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Back Issues
| Constructive discussions on complex issues | | Print | |
| Nov/Dec 2008 | |||
 Australia's chief FTA negotiator, Ric Wells, says more work lies ahead.The 12th round of Australia-China free trade agreement negotiations marked the start of more intensive discussions about early outcomes in the services sector and the willingness of each side to reduce tariffs in sensitive areas. Held in Canberra from September 22 to 26, the talks involved more than 150 officials from both sides, dealing with a number of complex issues that will require considerable follow-up work in the coming months. As you know, both China and Australia have agreed to work to achieve some early outcomes in areas of particular interest as a confidence-building measure. Australia has requested early outcomes in the areas of financial services and education, while China's requests focus on investment issues and quarantine market access. Work continued in all of these areas during the 12th round. Australia put forward a number of commercially focused requests in education and financial services. Discussion was positive, and China indicated a willingness to consider some of these, but a considerable amount of work still needs to be done. On China's early outcomes requests, Australia noted that it could not negotiate quarantine standards in a trade agreement. On tariffs, Australia asked China to explain why it characterised a range of agricultural products as ‘sensitive', when these same products had been liberalised in China's other free trade agreements, including its FTA with New Zealand. Also in relation to agriculture, the results of the joint wool study were discussed. It found that demand for Australian wool in China would continue to grow and imports would not substantially compete directly with Chinese wool. China expressed some reservations about the reliability of markets for its textiles and, as a result, increased future demand for Australian wool. We will continue to seek better market access through the FTA but progress may be affected by China's concerns. Australia encouraged China to indicate flexibility on sensitive products, and both sides have agreed to continue talks on agricultural market access at the next round. Some of Australia's sensitive products were also discussed during this round. Australian negotiators explained the policy and commercial rationale for sensitivity about further tariff liberalisation of certain manufactured goods under an FTA with China. We said Australia would only make commitments on these products in the context of an FTA that provided sufficient commercial gains for Australia, and China's current offer falls well short of this mark. On other issues, the discussion of non-tariff measures (NTMs) was difficult because China opposes using the FTA to address any of the NTMs we have raised. More progress was made on the proposed chapter on trade in goods and much of the chapter has been agreed. However, there are some significant differences on the incorporation in the FTA of WTO-plus commitments on issues such as import licensing. We agreed to hold additional meetings with China between negotiating rounds on productspecific rules of origin, because of the intensive nature of this aspect of the negotiations. And, we exchanged views with China on the rules of origin text. On a positive note, we have almost reached agreement on commitments regarding customs procedures, and are aiming for this part of the FTA to be substantially completed at the next negotiating round. We should also be close to finalising the chapters on sanitary and phytosanitary issues and technical barriers to trade by early next year. Electronic commerce talks will continue at the next round. We have had a full exchange on all of the provisions of this text, and will look to overcoming our remaining differences. As I have previously noted, government procurement is a very difficult part of these FTA negotiations. China does not want to negotiate market access commitments with Australia until after it has joined the World Trade Organization Government Procurement Agreement. On services, Australia raised commercially focused issues in the telecommunications and legal sectors, while China expressed interest in traditional Chinese medicine and gaining greater access to Australia's temporary entry provisions. Australia pursued a prioritised list of issues relating to mining services and investment. China continued to express its interest in how the FTA might address Australia's foreign investment screening regime, and access for Chinese mining investors to railway and port infrastructure. Australia clarified the openness and non-discriminatory nature of the investment screening and infrastructure access regimes. You may recall that at the 11th round of negotiations in June, we reinvigorated talks on the intellectual property chapter of the FTA. At these latest negotiations, we held two days of detailed and constructive discussions on the draft text of the chapter, which includes proposals from both China and Australia. While many important issues are yet to be resolved, there was some give and take on both sides, and the number of differences was again reduced. In general, negotiations were positive although hard. The unfreezing of the negotiations earlier this year by the Prime Minister and Trade Minister Crean continues to show benefits in terms of the willingness of both sides to discuss constructively the many difficult issues that will have to be solved. The 13th round of negotiations is scheduled to be held in Beijing in December. ■ For more information, contact the China FTA Taskforce: E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it F: +61 2 6112 2468
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