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Wednesday, February 20, 2019, 11:35
Sino-Australian trade deal proves to be a winner
By Karl Wilson in Sydney
Wednesday, February 20, 2019, 11:35 By Karl Wilson in Sydney

In this undated photo, a customer looks at a bottle of Australian wine in the import commodity trade center in the Nantong Free Trade Zone in Jiangsu province. (XU CONGJUN / FOR CHINA DAILY)

The signing of a historic free trade agreement between China and Australia in 2015 triggered an avalanche of criticism from the trade union movement, some academics, politicians, commentators and think tanks claiming the pact would seriously impact on the Australian labour market.

Some of the campaigns bordered on the hysterical.

A trade union ran a television campaign where a father sits down with his son in a dimly lit room and says the agreement, known as ChAFTA, will let Chinese companies bring in their own workers. “And that means you won’t even get a look in son …”

Two-way trade between Australia and China has been growing steadily since ChAFTA came into being. In 2017-18, two-way trade was valued at A$195 billion (US$138.68 billion), according to data by the Department of Foreign Affairs and Trade

Professor James Laurenceson, deputy director of the Australia China Relations Institute at the University of Technology Sydney said the “scare campaign” was not based on any facts and was designed to “sink the agreement before it had time to get off the ground”.

In a report entitled “The China-Australia Free Trade Agreement and Australia’s labour market: claims versus evidence” released on Feb 15, Laurenceson examines the accusations made at the time and found what he describes as a “clear disjoint between the claims on the one hand and the evidence on the other”.

“The accusations that thousands of Australian jobs would be lost as Chinese companies brought in their own workers were simply not true,” he said.

The report read that in a four-month period between July and October 2015, a period after its signing on June 17 and before its going into effect on Dec 20, 2015, it appeared that ChAFTA, a decade in the making, might be sunk.

Australia had already completed free trade agreements with its other major trading partners, but none had “attracted the ferocious” opposition ChAFTA did, the report read.

ALSO READ: New Australian trade minister committed to RCEP

“There was no panic about American workers, Thai workers or Japanese workers. But ChAFTA, it was claimed, would lead to a radical altering of the labour market and Australians would miss out on thousands of job opportunities to imported Chinese workers.”

The report reads the “reality has proven to be very different”.

Professor Zhu Ying, director of the Australian Centre for Asian Business at the University of South Australia, said the China Australia Free Trade Agreement “has turned out to be of great benefit to both countries”.

Some of the things that were being written and spoken (at the time) about the agreement was “ideologically driven”, he said. “None of the claims were based in fact or evidence.”

The FTA has not only increased the number of jobs in Australia but added to its revenue base. They are the facts.

Zhu Ying, Director, Australian Centre for Asian Business, University of South Australia

Bilateral trade over the past three years has increased dramatically, Zhu said.

“China certainly takes more from Australia than it (China) exports to Australia,” he said. “Just look at Australia’s exports of agricultural products such as olive oil, honey, fruit, sea food, wine, cheese and meat. Australia can’t produce enough to meet the demand in China.

READ MORE: Australia's biggest wine producer to shift focus to China

“The FTA has not only increased the number of jobs in Australia but added to its revenue base. They are the facts.”

Two-way trade between Australia and China has been growing steadily since ChAFTA came into being. In 2017-18, two-way trade was valued at A$195 billion (US$138.68 billion), according to data by the Department of Foreign Affairs and Trade. Of that A$123 billion were exports from Australia. China also overtook New Zealand to become Australia’s largest tourist source in 2018.

Citing Australian government data for 2014-15, Laurenceson said there were 204 Chinese mainland-majority owned businesses operating in Australia compared with 2,039 US owned; 842 British; 538 Japanese; 420 New Zealand; Germany 341; Singapore 287; Canada 263; France 257; and Hong Kong 220.

The number of people employed by the Chinese mainland companies was just 13,100 compared with 272,700 employed by majority US-owned companies. 

"The key point here is that even if all the workers at majority-Chinese owned companies were Chinese nationals – and there is no evidence to suggest this was remotely the case – any suggestion Chinese companies were bringing in Chinese workers and distorting the local labor market prior to ChAFTA was nonsensical," he said.

Since ChAFTA’s enactment, the number of Chinese workers granted temporary work visas to enter Australia has fallen in every year, according to the Department of Home Affairs data. The number of visas granted to Chinese workers has also fallen as a proportion of the total granted to all foreign workers.

Laurenceson said under ChAFTA, more Chinese on temporary work visas have returned home than have arrived. In addition, the number of labour agreements in effect between Chinese companies and the Australian Department of Home affairs, which could potentially facilitate Chinese workers temporarily entering Australia, is zero.

“These outcomes do not present a paradox. Rather, the facts of ChAFTA always pointed to some of the claims being alarmist,” he said.

Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney, said “there was some concern at the time – mainly from the trade union movement – that the agreement would impact on Australian jobs.

“That did not materialize,” he said. He said a lot of what was said at the time was “over blown”. The agreement, Hendrischke said, has been “working well”.

karlwilson@chinadailyapac.com

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