A leader of Australia's plastics industry trade association said a proposed free-trade agreement between China and Australia will have little effect on the plastics industry in Australia.
However, the Australia-China bilateral free-trade agreement, currently being negotiated, must deal with nontariff barriers that limit access of Australian plastic goods to the Chinese market, according to Brian Gallagher, trade and economic policy director for the Richmond, Australia-based Plastics and Chemicals Industry Association.
He cited China's restrictions on people's movement, poor banking services and lax enforcement of intellectual property rights as examples of nontariff barriers.
``Those are the more-significant, long-term issues - not tariff barriers,'' Gallagher said.
Australia began free-trade negotiations with China in April. A joint feasibility study concluded that an agreement could boost Australia's gross domestic profit by US$18 billion, and China's by US$64 billion over 10 years.
A PACIA submission to the feasibility study showed that in 2003, Australia exported A$26.7 million (US$20.4 million) worth of plastic extruded products and A$25.2 million (US$19.2 million) worth of injection molded products to China. Australian exports increased 145 percent for extruded products and 280 percent for injection molded products from 1999-2003. Imports of plastic products from China in 2003 totaled A$293.7 million (US$223.9 million).
Gallagher said the Australian plastics industry will face increased competition from overseas manufacturers if it continues to focus on supplying products for the Australian food, car and building industries.
If the free-trade agreement proceeds, then removing Australia's 5 percent tariff on plastic products from China will have little effect on the industry, he said. Although Chinese plastics manufacturers have lower labor costs, they have energy-supply problems and difficulty meeting consumer demand for goods with high plastic content, such as air conditioners, from a rapidly expanding middle class.
Those factors will provide the Australian industry with an opportunity to export finished plastic goods and raw materials to China, he added.
Mark Vaile, Australian trade minister, said at a China trade conference in Sydney in May that Australian industry is concerned with the lack of transparency in government regulations in China.
``Differences often arise between central and provincial levels of government in the implementation and interpretation of laws and regulations. Particular transparency-related concerns raised by industry include the application of taxes, legal and financial systems, the inconsistent enforcement of import duties, and unclear and conflicting standards across provinces,'' Vaile said.
Gallagher agreed with Vaile's assessment, but said any agreement that improves the Australian plastics industry's access to the Chinese market will provide opportunities.
