Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

I would like to take the opportunity right at the outset to acknowledge the work of the member for Ryan. I had the great pleasure of working with the member for Ryan in the previous parliament. I was the chair of the Australia-China Parliamentary Group and the member for Ryan was the secretary of that group. I have witnessed the considerable energy and enthusiasm that he has given to developing trade not just between China and Australia but also further afield. And, indeed, he is a very capable Mandarin speaker. I know that in his electorate he has held trade forums on many occasions, inviting people from China to meet potential trade partners in Australia. He is a young, vigorous member of parliament who is doing his bit to promote trade, which is a very fine contribution to the work of this parliament.

I am pleased to speak on the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and cognate bill, legislation that actually had its genesis under the coalition government. Considerable work was done to bring the legislation to its fruition but it has reached its finality under the current government. The Australia-Chile Free Trade Agreement should commence early next year—I think on 1 January. It is a comprehensive and wide-ranging agreement that provides Australia and Chile with more liberal access to each other’s good and services.

The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 contains proposed amendments to the Customs Act 1901. These amendments provide the rules for determining whether goods originate in Chile and introduce powers to allow Customs to obtain manufacturing records from Australian exporters and producers. The amendments will give effect to Australia’s obligations under chapter 4 of the Australia-Chile Free Trade Agreement. This chapter provides the rules for determining whether imported goods from Chile are eligible for preferential customs duty rates under the agreement. The bill will usher in a new and exciting period for Australia-Chile relations that have the potential to be mutually beneficial for both countries. From an Australian national interest point of view, there are likely to be many benefits from a closer alliance with Chile.

Over the last 15 years Chile’s economy has grown at an average rate of almost 5.5 per cent a year and is estimated to reach a total GDP of US$170 billion this year—but I am not quite sure how it is faring in the current financial circumstances. Chile is Australia’s second largest export market in Latin America, with coal, civil engineering equipment, lead, optical equipment and refined petroleum accounting for the majority of exported goods. Imports from Chile into Australia also increased by 125 per cent between 2006 and 2007. The majority of those imports are of copper, nonferrous base metal waste, pulp and waste paper, pig iron and wood. Having served on the Joint Standing Committee on Foreign Affairs, Defence and Trade Subcommittee in the last few parliaments, I know the work of the former member the Hon. Bruce Baird, who fostered closer ties with South America, including Chile, and led a delegation. Unfortunately, I was not able to go on that delegation at that time, but I commend that report to anyone who has a long-term interest in export into the South American countries, because there was a lot of very good information encompassed in that report.

According to the Department of Foreign Affairs and Trade, Australia is the fourth largest foreign investor in Chile, with around US$3 billion of direct investment. Chile already has a number of existing free trade agreements with most Latin American countries, the European Union, India, the United States of America, Canada, Japan and China. The Australia-Chile Free Trade Agreement will put Australia on an equal footing with competitors from these countries—in particular with Canadian coal exporters, who have increased their market share following the elimination of tariffs under the Canada-Chile FTA in 1997. Australian coal exporters will therefore be more competitive and increase their market share in Chile. I expect that the falling of the Australian dollar might also advantage them.

Through trade, Australia’s abundant resources and the skills of our people are building wealth at home and abroad. While the global marketplace is highly competitive, it abounds with opportunities. By exporting, Australian businesses access a global marketplace of more than six billion consumers. And, by participating in the global marketplace, Australia’s businesses are more likely to be innovative, to enhance their productivity and to integrate into global supply chains. In fact, I think it is fair to say that, in a country such as Australia with a population of 22 million, it is essential for many kinds of businesses to look to market their products further afield and to expand their marketplace. The domestic market in Australia is relatively small in global terms and we have many highly competitive and innovative businesses that benefit from seeking markets outside the domestic market and getting into the export market.

Strong and responsible budgets by the coalition government, I might say, delivered perhaps the longest period of sustained low-interest rates since the 1960s. This, coupled with low inflation and very low unemployment, allowed our businesses to grow and take further advantages in seizing export opportunities. In the 2006-07 period, Australia’s exports grew 10 per cent to a record $216 billion—more than double the level of a decade ago. Exports of manufactured goods, resources and services all reached record levels in this period. Resources exports rose nine per cent to $72.8 billion and services exports grew 11 per cent to $46.2 billion. Manufacturing exports increased 11 per cent to $44.1 billion, with strong growth in exports of metals, machinery and other manufactures.

An open and dynamic economy is the key to delivering the benefits of trade to all Australians. The nation is now reaping the rewards of two decades of wide-ranging structural reforms that have improved the functioning and flexibility of our goods, services, labour and capital markets and delivered 15 years of uninterrupted economic growth. In fact, the export of services is rapidly growing, and it is something that we are seeing in this decade as being highly beneficial—Australia having some good services to trade. Australia continues to pursue high-quality free trade agreements which offer the prospect of worthwhile gains for Australia—faster and more extensive gains than can sometimes be achieved through the World Trade Organisation process, which can be a bit cumbersome, a bit slow and a bit unwieldy. The Australia-Chile FTA will generate export opportunities for Australian companies in many services and investment areas, such as mining and energy technology, engineering and consulting services, information technology, tourism, agriculture, and the food and wine industry.

In an era when improving technology is seeing the world become a smaller place, free trade agreements are vital to continued prosperity and provide stimulus to both economies. While a good free trade agreement is recognised for what it offers, a great FTA should be applauded for what it protects. For this reason, I wish to acknowledge the contribution of the Joint Standing Committee on Treaties in the final shaping of this agreement, especially in its intentions to keep an eye out for the Australian horticulture industry. I suppose I have a vested interest in this, because in the electorate of Pearce we have a very substantial number of growers across the horticultural sector. In securing the economic wellbeing of our country we must make sure we do not destroy our local producers. We have an obligation to our own industries to ensure their safety and longevity. For an electorate such as mine, where almost anything you can imagine can be eaten is produced, this is very important.

The Joint Standing Committee on Treaties tabled report 95 on October 16, which included three recommendations on the Australia-Chile FTA. These were that the committee supports a review of its operation in two years to assess the ongoing relevance of concerns regarding phytosanitary measures, the impact on Australian horticulture, and labour and environmental standards. Phytosanitary measures protect plant life in the territory of each party to a free trade agreement and are usually considered in conjunction with sanitary or animal related measures. These are more commonly known as quarantine measures. With horticulture and agriculture playing such a vital role in the Australian economy, particularly in the electorate of Pearce, these measures are more than welcome. We need to make sure that, as I said, we are looking after our producers, pests and diseases that this country has not seen are not introduced and, indeed, the public have an opportunity to be sure that the produce they are purchasing is clean and healthy to consume.

This agreement has already made and will continue to make many horticulturalists nervous. I have to say that. Horticulture Australia’s submission to the Joint Standing Committee on Treaties pointed out that, because Chile and Australia are both in the Southern Hemisphere, they share common seasons. This means that Chilean horticultural products can be imported to Australia at the same time as Australian horticultural products are on the market. Horticulture Australia anticipates that the price of the Chilean products will be less than that of the Australian products because of the cheaper labour costs in Chile. These are not unreasonable considerations. You cannot blame our producers for being a little nervous. There have been warnings in Western Australia that rising costs of fertiliser, chemicals and fuel have increased the cost of planting a crop by more than a third and are threatening next year’s grain plantings in relation to farm incomes.

The Australian government is committed to bilateral and multilateral free trade or trade-liberalising agreements which aim to open up global markets as rapidly as possible. Horticulture, like other agricultural commodities, is and should be a part of these agreements. However, from these agreements horticulture needs and seeks tariff outcomes into target markets which are equivalent to those granted into Australia and at least equivalent or superior to those granted to other suppliers under similar agreements into those markets. On top of this, there must be a deep and mutual understanding of the sanitary and phytosanitary measures adopted by each country and there should be strengthened cooperation between the governments of Australia and Chile over sanitary and phytosanitary matters. In any free trade agreement the aim must be to facilitate bilateral trade in food, plants and animals while protecting as a priority the human, animal or plant life of each country.

While it should be remembered that free trade agreements can be beneficial to local farmers and producers, with export opportunities for their own goods, a way of promoting free trade with Chile while protecting our own growers and producers is through urgent amendments to Australia’s country-of-origin labelling laws. This is something I have been on about quite a lot lately, particularly in my electorate. If the current government listened to what growers wanted—clearer and simpler country-of-origin labelling for processed food and enforced compliance with these labels for fresh food—it could be a win-win situation. I think it is only fair, I say once again, that when the Australian public are buying products for consumption they fully understand whether those products are safe and where they have come from and that they have a choice of whether they buy imported products or Australian products. The government promised to overhaul its country-of-origin labelling laws, but the truth in labelling remains hidden. We have not seen evidence that there is any strong intent right at this point in time to deal with this matter of truth in labelling.

We as legislators need to examine how government can provide policy to assist farmers through difficult times and, at the same time, ensure the continuity of food supply, because it is a matter of national priority. We need to strike a balance between the need to have a vigorous trading system while understanding the pressures on our domestic producers and valuing their contribution in bringing clean, high-quality produce to the market and in providing a level of food security in this country which, to my mind, is greatly undervalued. Striking the right balance is particularly important during these times of drought, low market prices and high input costs. We cannot leave our growers to continually take a hammering without providing them some support.

That being said, we would not be looking after our long-term interest if we ignored the need to take sensible steps to remove trade barriers. Australia’s GDP has increased dramatically and has been a contributing factor in seeing us become one of the most financially secure nations in the world. At no time in our history has that been more apparent than today. So how does one manage the balance between foreign trade and looking after domestic producers? Some may say, ‘You can’t have your cake and eat it too.’ The recommendations of the Joint Standing Committee on Treaties will allow Australia to keep tight measures over this agreement. Having the option to assess the operation of the FTA after two years will provide the government with the appropriate checks and balances to ensure that the Australian horticulture industry, phytosanitary measures and labour and environment standards are not negatively affected.

I have long been a strong supporter of the agriculture and horticulture industries in Australia, particularly those within the Pearce electorate. That support has extended to pork producers seeking to ensure that we keep our industry free of disease and expand our export opportunities, to the table and wine grape industry, to olive growers and to those who produce high-quality fruit and vegetables for both domestic and export consumption. I fully understand the anxieties that they sometimes have about free trade agreements and believe our first obligation is to ensure the health and future of our own home-grown Australian industries. But the two objectives are not always mutually exclusive. It is a balancing act.

It is undeniable that at times there are tensions, but for a vast and productive country like Australia with a small population export is vital to our continued economic success and the growth and continuation of our commercial interests. I believe this FTA has the potential to be beneficial to all concerned, and there is some assurance that there will be opportunities within two years to make the necessary changes.

Some were of the view that the Minister for Trade could have made a more thorough assessment of the costs and benefits of this free trade agreement, but I am reassured with the recommendations of the Joint Standing Committee on Treaties that we will be able to manage this and that a proper review of the operation of this agreement will be carried out, as was recommended. I support the bill. But I look forward to seeing the results of the review and, hopefully, to the bill providing greater opportunities for Australian producers.

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