House debates
Tuesday, 28 October 2014
Committees
Treaties Committee; Report
12:30 pm
Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source
Is always a pleasure to follow the member for Higgins. On behalf of the Joint Standing Committee on Treaties, I present the committee's report 144, entitled Treaty tabled on 14 July 2014.
Report made a parliamentary paper in accordance with standing order 39(e).
by leave—Today I present the Joint Standing Committee on Treaties report 144, containing the committee's views on the agreement between Australia and Japan for an economic partnership.
The Japan-Australia Economic Partnership Agreement (JAEPA) was tabled in parliament on Monday, 14 July 2014. Australia and Japan enjoy a strong, longstanding bilateral relationship based on common values: democracy, human rights and the rule of law. During his visit to Australia the Prime Minister of Japan, Mr Shinzo Abe, spoke of the evolving nature of the 'special relationship' between our two countries, as it expanded to take in closer security bonds and broader trade ties.
That relationship has been reinforced by a steadily developing complementary bilateral economic relationship. Since the middle of the 20th century, Australian resources have supported Japan's prosperity and Japan's manufactured goods have contributed to Australia's modern living standards. Today, Japan is our second-largest trading partner with two-way trade, in 2013, standing at $70.8 billion.
JAEPA will further enhance this important economic relationship. It is the first agreement that Japan has signed with a major agriculture-exporting country. It is seen as the most liberalising trade agreement that Japan has ever concluded. This agreement places Australia at the front of the pack. Tariffs will be reduced in a range of areas. Modelling predicts that beef exports will benefit by around $5.5 billion over 20 years and deliver an increase of up to seven per cent in the annual gross value of Australian beef production.
There will be duty-free quotas for Australian cheese, immediate duty-free access for the growing trade in milk protein concentrates and new opportunities for ice cream and frozen yoghurt. Importantly, Australia will gain a first mover advantage. Australian exporters will have the opportunity to beat their competitors into the Japanese market and establish a presence with consumers before other countries have that chance.
As with all negotiated free trade agreements, JAEPA did not deliver on all the outcomes that we would have liked. However, as one witness pointed out to the committee, the agreement represents a 'seismic shift' in Japan's traditional thinking on trade. As another witness told the committee, JAEPA will refocus attention in both Japan and Australia on the relationship between the two countries. It will open up opportunities for further trade liberalisation and the flow-on effects will go far beyond tariff reductions.
The committee found that increasing the non-screening investment level to $1,078 million is expected to significantly increase Japanese investment in Australia. In 2013 it stood at $131 billion. The revised provisions will make it simpler for Japanese investors to do business in Australia, making it an attractive option in an increasingly competitive market.
Minerals and energy resources make up the bulk of Australia's export trade with Japan, worth over $24 billion and accounting for over 80 per cent of total merchandise exports in 2013. Australia is facing significant competition in this area from global competitors, but the economic agreement will offer Japan reassurance concerning energy and resource security from Australia, providing suppliers with a boost. Overall, we are satisfied that JAEPA has the potential to provide Australian business and industry with a range of profitable opportunities and to be a net benefit to the Australian economy.
I would like to take this opportunity to thank fellow members of the committee for their cooperation. You, Mr Deputy Speaker Whiteley, are of course a member of that committee and I thank you, as well as the deputy chair, who is in the chamber here today, and all members of the committee for their cooperation on this, and particularly the committee secretariat for their work in putting this report together. On behalf of the committee, I commend the report to the House.
12:35 pm
Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source
by leave—The Joint Standing Committee on Treaties is recommending the ratification of the Japan-Australia Economic Partnership Agreement. This is consistent with the weight of evidence and submissions to the committee, which stressed the advantages of this agreement for Australian agriculture, and the opposition supports that recommendation.
Having said that, I am not going to let this opportunity pass without expressing my concern that the trade agreements we are entering into reflect a willingness to sacrifice some parts of the Australian economy—conspicuously manufacturing—in order to advantage others, conspicuously agriculture. I have a number of concerns about this strategy. First, it is a recipe for unemployment in Australia's manufacturing centres.
I have just received the latest Department of Employment small area labour market figures for my area. They show that for the City of Moreland unemployment has increased since the change of government from 6.8 per cent in September 2013 to eight per cent in June this year. Unemployment in Coburg has risen from 8.5 per cent to 10 per cent, and unemployment in Brunswick and Fawkner has also climbed about 1½ per cent since the change of government, to over nine per cent.
But it is to the immediate north of my electorate where the real catastrophe is unfolding. In Broadmeadows unemployment has risen since the change of government from 21.9 per cent to 26.4 per cent. That is more than one in four. Unemployment in Campbellfield and Coolaroo has risen from 18.8 per cent to 22.9 per cent. Unemployment in Meadow Heights has risen from 18.6 per cent to also be 22.9 per cent. These are terrible figures. They are a recipe for social disadvantage on a massive scale with the certainty of crime, drugs and mental health problems to follow.
The second problem, as Tom Skladzien from the Australian Manufacturing Workers' Union says, is that these bilateral trade agreements will lead to the continued narrowing of our economic base, making secure employment harder and making us all the more vulnerable to international shocks and price changes. It is my absolute conviction that if Australia continues to go down the path of narrowing our economic base there will come a time when we will regret it. The mining and energy resources boom will not last forever. With apologies to Winston Churchill, never before in our history have we put so many eggs in so few baskets. The third problem is that, in practice, we often do not get the gains for agriculture that could justify the losses for manufacturing due to behind-the-border barriers.
I also want to make some comments about the way in which trade agreements have moved beyond tariffs and quotas and into every area where governments seek to regulate in the national interest, such as foreign ownership and migration. Chapter 12 sets out the conditions for the temporary entry of skilled persons. It is unlikely to prove problematic. But I cannot say the same thing about the proposed bilateral trade agreement with China. Michael O'Connor from the CFMEU warns that any agreement with China must not restrict the ability of Australia to regulate movement of workers, including through labour market testing, as well as numerical quotas. He says if the Korean labour market testing exemption is replicated in the China FTA then the impact on the labour market would be disastrous.
The other area of concern is the way in which trade agreements are being used to advance global corporate power at the expense of democratic decision making by elected governments. I am particularly concerned at the prospect of the Trans-Pacific Partnership Agreement, including a provision on investor state dispute settlement. It would bust the door wide open for US companies to sue government decisions they did not like. Since the NAFTA was signed, Canada in particular has been the victim of regular attacks by US corporations. Egypt was sued by a French company after the Arab Spring for raising the minimum wage! It goes to show how pernicious and wicked these provisions are.
What we do know about the TPP, from documents leaked by WikiLeaks, is very troubling. A few days ago WikiLeaks released the negotiating text for the intellectual property chapter of the TPP. Last week I was able to discuss copyright, intellectual property, patenting and pharmaceutical issues in the TPP with Trish Hepworth, the Executive Officer of the Australian Digital Alliance, Dr Burcu Kilic, Legal Counsel of the Washington-based Global Access to Medicines Program, and Sanya Reid Smith, Legal Adviser to the Geneva-based Third World Network. I share their concern that the intellectual property chapter of the TPP as it stands will impact adversely on innovation policy, freedom of expression and public health.
One of the key problems is that a lot of treaty negotiating goes on in secret and the public does not know what is actually being considered. By the time a treaty comes to the parliament, the Australian government, and other governments, have already signed it, and it is extremely difficult to do much about it then. I urge that there be more transparency in the negotiating of the China bilateral trade deal and the Trans-Pacific Partnership.