PM’s China free trade fantasy

What can the PM expect our shiny new international trade deal to get us when China ignores the free-trade deal we already have, asks Terry McCrann.

Prime Minister Scott Morrison.

Yesterday it was going to be the TPP that was going to shower billions of dollars on Australian exporters. Now tomorrow it’s going to be the RCEP.

The Trans-Pacific Partnership is dead – or at the very least, like Monty Python’s parrot, ‘just resting’. Long live the Regional Comprehensive Economic Partnership.

You have to admire the Prime Minister’s ability to keep a – relatively – straight face while spouting absolute crap, while also signing a cheque handing away $46m of taxpayer money.

But of course, we know it must be money very, very carefully spent. After all he was outraged – indeed “appalled and shocked” – by Australia Post’s former CEO Christine Holgate’s utterly reckless spending of all of $20,000 of precious taxpayer money.

On Sunday, the PM announced with great fanfare that it had signed the RCEP with 14 other “Indo-Pacific countries”.

“Australian farmers and businesses are set to benefit from better export opportunities,” the PM spouted. “This agreement covers the fastest growing region in the world … it will open up new doors for Australian farmers, businesses and investors.”

Trade Minister Simon Birmingham could hardly restrain himself: It would be the world’s largest free-trade agreement, he said. It “will further integrate Australian exporters into a booming part of the globe”.

The ‘deal’ is principally with the 10 ASEAN nations, but adds NZ, South Korea, Japan and, cough, cough, China. Is that the same China with which we already have a free-trade agreement – and which, despite that agreement, is playing hardball with our exports, successively from one to the next; first coal, then barley, wine, meat, lobsters, etc etc?

Yes, right, that China, which seems to interpret a ‘free-trade agreement’ as one that allows Australian shipments to be “free” to sit on wharves or in ships offshore China ports.

So what exactly is the RCEP going to give us, that all the other so-called ‘free-trade agreements’ haven’t already? We’ve had bilateral ‘free-trade’ deals with individual countries. We’ve had layers of multilateral deals; such as this one, the still-percolating TPP, APEC and the of course overall World Trade Organisation free-trade umbrella.

Apart, that is, from the most fundamental fact of all, out of all these deals and despite them? That, simply, the only goods and services we do end up selling into the markets of our so-called ‘free-trade partners’ are the ones they want to buy from us anyway. And, only for so long as they keep wanting to buy them from us: like coal.

Well, the answer is, of course, actually nothing remotely like “free trade”– more, “processes” for dealing with restrictions or, at best, “harmonising” them.

So there’ll be “a new single set of rules and procedures for accessing preferential tariffs in any of the 15 RCEP markets”.

Hmm: a “free-trade” agreement that allows – sorry, might allow – an Australian exporter to get a “preferential tariff’ in the buying country. The preferential tariff we’re supposed to be getting already. But will such “rules and procedures” get the goods off the wharf?

“Improved mechanisms for tackling non-tariff barriers including in areas such as customs procedures, quarantine and technical standards.”

Ah, that’s heartening. While the non-tariff barriers will stay, we’ll be getting “improved mechanisms” for “tackling them”.

Do those “improved mechanisms” guarantee to get the goods off the wharf?

“Greater investment certainty for businesses”. Gotta love that ‘greater certainty’.

“Rules on e-commerce to make it easier for businesses to trade online” and “a common set of rules on intellectual property”.

Rules, rules and yet more rules. Yup, that’ll work just dandy. Just look at the sparkling example of China and IP. They’ve always played straight down the line; you’ve never seen a cheap knock-off come out of the Middle Kingdom, have you?

Ah, but there is one certainty that’s come out of it: $46m of Australian taxpayer money – correction, another $46m of taxpayer money – is winging its way north. That’s to “provide technical assistance and capacity-building to help eligible ASEAN countries implement their RCEP commitments, ensuring RCEP delivers on its full potential”.

So we have to pay them to do something that is supposed to be mutually beneficial? And what’s the betting it stops at $46m. Five will get you ten that it will get them another $46m. At least.

Oh, PM and Minister, believe me. The $46m has well and truly already “ensured” the RCEP has delivered on its “full potential”. Milking dumb Aussies.

AND ANOTHER THING...

BLUNTLY, the rest of Australia can live with South Australia “locked down” in the way it couldn’t with Victoria.

SA is not much more than 5 per cent of the national economy; Victoria is one-quarter of it.

Victoria’s lockdown slashed two percentage points off national growth in the September quarter – cutting, in my assessment, the nation’s growth in half from what would have been around 4-5 per cent to something like 2-3 per cent.

We’ll find out when the official figures finally surface in early December.

Similarly, Victoria’s opening up is going to supercharge the national economy in the December quarter. Although it will still leave us going into 2021 a significant way behind where we were at the start of 2020.

SA will be, worst case, just a blip. Put another way, you could turn the lights off in SA and nobody would notice. Oh wait, they already did that – and, yes, nobody else noticed.

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Originally published as PM’s China free trade fantasy