Federal Nationals leader Warren Truss says his party would be open to a free trade agreement (FTA) with China if it contained the same protections for agriculture as Australia's recent deal with South Korea.
Prime Minister Tony Abbott has pledged to secure a FTA with China by the end of the year but has faced opposition from the government's coalition partner over the buying up of agricultural land and businesses by foreign investors.
The government had planned to reduce the Foreign Investment Review Board (FIRB) national interest test from $248 million to $15 million for proposed agricultural purchases, but China wants it increased to $1 billion.
Mr Truss has pointed to the South Korean FTA as a possible compromise.
In this case, the $1 billion threshold only applies to investment in "non-sensitive" areas.
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However, agricultural land and agribusinesses are protected as sensitive sectors of the economy and subject to $15 million and $53 million review caps respectively.
"We think that what happened in relation to Korea is a model that was acceptable in that instance - it may well be acceptable again in the case of China," Mr Truss told ABC radio on Monday.
"We think agriculture and agribusiness should be on the sensitive list, like media and a whole stack of other things, and that's the kind of principles that underpin the Korean arrangements."
