More ANU opposition to FTA’s

Lead­ing aca­d­e­mics at the Aus­tralian Nation­al Uni­ver­si­ty’s “Asia Pacif­ic School of Eco­nom­ics and Government”: seem to be grasp­ing at straws in their attempts to crit­i­cise Aus­tralian nego­ti­a­tion of free trade agree­ments. As some of the coun­try’s top trade econ­o­mists, they com­mand seri­ous atten­tion on this sub­ject. So far, how­ev­er, their pub­lic crit­i­cisms haven’t been backed by evi­dence of harm to Aus­tralian inter­ests from the cur­rent agree­ments (with New Zealand, Sin­ga­pore and prospec­tive­ly with the USA and Thai­land) or from glob­al FTA trends. I’ve pre­vi­ous­ly crit­i­cised Ross Gar­naut’s extra­or­di­nary claim[⇒ relat­ed sto­ry] that nego­ti­a­tion of the Aus­tralia-US FTA adverse­ly impact­ed Aus­trali­a’s recent trade per­for­mance (which Ross describes in lugubri­ous terms). Now his col­league Chris Find­lay takes up the cud­gels against work on an FTA nego­ti­a­tion with Chi­na. The joint Aus­tralia-Chi­na inves­ti­ga­tion of a pro­posed FTA is not going to address the issues of impor­tance to Aus­tralian exporters, Find­lay told “Radio Australia”: bq. “FTA’s are inevitably bureau­crat­ic process­es, they involve extra rules, they involve deci­sion mak­ing by bureau­cra­cies, they run the risk of intro­duc­ing more dis­cre­tion into deci­sion mak­ing,” he said. “I think that’s the last thing we want to see the Chi­nese doing, invest­ing more resources into a bureau­crat­ic process.” The sec­ond propo­si­tion is true as it applies to trade reg­u­la­tion. But the sweep­ing gen­er­al­iza­tion in the first propo­si­tion is not sup­port­ed by the evi­dence of the oth­er FTAs to which Aus­tralia is a par­ty. FTAs such as we have with New Zealand or Sin­ga­pore and we may soon have with Thai­land and the USA reduce bureau­crat­ic (and polit­i­cal) dis­cre­tion in bilat­er­al trade, replac­ing the dis­cre­tion with enforce­able rules and the ‘bound’ removal of bar­ri­ers that are the prod­ucts of dis­cre­tionary action. One of the most impor­tant rea­sons for exam­in­ing, over the next two years, whether there exists suf­fi­cient under­stand­ing between Chi­na and Aus­tralia to begin an FTA nego­ti­a­tion is to deter­mine whether the Chi­nese (in par­tic­u­lar) are will­ing to agree to allow the mar­ket to work in a ‘less fet­tered’ way with­out the lev­el of dis­cre­tionary inter­ven­tion both at the bor­der and in inter­nal com­mer­cial reg­u­la­tion that is allowed even by Chi­na’s mem­ber­ship of WTO.

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