Wandering China

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Get tough on China: unions [The Age]


Tough: Australian trade unions get touch on the China rhetoric as Australian manufacturing claims its worst crisis in eighty years since the Great Depression.

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Get tough on China: unions
Michelle Grattan
Source – The Age, published October 3, 2011

UNIONS have attacked China over its regulated currency and called for the government to impose tough conditions in negotiating free trade agreements to protect Australian manufacturing, saying it faces its worst crisis since the 1930s Great Depression.

The Australian Manufacturing Workers Union’s national secretary, Dave Oliver, has declared that a free trade deal with China – which the two countries have been battling over for years – should not be concluded unless China floats its currency.

In a paper for Thursday’s jobs summit, the AMWU and the Australian Workers Union also urge measures to get mining companies to use more local content, including tax incentives and requirements for increased transparency.

The paper will be among a pile of wish lists from business, unions and community groups this week at the jobs summit and the two-day tax summit.

”Australian manufacturing is currently facing its most acute crisis since the Great Depression,” the unions’ paper says. Its downturn was largely driven by the side effects of the mining boom creating a persistently high dollar, high input prices, and wage price inflation.

The unions have renewed their call for the government to act immediately to stimulate manufacturing by facilitating increased access to procurement for government and resource projects, although they do not specify an exact portion.

They urge an accelerated rate of depreciation to allow resource companies in particular to write down assets that include a percentage of Australian content.

They say clean technology innovation funding should be linked to regions with existing manufacturing bases, and that materials used in constructing new energy systems and industries should be sourced locally.

The unions say that while they recognise the fundamental importance of free trade to Australia’s economy, ”the federal government should consider the behaviour of trading partners’ policies in regard to government procurement, incentives to attract foreign investment, development of local industry, local content in contracts for natural resource projects, when both negotiating free trade agreements and setting domestic economic policy”.

China’s refusal to allow a free exchange rate ”is irresponsible for an emerging global economic super power”, the unions say.

The government has so far resisted a more interventionist approach in response to pressure from manufacturers.

The jobs summit agenda, released by Prime Minister Julia Gillard yesterday, emphasises innovation and technology. ”To succeed, manufacturing firms will need to be technologically sophisticated, agile, adaptive and efficient. They will need to be knowledgeable, innovative and well managed, and have access to the right skills as well as capital.”

Australian manufacturers of the future would have a better prospect of success if they focused on high value-added products, ”contributing to global production chains, and selling to niche markets.

”Continuing to make the most of the links between manufacturing and mining and our proximity to the Asian market will also be important”.

The government has refused a manufacturing inquiry, but Mr Oliver said: ”We want an ongoing process out of the jobs summit.”

The unions want a tripartite body to be set up to drive a ”real productivity agenda”, and have stressed the importance of improving management skills to getting better productivity.

The jobs summit will bring together almost 100 representatives from business, unions, government and academia. Ms Gillard said a focus ”will be how we can drive sectors further up the value chain, fostering business innovation, making use of digital technologies, addressing new export markets and improving workforce development”.

The international key note speaker, via video link from Michigan, will be Andrew Liveris, the Australian-born chairman and chief executive of the Dow Chemical Company and co-chair of US President Barack Obama’s Advanced Manufacturing Partnership.

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Filed under: Australia, Beijing Consensus, Chinese Model, Culture, Domestic Growth, Economics, Influence, Infrastructure, Politics, Public Diplomacy, Reform, Resources, Strategy, The Age, Trade

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