Oct 1, 2015

Political fix planned for China trade deal impasse | afr.com

The political impasse over the China trade deal could soon be broken with Labor shifting its position to enable the protection of local jobs while leaving the deal untouched and allowing both the government and Beijing to save face.
Senior sources have told The Australian Financial Review that while Labor would still insist on legislated changes to the Migration Act to enforce labour market testing before workers were imported, there would be no specific mention of China or the China-Australia Free Trade Agreement (ChAFTA).
The safeguards would, in effect, apply generally to all FTAs, would be non-discriminatory and require no change whatsoever to the agreement itself.
At the same time, it would still assuage labour movement concerns over the China agreement, which has more generous provisions for imported workers on large projects than any comparable deal.

CONTROVERSIAL ISDS MECHANISM TO STAY

Controversially, Labor is also set to drop its separate demand that the agreement be stripped of the Investor-State Dispute Settlement (ISDS) mechanism which would enable a Chinese company legal recourse against a policy decision by an Australian or state government should it feel it contravened the FTA.
As sign of how much the government values the deal, the lead negotiator Jan Adams is set to become Australia's next ambassador to China.
"It's not difficult to do but it does create all sorts of complications," Mr Robb said.
"It creates a complication because we are going to do things to China that we haven't done to any other country.
"For us to bring in legislation targeted at China, that is going to be an almighty snub and will sour the goodwill."

NON-DISCRIMINATORY COMPROMISE

Sources said the non-discriminatory compromise has already been discussed informally with Mr Robb by opposition trade spokesperson Penny Wong, who has been seeking to broker a deal which would satisfy the union movement and many in her own party, while not scuttling an important deal.
Senator Wong has also discussed the proposal with senior business groups, including the Business Council of Australia, which is running an ad campaign backing the FTA.
China has threatened to walk away from the deal should it be altered in any way. On Tuesday night, China's ambassador to Australia Ma Zhaoxu told a business function in Melbourne that the FTA was a "hard-won and historic opportunity" which should "not be allowed to slip through our fingers".
Removing the ISDS provision would require a rewriting the actual terms of the agreement and Labor has accepted the deal, per se it cannot be renegotiated. Previously, Senator Wong has noted the FTA has an in-built two-year review and Labor would reserve the right to use the review to make changes if it won the election.

CAUCUS APPROVAL NEEDED

The compromise being discussed would still need to be approved by the Labor caucus. But with the Canning byelection out of the way and the combative Tony Abbott deposed, Labor is hopeful the government will accept the deal.
"It's consistent with the (FTA) and it's non-discriminatory," said a source.
"The reaction from (the Turnbull) government so far has not been negative, nor positive".
The government wants the legislation passed by the end of the year to enable the ChAFTA to take effect on January 1, as scheduled.
The legislation has already been introduced to the House of Representatives and the committee inquiring into the FTA, will hand down its report a week early, on October 12, the same day parliament resumes.
The government will rush the legislation through the House but because of Senate estimates, it cannot be debated in the Senate until November 9. There will be three sitting weeks to secure its passage before parliament rises for the summer.

LABOR NEEDED

The government need Labor. It lacks the support of the requisite number of Senate independents with opponents, such as Nick Xenophon, believing the deal is bad for local jobs and he does not like the ISDS.
Independent Senator John Madigan has called the deal "WorkChoices by stealth".
On Wednesday, Greens leader Richard di Natale told the National Press Club the Greens had serious concerns about the same issues and, while happy to talk to the government, would not pass the deal in its current form.
"If it's an agreement that says we are going to hand over sovereignty to big, multinational corporations that allow us through investor state provisions to sue our governments for implementing public health regulation, environmental regulation, of course we are not going to go near it," he said.
"If it's an agreement that waters down Labor standards or indeed that makes it easier for cheap foreign labour to come here at the expense of Australian workers, huge concerns about that."

SUPPORT FOR FTA

Labor's foreign affairs spokeswoman Tanya Plibersek said Labor clearly supported the FTA and was only asking the government for "assurances in our domestic legislation that would make clear that what the government is promising is actually true".
"We want assurances from the government that there will be labour market testing so jobs will be offered to Australians where Australians can do those jobs. We want assurances that the skills level and the pay of people who are coming in from China to do work won't undercut the skills or pay of Australian workers," she said.
"The government says that that is no problem. In fact Andrew Robb has said it will be no problem legislating to give those commitments. If that is the case, I don't know why we are still having this debate."

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