China, Australia resume stalled free trade talks

Linda Mottram, Canberra correspondent

Last Updated: Wed, 24 Feb 2010 18:42:00 +1100

Chinese and Australian officials have resumed free trade talks in Canberra that have been stalled for 12 months - mainly over agriculture and investment.

Trade minister Simon Crean says furthering trade ties through a formal free trade agreement is vital as Australia's team sat down for three days of talks with 30 officials from the Chinese side.

Mr Crean says an agreement must make investment a two-way street.

"China has interests in investing in Australia. We've seen that over the last couple of years," he said.

"We need a new framework that reflects that interest, but a framework that reflects the importance of investment as a two-way street because Australia, too, has significant interests in getting greater investment into the Chinese economy."

Considered to be a 'hurry up' message, Mr Crean has warned China that it might be disadvantaged if it does not beat other North Asian states such as Korea and Japan in concluding FTA negotiations.

"So for North Asia, the sphere where China operates, I think it is also an interesting dynamic as to the pace and the progress of our free trade agreements between Japan, Korea and China," he said.

"At the moment, Korea is leading that race, but we're happy to be in the position in which not only are all of these trading relationships important to us, we have some competitiveness in the race."

Agricultural access required

On the big sticking point of agriculture, Mr Crean has told the Chinese they can not offer less than they have offered others in trade agreements.

"We understand the sensitivities in China, but we keep pointing out that we have been able to negotiate those sensitivites with other developing countries, that we have made it absolutely clear and we still remain committed, that we are not going to settle for less than was extended on agriculture to New Zealand," he said.

Talks stalled mainly on the issue of agricultural access, but Mr Crean says ironically the delay has been of value.

"The hiatus in the talks has enabled all countries to reassess their circumstances coming out of the global financial crisis," he said.

"One of those reassessments has significantly taken place in China whereby they are seeking to move to a more consumer-driven economy, one that's less reliant simply on exporting to the world."

Mr Crean says China needs key Australian services to develop its consumer-driven economy, and that should be part of any agreement.

"For that to happen there has to be a development of, within the country, important industries and services that see the development of that consumer driven-economy - urban development, logistics, infrastructure, retailing, financial services - these are all important spaces in which Australia can play," he said.