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China Free Trade deal: three issues

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by Bill F.

The China-Australia Free Trade Agreement has been hailed as a great benefit to Australian exporters, but there are at least three issues that will cause dismay and concern to progressive supporters of friendship between the Australian and Chinese people.

Of greatest concern is the inclusion of an Investor State Dispute Settlement clause (ISDS) in the agreement. This mechanism allows a foreign company to sue the Australian government if changes to Australian law harm their investments here.

For example, a future government might pass legislation restricting genetically modified foods or banning coal seam gas exploration and mining on agricultural land, or change visa conditions for 457 workers. The ISDS clause couldn’t prevent these changes to Australian law, but it could be used to sue the government for loss of profits.

The other effect of ISDS clauses is that they may inhibit a future government from adopting decent policies on social issues such as health and education to improve the living standards of the people, because this may cut across the profits of the foreign corporate investors in these areas.

ISDS clauses undermine the national sovereignty of countries. Governments that accept them betray the interests of their people.

US corporations have a history in using similar clauses to sue governments, such as the recent action by Phillip Morris over Australia’s tobacco plain packaging laws. Will China go down the same road?

Dr Kyla Tienhaara, from the Regulatory Institutions Network at the Australian National University said that “Corporations can challenge pretty much anything under these agreements” and noted that Australia would now have to include an ISDS clause retrospectively in the Japan-Australia free trade deal, as this was a condition required by Japan if an ISDS was in the deal with China.

In spite of Prime Minister Tony Abbott and Trade Minister Andrew saying that there are “… strong safeguards to protect the Australian Government's ability to regulate in the public interest and pursue legitimate welfare objectives in areas such as health, safety and the environment”, the text of the agreement is being kept secret, just like the Trans Pacific Partnership (TPP) trade deal being negotiated (pushed) by US imperialism.

Trans Pacific Partnership
A second concern is the knock-on effect this deal with China will have on the TPP negotiations.

For starters, it has killed off any faint chance of keeping out an ISDS clause.

There will now be extra pressure to conclude the TPP deal, as Australia now has ‘free trade’ deals with South Korea, Japan and China, plus the Australia-US Free Trade Agreement. (US FTA)

The US FTA didn’t deliver everything US imperialism demanded, so the TPP is another opportunity for the US corporate monopolies to further penetrate the Australian economy and tighten their grip over our nation.

China’s “market socialism”
 As for China, the deal allows Australian private healthcare providers and health insurance funds to operate in the country, further undermining the extensive public health system built up by socialism. Even this public system is no longer free, as “market socialism” has taken over.

Similarly, Australian private education and training companies are also welcome, undermining the public education system established by socialism.

The parasites are coming, and just like us, the Chinese people will end up with two-tier health and education systems – one for the rich and well-off and one for the poor.

There are also concessions to financial institutions and taxation lawyers to help the Chinese “market socialists” minimise their taxes both here and in China, leaving more for speculation around the globe.

What a sorry thing is “socialism with Chinese characteristics”.


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