OPINION: WATCHING the debate in recent weeks around the China-Australia Free Trade Agreement (ChAFTA) has reminded me once again how important FTAs are but how difficult they are to negotiate and conclude.
Take the Australia-United States FTA (AUSFTA) for example. Compared with ChAFTA, AUSFTA was a quick negotiation, starting in early 2003, the agreement coming into effect on January 1, 2005. ChAFTA, on the other hand, has taken 10 years to conclude, with many stops and starts along the way. But don't be fooled by the comparison.
While AUSFTA negotiations were short, they were at times bumpy and on occasion threatened to go off the rails. In that sense, they were no different from any other FTA negotiation. Why do I know this? Because as treasurer and minister for State and regional development in the Bracks Labor government, I was responsible for the Victorian government's input and support for the AUSFTA negotiations.
As minister, I saw firsthand how the treatment of blood plasma fractionation and the exclusion of sugar from the agreement, for example, could have derailed the negotiations. I also saw the give and take required to move beyond these issues and to not let them detract from the bigger picture and overall gains to be won from the agreement.
These lessons are timely in the context of ChAFTA's ratification. So it is important to look at the big picture. ChAFTA is a high-quality agreement that will deepen Australia's relationship with our biggest trading partner and which provides Australian companies with a real competitive edge in the China market.
And the China market matters. China is now, by almost every measure, the world's largest economy. In terms of foreign direct investment, its outbound investment this year will exceed inbound investment for the first time in China's history. It is our largest source of overseas students, our largest source of tourists and currently the second-largest global investor in research and development. Last year, for example, the CSIRO signed more scientific agreements with China than with any other country.
With a growing economy, a large middle class and an ageing population, the economic opportunities for Australia in agribusiness, e-commerce and health services are huge. All of these things mean new jobs and investment in Australia.
It is therefore vital that the Australian Parliament pass the legislation required as part of the ratification process. To unpick the ChAFTA package, which is a fine balance of interests, would in all likelihood kill the agreement and the gains for the Australian economy.
John Brumby is a former premier of Victoria and national president of the Australia China Business Council.