Andrew Robb has been hailed as the architect of one of the Coalition’s greatest achievements – their free trade agreements, hastily signed after years of other people’s negotiation. Either Robb was a gun negotiator, or, as seems to be the case, he chose an early signature above Australia’s best interests.
As thousands of people stand to lose their jobs in the steel industry, we are informed by our Prime Minister and Treasurer that Bill Shorten is endangering our free trade agreements by suggesting we use Australian steel in public works.
Apparently we can no longer decide to use Australian products or employ Australian firms. The implications of that are horrendous. The carbon tax didn’t wipe Whyalla off the map but the FTAs might well do the job.
For the car industry, the free trade agreements were yet another nail in the coffin with cheap cars from South Korea, Japan and China about to flood the market. Support for transitioning the industry to innovative manufacture of clean cars or superior quality parts evaporated. Had they had some assistance during the period when mining had forced the Aussie dollar to record highs, this industry may have survived along with the hundreds of thousands of jobs and the skills training it provided, but with no time to transition, they couldn’t survive the FTAs.
In July last year, Greens Senator for Tasmania Peter Whish-Wilson wrote to the Parliamentary Budgetary Office requesting a budget analysis of the impact of recently-signed trade agreements on projected revenue.
The Korea FTA is expected to cost us $840 million in lost tariff revenue over 5 years to July 2019.
The Japan FTA is estimated to lose us $2.16 billion in revenue and the China FTA, $4.15 billion.
This was money paid by businesses to government in order to protect domestic industries and jobs.
The only way this revenue can be replaced is if businesses expand and pay more company tax and employ more people who will pay income tax.
But will this potential expansion make up for the industries and jobs lost here?
An analysis by the World Bank shows that the Trans Pacific Partnership would grow Australia’s GDP by just 0.7% by 2030.
The deputy chairman of the JSCOT treaties committee, Labor MP Kelvin Thomson, said “The Coalition government was so keen on getting to a deal on agricultural products that it was indifferent to the effect on others – manufacturers and workers who face the risk of cheaper competition.”
Little has been said about the 15,000 jobs in Australia’s pulp, paper and fibre packaging industry that are now at risk.
The Australian Forest Products Association notes in its submission that ChAFTA delivers an inequitable tariff outcome for paper products which would have an adverse impact on investment and trade in the Australian paper industry.
“There is an asymmetrical treatment of paper products, including tissue, copy paper, newsprint and packaging papers – whereby Australian tariffs would immediately drop to zero or fall to zero within 3 to 5 years with no change at all in the Chinese tariff levels for those same products under the proposed ChAFTA.”
The Ai Group estimates that the local industry can expect to face almost $1billion of Chinese imports over the next four years, warning that Australian paper and packaging companies could “make the strategic decision to move manufacturing to China, as this is the business model currently being rewarded under ChAFTA.”
Even the much vaunted deal on beef exports is not as good as they would have us believe.
The Chinese deal on beef is only for an extra 10% exports before a trigger where tariffs will be charged again, and the proposed tariff reduction will not fully take place for nine years.
Agribusiness lawyer Lea Fua told a Brisbane hearing that China has a safeguard clause which allows it to add customs duties to fresh and frozen beef carcasses and meat when Australian beef imports hit a volume trigger of 170,000 tonnes.
“In 2013-14, Australia exported 161,000 tonnes of beef to China worth $787 million,” Mr Fua told the Joint Parliamentary Committee on Treaties.
“The concern here is that given the growth in Australian beef exports to China, which has been exponential in the last few years, the risk here is that the trigger will be reached fairly quickly and China is able to apply extra customs duty which appears to be against the spirit of chapter two [of the FTA],” he said.
Mr Fua said a similar situation applies to Chinese imports of Australian milk and cream solids.
As Bob Katter has warned, rather than being the food bowl for Asia, on current trajectory, Australia will become a net importer of food, and pretty much everything else other than coal and iron ore. This will have significant implications for domestic prices as farmers can make a greater profit by exporting their produce.
This view is backed up in an Agribusiness Bulletin from Deloittes assessing the impact of the China FTA where they say “the overall impacts on Australia from the FTA are dominated by the benefits to the coal industry.”
According to AMEC, “Elimination of the 3 per cent tariff on coking coal from day one of the Agreement and elimination of the 6 per cent tariff on non-coking coal within two years will be highly beneficial to the Australian coal industry. “
The ridiculous swindle in all this is that those tariffs on coal were only introduced in October 2014.
Either a naïve Andrew Robb was hopelessly out-manoeuvred or a calculatingly political Robb just didn’t care what he was giving up as long as there could be a photo shoot exchanging signatures.