Kevin Rudd

Sino-Australian trade deal fades quietly away

PUBLISHED : Wednesday, 12 March, 2008, 12:00am
UPDATED : Wednesday, 12 March, 2008, 12:00am

On April 9, Australian Prime Minister Kevin Rudd is due to touch down in Beijing for his first official visit since being elected. According to an announcement by his office last week, Mr Rudd wants to use his three days there to meet 'senior leaders, including President Hu Jintao and Premier Wen Jiabao , and the new generation of leadership emerging from the 17th Party Congress'.

Mr Rudd expects to discuss 'areas for greater bilateral co-operation, including in climate change and trade in services' and 'will be working closely ... with representatives of the Australian business community seeking to expand their trade and investment opportunities in China - Australia's largest trading partner'.

Hang on, though: isn't there something missing on Mr Rudd's list? Three years ago, his predecessor, John Howard, also on a visit to China, toasted a deal with Mr Hu to begin discussions on a free-trade agreement. It was a 'historic' decision said Mr Howard, because it was the first time China had entered free-trade talks with a developed-world country.

Chinese and Australian officials have met 10 times since April 2005 to thrash out details. The benefits to Australia would be more than A$24 billion (HK$173 billion) over a decade, was Mr Howard's mantra.

So, if it is such a big deal, why isn't Mr Rudd highlighting it as one of the key topics on his agenda? Is the deal dead? It's hard to know, but the trade minister, Simon Crean, who is responsible for driving the deal to completion, is not too optimistic. On February 28, he said: 'Is China serious about an FTA? I don't know ... I think we have to test the political will as to how serious they are to make our decision about how to proceed next.'

Mr Crean is no doubt reflecting what his officials, who have spent thousands of hours sitting across the negotiating table from their Chinese counterparts, are telling him. After the last round of talks, in Canberra in October, the Australians described overall progress as 'slow'.

According to Mr Crean, the Howard government was a weak negotiator. 'It's been pretty obvious that China's been a hard negotiator, but they got what they wanted: they got the recognition of market economy status. What's been the incentive for them to sit down and talk?' he said. ' I think this was the fundamental flaw with the previous government's approach; it was prepared to concede that without getting anything really in return.'

It almost sounds as though the new government would be happy to see the talks collapse. That might well be the case, given that Mr Rudd's most influential adviser, Ross Garnaut, a former ambassador to China, is the leading critic of bilateral trade deals. They are simply 'Trojan horses for protectionism', Professor Garnaut has famously said. So far, it appears that Mr Rudd and Mr Crean are listening attentively to Professor Garnaut. The prospects of Australia cutting a free-trade deal with its biggest trading partner are looking decidedly sickly.

Greg Barns is a political commentator in Australia and a former Australian government adviser




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