Disadvantages of China-Australia Free Trade Agreement

The China-Australia Free Trade Agreement (ChAFTA) was signed in 2015 with the aim of boosting economic ties between the two countries. While it was hailed as a landmark agreement at the time, it has since received criticism from different quarters, particularly for the disadvantages it presents to Australia.

Here are some of the most significant disadvantages of the China-Australia Free Trade Agreement:

1. Unfavourable Tariff Reductions

Under the agreement, large sectors of the Australian economy had tariffs removed or reduced, including dairy, meat, and wine. However, while Australian companies benefit from improved market access to China, the same cannot be said for Chinese businesses in Australia. Chinese products, including steel, aluminium, and textiles, were given duty-free access to the Australian market, with minimal tariffs imposed. The unbalanced tariff reductions have left Australian businesses struggling to compete against cheaper Chinese imports.

2. Potential Job Losses

The Australia-China Free Trade Agreement has been criticized for putting Australian jobs at risk. The deal allows Chinese companies to bring in their workers to work on projects in Australia, where they can pay them less than the local minimum wage, making it harder for Australian workers to compete for jobs. As a result, Australian workers are losing out on job opportunities in their own country.

3. Decreasing Manufacturing in Australia

One of the significant concerns for Australia is the impact of the deal on its manufacturing sector. The Australia-China Free Trade Agreement makes it easier for Chinese businesses to set up factories in Australia, but this could also mean a decrease in Australian manufacturing jobs as businesses opt for cheaper Chinese labour and materials. As Chinese companies increasingly take over Australia`s manufacturing industry, the country is becoming more dependent on imports, which could have long-term economic consequences.

4. Environmental Concerns

Another potential disadvantage of the Australia-China Free Trade Agreement is that it could lead to environmental degradation. The agreement does not require Chinese companies to adhere to the same environmental standards as Australian businesses. As Chinese companies take over Australian manufacturing, there are fears that this could lead to an increase in pollution, environmental destruction, and other negative effects on the environment.

In conclusion, the China-Australia Free Trade Agreement may have been intended to strengthen economic ties between the two countries. However, it has, unfortunately, provided some significant disadvantages to Australia, including unfair tariff reductions, potential job losses, decreasing manufacturing in Australia, and environmental degradation. While the full impact of the agreement is yet to be felt, it’s essential to continue to evaluate its effects on Australia`s economy and to take appropriate measures to minimize negative impacts while maximizing the benefits.