The Abbott government is accelerating negotiations in an effort to tie up a free trade deal with Beijing within the fortnight, but Labor is warning it will not offer bipartisan support for a pact that “sells out” Australian workers.
The opposition leader, Bill Shorten, said on Friday Labor would only support an FTA with China if it was a “good deal”.
The opposition spokeswoman for trade, Penny Wong, signalled Labor would only endorse the pact if it retained labour market testing requirements for temporary migration.
“Labor will assess the whole deal to determine whether the FTA with China agreed by the Abbott government is in the national interest,” Wong told Guardian Australia on Friday.
“Among other matters we will closely examine labour provisions to ensure Australian workers aren’t sold out. On 14 October Mr Abbott committed to retain labour market testing requirements for temporary migration. Labor will hold the prime minister to that commitment in the context of the China FTA.”
There is acute sensitivity in the trade union movement and in large sections of the Labor caucus about the potential for the new trade agreement to allow mining magnates and other large businesses to import workers from China on lower wages and conditions for big infrastructure developments.
Within Labor, the China FTA is shaping up as the most contentious internal debate since the US free trade deal negotiated by John Howard in 2004.
Labor divided on factional lines on the US agreement but the opposition – then led by Mark Latham – went on to support the agreement with Washington when the Howard government made concessions safeguarding local content rules for television production, and on the treatment of generic drugs.
Labor recently gave bipartisan support to the trade pact the Abbott government struck with South Korea, but there was first vigorous debate in the caucus. One Labor MP, Melissa Parke, spoke out publicly against the “negative ramifications” of the Korean deal.
The lively internal debate prompted Shorten and Wong to highlight publicly issues of concern regarding the Korean pact – including investor-state dispute settlement (ISDS) provisions, temporary migration and copyright issues.
The internal restiveness, concerns from some analysts about the quality of an FTA struck with Japan following the Korea deal, and a lack of clarity about the Coalition’s intentions in the negotiations, have prompted Wong to set out seven preconditions for bipartisanship over the China deal.
Labor’s conditions include better market access for Australian farmers than New Zealand secured in its FTA with Beijing; tariff reduction on industrial goods; safeguards to prevent predatory pricing through “dumping” of goods; no ISDS clauses and retention of labour market testing or “comparable safeguards” on temporary migration.
The specific flashpoints in caucus are temporary migration and people movement, dumping of cheap Chinese goods and ISDS clauses.
The trade minister, Andrew Robb, is currently in Beijing for talks on the trade agreement and for the Apec meeting this weekend.
After a morning of FTA negotiations, Robb told reporters that “substantial progress” had been made. “There are still a couple of issues we need to further negotiate. There are only two, but I’m not going to get into those because it is quite unproductive to have a negotiation in public,” he said.
Robb and trade officials are trying to clear remaining hurdles in time for one-on-one talks between Tony Abbott and the Chinese leadership, both at Apec and at next week’s G20 forum in Brisbane.
The Chinese president, Xi Jinping, is due to address parliament in Canberra in a special sitting on 17 November.
The closing stretch of the trade talks has prompted last-minute jockeying by various domestic interest groups.
The mining industry has signalled it wants an end not only to tariffs on coal, but tariffs on a range of Australian commodities bound for the Chinese market.
There is concern that some agricultural exports, such as sugar and dairy, will be left outside the agreement, or will be treated less favourably than products from New Zealand.
Many Australian farm groups were furious that the free trade deal Abbott reached with Japan in April failed to deliver significant liberalisation for local food producers. Some Coalition MPs broke ranks to complain the agreement was of low quality, delivering next to nothing for key constituencies.
The Ai Group, which represents manufacturers, also sounded a warning on Friday about the economic implications of the pact.
The Ai Group chief executive, Innes Willox, told the ABC a free trade agreement with China “would certainly benefit a lot of the economy but some parts of the economy would be hard hit potentially”.
He said the trade agreement would likely allow “unfettered access of Chinese manufactured goods into Australia and when Australia is already a high-cost economy”.
“It would add to the impacts of a whole lot of other events that are occurring around this time – the looming closure of the automotive sector is perhaps the most obvious one,” Willox said. “So there are a lot of pressure points on the Australian economy at the moment and the China FTA would be another one.”
