China bull howls “racism” on ChAFTA debate

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From card carrying China bull James Laurenceson via BS:

Xenophobic, even racist: that’s the accusation being levelled at federal Labor in its handling of the China Free Trade Agreement.

Two considerations have left them vulnerable to the charge.

First, Labor leader, Bill Shorten, has chosen to repeat some of the more extreme dog-whistle claims coming from the trade union movement.

This includes suggesting that the China FTA could lead to unqualified electricians climbing up into our roofs and labelling it a “dud deal” and a “bad agreement”.

…Second, Labor has been quiet on the fact that Australia’s existing FTAs act to loosen labour market testing requirements.

These FTAs cover all our other major trade and investment partners such as Japan, Korea, the U.S and New Zealand, as well as some minor ones such as Thailand and Chile.

Is it really “racist” to debate the degree of perforation to Australian sovereignty that should be allowed for the rising super power of the region, which is engaged in an increasingly tense competition with Australia’s other super power ally, and from which the size of people and investment is an order of magnitude of difference to anyone else? I would not have thought so. Moreover, the ALP policy aim is not China specific, from the AFR:

The federal government is leaning towards doing a deal with Labor on the China-Australia Free Trade Agreement but argues that such a decision would be a pragmatic one designed to get the deal in place, and not a concession to the opposition.

Labor will officially release its proposed changes to safeguard Australia jobs on Tuesday, after they have been approved by the Caucus. They were approved by the shadow cabinet on Monday night.

A government source said on Monday that there had now been several discussions between Trade Minister Andrew Robb and his shadow counterpart, Penny Wong, and the government was, in principle, amenable to the Labor compromise because it was effectively having to give away nothing.

…He said enshrining local labour market testing in legislation “just mirrors what we say are already mandatory requirements”.

As revealed by The Australian Financial Review, the ALP will now insist on legislated changes to the Migration Act to enforce local labour market testing before workers were imported for large projects under Investment Facilitation Agreements (IFAs), but with no specific mention of China or the China-Australia Free Trade Agreement.

The safeguards would, in effect, apply generally to all FTAs, would be non-discriminatory so as not to offend China, and would require no change whatsoever to the agreement itself.

So, Australian workers will get the protection of the law, as opposed to the protection of Departmental discretion. As we recall, Joanna Howe, a Senior Lecturer at the University of Adelaide Law School and an expert in temporary labour migration, revealed that ChAFTA provides only minimal protections for local workers:

…the interpretation of what constitutes sufficient labour market testing is entirely left up to the department. This can be weakly interpreted by the department so that Chinese companies do not have to properly and rigorously test the local labour market in order to access Chinese workers…

Moreover, the protection afforded to local workers is contained in policy rather than law, as the requirements around the nature, type and duration of labour market testing is up to the department. These can be whittled away at any time so that the ability of these requirements to protect local workers’ preferential access to jobs becomes virtually meaningless.

In short, playing he race card is not a sophisticated contribution to the debate.

If I were also in the business of taking cheap shots I might point to the Australia-China Relations Institute website where Mr Laurenceson is Deputy Director:

ACRI was established in December 2013 with the generous assistance of Mr Xiangmo Huang, Founder and Chairman of the Yuhu Group.

Yuhu Group describes itself thusly:

By integrating capital operations and industrial development, Yuhu Group has engaged in the agricultural product market, trade logistics and property management. Investment, Real Estate and Hydropower are the three target industries, which the company pursues to achieve business diversification and professionalism. The Group’s corporate philosophy is: aim for perfection, concentrate on quality, and work for practical to make Yuhu Group a top-grade, responsible modern enterprise. Since its establishment, the Group has held to specialized development, constantly upgrading its business management and level of operations, rapidly expanding with stable policies.

And its Australian subsidiary is developing all sorts of very welcome major projects that will need labour.

Of course I’m not in the business of cheap shots so I won’t point to those things for any reason other than to praise some excellent second track diplomacy that ACRI describes this way:

  • Focuses specifically on the relationship between Australia and China.
  • Identifies and promotes insights to inform policy development and bi-lateral business relationships.
  • Explores how contemporary Australia and China engage socially, culturally, economically and diplomatically.
  • Identifies issues with the potential to shape the Relationship.
  • Speaks to the general public, as well as to expert opinion, encouraging interactive debate.
  • Illuminates the Australia-China relationship by using data analytics, social media data analysis and choice modelling to understand trends, opportunities and sentiment.
  • Focuses on doing, as well as thinking in enhancing the relationship. ACRI will pursue both practical and theoretical engagement opportunities between Australia and China.

As well as reiterating allegations of “racism” rather unnecessarily.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.