Free Trade Example

Mr Losley Heckler
Head
Agreement Study Taskforce
Department of Trade
To email: junfer@gmail.com
Dear Mr Heckler
Please find attached the ACTU’s submission to the Joint Feasibility Study on the
Australia China Free Trade Agreement.
Yours sincerely
Sharan Burrow
PRESIDENT
ACTU Submission to DFAT Study Taskforce 1

30 June 2004
FREE TRADE AGREEMENT JOINT
FEASIBILITY STUDY
ACTU Submission
To DFAT Study Taskforce

30 June 2004
30 June 2004

30 June 2004
Introduction
The Australian Council of Trade Unions [ACTU] is Australia’s peak union

organisation. All major unions in Australia representing almost 2 million
working women and men are affiliated to the ACTU.
The ACTU is affiliated with several international union organisations and

represents Australian organised labour at the International Labour
Organisation [ILO]. Our position and submissions on issues relating to
international trade negotiations and agreements reflect our solidarity with
working people worldwide.
In general the ACTU believes multilateral arrangements are preferable to

bilateral arrangements. We reject the view that unilateral free trade is optimal.
Moreover, we do not support free trade agreements in the abstract or for their
own sake. Our support for trade agreements is rather directed to improving
the human condition; accordingly free trade agreements must provide for
trade to be fair for all parties involved.
Market Economy Status
Since the late eighties the Chinese economy has undergone significant
restructuring based on certain ‘market economy’ precepts.
This restructuring has not been accompanied by increased openness in

Chinese society.
Without social openness and respect for basic human rights, an essential
element of a free market economy is missing.
In short, China has had much economic perestroika but little social or political
glasnost.
Chinese working people have no effective right to organise.
The All China Federation of Trade Unions [ACFTU] is the sole union
federation in China. It is sanctioned by the government, and is officially and
legally subservient to the policies of the government and the communist party.
The ACFTU is not independent. Nor is it a true trade union. Independent

trade unions are outlawed, and any strikes are rapidly repressed.
While workers’ protections exist on paper local authorities rarely enforce

them. Freedom of association is a fiction, and repression of workers’ rights is
a systematic part of state policy [ref www.ICFTU.org ]
Imprisonment of unionists for ‘illegal demonstrations’ is well documented.

[Ref ICFTU Annual Survey of Violations of Trade Union Rights, 2003]

30 June 2004
China has never ratified ILO conventions 87 and 98, which provide for the
right to organise and bargain collectively.
The suppression of workers’ rights and failure by China to enforce its own
minimum labour code has been estimated by the AFL-CIO to have cut the
price of Chinese labour by between 47% and 86%. [Ref www.aflcio.org ]
A first-hand window on these issues is available from the experience of the

Maritime Union of Australia [MUA] and the Global Union Federation ITF to
which the MUA is affiliated. The MUA and ITF have some understanding of
dealing with the China through the Flag of Convenience [FOC] Shipping
campaign and highlight the following concerns which should be considered in
the context of a FTA feasibility study.
The international campaign against flag of convenience has focused on a

perceived threat of Chinese seafarers’ becoming the lowest paid group of
workers in the world prepared to sail on the world’s FOC fleet as well as the
large Chinese national line ships, COSCO.
There are tens of thousands of workers now trained and gradually replacing
workers from traditional labour countries, like Filipino seafarers, on the FOC
fleet. It is extremely difficult to communicate with these workers because their
employment conditions and rates of wages are considered national secrets
and to divulge this information to anyone including the ITF is regarded as an
act of treason. In many cases and on many routes COSCO still employ a
political commissar on board to protect the interests of the Chinese
government.
The ITF has evidence suggesting that Chinese seafarer ratings are paid less
than three dollars a day and a little more for officers. Even when the ship is
covered by an ITF agreement there is little that can be done by the ITF to
police the higher level of wages and even less to confirm that any of the
seafarers concerned really receive the correct (agreement) rate.
The ACTU considers it would be wholly inappropriate to accord China status

as a full market economy in such circumstances.
These reservations are magnified by several additional critical considerations.

The secretive nature of Chinese society and suppression of political dissent
makes it difficult to quantify the true extent of these considerations, but reports
are sufficiently authoritative and frequent to establish the existence of a
substantial and continuing violation of market economy precepts. [Refer
submission to this Inquiry by Chris Nyland and Anne O’Rourke.]
First, China’s ‘Laogai’ is an extensive prison system with estimates of the

number of inmates ranging from 10 to 20 million. The Laogai system
incorporates the view that state criminals must be stripped of their exploiter
ideology and taught to work like members of the proletariat. Accordingly
inmates are required to work during their incarceration with food rationed
according to personal output [The New Internationalist 2001].

30 June 2004
The Laogai are operated as businesses and seek to recoup most of their
costs in sales of goods. Prison output in contemporary China is substantially
consumer goods, and finds its way to export markets.
Second, child labour is common and widespread in the manufacture of

fireworks, textiles and toys.
Third, the country’s own occupational health and safety standards are not
enforced, resulting in appalling working conditions and atrocious records of
work related accidents and disease.
Fourth, failure by China to establish and/or enforce effective environmental

laws and standards delivers an unfair competitive advantage to Chinese
industry.
The ACTU considers it would be utterly retrograde and against Australia’s

national interest to proceed with a free trade agreement with China in the face
of these substantial concerns.
This is heightened by concerns related to the capacity of Australian

governments to pursue effective industry development policies under the
provisions of certain FTAs. By way of illustration an FTA should focus on the
inclusion of the maritime industry in Australia not only for the employment of
seagoing workers but also in the development of shipbuilding and associated
domestic industries.
The recent gas deal signed by Howard for $28Billion gave absolutely no
consideration to Australia to provide hardware or workers for the delivery of
essential gas supplies from the Australian fields. Our information is that this
requirement will double in 7 years.
The delivery of LNG from the W.A. North West gas fields is a clear example of
how the Australian unions and industries can be included with Australian
ships and crews being tasked with one third of the transport requirements with
an unblemished record of industrial cooperation.
Alternatives to a China-Australia FTA
The ACTU understands many Australian firms to hold grave misgivings about
investment in China, because of the absence of effective and transparent
enforcement mechanisms under the Chinese legal code. These misgivings
are most pronounced with administrative arrangements in the non-coastal
precincts of the country.
Such concerns can be, and have been addressed in other contexts, by means
of bi-lateral investment agreements explicitly incorporating specific and

30 June 2004
agreed disputes settlement procedures. A full FTA is not necessary for such
concerns to be met.
The Australia – China Trading Relationship
In October 2003 Australia and China signed a Trade and Economic

Framework agreement. Paragraph one of that agreement states:
``By means of all-round economic and trade co-operation, the

parties will co-operate to achieve balanced and comprehensive
trade and investment facilitation and liberalisation.''
(Source: Trade and Economic Framework between Australia and the People's
Republic of China accessed via DFAT web site).
Getting more balance within the Australia-China trading relationship would be

a most welcome development.
Table One below shows that the current trading relationship is almost solely
based on Australia exporting largely unprocessed commodities and importing
manufactures. Greater balance in the trading relationship would involve
substantial increases in Australia's exports of elaborately transformed
manufactures (ETM's) to China.

30 June 2004
30 June 2004

Free Trade Example

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Free Trade Example

Uploaded by

Copyright:

Available Formats

Mr Losley Heckler

ACTU Submission to DFAT Study Taskforce 1

To DFAT Study Taskforce

ACTU Submission to DFAT Study Taskforce 2

The Australian Council of Trade Unions [ACTU] is Australia’s peak union

The ACTU is affiliated with several international union organisations and

In general the ACTU believes multilateral arrangements are preferable to

Market Economy Status

This restructuring has not been accompanied by increased openness in

Chinese working people have no effective right to organise.

The ACFTU is not independent. Nor is it a true trade union. Independent

While workers’ protections exist on paper local authorities rarely enforce

Imprisonment of unionists for ‘illegal demonstrations’ is well documented.

ACTU Submission to DFAT Study Taskforce 3

A first-hand window on these issues is available from the experience of the

The international campaign against flag of convenience has focused on a

The ACTU considers it would be wholly inappropriate to accord China status

These reservations are magnified by several additional critical considerations.

First, China’s ‘Laogai’ is an extensive prison system with estimates of the

ACTU Submission to DFAT Study Taskforce 4

Second, child labour is common and widespread in the manufacture of

Fourth, failure by China to establish and/or enforce effective environmental

The ACTU considers it would be utterly retrograde and against Australia’s

This is heightened by concerns related to the capacity of Australian

Alternatives to a China-Australia FTA

ACTU Submission to DFAT Study Taskforce 5

The Australia – China Trading Relationship

In October 2003 Australia and China signed a Trade and Economic

``By means of all-round economic and trade co-operation, the

Getting more balance within the Australia-China trading relationship would be

ACTU Submission to DFAT Study Taskforce 6

You might also like