China Australia Free Trade Agreement

China Australia Free Trade Agreement (ChAFTA) Myths and Facts Sheet

ChAFTA Myths and Facts

Update: China-Australia Free Trade Agreement Safeguards

MYTH: ChAFTA is the same deal as the Chile FTA signed by Labor

FACT: The labour market testing provisions of the Chile FTA and Chinese FTA are substantially different.

For Chile it is high level technical or professional qualifications, skills and experience, whereas under ChAFTA it is trade, technical or professional skills and experience.

This means that basic trades like carpenters, plumbers, electricians will be able to come in as contractual service suppliers without Labour Market Testing under ChAFTA’s Movement of Natural Persons provisions but would not under the equivalent Chile provision.

The Australian Bureau of Statistics’ Australian and New Zealand Standard Classification of Occupations identifies more than 100 trades occupations – the China FTA’s Movement of Natural Persons provisions removes labour market testing requirements for contractual service suppliers in all of these occupations.

 

MYTH: Labour protections and safeguards would require the agreement to be re-negotiated with the Chinese government.

FACT: Labour market safeguards that protect Australian jobs can be implemented through the visa framework to ensure that Australia maximises the benefits of the Chinese FTA.

 

MYTH: ChAFTA Investment Facilitation Arrangements are the same as Enterprise Migration Agreements introduced by Labor.

FACT: Investment Facilitation Arrangements are substantially different to Enterprise Migration Agreements.

EMAs are for projects greater than $2 billion, whereas an IFA can be negotiated for projects of $150 million.

EMAs are limited to resource projects only, whereas an IFA can be negotiated for projects  ‘related to infrastructure development within the food and agribusiness; resources and energy; transport; telecommunications; power supply and generation; environment; or tourism sectors’.

EMAs are also required to create more than 1500 jobs at the peak of the project, whereas IFAs do not have any minimum requirements for the numbers of jobs to be created.

Labor market analysis is required for EMAs, whereas labour market testing is not a requirement under IFAs (Memorandum of Understanding on IFAs)

 

MYTH: ChAFTA will not allow unrestricted access to the Australian labour market by Chinese workers. DFAT “fact sheet”

FACT: “In respect of the specific commitments on temporary entry in this Chapter… neither Party shall: (a) impose or maintain any limitations on the total number of visas to be granted to natural persons of the other Party; or (b) require labour market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry.” Chapter 10, Movement of Natural Persons, China Australia FTA

 

MYTH: Under IFAs [Investment Facilitation Arrangements] Australian workers will continue to be given first opportunity. DFAT “fact sheet”

FACT: There will be no requirement for labour market testing to enter into an IFA. Memorandum of Understanding on IFAs

 

MYTH: ChAFTA does not change the required skills levels for Chinese visa applicants. DFAT “fact sheet”

FACT: Australia will remove the requirement for mandatory skills assessment for the following ten occupations on the date of entry into force of the Agreement: Automotive Electrician, Cabinetmaker, Carpenter, Carpenter and Joiner, Diesel Motor Mechanic, Electrician (General), Electrician (Special Class), Joiner, Motor Mechanic (General) and Motorcycle Mechanic. Side letter on skills assessment and testing

 

MYTH: Investor-State Dispute Settlement does not protect an investor from a mere loss of profits following a change in government policy or regulation. DFAT “fact sheet”

FACT: Philip Morris Asia is challenging Australia’s tobacco plain packaging legislation under an Investor-State Dispute Settlement mechanism in the 1993 Investment Agreement between the Government of Australia and the Government of Hong Kong. Philip Morris Asia is arguing that Australia's tobacco plain packaging measure constitutes an expropriation of its Australian investments. Tobacco plain packaging—investor-state arbitration, Attorney-General’s Department

 

MYTH: Australia is “open for business” under the Abbott Government.

FACT: Over the past 18 months the Abbott Government has turned away foreign investors, introduced a lower screening threshold for foreign investment in agricultural land, imposed a raft of new application fees, charges and penalties on foreign investors that will gouge an extra $735 million in application fees alone over the next four years. A new exposure draft foreign investment bill confirms the Abbott Government’s red tape run around for foreign investors.

 

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