China FTA under review: make a submission

30 May 2017: The Australian and Chinese governments are reviewing the investment and services chapters of the China-Australia free trade agreement (ChAFTA) and the associated MOU on temporary workers. They called for submissions. The AFTINET submission is here.

Temporary worker clause

The Investment Facilitation Memorandum of Understanding (MOU) attached to the ChAFTA is the controversial clause allowing employers with infrastructure projects valued at only $150 million with a minimum of 15 per cent Chinese investment to bring in unlimited numbers of temporary skilled workers without testing if local workers are available. No other Australian trade agreement has similar arrangements.

The agreement allows relatively small investment projects to bypass the local workforce and employ many workers at a minimum rate for temporary migrant workers which is lower than the rates paid to local workers under enterprise agreements.

The workers would be tied to one employer, isolated from the local workforce and extremely vulnerable to exploitation. The projects are supposed to comply with the Australian workforce law but there are no clear means of enforcement.

However, the MOU is separate from the main trade agreement, is not legally binding and can be easily canceled by the Australian Government.

We have seen many examples of temporary migrant workers being exploited in Australia and more regulation is needed. Including such arrangements in or alongside trade agreements treats workers as commodities and is unacceptable.

AFTINET has called on the Australian Government to use this review to ditch the MOU, and we are working on a submission which will also advocate for its cancellation.

Unfinished ISDS provisions

ChAFTA’s investment chapter includes the right for foreign companies to sue governments in unfair international tribunal is (ISDS). These provisions foreign investors to bypass national courts and give increased power to corporations at the expense of democracy and the public interest.

But the section is unfinished and the current review will examine some of the criteria that can be used to sue governments, including two of the most controversial aspects of ISDS - the definition of indirect expropriation and the definition of minimum standard of treatment for foreign investors. 

We will use our submission to advocate for the removal of the ISDS clauses in the ChAFTA.

Services chapter

ChAFTA has been heavily criticised for being one-sided, with Australia giving many more concessions than China. One example of this was the services chapter, where China used a positive list, meaning that it only includes certain services in the agreement). In contrast Australia used a negative list, meaning everything is included, including future new services, unless specifically excluded.

For more information, read AFTINET’s original 2015 submission to the ChAFTA parliamentary inquiries here.