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No breakthroughs on trade deal for Australia PM in China

By: | at 08:04 AM | International Trade  

Australian Prime Minister Tony Abbott said that he hoped a free trade agreement with China would be signed before November, offering little progress on a deal at the center of his visit to his country’s largest trade partner.

Abbott, whose week-long trip to North Asia includes stops in Japan and South Korea, has put trade atop his agenda. In Japan on Monday, he clinched a basic trade deal to cut import tariffs during a visit with Prime Minister Shinzo Abe.

There were no apparent breakthroughs in China, where Abbott met Premier Li Keqiang at a business conference on the south Chinese island of Hainan earlier in the week. Both sides agreed to speed up talks.

“I welcome Premier Li’s commitment to accelerate these talks and hope that they might be concluded by the time President Xi visits Australia in November,” Abbott said in a speech in China’s commercial capital Shanghai.

His calls to seal the trade deal before Xi’s planned visit are consistent with his pledges in October to settle terms within 12 months.

Abbott touted Australia’s role as a leading exporter of coal, iron ore, beef and natural gas.

“This means that Australia can offer China - and the other big economies of North Asia - the resource security, the energy security and the food security that they all seek,” he said.

Annual trade between Australia and China is worth around A$125 billion ($117.8 billion), and China’s thirst for minerals has fuelled more than 20 years of unbroken economic growth in Australia. Australian goods exports to China hit a record A$27.2 billion in the fourth quarter of last year, an increase of 45 percent on the same period in 2012.

But some criticize Abbott for setting a timeline for clinching the deal, arguing that it gives China leverage in the negotiations, which began in 2005 and are soon to enter their 20th round.

Since negotiations with China were launched, Australia has started and finished deals with both Japan and South Korea.

Talks had stalled over Beijing’s concerns over opening their markets to Australian food and there are fears in Australia that an influx of cheap Chinese goods could threaten domestic producers facing a strong local currency and high costs.

China has expressed worries over Australia’s stringent approval process on foreign investment by state-owned enterprises. Canberra, like many of China’s trading partners, wants Beijing to improve access to key industries in which foreign investment is currently restricted. (Reuters)