Free trade agreement negotiations between Australia and China were likely to go ahead with Canberra granting the communist nation market economy status, Prime Minister John Howard said Sunday. Asked whether he was optimistic the talks, which are yet to be approved by cabinet, would begin, Howard said: "I believe there is a good chance they will." The talks are likely to see Australia granting China, the world's largest Communist country, market economy status, he said.
"If we do concede market economy status it will be in return for everything being on the table and also a very comprehensive agreement at the end," Howard told ABC television.
Howard said Trade Minister Mark Vaile, who visited China this week, had won two concessions from Beijing, which would smooth the way for negotiations to begin.
"In return for acknowledging market economy status (at the World Trade Organisation), if the negotiations start, China will put everything on the table," he said.
"And China has also agreed that at the end of the day it will be a total agreement; in other words, there won't be an agreement on some things and some other things left for further discussions."
Howard said Australia approached the discussions in a "pragmatic" manner.
"It's very important in all of our trade relationships, whether with China or Japan or the ASEAN countries, we don't get hung up by process, that we look at the volume of trade and opportunities and not the agreements and the free trade discussions," he said.
Should the talks not progress, Canberra would still have a robust economic relationship with Beijing, Howard said.
"At the moment, we're selling a lot to China, we'll go on selling a lot to China irrespective of whether we have a free trade agreement (FTA) or not, and we'll go on importing a lot from China, whether we have an FTA or not," he said.
Howard is due to visit China, Australia's third largest trading partner, next month where he is expected to make a formal announcement on the talks.
Vaile said that a two-year feasibility study into a free trade agreement was about to conclude with both sides agreeing that, if negotiations were to go ahead, it would be done "on the basis of being equal trading partners under the WTO."
"That meant recognising China as a market economy," Vaile said on commercial television. "We haven't yet conceded to China market economy status, but part of the economic framework was an agreement that, to embark upon a negotiation, we would do that.
"That would come at the point of agreeing to go ahead with the FTA negotiations, which hasn't happened yet." Australia stands to gain tens of millions of dollars from a free trade agreement with China, Vaile said.