Fed: China trade deal will be tricky: Downer

AAP General News (Australia)
08-07-2006
Fed: China trade deal will be tricky: Downer

CANBERRA, Aug 7 AAP - Foreign Minister Alexander Downer has acknowledged it will be
difficult to negotiate a free trade agreement with China, amid reports of divisions within
the government over plans to cut tariffs on some goods.

Labor says a rift has developed in cabinet over the potential tariff cuts associated
with the agreement.

The claim follows a report in The Australian newspaper which says Industry Minister
Ian Macfarlane and Finance Minister Nick Minchin are challenging Deputy Prime Minister
and Trade Minister Mark Vaile's plans for the deal.

Mr Downer today said there were difficulties on both sides, but stressed negotiations
had a long way to go.

"We'd like to negotiate a free trade agreement with China but ... it's going to be
very difficult from both sides," he told Sky News.

"From the Chinese side there's a lot of sensitivity over opening up agricultural markets
and also services.

"For Australia the sensitivities are in the areas where we have ... relatively high
levels of protection, like in the textiles, clothing, footwear and passenger motor vehicle
industries."

Mr Downer said a free trade agreement with China would deliver substantial gains to
Australia in the financial and education services sectors, but it was early days in the
negotiation process.

"We're going to have to work all of that through, and how both sides are going to make
offers and how we're going to negotiate," he said.

"We're in the early stages of the negotiation so ... we'll have a look at what we can negotiate.

"That will be a year or two from now and we'll make decisions on whether we'll accept it."

AAP dcr/sb/apm/jlw

KEYWORD: TRADE CHINA DOWNER

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