Protectionism Doesn’t Protect Jobs

In 1860 at Lambing Flat, NSW miners collectively banded together, rioting in protest of Chinese work practices on the goldfields.  Chinese mining methods used more water than European methods, and such practices were not appreciated in a country known for its heat and droughts. Furthermore, few of them traded their gold in the towns, preferring to store it up and return to China with their wealth.  It seems that 150 years later very little has changed in the way that some people view the world and their place in it.  The riots at what we now know as the town of Young resulted in around 30 Chinese being murdered and many more being scalped.

Opportunity Missed and Taken Green Road Sign Over Dramatic Blue Sky and Clouds.

The ChAFTA or China-Australia Free Trade Agreement is currently going through the ratification process in parliament, at the same time the TPP or Trans-Pacific Partnership is also on the table between 25 nations in the Pacific area including the United States and Australia.  I personally d0n’t like Free Trade Agreements, but not for the reason being argued at the moment around job protections; FTAs exclude developing nations from an equal opportunity to trade their way to prosperity.  In a perfect world there would be free trade between all nations, at the moment though tariffs and protectionism exists so FTAs are a step in the right direction, just not far enough!

So why is the protectionism argument false, well firstly lies and innuendo are being spread in the name of self interest.  If Unions are not seen to be protecting the interests of their workers then they have no relevance, unfortunately sometimes creative licence can get in the way of objectivity.  The Dept of Foreign Affairs and Trade (DFAT) has taken the unprecedented step of issuing a paper debunking these misleading claims, you can read it here.

Henry Ford is widely attributed as saying “If I asked my customers what they wanted I’d have built a faster horse.”   Now while that is an urban myth, the message behind it is that the world changes and jobs such as farriers and blacksmiths passed into antiquity in the general market and new jobs and opportunities arose as we moved away from animals into the combustion engine era.  I can understand the simplistic approach of unions and people who don’t consider the benefits of an agreement like the ChAFTA.  However, a shift in the type of jobs that Australians will be able to be employed in is the worst case scenario.

There may be less electricians for example as a consequence of the FTA, unlikely but possible, but the real benefit is that our economy get access to the largest economy in the world.  If we cannot grow our economy and create jobs in other industries as a consequence then like the White Australia policy of times past we can put our heads in a bucket and pretend that our future is secure if we just look after ourselves.  If we want to be a Cuba or East Germany in economic terms then thats fine, but for my mind I’m backing the enterprise of Aussies to create prosperity from this opportunity.


Trevor Dixon

Chairman Small Business Foundation

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