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Wednesday, October 22, 2003

Australia seeks free trade talks with China

Reuters
Canberra, October 22

Australia hopes to announce plans this week to explore a free trade
agreement with China, its fastest-growing trading partner, during a visit by
Chinese president Hu Jintao, Australian officials said on Wednesday.

The Australian dollar gained on the news, rising to fresh six-year highs and
breaching the 70 US cents level as the market grew excited at the prospect
of Australian exporters tapping into the vibrant Chinese economy.

Australia-China trade has nearly tripled to A$21 billion ($14.7 billion)
since 1996 and China ranks as Australia's third-biggest partner, behind
Japan and the United States.

"We are working towards the possibility of announcing a scoping study on
Friday," a spokesman for Trade Minister Mark Vaile told Reuters on
Wednesday.

A launch of exploratory talks could be announced that day as Chinese
President Hu Jintao visits the Australian capital, Canberra. He arrived in
Sydney for a state visit on Wednesday.

Major trading countries have been scurrying to strike bilateral trade
agreements ever since the collapse of World Trade Organisation talks in
Mexico last month.

At an Asia Pacific summit in Thailand this week, Japan and South Korea
agreed to negotiate a free trade pact and the United States started talks
with Thailand.

Australia finalised a free trade pact with Thailand at the summit and this
follows similar earlier deals with Singapore and New Zealand.

PAST SUCCESS

Australia, a world leading agricultural and mineral exporter, is keen to
build on its 2002 success when it won a A$25 billion liquefied natural gas
(LNG) supply contact with China's Guangdong province -- Australia's largest
single export deal.

Trade analysts said any free trade pact between the two countries could take
several years but would be keenly sought by Australian exporters as China's
demand for natural resources such as LNG and iron ore rises to feed its
growing economy.

"Any agreement is a demonstration that Australia and China both think the
relationship is important," Alan Oxley, managing director of the FTA Analyst
publication told Reuters.

"This is important politically as well as economically as many of the
resource buyers in China are government owned."

China, with 1.3 billion people, is now the fourth-largest destination for
Australian exports such as iron ore, wool and crude petroleum, taking about
seven per cent of last year's total exports, and Australia's third-largest
source of imports, such as computers, toys and textiles.

Canberra also hopes to finalise a free trade agreement with the United
States by the end of this year to boost two-way trade worth A$28 billion but
trade in agriculture is a stumbling block.

Negotiations will be given fresh momentum when US President George W Bush
arrives in Canberra later on Wednesday for a 20-hour visit to thank
Australia for its role in the US-led war on terror, sending troops to
Afghanistan and Iraq.

 © Hindustan Times Ltd. 2003.
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