Australia, China to resume trade talks despite strained ties

Australia and China will resume stalled free trade talks this month despite tensions over the trial of an Australian mining executive in China, but agriculture remains a stumbling block, Australia's trade minister said.

"The political will in my judgement is there," Simon Crean said yesterday while announcing the resumption of Free Trade Agreement (FTA) talks with China in Canberra after a break of more than a year.

"The stumbling block still, in essence, remains the sensitivity surrounding agriculture. These are sensitivities that, I believe, we can address but we can't ignore," the trade minister told the Foreign Correspondents' Association in Sydney.

"It is clearly impossible for Australia to accept an FTA outcome that is lesser than China has already offered to New Zealand when it comes to agriculture."

Chinese state-owned companies are eager to buy into Australian mining assets to secure supplies of raw materials in its rapidly growing economy, the world's third largest, and China wants more clarity on Australian foreign investment rules. But China is reluctant to open its market to Australian agriculture and the two have unresolved differences over the lack of strong rules to protect intellectual property in China.

China and Australia announced plans for a free trade deal in April 2005, but there have been no negotiations since the 13th round of talks in Beijing in December 2008.

China is Australia's biggest trading partner, with two-way trade worth some A$76 billion ($67.61bn, Dh247.81bn) in the year to June 30 and China buying more than A$25bn worth of Australian iron ore and coal.

Relations between Australia and China plummeted in June 2009 over a failed bid by China's state-owned Chinalco to buy a $19.5bn (Dh71.56bn) stake in mining company Rio Tinto.

China's arrest of Australian Rio executive Stern Hu, who was indicted to stand trial last week on charges of bribery and stealing commercial secrets, has also strained ties.

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