Jul 31, 2015

Protectionist sentiments against national interest | The Australian

For a country that has prospered immensely from trade, capital inflow and migration, it defies belief that xenophobia continues to rear its head in our politics and political debates. You’ll find such ugly and wrongheaded sentiments aired in the bush, in outer suburbs, on the shopfloor and, most bizarrely, among the delegates of Labor’s national conference. Having concluded a historic free trade agreement with China, Australia is poised to reap tremendous benefits, not only economically but in cultural and social terms as well. Yet the economic vandals and workplace Visigoths of the Construction, Forestry, Mining and Energy Union want to keep out Chinese workers and are running a fraudulent advertising campaign to scuttle the trade deal. To preserve their cosy position on building sites, the CFMEU risks destroying a chance to boost our exports, reduce the cost of inputs, create jobs and improve the efficiency of our local producers.
The ALP conference has indulged the militant union’s dangerous, nativist tilt and given succour to other protectionist sentiments of the illiterate Left and Right. The resolution on the China FTA committed the party to “exploring every possible option” and pursuit of “all possible parliamentary processes” to ensure local workers were not disadvantaged under its terms. Bill Shorten has miscast the agreement as a “race to the bottom on wages and con­ditions” and under the weasel-word banner of “safeguards” wants to rewrite provisions on labour standards, skills testing and conditions. These are spurious arguments. Normal 457 visa conditions will apply, where Australian workers have first call on job vacancies. Chinese workers will have their skills accredited here. As always, wages and conditions on projects will be determined by our workplace laws.
Over its history, organised labour has fanned fears that temporary foreign workers will steal Australian jobs. As economics editor David Uren argued yesterday, foreign workers need to be housed, fed, clothed and entertained. They boost local retail sales and services. After the global financial crisis, the increase to demand from the influx of temporary workers to fill workforce gaps may have had a broader economic impact than Kevin Rudd’s extravagant stimulus program at its peak. In the spirit of reformist Labor leaders such as Gough Whitlam, Bob Hawke and Paul Keating, Mr Shorten and his treasurer-in-waiting Chris Bowen should denounce this self-defeating, forlorn push. That both men are encouraging this union-led hysteria tells you how weak their commitment to the free market is and who holds the real power within Labor ranks.
Logically, any tampering to the FTA will be economically costly; Trade Minister Andrew Robb argues delay could hurt our industries by as much as $300 million next year. Labor should heed the words of former leader and trade minister Simon Crean, who argues free trade is “a multiplier of economic growth”. Mr Crean urged Labor not to vote against the China FTA, but to work closely with the Abbott government. If Mr Shorten and Mr Bowen, both avowed economic pragmatists, are true champions of jobs and investment, they must stop this nonsense, enhance engagement with our largest trading partner and promote policies that reduce trade barriers. Such ominous tendencies on the Left do not bode well for the ambitious Trans-Pacific Partnership, currently being negotiated by Mr Robb in Hawaii. The vast TPP aims to cover a dozen nations, which account for 40 per cent of global GDP.
If anyone thought conservatives were immune to economic idiocy, there are protectionist holdouts within the Coalition. Tony Abbott is facing a Nationals revolt on the TPP. MPs from Queensland’s so-called “sugar seats” are opposed to the watershed deal because they fear the US will not open its market to sugar producers. More than a decade ago when we negotiated an FTA with the US, sugar was not liberalised. Our canegrowers were compensated at the time by the Howard government. Of course, Mr Robb will try to carve out better access for our local producers. But if he can’t succeed, where others have failed, Nationals MPs must yield to the national interest.
A Hansonite, nay Palmerite, strain has emerged on the Coalition side, fearful of foreigners buying agricultural land and residential property. The TPP has the potential to transform the region’s economies and to promote the cause of multilateral free trade, which has struggled for progress since the conclusion of the Uruguay Round of talks just over two decades ago. Although the Prime Minister was berating the Left’s troglodytes yesterday for xenophobic impulses on the China FTA, the same broad principles come into play on the TPP. When trade barriers come down, so do production costs. Productivity is able to flourish, capital can flow more easily, jobs are created and living standards rise. It is a virtuous circle.

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