Free trade should be free trade, not politics

By Victor Zhikai Gao, Chairman of China Energy Security Institute

On November 9, 2015, the Senate of the Australian Federal Parliament passed the China-Australian Free Trade Agreement, which was signed by the Chinese and the Australian governments in June 2015, after the Australian House of Representatives approved it in October.

The FTA can soon go into effect. China's National People's Congress is expected to endorse the FTA in the near future.

Bilateral trade between China and Australia, which reached a total volume of US$152 billion in 2014, will be freed from existing tariffs and other trade barriers in the coming years that could create more benefits and jobs for the Chinese and Australians.

As the largest trading partner of Australia, China has boosted the Australian economic sectors of natural gas, commodities, agricultural, meat, and dairy products.

With the global economic recovery remaining weak and Chinese economic growth rates slowing down from the highs of 12 percent a few years ago to the current approximately 7 percent expected for 2015, many economic sectors in Australia are under pressure.

In recent years, Australia has become an increasingly attractive destination for Chinese students and tourists. The FTA will make the exchanges of goods, services and people between the two nations more convenient and attractive.

Australia, as a staunch ally of the United States, coordinates with Washington on many geopolitical issues in the Asia-Pacific region.

Nonetheless, Australia has embraced China as its largest trading partner and is committed to generating the maximum economic value for its citizens. Australia is also one of the twelve members of the TPP, which was signed by their trade ministers on October 5, 2015.

While it may take months if not one or two years for the twelve countries to go through and complete their respective domestic legislative process before TPP will go into effect, uncertainties remain over its full impact on trade in the Asia-Pacific region.

China, which is the largest trading and manufacturing nation in the world, is not included in the TPP. Whether TPP is designed to exclude China is not clear at this stage.

Beijing welcomes initiatives to promote genuine free trade in the world. In this sense, so long as the TPP supports genuine free trade in the Asia-Pacific region, Beijing will welcome it and request to join in.

Beijing has signed 14 FTAs, covering 22 countries in total, including 8 of the 12 TPP members (Australia, New Zealand, Chile, Peru, and four of the ten ASEAN members, i.e. Singapore, Malaysia, Brunei and Vietnam).

Beijing supports the RCEP (Regional Comprehensive Economic Partnership), the China-Japan-ROK FTA, the enhanced version of China-ASEAN FTA, the BIT (Bilateral Investment Treaty) between China and the United States, the BIT between China and the EU (European Union), as well as major initiatives, such as the Belt and Road initiative.

More recently, China and the EU have started discussions about signing an FTA, which would be a major step for free trade in the world.

Accordingly, let's congratulate the Australian Senate and the House of Representatives for approving the FTA between China and Australia, and we can anticipate the Chinese National People's Congress will do so soon.

Let us work together to promote genuine free trade. Free trade should remain free trade, and should avoid getting mixed up with politics and ideology.