| Australia’s gains at China’s expense signal new Free Trade Agreement landscape International trade experts and diplomats have been astonished at one-sided gains made by Australia in this week’s free trade deal with China, with some believing Australia is poised to ride on the coat tails of a new era in China opening to international trade. Experts point to unprecedented gains in access to China’s professional services markets, strengthening bullish claims by Trade Minister Andrew Robb in an exclusive interview with Fairfax Media. "I really feel it is transformational," said Mr Robb. "All of the negotiators know it’s by far the best thing China’s ever done." Mr Robb said the deal he signed on Monday reflected a "commitment from the president" to kick-start a new round of trade liberalisation and push China to become into a modern, services-based economy. "I felt that one of their major objectives was to send an unequivocal signal to the world, especially to the major countries in the developed world, that they were ready and able to enter a whole new phase of their development," said Mr Robb. Dan Rosen, a former White House adviser who worked on China’s historic accession to the World Trade Organisation 15 years ago, said President Xi Jinping’s administration was likely to see the Australia deal as a pilot for integrating trade policy with domestic reform. "The China-Australia FTA is a harbinger of China’s coming international economic policy directions," said Mr Rosen, co-founder of the consultancy Rhodium Group. Some analysts, however, say the one-sided deal shows Beijing’s efforts to draw Canberra into China’s geopolitical orbit. "Australia seems to have offered China far less access to its market than the other way round," said Guy de Jonquieres, previously a specialist trade reporter with the Financial Times and now research fellow at the European Centre for International Political Economy. China wanted to "bring a staunch US ally closer to China" and offsetting the US-led Trans Pacific Partnership, he said. Mr Robb’s approach reflected a conviction – not shared by all his colleagues – that Chinese leaders understand that they have no choice but to embrace the global markets, rules and institutions if they want China’s modernisation to succeed. In negotiations he encouraged China to see Australia as a safe partner for demonstrating commitments necessary to participate in the next big round of World Trade Organisation talks, which the United States has been resisting. "We’ve been trying to get them in to other negotiations, like [the Trade in Services Agreement], but the US has blocked it," said Mr Robb. Australian diplomats say the FTA trade talks went nowhere for eight years until immediately after Mr Xi became president and his administration took over in March last year. "We got the strong signals around May last year," said a source. "As soon as new regime was in place the Chinese were saying ’we can do a lot more’." Those progressive intentions were conveyed by China’s lead negotiators, at the Ministry of Commerce, but frequently obstructed by the "mercantilist" efforts of individual bureaucracies. "The top political level had got the message but individual agencies were running their nails down the chalk board, hanging on," said the source. "(Ministry of Commerce) had to fight a lot of battles on an agency-by-agency level, proving to those agencies they’re getting something in return." The second negotiating breakthrough came in May this year, when Mr Robb offered China the same services-sector access that Australia had given developed-world nations like Japan, Korea and the US. "I wanted to gain their trust that we were serious about doing something comprehensive, not mucking around with games," said Mr Robb. "I felt if ’we have the got the president [in support] and they do want a good deal so let’s not waste months going tit-for-tat." The final breakthrough came only in the final days, when China offered the agricultural concessions necessary to give the deal solid political backing in Australia. Mr Robb acknowledged that different views on how to get the best from China had led to a messy Cabinet split on when and how to join a Chinese-led Asia Infrastructure Investment Bank last month. "The Cabinet unanimously agreed on a set of governance provisions to meet world standards, it was put to the Chinese, and to be fair to them it was put late," said Mr Robb. "They fully incorporated four [conditions] and said haven’t got time to debate the other four or five with the other respective members," he said. He was "very confident" that China would meet Australia’s conditions within the next 12 months. Source URL |