Dr EMERSON (4:22 PM) —Labor’s trade policy priority is the multilateral forum of the Doha Round of trade negotiations. The reason we support the Doha Round is that it stands to provide the biggest gains for Australia and the largest stimulus to world economic growth. The government says that the World Trade Organisation is also its priority, but in truth it has concentrated on preferential trading arrangements that discriminate against other countries. Labor will support bilateral trade deals if they contribute to our multilateral liberalisation objectives, if they generate real market access and if they simplify, rather than make more complex, the trading rules that govern Australian and global trade.

When the joint study into a possible free trade agreement between Australia and China is released in March, it is expected that both governments will announce agreement to begin formal negotiations. Labor’s trade policy priority remains the WTO Doha Round, but we have strong political, economic and trade links with China. We were a key advocate of China’s accession to the World Trade Organisation, and China would hope for and expect bipartisan support for the negotiations towards a trade deal with China.

Unlike the US free trade agreement, a free trade agreement with China would not extend to sensitive social policy issues such as the Pharmaceutical Benefits Scheme and local media content rules. However, there will be sensitive issues in negotiating a free trade agreement with China. In particular, China’s demand that trade negotiations can only occur if Australia recognises China as a market economy has implications for Australia’s antidumping regime and for our manufacturing sector. Granting China market economy status will not necessarily undermine legitimate antidumping claims, but we need to be careful in this regard.

Australian industry would continue to be protected by our rights under the World Trade Organisation’s antidumping regime. Those rights include the right to utilise price information from a third country—this is called ‘surrogacy’—in circumstances where there is no reliable Chinese information to enable Customs to investigate a dumping complaint. The difficult part of the use of surrogacy is that China will claim—in many circumstances, correctly—that the use of a third country’s costs does not reflect the competitive advantage that China has gained in the production of those particular manufactured goods. That creates the difficulty of establishing the legitimacy of antidumping cases. Nevertheless, the government has already agreed that, as a precondition for negotiating a trade deal with China, it will grant China market economy status. We need to be careful about that, but, as I have indicated, it does not necessarily mean that legitimate antidumping claims would have no proper hearing, because the World Trade Organisation rules provide for legitimate antidumping action.

Any free trade agreement with China should be non-discriminatory. This is a very important point. Better access to Australian markets granted to China by the Australian government should also be extended to other countries. This is the most favoured nation principle and it is the bedrock of the world trading rules. Australia should not be seeking preferred access to Chinese markets—just an opportunity to compete. A nondiscriminatory trade deal with China could support the overall liberalisation of trade.

This Labor formula of nondiscrimination in trade negotiations contributed to the strongest export expansion in Australia’s history. But all of that came to a shuddering halt in 2000, and since then volumes have remained flat and Australia’s share of world exports has fallen to its lowest level since at least 1948.

A return to the principle of nondiscrimination in negotiating agreements such as the proposed Australia-China FTA would ensure that such deals contribute to rather than detract from the objective of global trade liberalisation. (Time expired)