Dr John Lee, adjunct associate professor at the University of Sydney, has written a ripper article at Business Spectator warning that many of the claimed market access improvements gained by Australia in the China FTA are unlikely to materialise due to deliberate behind-the-boarder barriers erected by the Chinese:
China has signed many FTAs and other trade agreements… [Yet] Beijing has frequently resorted to using ad hoc regulatory hurdles to restrict the import of goods if the government believes that China is not ‘winning’ from the agreement; or sometimes this is done for political reasons.
For example, Beijing banned American beef in 2003 (largely at the request of domestic beef producers) after Chinese authorities discovered the existence of mad cow disease that was traced to just one cow in Washington state, and has yet to comprehensively relax the ban. Beijing banned American pork that uses small amounts of growth-inducing chemicals, even as Chinese farmers use the same or similar hormones…In 2012, China banned the import of Filipino bananas on the basis that scale insects were found in one shipment of bananas from the Philippines [the largest banana exporter in the world]… The ban also occurred ‘coincidentally’ during a tense stand-off between China and the Philippines over sovereignty of the Scarborough Shoal…
…The point is that Beijing tends to lower tariffs when the domestic market needs particular imports but will use regulatory and other obstacles selectively to achieve its domestic policy priorities…
All very good points by Lee that, when combined with the pitfalls highlighted in my earlier article this morning, suggests the Australia-China FTA will not deliver anywhere near the claimed $18 billion of benefits to the Australian economy, as promised by the Government.
This doesn’t mean that the FTA is not worth doing – as I said this morning, the logic of the deal is sound – but rather that the Panglossian views expressed across the mainstream media need a reality check.
