Chinese farmers, Aussie tariffs main hurdles in trade talks

April 19 | Updated: Apr 20 2005, 05:30am hrs
China's desire to shield its farmers from increased competition and Australian garment makers' concern about cheaper imports are the biggest obstacles to a planned free trade agreement, Australian Foreign Minister Alexander Downer said.

China has some concern Australian agriculture will be extremely competitive,'' Downer, 53, said in an interview from Canberra. On our side, we have some tariffs on textiles, clothing and footwear and passenger vehicle imports.''

Chinese President Hu Jintao and Australian Prime Minister John Howard on Monday agreed to start free-trade talks that may give an advantage to companies such as cattle rancher Australian Agricultural over US rivals in the world's fastest-growing major economy. Trade between the countries has tripled in the past six years to A$31.1 billion ($24 billion) on Chinese demand for iron ore and coal.

It will be a boon for Australian business and we would be the envy of our trading competitors,'' said Peter Hendy, chief executive of the Canberra-based Australian Chamber of Commerce and Industry, which has 350,000 members. Still, it's far from being a done deal and no-one should underestimate how tough these negotiations will be.''

A free trade agreement would be worth $18 billion to Australia's $600 billion economy between 2006 and 2015, a government report said.

China imposes tariffs of as much as 15% on beef, lamb and dairy goods. Beef exports to China rose 12.4% last year to A$13.4 million and lamb and mutton sales rose 42.1% to A$17.6 million, according to the Australian trade department. If we have those barriers removed, it means farmers are more competitive,'' said Peter Corish, president of the Canberra-based National Farmers Federation. This pact will be positive for Australian agriculture if the agreement is comprehensive, he added.

Australian exports to China surged 21% to A$11 billion in 2004, making it the country's third-biggest export market behind Japan and the US. Howard said he wouldn't hazard a guess'' on the time it would take for the negotiations.

Bloomberg