The China Australia Free Trade Agreement (ChAFTA) will reduce local job opportunities and leave foreign workers at risk of exploitation, an international trade expert warns.
Under the agreement signed on June 17, Chinese companies will be able to bring in their own workers for any investment project worth more than $150 million without having to advertise jobs locally, under the Investment Facilitation Arrangement (IFA).
Patricia Ranald, from the Australian Fair Trade and Investment Network (AFTINET), told The Newsroom it would have inevitable impacts on the domestic job market.
“There won’t be local job opportunities that there would normally be in Australia,” said Dr Ranald.
“We don’t think that’s in the interests of most Australians.”
Industries included under the IFA provision are those related to infrastructure development within the: food and agribusiness, resources and energy, transport and telecommunications, power supply and generation, environment, and tourism.
“There would be reduced employment opportunities if there were projects of $150 million or more by Chinese investors in these industries,” Dr Ranald said.
Dr Ranald said another concern of the ChAFTA was that groups of foreign workers that came tied to a single employer could also be exposed to abuse, including people coming to Australia on working holiday visas and backpackers.
“If people are brought here by Chinese companies, they’re much less likely to be able to speak English or to be aware of what their rights are in Australia so that they would be more vulnerable to exploitation,” she said.
Dr Ranald explained that the only protections these workers would have was access to Australia’s safety net of minimum wages and conditions, the National Employment Standards (NES), but this could be below the market rate that was actually paid to Australian workers in the covered industries.
“If they complain, the company can just send them back – they haven’t got an option to go on to another job,” she said.
Dr Ranald believes more consideration should have been put in the specificities of the trade deal.
“I think this government is particularly obsessed with the idea that trade agreements are always beneficial, no matter what the terms. That is simply not true,” she said.
Greg Mikkelsen, founder of 3Mandarins, a business consultancy specialising in the Chinese market, disputed that, telling The Newsroom “the ChAFTA will only be a good thing for Australia’s economy”.
“The ChAFTA is certainly great news for Australian exports, especially agricultural and food products,” he said.
“The ChAFTA is also good for Australian services based companies as it provides them with greater access to the Chinese market.”
Mr Mikkelsen said he did not think the clause in the MOU would have a negative impact on the domestic labour market, especially in the professional context.
“These concessions will in most cases be used to bring in low-skilled workers to work on construction projects operated by Chinese companies … it will boost infrastructure development,” said Mr Mikkelsen.
“Whilst higher skilled Chinese workers may in some cases gain easier access to the Australian labour market, it is unlikely that their skills will be in high demand of Australian companies.
“This is already the trend and I can’t see how the ChAFTA provisions will adversely affect the professional labour market.”
China is Australia’s largest two-way trading partner, with trade value reaching nearly $160 billion in 2013-2014.
But union groups are not happy about the new trade pact, despite promising to increase the value of trade by US$18 billion over a decade.
In a statement, Michael O’Connor, National Secretary of the Construction, Forestry, Mining and Energy Union (CFMEU), describes the ChAFTA as a “badly negotiated deal”.
“Let’s be very clear – these ($150 million projects) are not big projects and there is absolutely no requirement for the company to look for local workers first,” Mr O’Connor said.
“A free trade deal where profits go overseas and local workers can’t get on projects is not a good deal.”
In a polling survey conducted by UMR Research in several electorates in NSW and QLD, 92 per cent of participants were against the ChAFTA after knowing about the IFA provision. Only 26 per cent opposed it prior to being told about the clause.
But a spokesperson for Trade Minister Andrew Robb said the poll had “zero-credibility”, claiming these labour provisions were no different to the free-trade agreements by the Labor Party.
“This is part of a most disingenuous scare campaign that is based on falsehoods,” the spokesman told the ABC.
“At all times Australian workers would have priority and skilled overseas workers could only be utilised if it could be demonstrated that local skills shortages exist.” – Alison Cheung
Top picture from AK Rockefeller’s Flickr photostream.