What is in the China Australia Free Trade Agreement?

August 28, 2015
Chinese Minister of Commerce Gao Hucheng, Prime Minister Tony Abbott and Minister for Trade and Investment Andrew Robb after the

The China Australia Free Trade Agreement (ChAFTA) is a major deal, but there is little public understanding of its content. Much of the coverage of ChAFTA in the corporate media has focused on its benefits for business and its impact on Australia. But ChAFTA has far reaching consequences for working people in both countries.

The Chinese and Australian governments signed off on ChAFTA on June 17. But before it can come into effect, both the Australian and Chinese governments need to pass enabling legislation.

Tony Abbott’s government should be condemned for signing ChAFTA; and even though Labor politicians have recently come out against the agreement, the ALP should also be criticised. ChAFTA negotiations have been going on for 10 years. That means negotiations began under the John Howard government, but continued under Kevin Rudd.

The public has a right to know what role both major parties have played in the negotiations.

Australian unions have been protesting against ChAFTA because of its impact on Australian jobs. ChAFTA removes many of the barriers to Chinese corporations doing business in Australia and allows them to bring in a Chinese workforce without even advertising the jobs to Australians.

Right-wing commentators have smeared the union campaign against ChAFTA as racist, because of its emphasis on “Aussie jobs”. But if workers lose jobs in any part of the world, including Australia, it is right that unions take a stand.

Australian unions have rightly pointed out that ChAFTA impacts on Chinese workers too. The Chinese workers that ChAFTA brings in will be vulnerable to exploitation, which threatens to undermine pay and conditions for all workers in Australia.

ChAFTA allows Chinese corporations to sue the Australian government if new legislation impacts on their profits. This could have devastating consequences for agriculture and the environment. It means that Chinese mining companies can sue the Australian government for passing stronger legislation to protect the environment. This is bad for farmers and environmentalists across the country fighting the coal and gas industries.

But it is important to recognise that ChAFTA works both ways. It also allows Australian corporations to sue the Chinese government for passing new legislation that impacts on their profits. China already has very serious environmental problems. China urgently needs to enact stronger environmental legislation and Australian businesses should not have the right to prevent this.

ChAFTA allows Australian corporations to set up aged care centres and hospitals for profit in China. Aged care and health care should be in public hands. The privatisation of important social services has severe consequences for the old and the sick. If making a buck takes priority over caring for human beings, the quality of care is bound to suffer.

It is important to understand ChAFTA’s context. ChAFTA is part of a wider free trade push that has been going on for several decades and is now getting more intense. It is called neoliberalism. Australia is also involved in negotiations for the Trans-Pacific Partnership (TPP) and the biggest trade deal in history, the Trade in Services Agreement (TISA). These two agreements have many of the same problems as ChAFTA, but they have even more far-reaching consequences because they cover much more of the world. It is good that the Australian union movement is fighting ChAFTA, but we need to fight these global agreements too.

The precedent that ChAFTA sets is even more alarming than the agreement itself. What if, following ChAFTA, the Chinese government enters into more free trade agreements with other countries?

China has been excluded from the TPP and TISA. The big capitalist powers of the world, particularly the US, do not want Chinese capitalism to get any more of a foothold on the world stage. But ChAFTA signals the aspirations of the Chinese government to play a leading role in the free trade push.

The more free trade agreements China enters into, the more working people all over the world will suffer. ChAFTA could be a stepping stone to the mammoth "Free Trade Area of the Asia-Pacific", a gargantuan free trade agreement that China has been pushing to rival the TPP.

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