What China wants in a ‘free trade’ agreement

The Syd­ney “conference(conference program—pdf file about 200k)”:http://www.apec.org.au/ChinaFTAProgram.pdf on the pro­posed Free Trade Agree­ment with Chi­na heard a keynote speech tonight from the for­mer nego­tia­tor of Chi­na’s acces­sion to the WTO, Long Yong­tu, in which he set out, for the first time, some of Chi­na’s ideas on the con­tent of the pro­posed ‘free trade’ agree­ment. Long, who is now Sec­re­tary Gen­er­al of the Baoa Foundation—the ‘Asian Davos’—deliv­ered a speech that was most­ly pub­lic rela­tions and flat­tery (‘Aus­tralians are our teach­ers’ on the sub­ject of trade agree­ments). But the last part of his speech devel­oped four points that, tak­en togeth­er, tell us for the first time what lim­its Chi­na may have in mind to the con­cept of ‘free trade’. This is impor­tant news. Because one of the most puz­zling ques­tions about the pro­posed FTA between Aus­tralia and Chi­na is the extent to which Chi­na would real­ly be pre­pared to allow a trade agree­ment with a minor trad­ing part­ner (12th largest des­ti­na­tion for their exports) to dri­ve changes in impor­tant com­mer­cial poli­cies, going beyond even the still-undi­gest­ed oblig­a­tions that they accept­ed when join­ing WTO. Long’s four points were: # We must make a good job of the pub­lic diplo­ma­cy asso­ci­at­ed with the Agree­ment. We must devel­op a broad con­sen­sus on the com­mit­ment to more open mar­kets
# We must be ‘sen­si­tive’ to the con­cerns of par­tic­u­lar sec­tors on both sides. Long men­tioned agri­cul­ture as a sec­tor with par­tic­u­lar sen­si­tiv­i­ty in Chi­na (no sur­prise there). On Aus­trali­a’s side, sev­er­al man­u­fac­tur­ing indus­tries such as steel, plas­tics and chem­i­cals seem to be build­ing a case for ‘sen­si­tive’ treat­ment.
# We must be ‘sen­si­tive to the con­cerns of oth­er WTO mem­bers’. This was left unex­plained and is the most obscure of Long’s four points. But it seems to mean that Chi­na will not, in the end, offer any pref­er­en­tial con­ces­sions to Aus­tralia that seem to jeop­ar­dise impor­tant US or Japan­ese (?) inter­ests
# We must take account of the strate­gic pri­or­i­ties of both sides (i.e. Chi­nese pol­i­cy on Tai­wan remains a ‘giv­en’ in any agree­ment). By far the most sig­nif­i­cant of these is the sec­ond con­di­tion. It seems to sig­nal a need for Chi­nese safe­guard mea­sures and an offer (per­haps?) to allow Aus­tralia to seek safe­guards for it’s own ‘sen­si­tive’ sec­tors.  Rem­i­nis­cent of the recent agree­ment with Thai­land in which Aus­tralian demand for safe­guards on tex­tile imports was the jus­ti­fi­ca­tion for Thai safe­guards on imports of Aus­tralian dairy products.

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