Australia leads the way to Globalisation with triple FTA with Asia’s big three
On Wednesday, Japan’s Farm Minister Yoshimasa Hayashi and Australia’s Trade and Investment Minister Andrew Robb failed to reach a consensus on tariff elimination. However, they confirmed negotiations would still be underway to obtain a win-win agreement after 7 years.
Specifically, Australia wants Japan to cut the current beef tariffs to 19% while Japan is only willing to go for around 30%. On the other hand, the Asian country wants Australia to slash its 5% auto tariff straight away.
If the deal goes through, Australia will become the first major farm exporting country to finalise a FTA with Japan, who has been the biggest importer of Australia’s beef.
The Australian beef industry is also awaiting the outcome of talks with Korea over the Korea-Australia free trade agreement (KAFTA), which is under ratification.
On Thursday, the upper house referred KAFTA to a Senate inquiry to get “the best deal Australia can get” for its producers. The country’s beef sector hopes the deal is ratified soon as the US – Australia’s major competitor in Korea’s beef market – has made faster progress regarding tariff slashing.
“There is a unique situation with Australia for both Japan and Korea, as there should be no competition in various sectors between Australia and Japan/Korea. If FTAs go through, we can expect to see synergies created from many supply networks, which will create value for everyone,” said Vivek Sood – CEO of Global Supply Chain Group.
Meanwhile, businesses are calling on Prime Minister Tony Abbott to finalise a FTA with China during his visit to country next month.
“It’s hard to overstate the importance and the strength of Australia’s relationship with China. China is now, by far, our largest trading partner. In some years, it’s our largest source of immigrants. And in most years, it’s our largest source of foreign tourists and students”, Mr Abbott said during an Asia Society Luncheon in Canberra.
The Department of Foreign Affairs and Trade says China’s trade with Australia reached $125 billion in 2012, with great opportunities for the beef and dairy industries.
However, critics point out China’s poor records in labour rights and environmental standards, which means compromising Australia’s standards for a FTA may be unethical.
Despite making no reference to China’s labour and environmental records, New Zealand signed an agreement with China back in 2008 and has greatly improved dairy and meat’s access to the Chinese market.
“In a globalized world, the quicker we can eliminate trade barriers and roadblocks, faster we can integrate Australian companies into the global 5-STAR Business Networks that run modern economies” said Vivek Sood, author of the book “The 5-STAR Business Network“. “Globalisation has been blamed by both the extreme right and extreme left for a host of economic ills facing various nations. Having seen the effects of globalisation at close quarters in more than 100 countries, I cannot disagree more. In my view the results attributed to globalisation are more attributable to other factors such as human malfeasance, institutionalized corruption even in the highest places, laziness, a sense of entitlement to riches without working for them and herd mentality leading to action without thinking and many such factors – all a small part of basic human nature.”