Thursday, 13 September 2018
Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018; Second Reading
I rise to support this bill, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, and related bill and, in particular, to speak about the amendment that the member for Blaxland has moved, which I see as key to Australia having a transparent and open trade negotiation system as we move forward. Listening to the member for Lyne, I have to say that I admire his optimism and his hope for the benefits that this agreement may bring. But one of the key issues that Labor has with the way the agreement has been negotiated is that there has been no independent modelling. There has been no Australian-funded independent modelling to look not just at the economic benefits but also at the social benefits—and I want to talk about some of those aspects.
It isn't just this side of the House that believes independent modelling is important. As a member of the Joint Standing Committee on Treaties, I've had the privilege of working through two inquiries, one into the first TPP and the second into TPP-11. I think all members were very clear in our report that independent modelling is a favourable thing to have in general on a trade agreement. You can read the committee's reports and the committee's comments on that. For this agreement, in particular, it should have been vital. I'm not the only one calling for it. Independent economic modelling has been called for by some of the largest business and industry groups in this country, including the Australian Chamber of Commercial and Industry, the Minerals Council of Australia. The Harper review and the Productivity Commission have called for independent modelling, as have the Standing Committee on Foreign Affairs, Defence and Trade and the Joint Standing Committee on Trade and Investment and Growth. So there is a general belief that, before we proceed, it is much, much better to have independent modelling. So I welcome Labor's longstanding commitment that if we take office we will introduce this.
What's concerning is that the modelling that has been done might burst the balloon a bit of some of the people who think that this is going to suddenly, in the next few months, bring about massive change. The Victorian government did undertake modelling. Any modelling that has been done has shown very modest improvements in GDP over a decade—so not modest improvements next year, but modest improvements over a decade. In fact, it's clear that organisations like the Minerals Council, the Business Council, the Australian Food and Grocery Council, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the National Farmers' Federation, the Winemakers' Federation and others weren't satisfied with the modelling that had been done. They commissioned their own. Recently, Peter Petri and Michael Plummer, two US economists, have produced a report, which I think we should be honest with the community about in terms of the benefits it says will flow through.
The new modelling shows that the Australian agriculture sector stands to make zero gains under TPP-11. The report also acknowledges that durable manufacturing will shrink in Australia by two per cent under TPP-11 and that any increase in exports will be completely offset by increased imports. So, yes, there will be some winners, but we need to be really up-front about who the losers will be. The report commissioned by the industry groups showed that Australia's grains exports would not change at all under TPP-11 and all other agriculture could actually decline. They also say there will be less than 0.5 per cent added to GDP in a decade's time. To put that in context, that is 1½ days of Australia's income. That is the benefit we could expect to see. The point really is that we need to have independent modelling that this parliament has absolute confidence in as we progress negotiations and discussions around trade agreements. I absolutely support our position that that becomes mandatory.
The other issues raised in this place around this agreement really go to the process around which the agreements are negotiated. As a member of JSCOT, I'm surprised that the committee that's meant to pull apart a treaty and look at it doesn't get to do that until after Australia has signed it—before it's ratified but after it's signed. That process really limits the ability of a committee. A committee that works hard to find agreement on these things is really not going to make a lot of difference, given the current process that we have. So I absolutely support that there is a need to subject treaties to proper scrutiny by this parliament. We also need to include businesses and unions and all the other community stakeholders much more effectively in the negotiation process. Right now they are essentially locked out. They get told things after the fact. This is not how it is done in the EU or the United States. We do need to move to a better process. I will talk about that in more detail.
We are also clear that we won't accept ISDS in treaties that we negotiate when we ultimately come to government. I think that is a really important thing. While members on the other side seem to dismiss that, I have deep concerns about ISDS.
If I can talk about the process of negotiating a trade agreement, one of the things that operate really effectively in other parts of the world—remember that we are negotiating with places all around the globe and our process needs to stand up to the same scrutiny that theirs does—and what gives people confidence in those places that an agreement that a government signs is going to be in the best interests of that country is that they have a program similar to what we're calling an accredited trade advisers program. This means that you will need to agree to keep certain things confidential, but it gives you an insight into the process of negotiation as it happens. This seems eminently sensible to me. An accredited trade advisers program would allow all sorts of industry groups with different interests, the union movement and civil society groups to give real-time feedback on the agreement. It is too late for these groups to raise really significant issues after an agreement has been signed. The accredited trade advisers program that we are proposing is a very positive step forward.
In terms of strengthening the role of parliament in trade negotiations, using the existing Joint Standing Committee on Treaties and requiring a government to put to that committee a statement of objectives for negotiations and for there to be consideration of that and feedback to government, we're really giving transparency to something that has not just an impact next year but an impact for decades down the way. It would also involve JSCOT, the joint standing committee, having a briefing with departmental officials at the end of every round of negotiations. This is a really sensible check and balance on a document that this parliament would be asked to endorse. As I say, this is something that is done in other parts of the world. Accredited advisers, for the first stage, need to be security cleared. A whole lot of things would have to go around that, but I think we can trust business groups and I think we can trust unions and civil society to respect those things, knowing that they are having genuine input into what a government will ultimately decide and ask this parliament to support.
It would need to represent the full span of community interests, including manufacturing, agriculture, digital trade, intellectual property, services and small business. Small businesses do not seem to get the benefits of these agreements that big businesses sometimes receive. They really need to be involved. People involved in the labour market, environmental groups, consumer and public health organisations, as well as state and local governments, should all have the opportunity for input. I think they are very sensible reforms. While they were only announced earlier this week, they've already been endorsed by the Export Council of Australia, the National Farmers' Federation, the Australian Chamber of Commerce and Industry, the Australian Fair Trade and Investment Network and the Australian Council of Trade Unions.
Some of the other points that have come up in the course of the joint standing committee inquiry relate to issues around labour market testing. I remain concerned about the consequences. We will need to be vigilant in the implementation of the agreement. TPP-11 waives labour market testing for what are called 'contractual service suppliers' for six of the countries in the partnership. That means workers from Canada, Peru, Brunei, Mexico, Malaysia and Vietnam will be able to be offered jobs without Australians being offered them first. That is a lot to ask a community to accept, and there needs to be absolute vigilance in the way that is implemented. At a time when many in Australia are concerned about underemployment and low wages, we need to look at the impacts of that.
I should point out that the independent modelling done by the industry groups looked at the impact of the TPP-11 on wages. The report is only brief on wages, but it does indicate that wages would, after a decade, grow by only a minuscule amount of 0.46 per cent per year, or about $10 a year in 2030. That is another area we need to follow closely.
The other issue that has set alarms off for me is around skills testing. I'm really grateful to the ETU and the ACTU for the work that they did with the committee on identifying concerns about skills testing. We say people can only come to the country when their skills are considered to be on a par with those in Australia. Unfortunately, getting the measure of that could potentially have life-threatening consequences when it comes to industries like construction and, in particular, the electrical-contracting sector. Australia has exceptionally high standards for electricians' work. You don't get to become an electrician only because you know how to fit a light bulb in a domestic environment. You are required to cover a whole range of electrical-contracting skills. I can see the member for Hinkler nodding on other side.
Mr Pitt interjecting—
Indeed, it is a very high skill set, and that's because we take seriously the lives of the electricians doing the work and the lives of people who will be working in the buildings or on the sites where that work's been done. I do note the concerns that have been raised about less-qualified and inexperienced tradespeople working in Australia because they may not be subject to our rigorous testing processes. Again, these are issues that we take very seriously.
Finally, another area that Labor will address when we ultimately take government is the area of ISDS. It does get dismissed by people who say, 'This doesn't really count for us; it's not really a big deal,' but let's be very clear about what ISDS is. ISDS allows a foreign company to sue the Australian government where there is an agreement in place that this is allowed to happen. That court case then gets heard not in an Australian court and not in a court of that other country but in a completely separate judicial process. Having heard the unpacking of that process, I have to say it raises huge concerns about the outcomes. Even if a finding goes in favour of the country that has been sued and it's not found to have been a breach, there are still enormous legal costs that are involved for a country that has to go through an ISDS challenge. It has always been the view of Labor members of the committee and it will now be Labor policy that we will not allow agreements to be negotiated with ISDS clauses. I note that New Zealand, with Jacinda Ardern as prime minister, has written a side letter with the countries to remove ISDS from the agreement. We would certainly be seeking to do that.
As we look at this legislation, my advice to this parliament is to be open and transparent with communities about what is really involved. We need to be brutally honest about the benefits and we need to be brutally honest about the downsides.