Export
Issue No. 17 - June/July 2004
We’re selling to the converted
Export to China
China has been eager to create a stronger trade relationship with Australia. In the wake of the controversial US–Australia free trade agreement, Austrade chief economist Tim Harcourt analysed the implications of our concurrent trade framework agreement with the People’s Republic.
President Hu’s done it. The announcement of an economic framework agreement between Australia and China is the big story this week. It gives Australia a great opportunity to forge our economic links closer with the world’s most populous nation and puts us at the head of the race for global trade agreements. It follows on from good news for Australian exporters about agreements with Thailand and the USA earlier in the week.
The announcement has indeed taken some by surprise. Many commentators thought that Australia’s free trade negotiations with the USA would crowd out other nations – including China. For instance, earlier this year, I chaired an Australian Business Economists (ABE) debate in Sydney between Professor Ross Garnaut and Alan Oxley on the question of US FTA. Garnaut thought the FTA would hurt our relations with Asia, and China in particular, whilst Oxley thought it would not. Garnaut argued that a trade deal with the USA would send the wrong signals and cause China to source its imports from an ASEAN nation such as Thailand rather than Australia (using Thai sugar as an example). A surprising gulf occurred between the two, especially when both individuals are former Australian ambassadors and well-known commentators on trade policy.
After hearing all this, I travelled to China myself. I met with Australian companies – many of them small and medium sized enterprises in the amazing, dynamic, vibrant global city of Shanghai. This was followed by interviews with Chinese officials and economists in the very imposing capital of Beijing. In light of the Garnaut-Oxley encounter, I asked about the US FTA and its likely effect on Asia. The unanimous opini...
