Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties, I present the following reports: Report 79—Treaties tabled on 10 May (2), 5 and 6 September 2006; and Report 80incorporating a dissenting report—Treaties tabled on 28 March (4) and 5 September (2) 2006.

Ordered that the reports be made parliamentary papers.

by leave—I move:

That the House take note of the reports.

Reports 79 and 80 contain the findings and binding treaty action recommendations of the committee’s review of 12 treaty actions tabled in parliament on 28 March, 10 May and 5 and 6 September 2006. The committee found all the treaties reviewed to be in Australia’s national interest. I will comment on all the treaties reviewed.

The mutual assistance treaties with China and Malaysia provide a formal process enabling Australia and Malaysia and Australia and China to assist each other in investigations, prosecutions and proceedings related to criminal matters. As both Malaysia and China retain the death penalty for a range of offences, the obligation to provide mutual assistance is limited by a number of internationally accepted grounds for refusal. These grounds are well recognised and are already reflected in Australia’s domestic laws. The extradition treaty with Malaysia provides for the surrender of an accused or convicted person between Australia and Malaysia to face criminal charges or to serve a sentence and will provide a modern and effective extradition relationship between Australia and Malaysia.

The conventions with France and Norway for the avoidance of double taxation are expected to meet Australia’s most favoured nation obligations with both countries, reduce barriers to trade and investment caused by overlapping taxing jurisdictions and help to prevent tax evasion.

Amendments to the agreements with China and Japan for the protection of migratory birds and birds in danger of extinction and their environment update the scientific nomenclature and add the Roseate Tern to both agreements. Australia supported the addition of the Roseate Tern following a bird-banding and colour-flagging study which demonstrated that the Roseate Tern regularly and predictably migrates between the Swain Reef, Queensland, and Chinese Taipei and between the Swain Reef and Okinawa, Japan.

The air service agreements with India and China provide a framework for the operation of scheduled air services by designated airlines between Australia and India and between Australia and China. The agreements improve access for Australian airlines to the international Chinese aviation market and the international Indian aviation market and include reciprocal provisions on safety, security, customs regulations and commercial matters.

Protocol V, on explosive remnants of war, to the 1980 Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons reduces the humanitarian risk posed by explosive remnants of war by obliging contracting states to mark and clear, remove or destroy explosive remnants of war.

The amendments to the Australia-United States Free Trade Agreement annexes incorporate further changes to ensure compliance, with changes to the harmonised commodity description and coding system that will come into effect on 1 January 2007.

Amendments to the Australia-New Zealand Closer Economic Relations Trade Agreement change the method that both countries use to determine whether goods imported from the other country meet rules of origin requirements to be free of import duty. Late in the inquiry, the committee received evidence that an Australian based detergent manufacturer, Albright and Wilson Australia, may be negatively affected by the agreement, which could lead to the possible loss of 65 jobs at its Yarraville factory. The Minister for Trade responded to concerns raised by Albright and Wilson and by the committee but was unable to accommodate Albright and Wilson’s request, to retain the current method for determining rules of origin, due to the conclusion of negotiations with New Zealand.

The committee believes it would have been preferable for these issues to have been raised during negotiations so that they could have been part of Australia’s negotiation position. The committee is also concerned that a business with significant trans-Tasman trade was unaware of these changes until negotiations were concluded and has recommended that Austrade make greater use of their database of businesses to consult at a business level. Overall, the agreement is expected to reduce barriers to trade, leading to better economic conditions for the majority of Australian companies, and the committee has recommended it enters into force.

Report 80 does incorporate a dissenting report. I would say that the difference between the main report and the dissenting report is not great. I thank the members of the committee secretariat for their assistance in conducting the public hearings, with the submissions and in preparing the report. I commend the reports to the House.

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

by leave—Although reports 79 and 80 of the Joint Standing Committee on Treaties actually refer to 12 particular treaty actions, I intend to keep my remarks to the dissenting report that we have put into report 80. Hopefully, I will obtain permission from the House at some stage to refer both reports 79 and 80 to the Main Committee, where other members of the House will be able to speak on these matters. As has already been said by the chair of the committee, the member for Boothby, there are some very significant treaties that form part of these reports.

In the dissenting report we noted our concern about the impact of the rules of origin changes on a company in Victoria. Let me tell you a bit of the background of this company. The company is named Albright and Wilson, and it was established in 1939. It employs 130 employees and has a current turnover of $100 million. It has manufacturing plants in New South Wales and also in Victoria, where industrial phosphates used in food, detergent, water treatment, mining and mineral industries are manufactured. It currently exports sodium tripolyphosphates—a detergent ingredient—to New Zealand and it ends up being remanufactured there and returned to Australia by way of the end product.

The change to these rules will mean that, although they are no longer buying or using an Australian product, Unilever in New Zealand will continue to get favourable tariff treatment. This proposed change has already led to the cancellation of Albright and Wilson’s contract and will have, as has been said already, a significant impact on the company—the loss of some 65 jobs and the loss of some $7 million per year in turnover. As the chair has already stated, the committee is very concerned at the lack of consultation that has taken place in regard to this particular matter. Even though Albright and Wilson is significantly involved in supplying manufacturers in New Zealand and there is going to be a dramatic impact on their business, they were not consulted by Austrade in regard to these changes or arrangements. It was only when Unilever, the company in New Zealand, cancelled their contract—because they had to give six months notice—that they realised they were in trouble and there was a serious problem here.

In my view, Austrade, given that they know who is trading with New Zealand—they have an extensive database in regard to this—should have been out there actively seeking advice from companies such as Albright and Wilson to find out what the impact on them would be. It is not as if this has not happened in the past; they have negotiated with other companies—for example, some in the area of men’s apparel and suits and some auto parts manufacturers—which have also been affected by this change and they have introduced exemptions so that these companies can continue to operate without penalty. Once Albright and Wilson realised that there was a problem they gave advice to the committee. They gave us evidence and said, ‘Look, how about introducing a change in the treaty which would allow us to get an exemption in the same way that the government has already negotiated an exemption for men’s apparel and some automotive products?’ That is entirely fair and reasonable, I would have thought.

But, unfortunately, because the government want to ram this treaty through and have it come into effect on 1 January, the government have turned their back on Albright and Wilson and said, ‘Sorry, we’ve already done the negotiations. We don’t intend to go back and revisit this particular treaty.’ I think that is appalling. Obviously, there is a problem. The government knew there was a problem; in fact Albright and Wilson wrote to them. What Albright and Wilson found was that, because the treaty had been negotiated, they were told, ‘Sorry, tough luck. We don’t actually intend to do anything about this.’ I think that is appalling. This shows a complete disregard for Australian jobs and a complete disregard for an Australian company.

It was put to us that Unilever, who is the manufacturer in New Zealand, is an Australasian company so therefore some of that profit will also be coming back to Australia. I looked into this matter, and that claim is absolutely false. Unilever in Australia is a separately incorporated company and will have nothing to do with what is going on in the New Zealand arm of Unilever, which is incorporated in New Zealand. So Unilever in New Zealand will increase their profits by about $1 million to $2 million, because they are going to be able to buy source product dumped on the New Zealand market from China, and we will end up losing 65 jobs as a result of that. I thought the government was here to stick up for Australian workers, Australian jobs and Australian profits, but, no, in this case it is quite happy to see that money go offshore to New Zealand and have a severe negative impact on our people.

To her credit, the member for Gellibrand, Nicola Roxon, has been fighting this fight quite extensively. Nicola has been on the phone constantly trying to argue the cause of Albright and Wilson. I think she is to be congratulated for that. She has put in an enormous amount of effort to try to get some result here which would benefit them, but unfortunately this does not appear to be the case with the government. This has led us to put in a dissenting report. The dissenting report primarily says that the opposition members of the committee support comments included in paragraph 2.69 of recommendation 1 of the report. Paragraph 2.69 says:

2.69 The Committee believes there should be ongoing negotiation between Australia and New Zealand in order for tariff line 3402.20 to be exempted from the new ROO as was done, for example, for men’s suits.

We also say:

1.2 On balance, Opposition Members of the Committee recognise that the Agreement will increase trade between Australia and New Zealand in a mutually beneficial way and serve to strengthen existing economic ties between the countries. However, the Opposition Members of the Committee remain extremely concerned about the impact on jobs as a result of the change to the rules of origin in respect of the category of goods manufactured by Albright and Wilson (Australia).

Therefore we have put in a change to recommendation 2. Recommendation 2 in the dissenting report states:

The Committee supports the Exchange of Letters constituting an Agreement between the Government of Australia and the Government of New Zealand to amend Article 3 of the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) of 28 March 1983 and recommends that:

(a)

binding treaty action be taken; and

(b)

negotiations between Australia and New Zealand commence immediately to secure agreement on retention of the RVC method of calculating ROO under the current ANZCERTA for tariff line 3402.20 before the Amending Agreement comes into force.

In other words, we are saying to the government: get out there; it is not too late. Start negotiations with New Zealand before this treaty comes into effect on 1 January. Save 65 Australian jobs in Victoria and keep that profit here where it belongs.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with standing order 39(c), the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.