Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak on the Customs Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014 and the Customs Tariff Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014, more commonly is that KAFTA tariff bill. However, just so people understand, this is not actually a free trade agreement. It is more accurately a bilateral preferential agreement. I would turn to the fine work done by the Joint Standing Committee on Treaties—and I note that the member for Fremantle is here in the chamber with me—and note that the member for Fremantle and the member for Wills put in a dissenting report to the committee's report on this KAFTA tariff bill. It makes for very interesting reading and makes some very good points.

It is my understanding that the opposition will be supporting this agreement, but I want to draw to the attention of those listening some of the concerns that the Labor Party has with this agreement—concerns highlighted by the member for Fremantle and the member for Wills in their dissenting report.

Obviously, Labor supports implementing agreements that will create economic growth and jobs for Australians. We are the Labor Party, and we have always believed that keeping people in employment and well educated will give people a greater chance at prosperity. That is what motivated those shearers in Barcaldine to come together in the first place. We have always been about jobs. That is why the Labor Party has such are proud history of being part of the Australian story and making sure that people are employed. That is why we are, economically, the envy of the rest of the world and, historically, have always been a nation that believed in the fair go. And what is a fair go? It is really about making sure people get opportunities and get jobs.

Australia is the fourth-largest supplier of agricultural products to the Republic of Korea, accounting for around 10 per cent of the Republic of Korea's total agricultural imports. Obviously, the farming sector would be particularly keen on this KAFTA agreement. When you think of South Korea, with a population of 50 million and rising—although slowly—and a GDP of US$1.3 trillion, if we can get 10 per cent of their total agricultural imports that would be good news for the farmers of Western Australia, the farmers of Queensland and the farmers of Australia. We understand that trade is important. In 2013 Australian exports to the Republic of Korea were valued at around $1.9 billion. Hopefully, this agreement will see an improvement in that. The government report into KAFTA said that an agreement would eliminate high tariffs on a wide range of Australian exports—particularly beef, wheat, sugar, dairy, wine, horticulture and seafood. All of these are what you would call natural resource sources. If you go through those products, there is not a significant value-adding in any of those products—with all respect to the wine industry and some of those other things—but they are not high value, value-adding, I guess. They are the sorts of jobs where the higher skills are involved.

This agreement with Korea is expected to be worth about $5 billion in additional income in Australia between 2015 and 2030, and that is good. The agreement will obviously provide a boost to the Australian economy, projected at $650 million after 15 years of operation if all goes well. It is important that we compare it not just with the opportunities but also with the threats—and there are threats. The United States, who compete with us in the Korean market in many of the products—beef, wheat, sugar, dairy, wine; I am not sure about their seafood industry—there is the possibility that they would take the Australian share of the Korean market. So it is not just the opportunities that are there but the threat, if we did not have such an agreement.

In its first year of operation it is expected that the Customs Tariff Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014, or the Korean bilateral preferential agreement, will create approximately 1,700 jobs and after this agreement is signed 84 per cent of Australia's current exports by value will enter Korea duty-free. Agricultural exports are expected to increase by 73 per cent and manufacturing by 53 per cent by 2030 as a result of this agreement.

Whilst acknowledging the good things that come with this agreement—and we are a trading nation and we should be doing all we can to make sure that there is free trade around the world, free and fair trade around the world—obviously our preference is always to do this with all nations rather than through these bilateral agreements, but there is not a lot happening there at the moment in terms of world trade improvements.

I do have some concerns, particularly about the implications on investor-state dispute settlements provisions, some of the intellectual property provisions and, most importantly, as a member of the Labor Party, the protection and nurturing of Australian jobs. They are the three things that I wanted to highlight.

The investor-state dispute settlement clauses, or ISDSs, enables corporations or investors to sue governments if their investments are harmed by a government policy or regulation and then governments, almost as a corporate entity, can be held responsible and financially liable if the legal action is successful. There is an argument up-front that such clauses are essentially a threat to our sovereignty—a threat to Australia.

Ms Parke interjecting—

I acknowledge that there were treaties in the past negotiated by Labor governments that do have these clauses. However, not since 2011 when the Gillard government agreed, and I think the national platform of the Labor Party now reflects this, that we will never allow an investor-state dispute settlement clause in any of our treaties because of that very fact.

The member for Fremantle interjected earlier on the idea that they are a threat to our sovereignty. If you look at this around the world now, we see countries like Canada being particularly hammered and the United Kingdom, I think—the member for Fremantle? There are many cases where they are taking these countries, El Salvador, where they are being hammered. As corporations rise, as the economy of the planet becomes so much more interconnected and the significance of the nation-state is on the decline, I guess, and as the Apples and the McDonalds and those multinational corporations that spread around the planet looking for tax havens, which is their legal right, we have some interesting challenges before us. We form communities, nation-states, to benefit the people who are members of them. Corporations have a different motivation. Obviously, they are duty bound to do the right thing by their shareholders, and that is deliver a profit. We do have the Corporations Law, which has some oversight, but it is not the same as the concerns of a nation. Whether they are Liberal, National or Labor, I think I can say of nearly every single member of this parliament—certainly, 225 of them—that every decision they make is in what they believe to be the nation's interest, not in their interest.

So these investor-state dispute settlement clauses mean we could end up with a Korean company like Hyundai challenging a decision made by the Commonwealth of Australia that has been made in the national interest, saying, 'That's going to affect us,' and we end up in court. There is already a challenge taking place over our plain tobacco packaging laws.

As a member of the Labor Party I strongly believe that introducing ISDS clauses within this Customs amendment bill will undermine the democratic rights of all Australians and represents a violation of competitive neutrality when it comes to Australian businesses' ability to compete on the level playing field that we aspire to. In fact, as a nation we are so honest and fair dinkum and trustworthy that we get hoodwinked, I think, sometimes by other nations that are not as committed to that level playing field. So these clauses can hamper a nation-state's ability to make a decision that is in the national interest. It is, as I said, part of the Labor Party platform that we stand by Australian jobs, and we make our position very clear on this particular ISDS provision.

Obviously, we are in opposition so we do not get sign off on treaties. We do not get to make decisions from opposition. But I do urge caution with this clause, and I think there should be particular focus on this by the government when it comes to negotiating other such agreements. The government are the world's worst card players when it comes to negotiating treaties. They have already flagged with China that there will be an agreement within a certain time—not a great approach to negotiating a treaty. Some might argue that the Chinese are the world's greatest card players, and the government have already said, 'These are the cards we're holding.' That is going to make for an interesting process in the months ahead.

Evidence shows when you look around the world that many governments are critiquing these ISDSs because transnational investors have lodged and won more cases and been awarded huge damages over health and environmental legislation—legislation that is made in the nation's interest but that affects the corporations. Governments in significant economies in Europe, South America, Africa, the Indian subcontinent and Asia have reviewed and/or renounced ISDS on the grounds that it undermines their legitimate democratic legislation. There is widespread concern about the tobacco companies' use of ISDS to undermine national public health measures to regulate tobacco advertising. In a laissez-faire, uncontrolled world, corporations can sell tobacco; but, obviously, when you make decisions in the interest of a nation, you put curbs on tobacco sales. This is a classic praxis, I guess, this intersection between the interests of a corporation and the interests of the people who live in a nation.

In 2011, the Labor government introduced groundbreaking plain packaging laws to combat tobacco consumption and in turn reduce the immense impact on the Australian healthcare system from tobacco related diseases, costs that were not being borne by the people selling the product—a legal product, I admit. That legislation was a world first. I think there was bipartisan support for the plain tobacco packaging legislation; I am not quite sure about that. There was? Yes.

But then, within a few months, the tobacco giant Philip Morris Asia Ltd, the Asian arm of the American tobacco producer, took the Australian government to the international Permanent Court of Arbitration using the ISDS mechanism embedded in Australia's bilateral investment treaty with Hong Kong. So Philip Morris Asia is using the provisions in a 1993 investment agreement to challenge the plain tobacco packaging legislation in the courts and to seek compensation, arguing that the Australian parliament's policy undermined the value of its investment by appropriating its trademarks and its branding—appropriating the company's property, if you like.

Monique Goyens, Director General of the European Consumer Organisation and lawyer of 30 years has stated that there is no need for additional legal mechanism to deal with disputes that could be resolved through routine court action. The ISDS clause offers greater legal rights to foreign businesses than those available to domestic businesses, so putting Australian businesses further behind. Labor does not support provisions that would constrain the ability of the government to make laws on social, environmental and economic matters in circumstances where those laws do not discriminate between domestic and foreign businesses.

As I said before, I do agree that there were previous treaties by Labor governments that actually had these ISDS clauses. But these are all serious issues that, if handled poorly, could have an adverse consequences for Australia's sovereignty, our economy and our legal system as well as for the intellectual property providers, consumers and unemployed Australians.

Labor also has concerns about the expansion of intellectual property rights which would extend monopoly patent rights to charge higher prices and give copyright holders greater rights at the expense of consumers, particularly Australians. Labor has concerns about KAFTA's provisions on intellectual property and obviously we will determine our position on any changes to the Copyright Act when that debate comes on later.

I also have concerns about the changes to advertising for labour. Obviously, modern Labor, whilst it came out of a protectionist party back in the 1890s, champion free trade. If you look at our history from Curtin, to Forde to Chifley—not much time with Forde, obviously, but I must mention him because he is a Queenslander—to Whitlam, Hawke and Keating, we started protectionist but then we became much more committed to trade. Labor believes the government should require employers show that there are fair dinkum skill shortages if they wish to utilise KAFTA's provisions on the movement of people and do so in a fair dinkum way; otherwise we will be swamped by skilled workers coming from Korea.(Time expired)

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