Labour rules may work against ChAFTA
Tony Abbott left several messy situations for Malcolm Turnbull, and on the foreign policy side the most urgent thing to be cleared up is the China–Australia Free Trade Agreement, finalised and signed midyear after more than a decade of on-off negotiations.
It is quite something to have broken the thread of bipartisanship on the Chinese economic relationship, but Abbott and his trade minister, Andrew Robb, managed to do that. The chief objections to ChAFTA centre on provisions for access of Chinese skilled workers for medium to large investment projects. These objections are unlikely to disappear now that the Canning byelection is over.
Take the agreement’s chapter 10, stipulating that, regarding temporary entry of skilled workers, neither country shall put any limit on the number of visas, or “require labour market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry”.
Or the “Side Letter on Skills Assessment” stating that “Australia will remove the requirement for mandatory skills assessment for the following 10 occupations”, before listing automotive electrician, cabinetmaker, carpenter, carpenter and joiner, diesel motor mechanic, electrician (general and special class), joiner, motor mechanic and motorcycle mechanic.
ChAFTA is now in parliament’s Joint Standing Committee on Treaties for review. The committee has a government majority but can’t block or amend what the executive has already signed. Implementing legislation could get sticky in the senate in November, but it’s a moot legal question whether such domestic legislation can prevail over an international treaty.
The overall benefit of ChAFTA has also been greatly oversold, partly by distorting the analysis of Canberra’s Centre for International Economics. Robb claimed ChAFTA (combined with his earlier deals with Japan and South Korea) would provide 178,000 additional jobs over 20 years; the institute’s figure is actually 5434 additional jobs, and this to a workforce that would be about 15 million by 2035. Is it all just political symbolism?
Andrew Robb has been retained in the trade portfolio, and next week will be in Atlanta for negotiations trying to finalise the Trans-Pacific Partnership, the trade, intellectual property and investment treaty with the United States, Japan and nine other Pacific Rim nations, but so far excluding China and South Korea.
The TPP is full of controversial elements, including patent protection for pharmaceuticals and arbitration of investor disputes. But this “21st century” pact is still hung up on old-fashioned wrangles over car parts and farm commodity access. Japan is reported to be going with a token offer of duty-free access for rice from partner countries − 50,000 tonnes a year initially from the US, and 8400 from Australia − and a slow and partial lowering of tariffs and quotas on imported meat and dairy products.
As with ChAFTA, farmers look like being the immediate winners from the TPP, while the cost in medicines and other intellectual property items could be felt by us all. Patricia Ranald, a trade specialist at Sydney University, told the Australian Institute of International Affairs this week that Robb (a former head of the National Farmers’ Federation) is “completely obsessed” with this side of trade. “What price are we paying for that particular market access for agricultural products?” she asked.
The big international game this week has been the Chinese leader Xi Jinping’s visit to the US, which kicked off in Seattle where he met top executives of Microsoft, Starbucks, Apple, Boeing, Amazon, IBM, DuPont, General Motors and other major corporations.
The tough part of his talks with Barack Obama later in Washington centred on cyber espionage and hacking, after the US accused Chinese hackers of accessing the personal data of millions of government employees. “This isn’t a mild irritation,” Obama’s national security adviser, Susan Rice, said on Monday. “It is an economic and national security concern to the United States.”
China has also shown its “assertive” face just ahead of the visit by working on a third airstrip on reclaimed atolls in the South China Sea. Xi is unlikely to back off on this, but America hopes he may agree to work on a cyber “arms limitation treaty” governing peacetime intrusions. The main positive in the visit was expected to be more agreement on controlling carbon emissions, ahead of the December climate change meeting in Paris. Bargaining chips for the Americans were two formerly high-ranking Chinese fugitives Xi wants extradited back to face corruption charges.
With Xi courting the capitalists and Pope Francis arriving via Cuba and riding into town in a baby Fiat, Washington’s conservatives had a hard time figuring out which was the real communist threat.
American law ranges far beyond US borders, and this week it emerged that the “Kleptocracy Initiative” of the Justice Department − which has already seized American properties linked to politicos in Equatorial Guinea, Nigeria, South Korea and Taiwan − has turned its attention to family and friends of Malaysian Prime Minister Najib Razak.
According to reports, a federal grand jury has been set to work on properties acquired by Najib’s stepson, Riza Aziz, and a business associate, Jho Low. It’s also looking at a $US681 million payment that went into Najib’s personal bank account via the American bank Wells Fargo. Najib is already in hot water enough with allegations of money being siphoned off from a government development fund called 1MDB being investigated in Switzerland, Hong Kong and Singapore, as well as Malaysia itself.
Vladimir Putin is being grudgingly accepted as a major player in the new stage of the war in Syria, as his forces continue to reinforce the Russian air and naval footholds in the territory held by Bashar al-Assad’s government.
Israel’s Benjamin Netanyahu went to Moscow and got assurances Russian aircraft and missiles would not be targeted at Israeli aircraft, assistance to Assad would not involve a “second front” against Israel, and Russian arms would not flow to Hezbollah, the Lebanese militia assisting Assad but also a bitter foe of Israel. The US and Russian defence secretaries have also talked about avoiding clashes.
Russia, meanwhile, continues to ramp up military tensions in northern Europe, where NATO planners are working on scenarios to defend outlying members in the Baltic. Putin is sticking it to the British too: on September 17, it was reported, a Russian Tu-160 bomber approached British air space and, according to decoded radio transmissions, went partially through the arming sequence of its nuclear weapons.
But even that hasn’t been enough to divert the British media from “Pig-gate”, the story of the week, derived from a new biography by disgruntled Tory peer and businessman Lord Michael Ashcroft (a major donor to Australia’s Liberal Party in past years) and Isabel Oakeshott: that as a student, Prime Minister David Cameron inserted his penis into the mouth of a dead pig as part of a club initiation.
This article was first published in the print edition of The Saturday Paper on Sep 26, 2015 as "Labour rules may work against ChAFTA". Subscribe here.