possibly at the expense of economic activity and development".

And the problem is?