Confused about the China free trade deal? Here's what you need to know
|
Version 0 of 1. Both sides of politics agree that a trade deal between China and Australia is a good thing but the so-called Chafta deal is looming as an issue that will dominate the spring parliamentary sitting sessions. Related: Coalition puts more pressure on Labor to back China-Australia free trade deal The China free trade agreement is a weighty 17 chapters plus related material, made up of: Generally, the agreement signed in June breaks down tariff barriers, promotes investment and provides new markets for Australian products, commodities and services. The reason it’s in the news lies in four contentious bits. As these are predominantly work-related issues, this is the reason you are seeing those union ads on your TV screens. Both sides agree the campaign is biting. Tony Abbott says Labor should stop telling “xenophobic lies” and is not for negotiating. The agreement requires enabling legislation – not yet released – to bring the thing into law. The trade minister, Andrew Robb, has said he will talk to Labor about the agreement but will not “unpick” the formal text which has been 10 years in the making. Labor is seeking assurances on jobs in the enabling legislation. Labor’s union base is pushing it to oppose the labour provisions outright. Yet at a state level, Labor premiers in Victoria – Daniel Andrews – and South Australia – Jay Weatherill – have supported the deal, as has the New South Wales Labor opposition leader, Luke Foley. The Queensland premier, Annastacia Palaszczuk, has given qualified support. Former Labor prime minister Bob Hawke, former Labor leader Simon Crean and former Labor foreign minister Bob Carr have also spoken out in support. Federal Labor says that, like the premiers, it supports the agreement but wants to include some safeguards on Australian jobs. Related: Bill Shorten says Labor won't back off over China trade deal negotiations A parliamentary committee examining the Chafta will report on 19 October and soon after, according to Robb, we will see the enabling legislation. This is a large agreement and the contentious parts of the text often appear contradictory, which is why both sides can brandish quotes which appear to back their argument. Here, we try to separate the wheat from the Chafta. Labour market testing for workers on projects worth more than $150m This issue is contained in the MOU on an investment facilitation arrangement (IFA). It allows for a Chinese project company to establish an IFA with the immigration department for infrastructure development projects worth more than $150m, within sectors of food, agribusiness, resources, energy, transport, telecommunications, power supply and generation, environment or tourism. The project company must agree “to comply with all Australian laws and regulations, including applicable Australian workplace law, work safety law and relevant Australian licensing, regulation and certification standards”. Paragraph 6 of the MOU states: “There will be no requirement for labour market testing to enter into an IFA.” Yet in paragraph 8, relating to sponsoring temporary skilled workers, the MOU says a labour agreements must include terms and conditions, including “any requirements for labour market testing”... where labour market testing is required. The reason it appears contradictory is that there is a three step process for IFAs: This last point is contained in footnote 6 in the IFA MOU: “Where labour market testing is required, employers may satisfy this requirement by demonstrating that they have first tested the Australian labour market and not found sufficient suitable workers. DIBP will make publicly available information on how any labour market testing requirements could be met.” Related: No need to change China trade deal to address job fears, say Australian unions Mandatory skills testing (aka the Chinese electrician argument) At the moment, if you are an electrician from a comparable country, you can show your certification to the DIBP and then get licensed to practice in Australia by state regulators. Generally, if you are from most developing countries such as China, temporary (skilled) workers have to sit a written (mandatory skills) test for the purposes of immigration to prove your knowledge and then get licensed by state regulators in order to work. However in the side letter on skills assessment, this is what the Robb and his counterpart, Chinese commerce minister Gao Hucheng, agreed on: “Australia will remove the requirement for mandatory skills assessment for the following 10 occupations on the date of entry into force of the agreement”. The categories listed are automotive electrician, cabinetmaker, carpenter, carpenter and joiner, diesel motor mechanic, electrician (general), electrician (special class), joiner, motor mechanic, motorcycle mechanic. Robb also agreed: “The remaining occupations will be reviewed within two years of the date of entry into force, with the aim of reducing the occupations or eliminating the requirement within five years”. By way of explanation DFAT says: “All such visa holders will also continue to have to obtain any required federal, state or territory licenses or registration, to commence work within 90 days of arriving in Australia and be engaged in accordance with Australian workplace law, including awards and workplace health and safety.” So workers in those categories will need licenses but will forgo the first skills test required by immigration. Unions want to know: Movement of “natural persons” This is general agreement on movement of citizens between the two countries, contained in chapter 10, separate from the rules around $150m IFA projects. Chapter 10.4 says in respect of temporary entry permits: “neither party shall: (a) impose or maintain any limitations on the total number of visas to be granted to natural persons of the other party; or (b) require labour market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry”. The chapter allows temporary entry for: Investor-state dispute settlement clauses (ISDS) ISDS clauses generally give foreign investors the right to sue governments if they are adversely affected by national policy. For example, the Asian arm of the tobacco multinational Philip Morris is challenging the Australian government over the plain packaging laws on the basis it harmed their business, even though Philip Morris lost a case in the Australian courts. ISDS clauses have been included in the Chafta and according to the text, any disputes do not have to be made public, according to the text at Chapter 9.17, paragraphs 4 and 5: “Nothing in this section requires a respondent to disclose protected information or to furnish or allow access to information that it may withhold... The ISDS section in Chafta are also subject to review in three years time so essentially, the agreement around them has been left unfinished. Labor’s trade spokeswoman, Penny Wong, says Labor is not keen on ISDS clauses, though Labor also opposed them in the Korean free trade agreement but eventually passed the enabling legislation. Related: What would Howard do? How Tony Abbott could salvage China trade deal Where to next? The government and the opposition are currently holding out against meaningful negotiations around the Chafta. The Greens do not support the agreement, which means without Labor, the government does not have a chance of passing the enabling legislation. That leaves three options: |