The signing of a "Free Trade "agreement with China is the third leg of a "Trifecta "that will usher in a new era of prosperity for Australia. Goods from China, Korea and Japan will be cheaper for Australian buyers, and our exports will face lower or no tariffs when they reach the shores of our new trading partners.
Expect cheaper Chinese electrical goods, clothing and cars as a result of this agreement, and we will also see the doors opened to the export of our beef cattle to the vastly more affluent Chinese middle class. Another big sector expected to rise is the "service "industries which include insurance, accounting and education. Unfortunately, rice, sugar and cotton were not included in the present agreement, but will come up for renegotiation in three years time.
Negotiations are at the advanced stage for a similar free trade agreement with the United States. It seems that the world is embracing an age of lowered trade barriers and a reduction of tariffs to free up the movement of goods on a world wide basis. The barriers of "protectionism "are falling !
One aspect of this newly signed agreement will receive a mixed reception from many Australians. China does not allow foreign ownership of farming land in that country, but Australia does permit foreign investment in farming and permits the freehold title of land for that purpose. Already there are negative cries that Australia is "selling the farm "from some quarters. In particular, there is a degree of opposition to the existing Chinese acquisition of sections of our dairy industries.
Like most divisive issues, there is logic on both sides of the argument. Australia is a huge continent with a small population. It is quite clear that feeding a world population expected to reach ten billion by 2050 will need a huge increase in food production - and we have the land to achieve that objective.
Our government would be wise to restrict foreign ownership of existing productive farming properties in favour of allowing the money flow and expertise of foreigners to be directed at opening up unproductive regions for new farms. If unproductive land that is presently laying idle is to be converted to arable farming soil it will take the injection of vast sums of money to create the conditions to make that happen - and foreign investors will need ownership rights to justify spending that money.
"Ownership "tends to be a bogey of disproportionate dimensions in many people's minds. Land is not something a foreigner can pack up and take home with him. The laws of Australia pertaining to what can happen on that land apply equally to whoever has land tenure, be they Australian or foreign - and the levers of control are firmly located in Canberra. The lawmakers control what happens on Australian soil
This is an argument we have had many times before. At the start of the twentieth century, Britain was the richest country in the world and it was British money that flooded into Australia and financed great buildings and new industries. After the end of the second world war the money climate changed. America was now the new super power - and many folk here complained that "America was buying up Australia ". A few decades ago Japan became the manufacturing titan of the world - and we were seeing busloads of Japanese tourists arriving on our shores and we were again complaining that they were changing our culture.
This era of free trade will certainly bring change. There is every prospect that it will improve our trading position and enhance prosperity - but the government will need to keep a firm hand on the tiller. Change is inevitable - just so long as it does not cascade to "excess "! There is absolutely no problem with Chinese money developing new farms and having land title - provided the quantity involved is "balanced ".
That is the reason we elect governments to run this country !
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