Angus Taylor (Hume, Liberal Party) Share this | Hansard source

It is a great pleasure to rise on the TPP today and a particular pleasure as the chairman of the Joint Standing Committee on Treaties. I want to open with an acknowledgement of the enormous contribution to Australia's growth in international trade we have seen from Minister Andrew Robb as well as from the current Deputy Prime Minister and former Howard government trade minister Warren Truss. Both of them have, today, confirmed their plans to retire from parliament. Their contribution to trade is something we should celebrate, because it has been very significant, particularly in the last couple of years. It sets Australia up for many years of openness and prosperity that has been so fundamental not just to our history but will be to our future.

Australians have an innate understanding of the contribution of openness to our prosperity. We only have to look at our relatively short European history to understand how that openness has contributed to prosperity—since that first bale of wool. That first bale of wool left John Macarthur's shearing shed, went to the port and was delivered to England. That was on the back of our first genuine trade agreement. It was not in the form of our modern trade agreements, but there was a very clear understanding between us and England that our wool would go into their market freely, without any serious inhibition. That was the beginning of an extraordinary history of trade in this country.

We saw, as we progressed through the 19th century, a shift from exports in wool to exports that included gold and meat. Then, by the time we got to the 20th century, we saw an extraordinary opening up of trade in coal, particularly with Japan, in the 1950s and sixties. This was soon after the Second World War, but there was an openness and understanding from Australians of how important these markets and free trade were to our prosperity.

More recently—and I see that the member for O'Connor is sitting next to me, and, as a Western Australian, he will understand this well—there was the opening up of the iron ore trade, which is an extraordinary story in its own right. We worked with the Japanese to open up that iron ore market, which ultimately moved from Japan to China. It has been an absolute backbone of our economy in recent years, particularly the Western Australian economy. But it has also made an enormous contribution to Australia more generally.

As we move into the postmining boom, growth in trade is now broadening—from that very strong focus on resources to, in recent years, rapid growth in agricultural trade, higher value agricultural products, as well as our more staple commodities. We are seeing that trade growth extending very rapidly into services. We are seeing extraordinary growth in tourism and financial services—and we have no doubt that that will broaden more in years to come. This is instinctive for Australians. This is at our core. We absolutely understand that openness, trade, these fast-growing countries to our north are fundamental to our prosperity in the future, just as trade was fundamental to our prosperity in the past.

Open trade has its critics. Those critics are not new. We have seen some argue that the economic benefits are small. When we look at the TPP, we see modelling that some claim as justification for trying to shut our borders to trade. As someone who has been heavily involved in economic modelling over many years, let me say to those people: those models rarely represent the reality.

When the New Zealanders entered their free trade agreement with China, no-one could have foreseen the scale and depth of benefit that would be delivered by that free trade agreement. The reason is very simple: when countries trade more, they specialise more. The modelling never captures the full extent of this. This is Adam Smith's pin factory, as each country specialises in the part of the pin manufacturer that they are really good at. Our fundamental competitive advantage is leveraged—used—when we open up trade and do what we are best at.

In a modern world prosperity comes from being best in the world—and let me tell you: Australian are the best in the world at producing resources. We are the best agricultural producers in the world, and we are well on the way to being absolute leaders in tourism, education, financial services, health services. I have no doubt that opening up these trade agreements will lead to that specialisation and focus on excellence, which is what Australians have always done and will continue to do for many years to come. So the critics, who rely on some static and, I would even argue, lacklustre economic modelling, should look a little more broadly, get out into the real world and, particularly, look at some of those very successful trade agreements that we have seen in our region in recent years.

Before I entered politics I had the opportunity to co-author a report in 2012 into the extraordinary opportunities for commodity exports in fast-growing Asian markets. I saw how enormous that growth potential was. It is why the recently signed bilateral agreements with Japan, Korea and China have been of the highest priority for this government. Just a couple of months ago, I tabled in this place, as Chair of JSCOT, the committee's report into ChAFTA, the China-Australia Free Trade Agreement. I said in tabling that report:

China is currently Australia's largest trading partner, with two-way trade worth $160 billion … One hundred and seven billion dollars of this … is exports, and that number is going up fast. Our exporters stand to gain greatly from reduced export costs from this agreement, just as we expect businesses and households to pay less for our $52 billion of imports. Together—

these trade agreements—

… will open up the major Asian markets to Australia's consumers and industry.

Turning to the TPP: this is an agreement of absolutely unprecedented scope. It will establish more seamless trade across 12 countries by setting commonly agreed rules and promoting transparency of law and regulations. It will provide greater certainty for businesses, reduce costs and red tape and facilitate participation in regional supply chains. It will also address contemporary trade challenges in ways that have not been addressed in Australian FTAs. It will stand as a model for future agreements.

The agreement will include state-of-the-art e-commerce provisions. For agriculture, it will eliminate tariffs on more than $4.3 billion of Australia's dutiable exports of agricultural goods. A further $2.1 billion of exports will receive preferential access through new quotas and tariff reductions. We will see new access for beef, dairy, sugar, rice, grains and wine. Of course, they are all important markets for my electorate of Hume.

I am also very excited about the opportunities for the Australian services sector. I have mentioned some of those services, but one in particular that we should be very focused on is financial services, as we see very rapid growth of Asian capital markets as they move from sending their capital into the US bond market. Instead of doing that, they will be investing it directly in their own capital markets, and they will need enormous amounts of support and expertise to develop those capital markets in years to come. I have no doubt Australia will play a significant role in exactly that, aided by the TPP.

The process from here will include an inquiry by the Joint Standing Committee on Treaties. This will be important in looking at these all-important issues: the investor-state-dispute mechanism, labour conditions and treatment of intellectual property. I am confident that those issues have been given due consideration in the formulation of this agreement, but it will be important for JSCOT to fully scrutinise those issues in its upcoming inquiry.

The day we stop preaching the benefits of openness is the day our economy starts to focus inwards and starts to go backwards. The 12 countries that negotiated the TPP make up almost 40 per cent of the world's GDP. This is a platform for Australia's future prosperity.

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