China FTA: Ratification Means Jobs -- But The Job Is Not Done

14/09/2015 1:54 PM AEST | Updated 15/07/2016 12:51 PM AEST

The super-heated debate over the merits of the China free trade agreement is predictably dividing along partisan political lines. When you have views that are diametrically opposed, you know it's business as usual for Australian politics -- and that the truth will be somewhere in the middle.

Make no bones about it, the proposed deal with China is overwhelmingly in our national interest and must be ratified. It's about jobs and nothing less than our future prosperity. That said, securing it is not a given and there are legitimate questions to which we need answers to build community understanding and assist us all to navigate the byzantine ratification process.

We have an anti-FTA campaign being run by the CFMEU and other unions pointing to clauses which they say will allow Chinese workers to replace Australian workers on major construction jobs.

The Opposition is raising questions about Australia's temporary migration system around labour market testing and mandatory skills assessments.

In some respects there are echoes of old Ned Ludd and his followers, the Luddites, who tried to hold back the tide of progress in the early 1800s in the form of technology changing the labour market. Of course Ned never existed but the industrial revolution occurred nonetheless, and the current concerns being raised in the community are all legitimate.

It is inarguable that there is confusion. It's not about the deal being good or bad per se, it's about not having enough information to make an informed judgment.

The Government's lack of leadership in making the case for the agreement has allowed the debate to deteriorate into an unhelpful political scuffle. Their unwillingness to explain some of the intricacies of the deal and associated side letters has undone a lot of the excellent work that got the deal finalised in the first place.

And now, after weeks of drift, the Government has finally signaled a fight back, but with their "jobs and growth" rhetoric peppered with comments about unions being "xenophobic and wrong" it could be argued that the Prime Minister is more motivated by managing ongoing problems with the union Royal Commission than he is with free trade.

Similarly, the latest moves in Parliament - forcing an early vote on the deal and attempting to reframe it as being only about exports - could be viewed as being more about tactics and semantics than open communication with the community.

For me, the beginning and end of the China trade deal is jobs. So, let's get some answers to the apparent vagaries of the Investment Facilitation Agreement and labour market testing. And when we talk about jobs, let's also ensure the conversation includes the new jobs that will come from Australian companies capitalising on new market opportunities in China. This represents a jobs bonanza for Australia.

When you have a trade deal which directly links growing sectors in China with Australian expertise you have opportunity with a capital 'O' and the scope to create new, high paying jobs for our children.

The deal does exactly that. It allows Australian firms to establish aged care institutions throughout China and hospitals in certain provinces, tariff reductions or elimination for certain processed foods and manufactured exports, and unprecedented opportunities for tourism and hospitality operators. That's not to mention the improved access to partnerships with Chinese firms for legal and financial services.

China's middle class is expected to expand by 400 million people, or more than 17 new Australias, over the decade to 2022. Even if the estimates are out by 50 percent, you've still got an exploding middle class comprising millions of new consumers with lots of money to spend -- and an agreement to facilitate preferential access for Australian companies.

China's growth has fuelled Australia's prosperity. Its transition to domestic consumption is creating a monumental market for goods and services. If our country is to remain relevant as the Asian Century evolves, and if we're committed to providing job opportunities for our kids, then we must ourselves transition to being a meaningful player in that market.

If we hesitate too long, others will surely jump in. China's agreement pipeline includes India and South Korea, and there's a precursor foreign investment treaty in place with Canada which could evolve into a full blown FTA.

I recall free trade being similarly controversial when the agreement with the United States was being debated in 2004. A prominent state Labor leader, battling unions and internal ructions, cut through with a "sooner we get on with it, the sooner we'll get the benefits" assessment that showed the way forward.

As a nation of 23 million people on the periphery of Asia this deal is the classic no-brainer. Or, as it was put in 2004, "this is about jobs... if we don't do this we are going to be left behind".

Alex Malley is chief executive of CPA Australia

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