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.