Government defends pursuit of free trade deals with key Asian countries amid industry concerns

Updated

The Federal Government is determined to pursue free trade deals with key Asian countries after two separate industries blamed job cuts on stiff competition from the region.

BP Australasia has announced 355 people will lose their jobs by the end of the year because of the emergence of export-based refineries in Asia operating on a lower cost base.

And 180 workers are also set to lose their jobs at cigarette producer Philip Morris, which is moving its Melbourne operations to South Korea by the end of the year.

The Government announced it had sealed a free trade agreement with South Korea in December and Prime Minister Tony Abbott is preparing to lead a major trade delegation to South Korea, China and Japan next week.

He will formally sign the South Korean FTA and the Government hopes to also finalise an agreement with Japan during the visit.

Trade Minister Andrew Robb, who will head to Tokyo ahead of Mr Abbott, says free trade deals will create many jobs.

"You do see job losses, they're very prominent in the community," he told ABC News 24.

"What you don't see is the new jobs and the free trade agreements [that] will create many hundreds of thousands [of jobs] over time."

Mr Robb says South Korea, Japan and China represent 51 per cent of Australia's exports.

"It is critical we get an agreement with these three countries to create hundreds of thousands of jobs," he said.

But he says Australia will not agree to any deal with Japan unless it includes cuts to beef and dairy tariffs.

There have been reports Japan does not want to significantly reduce beef and dairy tariffs, which in some cases are in excess of 30 per cent.

"It is a tough negotiation. They are very hard to move on agriculture, and we're insistent on some movement on agriculture - so fingers crossed," Mr Robb said.

"Beef is very fundamental [as is] dairy. They're our biggest markets both beef and dairy, there's a lot more we could do there.

"We're very good at production of those products, we're very competitive on a world basis and they are fundamental to any agreement."

Labor concerned about impact on workers

Opposition Foreign Affairs spokeswoman Tanya Plibersek agrees with the long-term benefits of free trade deals, but is concerned about the impact on workers.

"Better trading relationships with our neighbours has actually been in the long run very good for Australian jobs," she told ABC News 24.

"But it does mean that our economy goes through readjustments, and the Government has a responsibility to help with those readjustments, to make sure that we're looking into the future and we're looking forward to see what sort of jobs Australians will be doing in the future."

The Government has also been presented with another trade challenge, with Russian banning Australian beef imports worth $113 million last financial year.

Russian media has reported the restrictions are due to the presence of growth hormone in the meat.

But Agriculture Minister Barnaby Joyce has suggested it is a political reaction to Australia's stance on events in the Ukraine.

"I think it's to do with other circumstances that currently abound and obviously the issue in Crimea would have something to do with it," he said.

Mr Joyce says he will will work to restore the trade with Russia, but will also focus on developing other markets.

Topics: trade, business-economics-and-finance, federal-government, foreign-affairs, oil-and-gas, beef-cattle, dairy-production, australia, japan, korea-republic-of, russian-federation, china, asia

First posted