It is billed as the landmark deal of a lifetime for Australia’s economy.
It is set to provide a bigger trade market and more favourable economic conditions for our businesses.
It is set to bring more job opportunities and cheaper commodities for all Australians.
But there will be winners and there will be losers.
After a decade of negotiations, Prime Minister Tony Abbott and Chinese President Xi Jinping signed the historic free trade agreement last month during the G20 Summit. The agreement will “open doors” between the two nations.
The Abbott Government says a lucrative agreement with China will deliver economic prosperity and inject approximately $18 billion into the Australian economy.
The pact means tariffs will be slashed among a wide range of exported and imported products.
Australian households and businesses will benefit from cheaper goods and components from China, in the form of vehicles, household goods, electronics and clothing.
The trade agreement will also provide access for Australian service providers across most sectors including health, financial, telecommunications, aged care and agriculture.
With this forecasted boom across several sectors, will it be safe to assume that there will be a corresponding growth in wages and job opportunities?
However, unions are concerned the deal with China could put thousands of Australians out of work if Chinese workers are brought in to work on Chinese construction projects under a labour mobility clause. There are fears pay and conditions could be eroded as well.
The current challenge Australian individuals and businesses face now is to decide whether cuts to tariffs and cheaper living standards outweigh undercuts to wages and employment opportunities.
Economists say the deal is an overall win allowing Australian service providers unprecedented access to a huge market including non-mining parts of the economy.
Indeed employment will grow faster in some Australian industries with the help of institutional support from China. But there will be a price…
Those employment gains will be at the expense of industries that are less favourably affected.
What will happen to employment rates and wages for the minor agricultural sectors like sugar, rice and cotton?
There is no doubt the free trade agreement will be beneficial to some sectors of the economy. There is no doubt that the agreement will lift economic growth overall.
But the agreement will not cause an economic miracle and will place downward pressure on the cost of living and the cost of doing business.
At the end of the day, we don’t know if this agreement will secure growth in job opportunities across Australian sectors, nor how many jobs it will provide. We can’t base the cost of living and income on an uncertainty.