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China-Australia free trade agreement finally gets green light

China-Australia free trade agreement finally gets green light article image

The China-Australia free trade agreement will come into force before the end of the year after a compromise deal was struck between the Federal Government and Opposition.

Trade Minister Andrew Robb said Opposition support would ensure that implementing legislation for the landmark China-Australia Free Trade Agreement (ChAFTA) would pass through both houses of Parliament.

This would create enormous opportunities for Australia in the years and decades ahead, he said.

The deal reached with the Opposition would not in any way change or contravene the binding commitments made to China through the concluded FTA negotiations.

“Nor will they in any way discriminate against our biggest trading partner,” Mr Robb said.

Prime Minister Malcolm Turnbull said ChAFTA is "absolutely critical for Australian jobs in the future".

Australia's opportunities in the Chinese market are "limited only by our imagination and enterprise", he said.

Labor recently unveiled three specific amendments to the trade deal it would seek in order to agree to the deal.

Stricter licensing conditions

Those changes would have seen a revision to rules that meant there would not have been mandatory labour market testing applied to investor facilitation agreements (IFAs) for projects over $150 million, lifting the base pay threshold for 457 visa workers from $53,000 to about $57,000 and stricter licensing conditions for tradesmen and women looking to come to Australia.

Minister Robb and Shadow Trade Minister Penny Wong negotiated the compromise which was rubber stamped by Cabinet and the Labor caucus.China FTA finally gets green light5

Labor believes all three of its concerns have now been addressed and the changes will be put in place by making changes to migration regulations but not, as originally proposed, through changes to the act. The changes still have the force of law.

Under the deal, labour market testing will apply to people who enter Australia on work agreements, including workers brought in on 457 visas under the China-Australia deal as part of an IFA.

Secondly, 457 visa market salary requirements will be strengthened to reflect wage rates paid under enterprise agreements, a move that means 457 visa workers will be more expensive to hire as pay rates on enterprise agreements are typically higher than the minimum award rate.

Safeguards for Australian jobs

And thirdly, there will be new visa conditions for people on 457 visas in licensed trade occupations such as electricians and plumbers.

If passed by the Senate in 2015, two tariff cuts are in prospect before the end of the year and then immediately after on January 1.

Senator Wong described the deal as a "comprehensive package of safeguards for Australian jobs".

"What we've got is policy being turned into legal obligation. So I think that is a substantial strengthening of the safeguards."

The new conditions will require that 457 workers in those occupations cannot work until they get a trades licence, and they will have to get that licence within 90 days of arriving in Australia and report to the Immigration Department if their licence application is refused.

‘Sensible outcome’

Mr Robb said the agreement reached with the Opposition represented a “sensible outcome” which would allow the free trade agreement with China to come into force as soon as possible so that the substantial benefits can begin to flow.

The Australia China Business Council (ACBC) National President John Brumby welcomed the outcome.

“This is very good news for Australia. Mr Brumby said. “Both the Government and Opposition are to be congratulated for working cooperatively in the national interest to achieve this outcome.”

However, the union movement still has reservations.

AMWU national secretary Paul Bastian said while the strengthened safeguards were "a step in the right direction” the government and Labor should not think the political settlement is enough.

“Our campaign will continue until Australian workers can be confident that (the China free trade deal) and trade agreements generally deliver for their interests," he said.

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