THE MYTH OF THE TRADE LEVEL PLAYING FIELD
iWhen Labor removed most of the tariffs on imports they spruked the concept of global trade, a trade ‘level playing field’ as a fair concept that would benefit Australian manufacturers and consumers and our trading partners fairly and equitably for imports and exports. How is this working for us?
1 VOTERS OPINION on AUSTRALIAN POLITICS
RECONSIDERING IMPORT TARIFFS
We are now 30 + years down the track an Australia has seen the escalating closure of almost all manufacturing Australia with the resultant huge loss of jobs on our shores.
I remember Australian made TV’s, washing machines, carpets, fridges, ovens, shoes etc. Buying Australian Made, where all the components for materials and manufacturing originated here and were assembled together here is now a rarity for clothing, white-goods, electronics, vehicles, the list is growing daily to include more items.
It’s not only manufacturers that are suffering, it’s our farmers too, they simply can’t compete with the production costs of third world countries whilst complying with Australian legislation, and earn a viable living for themselves. This is before Australias' regular droughts, floods and fires are factored in. Added to this is the sell off of water rights to international entities such a Adani.
Australia cannot compete with countries whose workforce is not governed by any of the governmental legal obligations that face manufacturers and farmers here. Countries where there are no controls on pesticides, sanitary conditions, safe materials or quality control and where corruption is rife.
This often quoted ‘level playing field ‘is a complete mirage. The removal of tariffs on imports did not create a level playing field, it simply opened the floodgates for imports that have destroyed manufacturing here and is on the way to wiping out large sectors of primary production such as citrus farming.
A true level playing field should require our trading partners to have all things equivalent to those enforced in Australia:
Wages in a fair ratio to cost of living in the country of production and manufacture
Award rates for workers, a viable living wage
Conditions and labor laws
Quality assurance, safety compliance for materials, labelling requirements, guarantees. The recent case of imported frozen raspberries watered with polluted water is a case in point.
Occupational health and safety legeslation for workers
Paid holiday and sick leave
Superannuation provission for workers
Workers compensation for workplace injury
To create a true level playing field either Australia needs to lower /remove all the above conditions that are impediments to creating a level playing field for Australian manufacturers and primary producers competing with our major trading partners, China, Japan, Korea, India etc.; or expect international manufacturers to meet Australian standards. Neither of these scenarios are likely / desirable.
Whilst there have been short term benefits of the level playing field open door trade policy, namely-
Far broader choice of products and price ranges for consumers
Competition resulted in large scale improvements in quality of products manufactured in Australia e.g. Vehicles, machinery
The growth of international air freight, shipping, transport and logistics.
BUT - Further down the track this policy has resulted in the decimation of Australian manufacturing industry and primary producers.
Despite the fact that Australia has abundant natural resources and a largely well-educated workforce our manufacturers and primary producers can’t compete on the international scene. Orchardists are ploughing their oranges back into the soil, dairy farmers can’t make a living, factories have been pulled down to make way for apartments. The rampant un-regulated growth of the internet market place has further exacerbated the problem for Australian manufacturers.
Our major exports tell the story, our largest exports are minerals and coal. We no longer process iron ore here, it is shipped overseas and back again as a finished product.
THE DOWN-SIDES OF THE 'BENEFITS'
Benefits 1-4 listed above also have associated down-sides -
AUSTRALIA - THE CONSUMER NATION
Benefits 1 & 2- Choice and price- this has generated a population with the mindset that they must have the latest item, even when they own a serviceable comparable product, goods are turned over at an ever-reducing rate with many goods virtually having in-built redundancy designed for a short life-span and frequent turn-over. (e.g. phones, computers, printers, washing machines, televisions).
OLD MODEL, UN-REPAIRABLE?- THROW IT OUT- GET A NEW ONE: rubbish tips are our growth industry:
Rampant consumerism has led to Items no longer being repaired, especially when spare parts and labor are so costly and new goods are cheap, resulting in disposals and new purchases causing a huge waste of natural resources and a big garbage problem along with the demise of the repair industry.
THE PACKAGING PROBLEM, TRANSPORT AND THE ENVIRONMENT:
It’s not only the goods themselves, it’s the packaging and transport issues. New goods are packaged for protection during international transport in paper and plastics. Our rubbish tips are full and second-hand items have no value, worse still we have no sustainable solution for recycling, compounded when China stopped taking our recycleable plastics.
SUB-STANDARD PRODUCTS, QUALITY CONTROL , CORRUPTION:
imports from countries that have no quality control and/or corrupt governing bodies/ officials, has seen the safety and quality of imports often questionable and sometimes downright dangerous.
Recently the steel imported from China for a major Melbourne tunnel project was found to be substandard and un-useable. We have seen plastics and paints containing dangerous substances and the list goes on. In London, a major fire in a high-rise building was attributed to the highly flammable cladding purchased from China, a similar product caused a fire in a Melbourne high rise.
Regarding Benefit 3 above: Yes. there was a short-lived improvement in Australian design, technology and productivity followed by many sectors of Australian manufacturing disappearing. They just couldn't compete with imports bottom line - PRICE.
Astonishingly, previous Australian National Governments and States have never had a policy of purchasing Australian made for their departments and sub-contractors.
AUSTRALIAN GOVERNMENT DOESN'T SUPPORT AUSTRALIAN MANUFACTURERS /INDUSTRY
Government support of Australian manufacturers may cost more in the initial purchase but the resultant benefits in maintaining and growing manufacturing jobs and the flow on of wage earners paying taxes would have more than offset the initial purchase. E.g. Australian army changed their boot supplier from their long-term Australian manufacturer to an overseas manufacturer.
When our own Government doesn't have enough faith in Australian manufactured products to purchase them, why should they expect the Australian public to do otherwise?
TRANSPORT & LOGISTICS
Whilst benefit 4 has undoubtedly created some jobs within a fairly narrow range it has also had negative impacts. Environmentally it makes little sense to ship raw materials internationally then ship the items manufactured from them back to the country of origin.
With increased volume of transportation of goods and raw materials internationally comes increased pollution, use of decreasing fossil fuels, disease, contamination and pest transmission internationally, national security issues, road congestion and deterioration of road surfaces; all negative side effects. e.g. Prawns caught in Australian waters sent to Thailand for cleaning and packaging then sent back to Australia!
ADDRESSING THESE ISSUES – Some suggestions
Federal and State Governments, their sub-contractors, projects and project tenders (army, education, hospitals, infrastructure etc.) should be mandated to purchase materials and supplies from Australian manufacturers and producers where a suitable item or product is available,regardless of price. The flow on benefits of this will mitigate any prce difference.
A True level playing Field
Imports should only be permitted from countries that have equivalent conditions as implemented in Australia.
This could have the beneficial side-effect of improving conditions for workers and producers in third world countries.
AUSTRALIA IS NOT A RUBBISH DUMP-
Impose an Environmental levy (composite) paid by the importer on:
Truth in Packaging – The over-packaging of products to make the item itself appear larger: levy based on the ratio of packaged air: actual product. E.g. Vitamins in over-sized plastic containers, perfume and cosmetics.
Proportional levy on packaged goods per weight of the packaging: ratio size/weight of the product; per category – recycled plastic, recyclable plastic, unrecycled plastic, paper and cardboard, other. Here I assume that international freight requires more packaging protection than local products to withstand multiple storage and handling transitions. This should give local products the edge.
A similar levy should be placed on Australian manufacturers packaging which should require less packaging as it has to travel less distance.
Environmental levy on - Higher value Imports with built-in redundancy: limited repairability, lacking in spare parts available for a minimum time period, over prices ancillary elements e.g. printer drums
Mechanical and electronic products above a certain value threshold should have the support of (most likely to fail) spare parts. Where the sum total of the retail price of these spare parts exceeds the cost of the 'whole' original item, the original item should incur a % based environmental levy. ) i.e. it has inbuilt redundancy)
Products imported and retailing over a threshold value per item must be supported by imported spare parts for a minimum period alongside certified repairers.
Product support should be delivered by call centrese located in Australia. Non compliant companies should have thsi identified on their product.
Australia has to manage the resultant packaging and discarded products. Funds generated by the environmental levy to be used for the disposal/recycling of same, compliance and inspection teams. This should generate more jobs in this new and expanding area.
Environmental levys' should result in the country of origin devising less/ more sustainable /clever packaging.
Undoubtedly the price of packaged imported items will rise, this may slow rampant consumerism and encourage the purchase of Australian goods and clever manufacturing of repairable products and the re-generation of a repair industry.
Substantial Environmental advantages – less packaging wastage, less manufacturing materials wastage, less greenhouse gasses, less garbage, less use of fossil fuels for international freight.
An environmental levy on imported goods is basically an import tariff with a difference, as clever sustainable packaging, manufacturing and design in the country of origin can minimize the levy. It has immense environmental advantages and benefits for Australian manufacturers and Australia as a whole and would make opposition to its implementation difficult.
There's nothing 'level' about this 'level playing field for trade' , it's all downhill for Australian manufacturers and produces, except if you are a mine. We are not striking goals on this field and it's time to re design the whole thing.
Unfortunately 'stupid' agreements like CHAFTA and the Indonesian Free Trade Agreement will hobble the process and will not benefit Australia in the long-run.
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