Australian Prime Minister Slams 'Xenophobic' Opposition To China Trade Deal

SYDNEY (Reuters) - Opposition to a landmark free trade deal with China is driven by racism and xenophobia, Australian Prime Minister Tony Abbott said on Tuesday, as his political opponents dug in their heels over what they say are weaknesses in its labor provisions.

China and Australia sealed a trade agreement last year that was more than a decade in the making, significantly expanding ties between the world's second-largest economy and one of Washington's closest allies in Asia.

The deal, which members of Abbott's conservative government called the best ever signed between Beijing and a Western country, will open up Chinese markets to Australian farm exporters and the services sector while easing curbs on Chinese investment in resource-rich Australia.

However Bill Shorten, leader of the center-left opposition Labor Party, has pledged to withhold support for the deal in parliament unless greater protections are introduced for Australian workers.

That has put Shorten at odds with state Labor Party leaders, who have pledged to support the deal, despite ratcheting up political pressure by endangering one of the unpopular government's signature policy accomplishments.

Abbott called opposition to the deal "xenophobic at best, racist at worst" during a raucous debate in parliament.

"The only free trade agreement that members opposite have complained about is the free trade agreement with China. What have they got against China?" Abbott said.

Shorten hit back by proposing changes that would maximize job opportunities for Australians, protect overseas workers from exploitation and ensure safety on work sites.

"You are a good man at being stubborn, but you confuse it with strength," Shorten shouted at Abbott. "It is time for you to put Australian jobs first in the agreement."

China is Australia's top trading partner, with two-way trade of around A$150 billion ($130 billion) in 2013. Once the agreement is fully implemented, 95 percent of all Australian exports will enjoy duty-free entry into China.

Australia needs China's help to transition from a reliance on exports of minerals such as coal and iron ore to expanding its food and agricultural exports to a growing Asian middle class.

However, growing anxiety over the decline of Australia's manufacturing sector, a slump in the price of key commodities and tailing off of a mining boom has helped stoke fears that the deal would do little for struggling Australian workers.