Patrick Secker (Barker, Liberal Party) Share this | Hansard source

I rise to speak on the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. I have quite a bit of personal experience with New Zealand. For example, I can remember being there in about March 1978, when CER, Closer Economic Relations, was a big talking point in New Zealand. I have been to New Zealand seven times in my life. In fact, I was there as a member of the Joint Standing Committee on the National Capital and External Territories about three weeks ago, when we looked at their Antarctic division and had numerous discussions comparing their islands to islands of ours such as Cocos (Keeling), Christmas and Norfolk. I have also imported rams and semen from New Zealand, so I have quite a bit of experience when it comes to some of the protocols which, in some cases, we had to change because they restricted trade between our two countries. Frankly, I do not think there should be any restrictions between New Zealand and Australia. New Zealand is like a sister state; there is no other country more like Australia. We even have rugby competitions between just New Zealand and Australia. So it is important that in our laws we harmonise our trade as much as possible, and part of this legislation will do that.

As I represent nearly half of Australia’s wine industry I obviously take a lot of interest in this. About 12 per cent of wine consumed in Australia is imported, and most of that is New Zealand sauvignon blanc. Some people might say, ‘Why are we letting all this New Zealand wine into Australia?’ The fact is that we also send a lot of good red wine from my electorate and other electorates around this country to New Zealand. We can grow red wine grapes, such as cabernet, merlot and shiraz, better than most New Zealanders, and they are very good at sauvignon blanc, so there should be free trade between the countries—and I suspect that we actually do better out of it than New Zealand. That does not matter. It is important that we have free trade between the two countries.

These bills will implement the ASEAN-Australia-New Zealand Free Trade Agreement by amending the Customs Tariff Act 1995 to provide for the elimination or reduction of customs duties for many goods that qualify as originating in Australia, New Zealand or ASEAN countries. The free trade agreement provides tit for tat tariff reduction for motor vehicles, textiles, clothing and footwear and a range of other manufactured goods. All Australian tariff rates on agricultural imports will be reduced to zero on day 1. This is a culmination of 30 or 40 years of arguments about reductions in tariffs and how they benefit our country. It is very easy for people to say, ‘We should stop competition from other countries by putting on a tariff’, but that is a dead-end way to go. I am very thankful that governments in the last 30 years—dare I say neoliberal governments—have continued to implement free trade ideas. Reducing tariffs in the long term is always good for free trade around the world, and we should continue to fight for those sorts of things. Indeed, free trade is the one area that really got me interested in politics. As a politician, I have come up against people who say we should reduce competition from overseas countries because we can produce things here in Australia. I think you could grow bananas at the South Pole, but would it be a very sensible thing to do? No, it would not. We could grow anything here, but the importance of free trade is to ensure that we have efficiencies in our trade and production. Subsidies end up being a short-term and long-term disaster for our country. It is only by liberating our trade that we continue to increase it and increase the efficient production of anything that we might do better than other countries, so we should continue with that.

The present Minister for Trade is a bit like a fingerprint because no two of his policies have been the same over the years. In fact, I remember that before the 1998 election he tried to argue that we should put tariffs on pork because we were importing pork. But the problem with that was that we had eight times more other agricultural products, such as lamb, going the other way. It was a pretty stupid idea. At one stage he also used to argue that free trade agreements were useless. In actual fact, he started off doing free trade agreements and now he is finishing off with free trade agreements, but at many stages through that period he has had a different view. At least I can say I have had a very consistent view on the tariff regime in this country.

The ASEAN-Australia-New Zealand Free Trade Agreement is intended to liberalise and facilitate trade between the parties to the agreement. Countries are obliged to eliminate tariffs applied to goods and services imported from other countries that meet the agreed rules-of-origin criteria. More than 90 per cent of goods and services traded between the more developed countries are expected to be tariff free by 2013. That will be a very proud moment for me. It is a pity we cannot say that about the rest of the world. The fact that we will basically be tariff free by 2013 will be an enormous milestone in this country, and it is something that we should celebrate. The Treasury has estimated that Australia will lose $971 million in revenues from tariff reductions up to the 2012-13 financial year. That may be the case, but a tariff is no more than a tax on consumers, so consumers will benefit and our trade will benefit.

The horticulture industry holds the view that the horticultural tariff outcomes under the ASEAN-Australia-New Zealand Free Trade Agreement unfortunately are:

… in significant cases below optimal outcomes and lock Australian horticulture either temporarily or permanently into certain inferior trading positions against Australian horticulture’s competitors into the ASEAN markets.

I think the most quoted example is of mandarines, of which quite a few are grown in the Riverland in my electorate. We have very strong mandarine production and at times, though not always, it is reasonably profitable. It has quite good returns, so the more we can open that trade the better. Unfortunately, in the rush to get a deal, the minister has affected this market in a way contrary to that which we had all hoped for, which was to have free trade like other countries.

Horticulture is a very prominent industry in my electorate of Barker, with many established production areas such as the Riverland, the Barossa, the Murraylands and the south-east. The Riverland in particular has a crucial place in Australia’s food bowl. I note the member for Mallee and I both have situations where wine grapes coexist with citrus orchards and almond plantations. Between them, our electorates of Barker and Mallee account for something like 70 per cent of Australia’s wine grape production. It is certainly something we take a very keen interest in. This agreement would place added strain on many growers in my electorate already under increased pressure because of zero water allocations.

The specific concerns in relation to the outcome for horticulture are that the ASEAN-Australia-New Zealand Free Trade Agreement does not match the horticultural outcomes in the ASEAN-China Free Trade Agreement in the following ways: the tariff outcomes in the ASEAN-Australia-New Zealand Free Trade Agreement are worse than the tariff outcomes in previous bilateral free trade agreements with ASEAN members; the applied tariff outcomes in the ASEAN-Australia-New Zealand Free Trade Agreement are above the globally applied ‘most favoured nation’ rates; and the effectiveness of Australian negotiators in representing the interests of the horticulture industry is lower. So this is a sad occasion when—for the first time, to my knowledge—this country has gone backwards.

From the point of view of the Horticultural Market Access Committee, in a situation in which China enjoys zero tariffs on most horticulture lines into most ASEAN countries and Australia does not and will not for the term of the AANZFTA, Australia’s competitive position will suffer for many years. According to the Horticultural Market Access Committee:

It is a very sensitive issue for vegetable growers because basically we have lost a lot of our markets in South-East Asia to Chinese competition. When you are trying to talk to vegetable growers about becoming export orientated, they see China getting unfair advantages in, say, these free trade agreements vis-a-vis Australia.

Basically it will become almost a no-trade zone for us, which is not in our best interests.

The expectation out of all this was that Australian vegetable growers would at least be able to compete on an equal footing with Chinese vegetable growers in these markets.

The concept of an ASEAN-Australia-New Zealand free trade agreement was floated by the Hawke and Keating governments in the early 1990s. Formal discussion commenced under Minister Vaile in 1999—so we took up that cudgel fairly soon in government. Negotiations commenced in 2004 and continued under Minister Truss. And an agreement was signed by Minister Crean on 27 February 2009. I suppose he can claim the glory, but he still does not have it right.

The amendments proposed in the bill implement relevant parts of the ASEAN-Australia-New Zealand Free Trade Agreement. Whilst the coalition supports the bill, it is disappointing to note that the government is pushing this legislation through with very little notice. The ASEAN-Australia-New Zealand Free Trade Agreement was signed by the Minister for Trade and his counterpart ministers from ASEAN countries and New Zealand months ago, on 27 February. Here we are in September before we are finally getting some action on it. The agreement was tabled in parliament on 16 March this year, six months ago, and referred to the Joint Standing Committee on Treaties, which recommended that binding treaty action be taken in its report tabled on 24 June 2009—again, almost three months ago. Minister Crean proposes to introduce and pass the bills in the House today, 16 September, and wishes to pass the bills through the Senate on Thursday, 17 September 2009. This is highly disorganised and it is typical of this government.

I am sure this is only happening so that the Minister for Trade can attend the East Asia Summit on 25 October, where he anticipates that at least New Zealand and four of the ASEAN countries will also have completed their internal arrangements, thereby enabling the FTA to come into force on 1 January 2010. All the signatories are in any case required to advise of progress with their internal arrangements by 2 November 2009. So we have this rush basically because the minister dropped the ball. It would be embarrassing for the Minister for Trade if Australia’s arrangements were not finalised by that date, which is why the government has tacked this important piece of legislation onto the end of the sitting week before the break—in much the same way that the Prime Minister has been trying to ram through his flawed ETS legislation so he can show off at Copenhagen at the end of the year.

Given that the joint standing committee report was tabled on 24 June 2009, the government has had ample time to introduce and pass the legislation in an orderly fashion. Despite this, the coalition agrees that the free trade agreement will provide greater access to the Australian market for goods originating from ASEAN countries and New Zealand, and, importantly, provide greater access for Australian goods into the markets of the ASEAN countries and New Zealand—notwithstanding the points I raised earlier.

As was noted in the national interest analysis of the agreement, as a group ASEAN and New Zealand constitute a larger trading partner for Australia than any single country. ASEAN member countries and New Zealand together account for 21 per cent of Australia’s total trade in goods and services. It is also worth noting that total trade in goods and services between Australia and ASEAN and New Zealand combined was $103 billion in 2007-08.

The coalition believes that the ASEAN-Australia-New Zealand Free Trade Agreement will also support economic integration in the region and enhance Australia’s participation in the region’s evolving economic architecture though commitments in a range of areas. The coalition agrees that it is to Australia’s advantage to take the proposed treaty action. We support this bill.

See this speech in context