By Emily Dunn
On 17 June, 2015, after a decade of negotiations through multiple government terms and differing political parties, the China-Australia Free Trade Agreement (ChAFTA) was officially signed.
When put into effect, ChAFTA will unlock unprecedented potential for Australian exporters, allowing for 95 per cent of our exports to be tariff free once it is fully implemented.
China will also benefit greatly from the agreement, with the same tariff reductions/removals set to apply to Chinese imports to Australia, and less red tape around visa arrangements for foreign workers when working contracts to the value $150 million are undertaken in Australia.
It is this part of ChAFTA which unions in Tasmania and around Australia have voiced their concerns about, citing implications for Australian jobs.
The Australian Council of Trade Unions believes ChAFTA poses great risks to local jobs and wage indexation, arguing the agreement will only lead to greater wage disparities and general social inequality.
While Labor supports free trade and the potential economic benefits, Leader of the Opposition Bryan Green said such benefits should not be prioritised over the security of local jobs.
“There must be safeguards in place to ensure foreign workers are not brought in at the expense of local workers. The wages and conditions of our workers should not be negotiable,” Mr Green said.
However, TradeStart adviser for the Tasmanian Chamber of Commerce and Industry, Sally Chandler, said unions need not worry about ChAFTA, because businesses will always look locally for skilled workers before looking overseas.
“What people need to understand is that Tasmanian businesses would have to pay foreign workers the same wage as what they would pay local workers, so the only reason local businesses would use foreign workers would be to fill a skills shortage in the state,” Ms Chandler said.
“Some employers currently use 457 visas to access skills that aren’t available in the local market.”
In response to the union backlash, Liberal Senator Richard Colbeck said unions are running a campaign based on xenophobia and misinformation.
“For the sake of Tasmanian businesses, workers and families, we need to bring ChAFTA into force by the end of this year,” Mr Colbeck said.
“It will create opportunities for Tasmanian businesses to expand their operations into the Chinese market – such as the horticulture industry which will experience the elimination of tariffs ranging up to 30 per cent.”
Ms Chandler said the reason we need ChAFTA to complete its administrative process this calendar year is so we can take advantage of two tariff reductions in quick succession, one on the implementation date of ChAFTA, termed ‘entry into force’, and one on the 1 January 2016.
“If it doesn’t come into force until sometime in 2016, we lose the 1 January tariff reduction until 2017. This is a huge opportunity missed,” Ms Chandler said.
In a trade relationship that contributed to a two-way flow of goods and services in excess of $160 billion last year, ChAFTA is a course of action to ensuring both countries benefit the most from their export/import arrangements.