Prime Minister Tony Abbott and Chinese President Xi Jinping during the ABAC dialogue in Bali, Indonesia. Photo: Alex EllinghausenPrime Minister Tony Abbott has set down an ambitious deadline of just 12 months to conclude deadlocked free trade talks with China, signalling Australia would sign up for “whatever we can get”.
Attending the annual 21-nation Asia-Pacific Economic Cooperation summit in Bali, Indonesia, Mr Abbott significantly stepped up the pace of Beijing-Canberra negotiations for a bilateral free trade agreement, even expressing the hope of using a high-level official visit to China within eight months to “consummate” an agreement.
“That might be a little too optimistic, but our intention is to move as quickly as we can. I have to say I would be disappointed if we can’t conclude a significant free trade agreement with China within 12 months,” he said.
In 2011, more than 70 per cent of Australia’s two-way trade took place with other APEC economies, with China leading the way followed by Japan, the United States and Korea.
But some trade officials regard the strategy of laying out such a short time-frame as tactically flawed.
“We have just sent the message to the Chinese that if they hold out, we’ll pretty much cave in in 12 months or else leave out the hard things we want from them like agriculture,” said one, on condition of anonymity.
Another former trade negotiator said the task was “not impossible” but the domestically thorny issues of lifting restrictions on Chinese so-called “state-owned enterprises” investing in Australia – and Beijing’s desire to allow more Chinese translators, cooks, and travel guides into the country to boost tourism – needed resolution.
Mr Abbott, who met with Chinese President Xi Jinping on Sunday evening in Bali on the side lines of the APEC summit, has accepted an invitation to visit Beijing next year, announcing plans to take business leaders and even state premiers along.
He said both leaders were eager to make progress on the FTA.
“Of course they can invest in Australia and we want them to invest in Australia. It is just they face Foreign Investment Review Board scrutiny from the first dollar rather than simply at the standard $240 million-odd threshold,” he said.
“The President made it clear to me how much foreign investment China hopes to make in coming years and I want Australia to get a fair share of that … it should be good for government revenues and it will certainly be good for prosperity back home in Australia.”
He said the job of the FIRB was to “scrutinise investment under certain circumstances but it’s light-touch scrutiny because we know that, in the medium and long run, foreign investment is important for Australia’s economic development”.
The current threshold triggering FIRB review kicks in on private foreign investments valued above $248 million, however the Chinese would like that dramatically increased – perhaps to mirror the US rules of $1 billion.
While in Bali, Mr Abbott will also attend a meeting of the so-called Trans-Pacific Partnership countries which has been spearheaded by the US President, Barack Obama.
The TPP talks are said to be progressing but with Mr Obama unable to attend, there are fears the talks on Tuesday will fail to materially progress the multi-lateral process.
Mr Abbott said the US was “ably represented by Secretary of State (John) Kerry”, dismissing any suggestion that the Obama no-show proved his Asia-Pacific “pivot” was just talk.
The original release of this article first appeared on the website of Shanghai Night Net.