Australia unions are beginning follow suit of their American counterparts in forcing assault on cheap imports and trade liberalization, putting the Prime Minister Julia Gillard and her cabinet in dilemma.

Gillard Government Faces Challenges

The latest union to signal a call-to-arms, joining the influential retail and food sectors, is the powerful AWU (Australian Workers Union). In a strongly worded statement on the AWU website, the Union suggests it will follow the retail and food sectors in campaigning against competition from imports with " artificially low prices".

It claimed these imports not only damage the economy, but also lead to job losses and cuts in local productivity across the board, calling for a campaign titled "Don't Dump on Australia", to force Labor-led Australian government to practice protectionism against cheap imports.

In a direct threat to the Gillard government, AWU National Secretary Paul Howes said, "We want to form alliances between our union and the Australian manufacturing sector to convince the Australian government we need to harden up the oversight on the trade cheats who undermine Australia's interests."
According to Melbourne-based political analyst James Roberts, the trouble is just beginning for Gillard.

"There are tough days ahead (for the Gillard government). When the AWU meets for it's annual conference in February, we can expect this campaign to kick off in earnest. Then you will have a Labor government literally caught between a rock and a very hard place."

The crusade aims to stir Australia's sensitive nationalistic sentiment with media advertising, lobbying of federal and local politicians and, according to one unnamed source, "the bankrolling of investigations into overseas safety standards."

All this could amount to disaster for Gillard.

Gillard Government Not To Resort To Protectionism

As he largest trading partner, China and its low-value-added manufacturing sector would be victimized by this brewed campaign. If that is the case, Gillard government would feel a stinging headache, bearing in mind the fact that it was Chinese potent import from Australian mining sector that hauled the nation away from Global Financial Crisis and that both two nations benefited a sound Sino-Australian trade relation and could not afford a trade war.

Statistics from Australian Department of Foreign Affairs and Trade showed that for the 2009 - 2010 fiscal year, China continued to be Australia's top trading partner, with bilateral trade volume hitting 90.33 billion Australian dollars (90.29 billion U.S. dollars). China exceeded Japan for the first time to become the biggest export market for Australian products and services, accounting for 17.6 percent of Australian foreign trade.

It's not hard to imagine that China has contributed much to the payroll of Australian workers and the emerging Asian economy will continue making good for Australian jobs in a crisis-ridden world economy.

Reeling from floods that have decimated sections of Australia's economy and still mistrusted by a divided voting public, Gillard must keep a subtle balance between building key trade relationship with China and her close political dependence on the unions that are gathering a creeping momentum on the nation's political stage.

So far the Gillard government has strongly opposed any moves to be pressured into using the World Trade Organization's loosely defined anti-dumping rules, in a world that is yet to gain a full recovery from the financial crisis.
Australian leaders along with their colleagues from major economies have repeatedly advocated free trade and promised to restrain from protectionism on highlighted occasions like G20 meetings since the outbreak of the financial crisis.

In a speech on Monday, the Trade Minister Craig Emerson strongly argued for further trade liberalization and denounced any "resort to protectionism".
Jan 26, 2011