612ABC - China Australia Free Trade

28 August 2015


SUBJECT/S: China-Australia Free Trade Agreement

AUSTIN: So let’s go to Jim Chalmers, the Labor Member for Rankin. Jim Chalmers was an advisor to former Labor Treasurer Wayne Swan. He’s a Queensland Federal Labor MP and Parliamentary Secretary – sorry, Shadow Parliamentary Secretary – for Trade and Investment. Jim Chalmers, I know you’ve been waiting on patiently, thank you very much.

CHALMERS: Morning Steve, how are things?

AUSTIN: I’m doing alright. But at a time when the Australian Dollar is providing exporters with a market advantage, why is the ALP opposing the China Free Trade Agreement?

CHALMERS: I don’t think that’s an accurate characterisation of our position, Steve. Our position is that we are up for an agreement with China – a Free Trade Agreement with China. We’re up for working with the Government to get a high quality China-Australia Free Trade Agreement but we want it to be one that maximises Australian jobs and minimises the risk of exploitation. We’ve said that all along.

We’re in a process right now where the so-called ChAFTA is being examined by two parliamentary committees and the enabling legislation hasn’t been presented to us yet, so we’re going through a process of examining the deal and we’ve said all along that we’re up for a deal – we’re up for a China-Australia Free Trade Agreement that maximises jobs and minimises exploitation.

AUSTIN: So you won’t make a decision until you see the legislation that you’re required to vote on in Parliament?

CHALMERS: That’s how it usually works, Steve. It gets presented to our party room as a piece of legislation that we’re asked to vote on. When that happens, after the completion of the two Parliamentary Committees that are examining the deal line-by-line, it will come to our party room and we’ll have a discussion about it then and announce a position. But we have said all along, whether it’s Bill Shorten or Penny Wong, or myself, we’ve said that we’re up for a deal, we’re up for a free trade agreement. We want it to be the best it can be, and that means dealing with some of these issues around labour market testing and skills assessment.

AUSTIN: Steve Ciobo said to me that the Japan, Korea and China Free Trade Agreements, the modelling shows they will bring about 8,000 jobs to Australia or for Australians. Are you challenging that at all? Do you accept that figure?

CHALMERS: Well one of the problems we’ve got, Steve, is the Government doesn’t routinely model each agreement for the costs and benefits of each agreement. At a Parliamentary Committee meeting recently, I asked officials from the Foreign Affairs and Trade Department why that was the case. They said it was very difficult to model. You were right to ask Steve Ciobo about the Productivity Commission view on these three trade agreements…

AUSTIN: They’ve never liked them though, have they, Jim Chalmers?

CHALMERS: No, they’re not big fans because they understand like we do that the best deals you can get are the multilateral ones that involve many countries at the World Trade Organisation level. The progress at that level has been pretty hard to come by in recent years, in recent decades, and so these free trade agreements have attempted to fill the void.

I’m someone who is generally pro-free trade –


CHALMERS: I think that these agreements are worthwhile. They’re not without their problems, you always have to make an on-balance decision about them. But I think that freer trade does create jobs and opportunities for Australians.

AUSTIN: Indeed, you would have been involved in negotiation, wouldn’t you under Kevin Rudd’s Prime Ministership when there were early negotiations about this?

CHALMERS: A lot of these agreements do have a long negotiation period that included our time in office, that’s true. So a lot of these issues are very familiar to us. But the ones that concern us greatly about the China deal that’s on the table now, are the ones where – the provision to test the local labour market before bringing foreign workers – those arrangements have been removed from the text of the China agreement. And that’s one of the things that does trouble us.

AUSTIN: I’m talking with Jim Chalmers. Jim Chalmers is the ALP member for Rankin here in Queensland. He’s the Shadow Parliamentary Secretary to the Leader of the Opposition and Shadow Parliamentary Secretary for Trade and Investment. This is 612 ABC Brisbane.

So you don’t accept or can’t provide a view on that apparent 8,000 jobs benefit from the Japan, Korea and China Free Trade Agreements?

CHALMERS: That modelling hasn’t been tested by the Government’s own modellers. Also you have to remember that modelling lumped in the three north Asia agreements together – South Korea, Japan and China – and it was done by an external body. I think that a real improvement to this process would be if there was routine – whether it’s Treasury or DFAT or another department – routine modelling of these agreements, so that when we’re discussing them, we can get to the bottom of what the ups and downs are of signing. I think that if there’s a demonstrable benefit in terms of jobs – Australian jobs – then we should be all for it. The problem we have with this one, of course, is that we think we can do more to maximise Australian jobs and minimise exploitation.

AUSTIN: Former Labor Prime Minister Bob Hawke has urged you to accept it, as has former Labor Cabinet Minister, Martin Ferguson – also urged you to accept it.

CHALMERS: Look, Bob’s a legend in our party as you know. He’s someone whose views carry genuine weight. I read the contribution that Bob made in the papers today and I think Bob makes a lot of sense, generally. He also said that we should look carefully at the labour market arrangements, that’s what we’re doing. That’s what people would expect of us. So his contribution was well-made as always.

AUSTIN: The ACTU advertisements go to those points – a number of points – labour market protections or provisions as one of them. Aren’t they virtually the same as the ones in place when Kevin Rudd was Prime Minister?

CHALMERS: No they’re not, Steve.

AUSTIN: How are they not?

CHALMERs: Well one of the things that troubled me about your conversation with Steve Ciobo a moment ago, and it’s the same with the Prime Minister and with Andrew Robb. They must either not understand what’s in their own agreement, or they mustn’t care what’s been removed.  So let me give you two specific examples from the text of the agreement, very quickly. In Chapter 10 of the FTA it says:

“Neither Party shall require labour market testing, economic needs testing or other procedures of similar effect.”

We put that to the Prime Minister and he said oh, but the Memorandum of Understanding. So we go to the Memorandum of Understanding and it says:

“There will be no requirement for labour market testing to enter in to an investment facilitation arrangement,”

which is these big project arrangements. So I do think that we need to get the facts on the table when we’re discussing this deal.

I personally think when we have the discussion at the party room level, I’ll be taking the view that we should be up for this agreement – this China-Australia Free Trade Agreement – but that we need to fix the things that this Government has traded away, which make it more likely that people will be exploited and less likely that we create the Australian jobs that the economy desperately needs right now.

AUSTIN: Now, we have signed agreements with Japan and Korea, why aren’t you concerned about those ones?

CHALMERS: Well we raised our concerns on the way through, particularly on the Korean one and we made an on-balance decision in both cases that we would support, on-balance, those agreements. It may be that we end up there in this case, we don’t know that as I described the process to you before. And in all cases when you’re looking at deals like that, you have to consider the upsides and downsides and come to an on-balance decision. What we’ve done and what others are doing in the community is highlighting our concerns with those specific parts which have the capacity to diminish Australian job opportunities.

AUSTIN: Look, I know you’ve been really under time pressures this morning, so I’m grateful you came on. Jim Chalmers, thanks for your time.

CHALMERS: Thanks Steve, catch you later.