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
Labor will support this legislation, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. This legislation implements the tariff cuts that the government agreed to maker earlier this year when it signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—otherwise known as the CPTPP. The CPTPP is a trade agreement signed by 11 countries in Chile in March this year. It replaced the TPP that was signed by 12 countries in New Zealand in February 2016. That agreement had a clause in it which required countries representing 85 per cent of the combined GDP of that agreement to ratify it before the TPP could come into effect. That clause meant that when President Trump pulled out of the TPP it killed that agreement signed in New Zealand and forced the other 11 countries back to the drawing board.
This agreement is different to the TPP in two substantive ways. First, the economic scale of the agreement or the percentage of the world's economy that it affects is much smaller than the TPP. The TPP covered 40 per cent of the world's economy; this agreement covers about 13 per cent. Second, it's also smaller in scope. Twenty-two provisions that were in the TPP have been suspended in this agreement. They include many of the more controversial sections of the TPP, including the sections on copyright and biologic medicines. The agreement itself eliminates more than 98 per cent of tariffs between signatory countries. For Australian farmers, it will reduce and eliminate tariffs on beef, sugar, cheese, wheat, barley, wine and seafood and expand quotas on rice, butter and skim milk. In mining, oil and gas it will eliminate tariffs on iron ore, copper, nickel, butane, propane and LNG. For Australian manufacturers, it will eliminate tariffs on iron and steel products. It will also give Australian universities the opportunity to expand or open new campuses in Brunei, Japan, Malaysia, Mexico and Vietnam. They are some of the economic benefits. I'll talk about the overall likely economic impact of the agreement in a moment.
It also has potential strategic benefits. Building an overarching set of trade rules for our region and building stronger trade ties between the countries of the Asia-Pacific is very important. This is where we already sell most of the things that we make. Two in every three dollars we make from trade come from Asia, and this is only likely to increase in the years ahead. It is in our interests for the region to be stable and secure, and trade can help with that. This is not an Asia-Pacific-wide free trade agreement, but it has the potential to grow over time.
I have said many times that our long-term ambition should be a regional trade agreement that includes all the countries of APEC. That is the Holy Grail. That's the sort of agreement that could help to ensure that potential trade wars like we are seeing at the moment don't erupt in the future, and could increase stability and security in our part of the world. That is the stated ambition of APEC—an organisation that Bob Hawke helped conceive and Paul Keating built into a meeting of regional leaders.
It was under Bob Hawke and Paul Keating—with extraordinary union leaders like my friend and mentor Bill Kelty—that we ripped down tariff walls here at home. The big changes Labor made in opening up the economy in the 1980s and 1990s have helped create now 27 years of uninterrupted economic growth—27 years without a recession. We've helped to create more businesses and jobs. According to work done by the Centre for International Economics last year, the average Australian family's real income today is $8,448 higher than it would have been otherwise because of those Hawke, Keating and Kelty trade reforms. We tend to look back at that time and think what was done then was easy—but it wasn't. Cutting tariffs was important but it wasn't popular. It helped create new businesses and new jobs, but all of that took time. And, while some parts of the economy grew, other parts shrank.
It is important that we understand as we are debating this legislation that free trade agreements and cutting tariffs are not overwhelmingly popular. There is a lot of scepticism and concern about agreements like this out there. There are a lot of people who think that all of this is great for big companies but not for ordinary workers. A recent Essential poll found that only about one in five Australians think that trade creates more jobs for Australians. That's a very scary statistic given how dependent we are on trade. You see the same sorts of results in the United States.
Trade wars don't just pop out of thin air. There has to be something that fuels them. In the United States at the moment, there are a lot of people who feel like their lives are getting tougher, not easier, and one of the things they blame is trade. That's particularly true in places like Michigan, Ohio and Wisconsin, where wages are flat and jobs have gone overseas. As Thomas Friedman said in his book, 'If people don't have floors under them they will reach for walls,' and that's what they have done in the United States. It helps explain what's going on right at this moment with the threat of another $200 billion in US tariffs being imposed on Chinese goods and potentially another $267 billion more. This is having a real effect already on us with the drop of the Australian dollar.
There is also a lesson for us here. We don't have anywhere near the gap between rich and poor that you see in the United States, but it exists and it's substantial. Just like America, there are parts of Australia doing it tougher than others. Look at parts of North Queensland, where youth employment is 17.6 per cent. Look at my own electorate in Western Sydney, where unemployment is double the national average.
We know, because of what Hawke and Keating did, that the way to create jobs is to tear down tariff walls, not build them. But we also know not everyone benefits equally from free trade; some do better than others. Part of our job here is to understand that and put into place the sorts of policies that help to make sure that, as we open up our economy, we don't grow apart. That's why when Hawke and Keating were cutting tariffs, they also set up Medicare and compulsory superannuation. If we win the next election, we will do the same sorts of things such as making our tax system fairer by giving bigger tax cuts to workers on modest incomes and by putting more money into our schools, our TAFEs and our universities so that more Australians get the skills they need to work in this big, open and fast-changing world.
But if we want more people to support free trade, open markets and agreements like the one we are debating here, we've also got to be more open and more honest with the Australian people. That's why I've been calling on the government to conduct independent economic modelling of this agreement. I'm not the only one who has been calling for independent economic modelling of trade agreements, so have the Australian Chamber of Commerce and Industry, the Minerals Council of Australia, the Harper review, the Productivity Commission, the Joint Standing Committee on Treaties, the Senate Standing Committee on Defence, Foreign Affairs and Trade, and the Joint Standing Committee on Trade and Investment Growth. But despite all of this, the government belligerently has refused to get this agreement independently modelled. Fortunately, though, someone else has.
The Victorian Labor government has commissioned an independent economic analysis of the CPTPP and so have a number of Australian business groups. They've all reached the same conclusion: that the agreement will provide relatively modest economic benefits in the short term, and there is the potential for more significant economic benefits in the longer term if more countries in the region sign up to the agreement. The analysis commissioned by the Victorian government concluded that while the agreement does not benefit all sectors equally, no sector would be worse off as a result.
The analysis commissioned by a number of Australian business groups—including Ai Group, ACCI, the BCA and the Minerals Council of Australia—estimates that by 2030 the agreement would increase Australia's national income by $15.6 billion, boost exports by $29.9 billion and lift investment in Australia by $7.8 billion. It also concludes that the economic benefits of this agreement are about 25 per cent less than the original TPP. This sort of independent economic analysis, I think, is really important. It doesn't over hype the potential benefits or the potential impact of an agreement like this, like some have, but it does show a positive impact. That's important given the scepticism that a lot of people have about deals like this. That's why I've been calling on the government to do it, and why, if we win the next federal election, all trade agreements will be subject to an independent economic assessment.
There are two parts of this agreement where Labor would have done things very differently. The first is the inclusion of an investor-state dispute settlement section, and the second is the waiver of labour market testing. As part of the CPTPP, the government has agreed to waive labour market testing for six countries: Canada, Peru, Mexico, Brunei, Malaysia and Vietnam. This means that an employer will be able to bring in workers from these countries without first checking if there's an Australian who can do the job. Frankly, this is the sort of thing that makes Australians very angry. It's not protectionism to say that before a company brings in an electrician or a carpenter or a mechanic from overseas, it should first have to check if there is an Australian who can do the job. It's just common sense.
Ironically, at the same time as it's removing the requirement to advertise jobs in Australia before advertising them overseas, the government is doing the opposite when it comes to agricultural land. In February the now Prime Minister announced that before agricultural land could be sold to foreign investors, it first had to be offered for sale to potential Australian buyers. If it's good enough for land to have to be advertised here first, it's good enough for jobs. If the Prime Minister and this government were really serious about being on the side of Australians, they'd understand this. They shouldn't have waived labour market testing in this agreement or the others that they've signed.
If we win the next election, we will not waive labour market testing in the trade agreements we sign. We'll also work to reinstate labour market testing for contractual service suppliers in the countries where the Liberals have agreed to waive it. We'll take the same approach when it comes to ISDS. Labor does not support the inclusion of ISDS clauses in trade agreements. That's because these provisions provide foreign corporations with increased legal rights and can be used to sue governments for legitimate policy decisions. The EU is changing its approach here, and there are reports that the United States is considering removing these provisions from NAFTA.
This agreement extends our ISDS obligations to one country, Canada. If we win the next election, we will negotiate with the Canadian government to remove the application of this clause between our two countries by way of side letters. That's what the new New Zealand Labour government has done. It has signed side letters with four countries that are part of the CPTPP. The effect of these letters is that the ISDS clause in this agreement does not apply between New Zealand and these countries. Australia has also signed a similar letter with New Zealand. This shows that it's possible to set these clauses aside, and that is what we will seek to do. To his credit, the former minister for trade, Steve Ciobo, also acknowledged that this was possible in his speech introducing this bill.
I think we can go further and do more than just that. There is more that we need to do to make sure that the trade agreements we sign are subject to the proper scrutiny of this parliament, that they have the benefit of more input from business, unions and other organisations as they're being developed, that they're subject to comprehensive independent assessment at arm's length from government and that they don't include the sorts of clauses I've just talked about—ISDS and the waiver of labour market testing. That's why I'm going to move, as part of this debate, the following second reading amendment that's been circulated in my name. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes that:
(1) the Coalition Government has waived labour market testing for contractual service suppliers for six new countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership as well as including investor state dispute settlement mechanisms which Labor does not support; and
(2) Labor believes the way Australia negotiates trade agreements needs to change, and a Labor Government will:
(a) seek to remove ISDS provisions from existing free trade agreements and legislate so that a future Australian government cannot sign an agreement with such provisions;
(b) seek to reinstate labour market testing for contractual service suppliers in existing free trade agreements and legislate so that a future Australian government cannot waive labour market testing in new agreements;
(c) legislate that all new free trade agreements would be subject to an independent national interest assessment before it is signed to examine the economic, strategic and social impact of any new trade agreement;
(d) legislate to create an Accredited Trade Advisors program where industry, union and civil society groups would provide real time feedback on draft trade agreements during negotiations; and
(e) strengthen the role of the Parliament in trade negotiations by increasing the participation of the Joint Standing Committee on Treaties (JSCoT) by providing:
(i) the Government’s Statement of Objectives for Negotiation to JSCoT for consideration and feedback; and
(ii) JSCoT with a briefing at the end of each round of negotiations".
This represents the next tranche of Labor's plan for trade. In October last year, I announced the first tranche of our trade policies. This is the second and more will follow. If we win the next election, we will introduce legislation that prohibits the sorts of clauses that we are concerned about here in the CPTPP. It will prohibit a future government from signing trade agreements that waive labour market testing or include ISDS clauses. We will also fix the way the trade deals are developed, negotiated and assessed. At the moment, the parliament only gets involved in assessing and scrutinising trade deals once they're done. In other countries, this is done differently. The legislative arm of government gets involved at the start and is kept involved throughout the process. I think that's very useful. That's why we will expand the role of the Joint Standing Committee on Treaties, so that members of that committee are consulted at the start of the trade agreement process, are provided with a statement of the government's objectives at the start of the negotiations and ask for feedback. In addition to that, JSCOT will be provided with a briefing by DFAT after each round of negotiations. This will provide valuable input for the team negotiating the trade agreement and will help ensure that, when a trade deal is completed, it's scrutinised by legislators who are familiar with it.
We'll also create an accredited adviser program based on the cleared adviser program in the United States. At the moment, DFAT consults informally with business and other organisations in developing its objectives in a trade deal and trying to implement it. This will formalise and expand this process. Accredited advisers would be security cleared and provided with access to draft texts after each round of negotiation. Like the system in the United States, accredited advisers will represent the full span of community interests, including manufacturing, agriculture, digital trade, intellectual property, services, small business, labour, environmental, consumer, public health organisations, and state and local government. We'll also provide public updates on each round of negotiations and will release draft texts during negotiations where this is feasible.
I made the point earlier how important it is that trade agreements like this are subject to independent economic analysis and I committed Labor to doing that in the first tranche of reforms I announced last year. Today, we take a step further. At the moment, DFAT provides the parliament with what it calls a 'national interest assessment' of the signed agreement. DFAT is full of exceptional people who do extraordinary work on our behalf, but getting the same team that negotiated a trade agreement to provide a report outlining why it is in the national interest is a bit like marking your own homework. If we win the next election, we will subject all trade agreements to an independent national interest assessment that includes independent economic modelling and looks at the social and the strategic impacts of the agreement. These reforms were announced by me on Tuesday, but they've already been backed by organisations like 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.
Both major parties support free and fair trade. We all realise that we are a trading nation. We rise and fall on what we sell to the rest of the world. The opening up of our economy over the last four decades has made us a stronger and wealthier country. It's also made the things that we buy cheaper and the average Australian family something like $8½ thousand a year, on average, better off. In an age of rising doubt and scepticism about the impact of globalisation and free trade, we have to get better and be more open about the way we do this. And we have to listen to what the community is telling us. The reforms that I have announced today are part of that. Doing better trade deals, though, is not enough. It's the start. Trade agreements can open doors, but more Australian businesses still need to walk through them. That is where even more work is needed.
The original question was that this bill be now read a second time. To this the honourable member for Blaxland has moved that all words after 'that' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.
You have to hand it to the coalition when it comes to nation building. Whether it comes from income tax reform, infrastructure investment or support for small businesses, the coalition not only gets it; the coalition gets it done. When it comes to delivering the ingredients for a strong economy, the coalition leaves Labor for dead. Look at the scoreboard. Firstly, there's the jobs score, with well over one million new jobs in five years under the coalition. There were 412,000 jobs created just last year, the strongest jobs growth record in history. Secondly, there is the growth score. You need look no further than last week's national accounts figures to get that score. With real GDP growth scooting along at 3.4 per cent under the coalition, our national economy is growing faster than any G7 economy, and that includes the United States. It is well above the OECD average, which is currently running at 2.5 per cent. As crucial as they are, it's not just about jobs and growth. All key sectors right across the Australian economy—household consumption, business investment, dwelling investment, public demand and exports—are all up for the year. The strength of the Australian economy under this government is an undeniable fact, a fact that underwrites the security, lifestyle and wellbeing of 25 million Australians.
Without a strong economy, all the hospitals, schools, infrastructure and even our national security would be in peril. Why is the coalition better at managing the economy? Why are coalition governments, from Menzies to Morrison, strong economic managers, while Labor has been hit and miss at best and absolutely catastrophic at worst? One reason could be that the coalition backs the aspirations of hardworking Australians and has a plan to create the opportunities that aspiration needs to flourish. A big part of that plan is maintaining the best environment for businesses to grow and employ more Australians. That's our plan and it works—as the results show.
There are few better examples of the coalition's plan in action than trade—specifically, the coalition's record when it comes to initiating and delivering free trade agreements. The coalition believes that the best way to create Australian jobs is for Australia to follow an ambitious and pragmatic trade agenda. This has been a consistent strategy for the coalition since the days of the Howard government, but it's an area where Labor has dropped the ball time and again. While the coalition and most Australians are delighted with trade agendas, Labor is not.
While the coalition is delighted by the opposition's decision to finally back the Trans-Pacific Partnership, the TPP-11, the truth is that the only thing Labor has ever had the capacity to do with free trade agreements is back them. Not once has Labor ever initiated, negotiated end to end and closed a free trade agreement. That's a telling statistic. Not once has Labor been capable of initiating, negotiating end to end and closing an FTA. That is telling, especially when you consider how important free trade is to the Australian economy and to the prosperity of all Australians. Yet you see under this coalition government, since the election in 2013, closures of FTAs with Japan, Korea, China and Peru, and here we are today with a bill in the House discussing the TPP-11.
I find it extraordinary that the shadow trade minister, who spoke just before me, formed part of his debating points on the belief that the coalition government needs to change how it negotiates FTAs. It's a bit rich coming from Labor, which has proven itself—and the stats say this—incapable of closing a deal and incapable of initiating, negotiating and closing FTAs, and yet the shadow minister is more than happy to stand in the chamber and try to lecture the government that's closed Korea, China, Japan, Peru and soon the TPP-11 and try to provide gratuitous advice about how things might improve.
The one thing that I heard the shadow trade minister mention was the idea of parliament playing a more intimate role in engaging in the FTA negotiation process. I found it particularly cute that the shadow minister decided to use words such as him 'announcing an idea today' when, in actual fact, the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade is currently reviewing the role of parliament in this regard. But, again, that's okay—it's Labor's typical form, and we see it across every area of government, including FTAs, where they would jump on the bandwagon and try to take the credit. So be it, but, again, they have no standing to try to lecture the coalition when it comes to free trade agreements.
From the very first decades, whether it be the New South Wales colony with John Macarthur or all the way up to today when we're talking about the TPP-11, Australians have been reliant on trade. That's beyond question. I'm proud to stand in support of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which we are discussing here in the House today. These bills will amend the Customs Act and the Customs Tariff Act to introduce new rules of origin and introduce new preferential customs duty rates for goods imported into Australia from nations that are parties to the TPP-11 and, in so doing, formally ratify that agreement.
As one of the most comprehensive trade deals ever concluded, the TPP-11 is set to eliminate more than 98 per cent of tariffs across a trading zone with a combined GDP of some A$13.8 trillion and close to 500 million consumers. The geographic and economic scope of the TPP-11 is immense. Already, even before the treaty comes into force, nearly one-quarter, or 24 per cent, of Australia's total exports, worth almost $88 billion, are to TPP-11 countries. This is set to grow substantially once the TPP-11 comes into force, that being some 60 days after formal ratification by the first six member countries. It is therefore essential that Australia is among the first six nations to ratify the treaty, with Singapore, Mexico and Japan already having ratified the deal and others close to completing the process. The early access to TPP-11 markets by nations other than Australia would clearly not be in our national interest.
The direct benefit to Australian farmers, producers, manufacturers and service providers in improved market access and a boost to exports will be significant. Recent modelling shows that the TPP-11 would lift Australia's national income by 0.5 per cent and deliver $15.6 billion in net annual benefits by 2030 while exports are forecast to rise by four per cent or approximately $30 billion per annum. A significant improvement to investment flows for Australia is also expected. Independent analysis forecasts inbound investment to increase by $7.8 billion while outbound investment by Australian businesses should increase by $26 billion.
There are also very tangible benefits for producers and exporters courtesy of the TPP-11, including significantly reduced tariffs on Australian beef imported into Japan so that, within two years, Australian beef will enjoy a 13 per cent tariff advantage over US beef; improved access for Australian dairy products imported into Japan, Canada and Mexico; new access for Australian sugar to Japan, Canada and Mexico; and the elimination of all tariffs on sheepmeat, cotton, seafood, wine, raw wool, horticulture and manufactured goods across the free trade zone. Exporting professional services will also see a significant reduction in regulatory risks, including improved levels of transparency to help Australian service providers compete freely and on an equal footing. Australian tertiary and vocational education providers will enjoy guaranteed special access to Brunei, Japan, Malaysia and Mexico and will be able to provide online education services across the entire trade zone. There will also be new opportunities for Australian businesses chasing government procurement and service contracts in many member countries.
The innovative approach taken by the architects of the TPP-11 is well demonstrated by, for the first time in a trade agreement, member countries guaranteeing the free flow of data across borders for service providers and investors across the trade zone. Another innovative approach taken by the architects of this deal and one I'm personally delighted to see is the inclusion of a dedicated chapter in the agreement that aims to encourage small and medium-sized enterprises to participate in government procurement. The TPP-11 is the first regional trade agreement to include such a small and medium enterprise, or SME, chapter, and this is vitally important.
As chair of the trade subcommittee of this parliament, we're currently amidst an inquiry into how small and medium businesses can better leverage Australia's string of free trade agreements. Let me assure you: the inclusion of a chapter in this TPP-11 deal specific for SMEs is being welcomed across the sector. Moreover, I suspect—I hope—that specific chapters for small and medium businesses will become a more regular feature of free trade agreements. Not only is Australia a nation with many small businesses—2.2 million, in fact—but we're fortunate to have so many at the forefront of their respective fields internationally. They are companies that have unique, cutting-edge intellectual property that needs to not only be recognised and protected but leveraged to the hilt.
In recent years, due to the approach of this government, we have seen more and more small and medium businesses win work through government procurement. One area where I have particularly seen this in play is in the defence industry, where multibillion dollar contracts have an increasing percentage of Australian industry content, and much of this is going to our small and medium businesses. This is not just delivering more jobs for locals but helping identify small and medium businesses that are genuinely world-class—businesses that could well have been left undiscovered in the broader marketplace if it weren't for this government's approach. Further, it's leading to greater investment in these small and medium businesses and the unique intellectual property that they possess. And one step further, if I may: when large multinational primes start engaging more and more small and medium businesses in their delivery of major government projects, they discover assets, ideas and talents which they can then bolt on to their global supply chains, effectively providing market entry strategies for small and medium businesses that are often otherwise very localised.
It's within this context that I praise the architects of the TPP-11 for their inclusion of a chapter for small and medium businesses, which will help create the opportunity for these businesses to flourish and for their ideas to take root internationally. The TPP-11 in no way threatens Australia's existing domestic policy or regulation in areas such as health, the labour market and intellectual property. These remain secure and unaffected by the treaty. Under the TPP-11, Australia is not obliged to recognise overseas qualifications, experience or licences from TPP-11 countries or elsewhere.
The TPP is truly one of the most comprehensive and far-reaching trade deals ever concluded since the inception of the World Trade Organization. The benefits for Australia are great. While this deal is an opportunity that would have been completely missed if Labor had won the last election or if the government had sought their guidance and taken their advice, today here we are with the TPP-11 almost over the line.
I rise today to speak on the complexly named and equally complex in detail Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which is cognate with the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. I'm pleased to stand here today in support of the amendments proposed by the shadow minister for trade and investment, the member for Blaxland, and also in support generally of the motivations behind what is now known as the CPTPP.
I stand alongside my colleagues with an unwavering commitment to protecting Australian jobs in trade agreements, a commitment to boosting transparency in the development of trade agreements and improving the way these agreements are negotiated in the first place and from the commencement. Because of these commitments, I can stand here in this chamber and support these amendments put forward by the member for Blaxland. I can say to the people of Australia that, yes, Labor is listening to your concerns. We understand and share these concerns around this agreement, and our priorities are first and foremost to you, the people and workers of Australia.
There has been significant debate over the past several years on the merits of free and open trade, not just in this place but across parliaments and economic forums across the world. Indeed, the decision by the 45th President of the United States to revoke and pull out from the original TPP is a large part of the reason why we as Australians find ourselves in this position. The original TPP in 2016 had 12 signatories: Australia, New Zealand, the US, Canada, Mexico, Japan, Singapore, Chile, Peru, Vietnam, Malaysia and Brunei Darussalam. In early 2017, with the election of the 45th President, the United States withdrew from the agreement, meaning it was unable to come into force. The agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is now between the remaining 11 signatories of the original TPP, of course including Australia. It is smaller than the original agreement and represents 13 per cent of world GDP, compared to the 40 per cent in the original agreement. The bills debated today implement the tariff cuts as agreed to when Australia signed the CPTPP and eliminated 98 per cent of tariffs between member countries, as well as suspending 22 provisions that were part of the original agreement and were regarded as contentious. It was a novel approach, adopted to revive the TPP. As I have said before in this place, I pay tribute to the very complex and hard work that trade negotiators involved in this put into coming up with this renegotiated TPP, and in particular the leadership shown by Japan in the absence of the US.
Free trade agreements are legitimately contentious enough as it is at the moment, but that does not mean that they are wrong—quite the opposite. It means they must be done right and done right from the very beginning. That is why we have listened to the legitimate concerns of many stakeholders as part of the issue, including the broader labour movement in this country.
Many have raised concerns, including about the inclusion of investor-state dispute settlement provisions and the waiver of labour market testing for six additional countries in the CPTPP. To quote my friend the member for Blaxland, 'It's not protectionism to say that, before a company brings in an electrician or a carpenter or a mechanic from overseas, it should first have to check if there is an Australian who can do the job; it's just common sense.' The member for Blaxland is absolutely right. It is why Labor has committed to fixing this should we be elected to government in the future by the Australian voters. It is why Labor, in the national interest, has been closely scrutinising the CPTPP to make sure it is a more progressive agreement than many of the previous multilateral trade agreements and that it will include protections concerning the environment, labour standards and anticorruption provisions.
We have watched other countries around the world and their reactions and approaches to free and open trade. The United States, once the largest proponent of this ideal, has partially retreated from free trade objectives. This agreement was talked about by the former US President, President Obama. His administration understood the issues of free trade that we face today. In his statement on the subject, he reaffirmed his commitment to the working people of America, and I quote:
Right now, the rules of global trade too often undermine our values and put our workers and businesses at a disadvantage. TPP will change that. It eliminates more than 18,000 taxes that various countries put on Made in America products. It promotes a free and open Internet … It includes the strongest labor standards and environmental commitments in history—and, unlike in past agreements, these standards are fully enforceable.
When looking at our American neighbours it is not too hard to see similarities. Indeed, much of what we have here in Australia in the context of a modern 21st-century nation democratic nation is also found in the US. We share common ideals and defence and trade relations and, until recently, we shared a common view on the benefits of free and open trade done intelligently and correctly.
It is not hard to see why the US have taken their current position. In the past, these agreements have been skewed in favour of business without proper regard for workers and their rights and progress without proper regard for its implications. The backlash from the manufacturing interior of the United States against this agreement, then, comes as little surprise. As a result of this, there are heightened tensions in the global sphere as tariffs are raised on commodities like aluminium and steel, and these tariffs are directed at the Asia-Pacific region and particularly China. However, even with this occurring, it doesn't represent a failure of free trade so much as a failure of communication and consultation, a failure of due diligence and a failure to understand the benefits of trade. It can clearly be seen how the TPP would benefit the US economy, with particularly significant advances in trade and agricultural services. The US puts this at risk by allowing its main competitors to gain increased market access while the US loses ground in market share.
We can take a look at our other neighbours in the region and their history on the issue. As we know, as much as it may be in the headlines, the US is not the only nation that has been advocating for an agreement like the Trans-Pacific Partnership. It is important to recognise the regional impact agreements like the TPP will have. As such, it is incumbent on us to engage more with our Asia-Pacific neighbours in this regard. Thailand, Korea and Indonesia are all considering a progression in their negotiations with the TPP and to possibly enter it. In joining, they would bolster the argument that the TPP would be a more fulsome regional trade agreement covering more of the Indo-Pacific region. For economies undergoing significant development such as Vietnam and Malaysia, agreements like the TPP offer a larger consumer market and therefore a greater chance for prosperity—and that's important in this region. The greater the prosperity that developing nations like Vietnam and Malaysia can have and enjoy is better for the whole region and therefore much better for Australia.
During the negotiations between Hanoi and Washington on the TPP, part of the agreement was that Vietnam had to legislate to recognise and legalise some independent unions, allowing them to strike and seek out assistance from foreign labour organisations. We can look at Vietnam's constitution and how it enshrines the right of all workers to engage in protest and strikes. However, until recently, until these negotiations, there was very little legislation to back up these rights of workers—rights that workers enjoy here in Australia. The salient point is that by making it part of the original TPP agreement it is helping to strengthen and broaden the appeal of fair industrial relations laws transnationally—and that's not stemming from parliamentary processes necessarily but from free and open trade.
It is wrong to suggest that the benefits of free trade are just economic. They can permeate every facet of machinery of government in any government in the world, and that is what we are seeing in Vietnam right now as a benefit of the CPTPP. Free trade can have a hugely positive impact in changing values and attitudes and bringing them in line with a modern and progressive 21st century. Free trade agreements like the TPP are not designed in a vacuum; they are continually moving and fluid and work as an institutionalised platform for the liberalisation of trade flows around the world.
If I can continue on the positive transnational impacts of this approach, I would like to touch very briefly on the university sector. The sector is one of the biggest sources of export income, and until fairly recently it was not fully understood what impact these agreements would have on the tertiary sector. These types of agreements can vastly benefit the Australian economy; that much is true. However, the two-way street that is international trade brings with it greater opportunities by allowing greater access to overseas student bodies and a more streamlined approach in the facilitation of international research projects, which are very important to this nation.
I'd like to speak about the difference between the approach of this side of the House and the approach of those opposite. As I mentioned before, the CPTPP includes the ISDS provisions, which give foreign companies the ability to sue the Australian government. Labor opposes the inclusion of these provisions in any trade agreement, now and into the future. The member for Blaxland, the shadow minister, outlined these in more detail, and they are set out in the amendment to this motion, so I won't go into it in detail. A Labor government would not pursue agreements that include these provisions and would negotiate to remove them from agreements where they have been included by the current government. We know there is a precedent for this to happen. The New Zealand government under Prime Minister Ardern has successfully negotiated with four countries to remove ISDS provisions, which were negotiated by the previous, conservative government of New Zealand, through additional negotiation in the form of side letters to the now CPTPP. Key regulatory measures outlined in these agreements are ongoing and indeed need to be strengthened, including in areas of transparency and corruption, with requirements to criminalise associated behaviour; greater developments in ecommerce, including protections on privacy and equalisation of content; and, importantly, labour standards, including requirements needed to enforce these standards and prevent child or forced labour.
The Australian Labor Party supports free trade and open markets. Open markets lift people out of poverty and create higher-paid, more-secure jobs. To quote directly from a recently published report called Expanding the TPP?by the Perth USAsia Centre in Perth, written by Dr Jeffrey Wilson and my friend and colleague Hugo Seymour:
The CPTPP also provides regional economies a 'lever' to resist coercive trade practices by the Trump Administration … US absence also imposes costs on the US economy, particularly in terms of preferential disadvantages for the agriculture sector in accessing Asian markets … In this way, the CPTPP functions as a strategic hedge for regional governments to bargain with the US for better trade outcomes.
Australians at every level want better trade outcomes as well, which is unsurprising given our status as a key trading nation. Our future economic success is underpinned by our ability to sell goods and services overseas. If I could make a further observation about the importance of free and open trade, some have observed—and there have been reputable reports on this—that Australia won't gain as much as other nations in this trade arrangement. This may be true; in fact, I'm certain it's true. Nonetheless, it is in Australia's interests for our neighbours to increase their prosperity and their access to consumer markets around the world and throughout the region. As I said before, for Vietnam and Malaysia to have access to a greater consumer base is good for their markets and for their continued and growing prosperity, and in that case it is very good for the region as a whole. Whilst Australia won't benefit from a GDP growth as high as other countries will, the CPTPP will nonetheless help secure our locational security in our geographic region. I think we should remember that free and open trade is not just all about us; it's not just about what's in it for Australia.
Free and open trade with other countries is something we should think about from a wider perspective. What's in it for our region? What safety and security do we get out of this? What is the increase in prosperity, and how does it benefit the welfare and concerns of our very near neighbours in the region, who we care greatly about? Global free trade, based on the international rules-based order that is currently being written through the CPTPP, will enable a free, safe and prosperous Indo-Pacific, and, in many ways, that is to the very great benefit of Australia and our neighbours. Multilateralism serves to share benefits. The unfortunate pursuit by the US of a strict bilateral approach tends to lead to the picking off of different countries for different trade agreements, which is more to the benefit of one nation than to the greater benefit of a collection of nations, such as we're seeing with the TPP.
Once again, I'd like to congratulate the trade negotiators, who are the unsung heroes in these agreements. They work many long hours in many countries around the world. They witnessed a change of administration in the US which saw their work undone to a large extent, but it was, thankfully, revived again. I pay tribute to the leadership of Japan in this. It has stepped up into a great leadership role in the Indo-Pacific. They should be congratulated on reviving the TPP and allowing Australia to continue a great tradition of free and open trade in this region.
I too rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. These bills before the House are important steps in the implementation of Australia's obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, commonly known as the TPP-11. This agreement between Australia and 10 of our most important trading partners in the Asia-Pacific region is one of the most comprehensive trade agreements ever negotiated. This agreement continues the Morrison government's successful economic agenda, which has delivered economic growth and prosperity, created new jobs and increased international trade and investment opportunities for our companies, large and small.
The coalition government's single-minded commitment to this economic agenda has already delivered real outcomes for Australian exporters in the form of the free trade agreements we have concluded with China, Japan and Korea. This commitment reflects the clear priority this government will continue to give to maintaining and strengthening an open, transparent and efficient international trade environment.
The TPP-11 makes our network of existing free trade agreements in the Asia-Pacific region even stronger, providing even greater access for our exporters to key markets such as Japan, Korea, ASEAN, New Zealand, Chile and Peru. It updates provisions to reflect the latest best practices in FTAs, and, probably more importantly, it brings the additional major markets of Canada and Mexico into our FTA network. Both of these countries are in the world's top 20 economies, and both have been impacted by changes in the attitude of the US in that North American area.
The countries covered by the TPP-11 have a combined GDP of $13.8 trillion and a population of close to 500 million consumers. These markets already take nearly one-quarter of all Australian exports. By eliminating more than 98 per cent of tariffs on our exports to this massive regional economy, the TPP-11 will open significant new opportunities for Australian businesses. This is why this agreement is incredibly important for rural and regional Australia, including the electorate of Parkes, which I represent. Agreements such as the TPP-11 are critical to communities throughout regional and rural Australia that are dependent on exports for their economic prosperity.
Some specific examples of the significant benefits for our agricultural exporters, including for farmers in my electorate of Parkes, are as follows. Australian beef exports in 2017 were $7.5 billion, with around one-third going to TPP-11 countries. TPP-11 outcomes include accelerated tariff reductions in our beef exports to Japan, Mexico and Canada. Elimination of Canadian tariffs on our beef, currently at 26.5 per cent, will be within five years. Elimination of Mexican tariffs on our beef, currently up to 25 per cent, will be within 10 years. This is an important step for our exports into that part of the world.
For lamb exporters—this is particularly important for the electorate I represent—there was $425 million in exports of lamb and mutton to the TPP-11 markets in 2017, which is 16 per cent of total sheep and meat exports. There will be the elimination of tariffs on sheepmeat exports to Mexico within eight years and immediate elimination of sheepmeat tariffs to all other TPP countries on entry into force.
For our wool producers there is the immediate elimination of all remaining tariffs on raw wool on entry into force, and rules of origin will drive greater demand within TPP-11 markets for high-quality yarns made from Australian wool.
For cereals and grains, already $1.6 billion goes to TPP markets. The TPP-11 outcomes will provide significant improvements in market access for our exports of cereals and grains to Japan, including new quotas for wheat, barley and malt; elimination of Mexican tariffs on wheat—currently at 67 per cent—within 10 years and on barley—currently at 115 per cent—within five years; and immediate elimination of all Canadian tariffs on cereals and grains. This is incredibly important as those two countries are now looking elsewhere to strengthen trading ties across the Pacific, and Australia is in a prime position to take advantage of this.
For our pork producers, who are doing it very tough at the moment—71 per cent of their exports already go to TPP-11 markets and were worth $88 million in 2017—there will be significant reductions in pork tariffs to Japan, elimination of all Malaysian pork tariffs within 15 years and immediate elimination of Mexico's pork tariffs.
For dairy there will be the elimination of Japanese tariffs on some cheese products and expanded quotas on all remaining cheeses; new Japanese quotas for butter and skim milk and new quotas on tariff reductions for ice cream, yoghurt, whole milk powder, condensed milk and infant formula; preferential access to the highly protected Canadian market; and new Mexican quotas for butter, cheese and milk and tariff elimination on yoghurt.
For sugar growers, there are opportunities for this sector, which is in a tough spot at the moment: immediate elimination of Japan's tariff on sugar; elimination of Canada's tariffs on refined sugar within five years; a guaranteed share of Mexico's quota for raw sugar; and immediate elimination of Vietnam's in-quota tariffs on sugar.
For cotton—another industry that's very important to the constituents whom I represent—there will be the elimination of all tariffs on Australian cotton exports, with most reductions occurring immediately. Our exporters will also benefit from new regional supply chains into the Japanese markets. For example, clothing produced in Vietnam from Australian cotton will benefit from preferential tariffs under the TPP-11, increasing demand for our raw cotton.
For rice growers, there will be new quota access for Australian rice and rice flour to Japan, with a new 6,000-tonne quota growing to 8,400 tonnes after 12 years, and, for wine, immediate elimination of Canada's wine tariffs and elimination of Malaysian, Vietnamese and Mexican wine tariffs over a period of some three to 15 years. And it goes on. For horticultural exporters there will be an extended out-of-season tariff on our orange exports to Japan, elimination of all Japanese tariffs on orange exports over seven years and elimination of Japan's tariffs on fruit juices over 10 years. I could go on to seafood and other issues.
I was recently in Thailand, Vietnam and Singapore for the RCEP negotiations and chatted with our neighbours in ASEAN. I've got to say that there is great excitement about the TPP-11. This will be the new gold standard of trade in the Pacific region, and other countries are very keen to take part and join the 11 countries that are already signatories to this. Indeed, in Bangkok about six years ago, I discussed this with my counterparts in the Thai government. They are looking to Australia to assist them through the process of being one of the first countries to be added to the TPP-11. Japan is also playing a major role in helping Thailand as well.
It's not just agricultural products; it provides opportunities across a broad range of manufactured goods, including iron, steel, aluminium, automotive parts, leather goods and paper products. For our service exporters, it delivers significant gains for exporters of education services. Incidentally, education services are now No. 3 in value of our exports for Australia.
From my discussions with our ASEAN neighbours, I think that they are really keen to tap into our education system as they are upskilling their own workforces and own populations to step up to that next level of production and to increase their own economies. They're looking to Australia's wonderful education system to help their economies out. There will be significant gains for our exporters of education services, including our universities, vocational education institutions, school sectors and private training providers.
There will be new opportunities for exports of Australian financial services, including banking, insurance and financial management. There will be improved access for professional services from firms across accounting, engineering, architecture, legal services and consulting, providing greater transparency and predictability for this important sector.
Incidentally, I met a representative of the music testers—I'm not sure what their title is in Melbourne—a couple of weeks ago. They are the people who provide testing for music students. They are looking at taking advantage of access to these other countries through the TPP-11. A lot of service industries that you might not think about are lining up. They are part of the small and medium exporters and they are the first who will take advantage of this. SMEs are critical to Australia's economic growth and prosperity, generating over $1.8 trillion in sales and employing over 7.4 million Australians.
The TPP-11 will make it easier for SMEs to establish new export markets and grow their businesses through tariff reductions; through improved access to regional value chains; and through common, transparent trade investment rules across the region, which reduce the time, cost and complexity of doing business in international markets.
There is a need for Australia to move quickly. Already three countries—Mexico, Japan and Singapore—have signed up. Within 60 days of six countries signing up, this trade deal comes into effect. It's very, very important for our exporters that Australia is one of those first six countries. It's very important that we are there on the ground floor when this starts. It's very important for our exporters to be right at the starting line.
I have noticed there are some concerns from the opposition around labour market testing. I believe that their concerns are unjustified. Where we have previously made such commitments in FTAs, there has not been an influx in workers from those countries. For example, we have not seen an influx of workers into Australia following the entry into force of Australia's FTAs with North Asian economies, such as Japan, Korea and China. It's also important to remember that we made temporary entry commitments in order to get better access for our service suppliers in return. This was an interest for Australia, so it's a two-way thing. It was part of a deal which will result in $15.6 billion in additional annual income by 2030, as per a report released by the Minerals Council of Australia last week.
With skills testing, the TPP-11 does not change the skill and experience requirements that need to be met by electricians and other foreign workers applying to work in Australia. It is important that this doesn't overrule the regulations in this country. Our regulations still have primary force. This means that workers from TPP-11 signatory countries, including electrical workers, remain subject to and must satisfy any skills assessment required by the visa process, which, for electricians and other trades, is administered by Trades Recognition Australia.
Workers from TPP-11 signatory countries also remain subject to and must satisfy licensing and registration processes required by state and territory governments. The Department of Foreign Affairs and Trade has confirmed the TPP-11 does not oblige Australia to recognise the education, experience obtained, requirements met or licences of certifications granted in the territory of another TPP-11 party or nonparty. The level of skills that is acceptable in Australia does remain. This does not weaken that.
The assessment of skills, qualifications and employment backgrounds for electricians applying under temporary work visas either under the FTA or otherwise is part of the visa assessment process undertaken by the Department of Home Affairs. The Department of Home Affairs has also confirmed that the present process for assessment of skills, qualifications and employment backgrounds for any foreign workers, including the specific occupations listed in your letter, will not change as a consequence of the TPP-11.
The ISDS mechanisms will provide valuable protections to Australian investments overseas and still safeguard the government's ability to regulate the public interest and pursue legitimate public welfare objectives. The TPP-11 contains explicit recognition of this right in addition to other safeguards. The TPP-11 also represents an opportunity for Australia to update a number of its investment arrangements with TPP-11 signatories through side letters with Peru, Mexico and Vietnam. Australia agreed to terminate decades-old bilateral investment agreements and replace them with modern standards by the TPP.
Finally, there is some concern about the US system of interested stakeholders. The US system of cleared advisers is longstanding and reflects the particular circumstances in the US. This process provides some stakeholders a greater level of access than others. Australia's practice has been to maintain an open, inclusive and flexible approach to consultation, ensuring all stakeholders, not just those with a vested interest, who want to continue can continue to do so.
The trickle-down troika is back. The Liberal Party, the Labor Party and big business are working hand in glove to give big corporations more rights at the expense of everyday people. I expect, from this shambolic Liberal government, nothing less than an attempt to give corporations more rights, to take away requirements to advertise locally first before you bring in someone from elsewhere for a job, and to go and reward a government that is on the verge of backing out of international whaling agreements and starting again. I expect nothing less from the Liberal-National government. But what may come as a surprise to many people is that this blueprint to give corporations more rights over governments and people is now being cheered through and waved through by the Labor Party in this place.
We're at a time when we've now got the opportunity to say, 'We've got to go back and renegotiate some of the terrible provisions in this agreement.' They are provisions that contravene the Labor Party's policy, and we even have members of the Labor Party here moving amendments to say, 'We don't like the things that are in these agreements,' at the very moment that we have the opportunity to say, 'We want better treatment.' But what is happening is that this bill is being brought on for debate, and the Labor Party is cheering it through.
'Trade deals' sounds innocuous. You're reaching an agreement with someone else to allow for greater trade. But what is not said in that is that these things aren't really trade deals. They're agreements about how corporations and governments are allowed to relate to each other. They're agreements that say that corporations, in many instances—including multinational corporations—have more rights than the Australian government. Corporations will be able to tell the Australian government what to do if the Australian government ever tries to pass legislation for the benefit of its people. If the Australian government, under these deals, starts to pass legislation that might affect the profits of some of these corporations because we decide it might be in our interest to, for example, require the local advertising of jobs before allowing someone else to come in from overseas, or if we start passing laws to protect our environment or start passing laws to protect public health because we think we want to look after the Australian people, corporations will be able to sue the Australian government in a secret panel where a few people get together—not a big court; a secret panel where a few people get together—and the decisions of that secret panel will be binding. What that means is that this parliament loses its right to govern to protect the Australian people.
These clauses are so bad that they're off the table for the upcoming EU negotiations. The EU is not going to ask for these clauses to be in any agreement that might be signed with Australia. Jacinda Ardern, in New Zealand, has had the good sense to negotiate side arrangements so that those clauses don't apply over there. The Labor Party said at its conference, 'These clauses are bad and we don't like them.' But they're in this agreement that the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 is about to bring into effect.
These clauses have been used by corporations to sue governments because governments have, for example, tried to take steps to make drugs more affordable or tried to do things to restrict corporations in their treatment of the environment. That's how these clauses are being used. As I say, New Zealand has said, 'We don't want a bar of them,' and they're not going to be in the EU agreements. So why on earth would we now sign up to them, knowing full well what it could mean for the Australian public?
Not only that; these agreements, like the agreements before them that Labor waved through as part of the trickle-down troika, say that certain countries—and in this case we're talking about Canada, Mexico, Chile, Japan, Malaysia and Vietnam—get a free pass from the laws that exist in Australia that say you need to advertise locally first. They get an exemption. We are now carving out loopholes in our labour laws that are big enough to fly plane loads of exploited workers through.
What we are seeing at the moment, under the agreements we've got, is that these deals not only put downward pressure on wages for local workers but lead to exploitation of overseas workers as well. Overseas workers come in on visas. They get brought in with the promise, 'You'll earn more than in your home country'—and who can fault people for sticking up their hands and saying, 'Yes, I'll go and work somewhere and earn a bit more money'?—but what happens when they come here is that the employers in many instances say: 'Right, we've got you here. If you arc up, we'll withdraw your permission to be here and you'll be on the next plane back. When you are here, you will accept whatever conditions that we want to impose on you.'
As a result we see in Hobart a couple of hundred people working in some instances on public works projects on below-legal wages and conditions. We've seen it in Victoria, in Western Australia and right around the country. In Victoria, on the electricity network—and you would think that, if there's anything called 'a project for the public good', it would be our electricity infrastructure—people brought in from overseas to work on maintaining the electricity network are getting paid below what the going rate is and are being exploited. It is all, in many instances, facilitated by these agreements.
Whatever requirements might be put in place in Australian labour law to restrict exploitation, these countries get a free pass. Australia will not be able to legislate to say, for example, 'We want to advertise locally first.' It is leading to exploitation right now of local workers and overseas workers, and it's why other countries say, 'We want the right to regulate that.' We are about to sign it away, and the Labor Party is about to sign it away.
The previous speaker, the member for Parkes, said—and put aside the advertising point—'Don't worry; at least everyone who comes in will be required to have the same level of skills.' That is just not right. That is not how the skills-testing system works in this country at the moment. In many instances, when people come in here, it's a paper based assessment that is often tick and flick. There's no systematic requirement to vet everyone who comes in to ensure that they're trained up to the same standard. You look at the paperwork and you take the word of the sponsor who's bringing them in. That's not good enough either. That's why, in many instances, what has been uncovered is people who, we would say, aren't trained to the same level locally. We need a thorough overhaul of that. What we're being told is that it's okay; this new agreement won't change it. That's not the point. The point is the system at the moment is thoroughly inadequate. People have been pointing to problems in it for a very long time. What are we going to do? We're now going to expand the number of people and the size of the loopholes through which people can pass.
When this TPP was negotiated, we were also told at the beginning that there were going to be seven enforceable international environmental agreements as part of it. So it's all right, we will still be able to protect the environment; corporations won't have greater power over the environment. When we saw the text of the agreement, it only mentioned four, and it turns out that only one of them has any enforceable commitments in it. Climate change is not mentioned anywhere. There are no environmental benchmarks in these agreements. That means that in the future when the Australian government legislate—once we've turfed this rotten mob out and potentially get a government that wants to act on climate change and protect the environment—they can't simply consider what would be good for the Australian people and the planet; we now have to go off and check this blueprint for the corporate takeover of democracy. We have to check these agreements to see whether we might offend a multinational corporation if we were to do something to cut out pollution or protect the environment. If so, maybe we can't do it, because we signed up to a deal that allows a corporation and a secret panel of lawyers to veto what this parliament might want to do.
It's not just our future environmental laws, but even our future labour laws. There's lots of talk at the moment about how the system is broken and we need to change the rules. This might stop us changing the rules in the way that we need to, because we will have to make sure, before we change those rules, that it doesn't affect the profits of someone who might have a claim under one of these agreements. That is wrong. That is why people are increasingly angry at governments, because they see governments signing away our rights to big corporations. This another example.
That is why the Greens have consistently opposed these kinds of agreements that go beyond a simple agreement with another country to say, 'Let's trade more together,' which in and of itself isn't objectionable. They attach all these other things that restrict what governments can do. It's because of that that we have stood firm against them. You've got the Greens saying this; you've got unions saying this; you've got civil society groups, environment groups, NGOs all saying this. You've even got the Productivity Commission—hardly well-known ideological allies of the Greens—saying that it's often hard to see what benefit these agreements deliver to the Australian public. What we need to do at the very least, before we sign up to this, is to have an assessment of it so that we're not just being asked to take the claims of the Labor and Liberal parties at face value, so we actually see some evidence that it's going to help not just corporations but also the Australian people. That sounds like a pretty sensible idea. I would have thought the government, if they thought this was such a cracker of an agreement, would say: 'Look at the research. We've undertaken a big Productivity Commission analysis of it. Look at the amazing benefits.' There is none of that. It's just, 'Take it on our word that handing over your rights to big corporations is somehow going to be of benefit to you.'
And this all happens in the context, as I've said before, that right now one of the parties to this agreement is in a position of wanting to restart whaling. They have already pulled out of the International Court of Justice, but now they want to be able to say, 'We want to go back to having full commercial whaling.' The Australian government should be holding them to account and saying: 'We've got some minimum standards, and if you want to do a deal with us that's about increasing economic activity, there are certain things we want in return. There are certain minimum standards we expect.' As we've already heard, some of those things have been the subject of these negotiations, like asking some other countries to perhaps try to at least say they will lift their labour standards. We've now got a great opportunity to say to Japan, 'This agreement is so important to you, but it's repugnant to the Australian people that you restart whaling, and we can't in good faith sign up to an agreement that increases economic activity between our two countries if part of your definition of economic activity involves killing whales.' But instead of standing up to them, we are rewarding them. This government is rewarding them and saying: 'It's all right, we're going to turn a blind eye to it. We're quite happy to give you a pat on the back and reward you by handing over a big fat reward.' That is reprehensible to many people.
There's absolutely no reason to rush ahead with this, especially in the context of so many people saying there are such big problems with it. We could park this until a better deal is negotiated. We could park this until we get the kinds of protections that Jacinda Ardern, the Prime Minister of New Zealand, has negotiated for her people. Park this until labour rights are better. Park this until we remove the ability of governments to be sued by corporations just because they happen to stand up for their people. That's what the Greens will be pushing for. We expect this from the Liberals, but the Labor Party stands condemned today because it's very crystal clear that, no matter what their policy is, they will vote for big business every time.
I'm delighted to speak in support of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which will implement the Australian government's commitment to free trade and, in particular, TPP-11, which I happen to believe is of similar importance to the future of Australia.
I will refer to the member for Melbourne's remarks later in my comments, but I want to say that I think we have yet again seen another demonstration of how his party's approach to these issues will provide a blueprint to drive Australia to become an isolated economic backwater—a 'greenprint' is probably a better way of describing it. I find it extraordinary that, from the representative of a party that spends much of their time arguing for greater international cooperation and regulation, we have this tirade which reflects the fact that their approach is entirely hypocritical. They want that international cooperation and regulation when it's on issues that match their ideological mindset, but when it actually comes to economic activity and economic growth, suddenly that support for international action completely dissipates. I also have to comment that you could change some of the words of the concerns raised by the member for Melbourne, but at their heart you get the same type of fear and, frankly, paranoia you would expect from a right-wing radio host in the United States railing against the United Nations. It is the same type of scepticism, so often unfounded, that we see infecting the international debate today.
The reason I support this legislation and the TPP more broadly is that our free trade agenda is a fundamental part of our economic program to advance Australia. I want to reflect on the fact that this is a multipronged approach. It's an approach that's involved reform to our tax system, which we have implemented through legislation over the last two years. The tax reforms are going to deliver personal income tax cuts of a scale and significance that we haven't seen for a generation. Those tax reforms are driving small- and medium-sized businesses by taking some of the corporate tax burden off their back.
It's part of our agenda that involves the investment we're making at record levels in infrastructure—in my state, there is groundbreaking infrastructure like the Western Sydney Airport—or investment in congestion busting or new roads, in public transport and rail. In Victoria, for example, there is that wonderful commitment we made to finally, at long last, after 40 or 50 years, build a railway line to Melbourne Airport.
It's part of that plan that involves the responsible financial management that we're providing which is giving people such great confidence in the future for the federal government's budget settings and the Australian economy. It's part of that plan which is supporting small business, which on this side of the House we believe is so vital to jobs creation and the economic future of the country. I refer to the corporate tax cuts that are benefiting small business, but obviously there are a range of other measures, such as the instant write-off of assets purchased under $20,000, which are really making a difference to our small- and medium-sized businesses.
Finally, it's part of that plan which is helping deliver in an area which I think is vitally important and making sure that Australia is not just in the middle of the pack but also moving to the top half of the pack in relation to innovation and technology. If you look at where the future of Australia's success will lie, there can be no more important area than making sure that we are part of the next wave of technological advancement, which is so important to the jobs of the future.
I want to turn particularly, in the context of the TPP, to why I believe that this multilateral free trade agreement is so important. It comes off the back of this government's extraordinary success in advancing the free trade agenda. I'm proud of the fact that this government has been able to sign FTAs with Korea, Japan, China, Peru and, very recently, Indonesia. It is an important part of the economic mix because of both the global implications and those on our own shores. Globally, I happen to believe that free trade has been one of the most important features of our international efforts to provide economic advancement for citizens around the world. It is no coincidence that, over the last 30 or 40 years, we have seen the most dramatic alleviation of poverty around the world being driven by the opportunities that free trade is opening up.
I want to refer to one statistic, and that's the fact that in 1981 almost 50 per cent of the world's population lived below the poverty line—I think it was close to two billion people. Today, with a much larger global population, that number is down to one billion people, or 15 per cent of the world's population. Clearly that remains too high, but the fact is that the opening of markets and all of the flows of investment and technology and opportunities for citizens in countries that have previously struggled have helped drive that poverty alleviation success story.
More broadly, I happen to believe that open markets and free trade have a dividend which is not just about economic relationships between countries but, frankly, about peace and security. It's often said that no two democracies have gone to war against each other. That is by and large true, depending on how you define democracy. It is also true that free trade is driving closer relationships between nations who develop a stronger economic integration. But it is also driving a closer integration between the peoples of those nations. That's particularly true as our free trade agreements evolve from just simply being about commodities, agriculture and resources to being about the provision of services in each other's countries. It's that person-to-person contact provided through our intellectual know-how and our service provisions—which is particularly relevant to Australia—which is helping bring countries together. I think that there is a real security dividend that is being driven by countries more closely cooperating on the economic field as much as anything else.
For Australia, open markets and free trade are particularly important. That reflects the fact that we are by global standards a country with a vast land mass but a small population. We don't have the huge domestic markets of other nations. The opportunity to export our goods and services, our know-how and our skills means that we are not constrained by a domestic market of 25 million people—the world really is our oyster. But that is only achievable by having access to those markets that are important to us.
We are a nation that has for so long depended on our capacity to export. Particularly over the last 40 years as we have recognised that the protectionist policies of the past were constraining those opportunities, we have seen the reforms that have been adopted by governments of both political persuasions ensure that we have opportunities that people 100 years ago, frankly, would never have imagined and only ever dreamed of. It's therefore no surprise that, over the last five years, a quarter of our economic growth—which has been leading the world—has been driven by our trade and our exports. That will grow in importance, and it will grow in importance because of our success in developing these free trade agreements.
This agreement is an important part of the mix. In the Trans-Pacific Partnership we have a multilateral agreement which provides us an opportunity in nations that represent a combined GDP of something like $13.8 trillion. It's an agreement that is providing us access to markets that represent 500 million people and it is an agreement providing us access to markets in parts of the world that are closest to us, in our own region, on either side of the Pacific.
The genesis of this agreement has been a surprisingly painful one in some ways, in that all of us would have hoped that today we were talking about TPP-12, not TPP-11. But we know that, following the election of Donald Trump, the United States decided to withdraw from the TPP that had been embraced by his predecessor. For me, that was a disappointment. Many people argued that it would be the death-knell for this agreement. But through the leadership of Australia and our friends in Japan and in other nations, we have been able to prove those doubters wrong. The fact we have continued to be able to successfully negotiate this agreement stands as extraordinary testament to the commitment and work of people like our former Prime Minister Malcolm Turnbull and our last trade minister, Steve Ciobo. I pay credit to both of them in particular. But for me there is a broader importance in the fact we have been able to sign this TPP because so much of the world is becoming consumed by nationalist populism, which, in my view, drove the US administration to withdraw its support from the TPP. Never has it been more important for Australia to stand firm against many of those pressures which, in my view, do not stand to Australia's benefit but, more importantly, will separate the world and constrain the prospects of economies around our globe. So by supporting the TPP, we are laying a marker to say that Australia, despite some of those pressures internationally and occasionally on our shores, will continue to be at the vanguard for those arguing for closer cooperation between nations, economically and more broadly.
I mentioned the fact that the TPP will open up new opportunities for Australian businesses in markets that represent some 500 million people. What is really significant about this agreement is that it will see 98 per cent of tariffs in those 11 countries removed. Many of the speakers before me have spoken about the benefits of this agreement to sectors of the economy that relate to their electorates. Not surprisingly, there's been a focus on the extraordinary benefits this will deliver to our agriculture sector, which is having a renaissance. But, for me as the member for North Sydney, which is an electorate—
I'm coming to that point. For me as the member for North Sydney, which is not an electorate famous for agricultural produce, what excites me about the TPP are the provisions that are included in the agreement that will support those working in our professional and service sectors. We know that, particularly with the growth of the economic opportunities in the middle-class in our region and across the Pacific, we are going to be ideally placed to provide that intellectual know-how in engineering and architecture, in law, in finances and so on, that are going to be increasingly demanded in those economies. And this agreement, as much as it focuses on the agricultural sector, also provides opportunities through the liberalisation of access to those service markets which is going to be important for so many people working in my electorate and so many businesses in my electorate, including those in the thriving innovation sector in North Sydney.
I also want to refer to one other aspect of this agreement which is important. We have signed a multitude of free trade agreements over the last five years. What this agreement delivers is not just benefits in those countries like Japan, where we already have an FTA and there are further benefits that will arise, particularly for the beef industry, for example; it means that for the first time we have effectively an FTA with those two North American markets, Canada and Mexico, that are going to be increasingly important to our future prospects, in my view. I particularly touch on Mexico. Mexico is a G20 economy. My view is that over the next few decades we will see increasing opportunities in Latin America, and this FTA with Mexico, joining as it does Peru and Chile, I think, will be very important in that regard. Overall, it's been estimated by recent studies that, between now and 2030, the TPP stands to increase Australia's economic opportunities by something like $15.6 billion. That is just so important, in my view, to our future prospects.
Before I conclude, I want to touch on two matters that have been raised by other speakers in this debate. The first is in relation to the ISDS provisions, which seem to rile and get excited many who come to the free trade debate. I want to stress that these are standard inclusions in FTAs that Australia has been part of for many, many years. I want to equally stress that none of the settlement provisions affect the ability of any national government to regulate in legislation in relation to the public interest or for legitimate public welfare grounds. In fact, I would challenge anyone to point to where the capacity of this parliament to legislate for the good governance of Australia has been affected by the inclusion of those provisions in any free trade agreements we've signed to date. What those provisions do—
The member opposite refers to plain packaging. A challenge was mounted and it failed, which proves the fact that the protections that are involved in those agreements are working as they should. There's nothing in our legal system that stops someone making a claim. What is important is the outcome of those claims. What is just as important is that, as a country with a strong legal system and a great sense of the importance of eliminating sovereign risk, these provisions provide Australian businesses with so much greater certainty in their relationships and dealings with countries where the legal system does not meet or have the standards that we would expect and impose upon ourselves. Therefore, the net benefit of these agreements, in my view, is overwhelming.
The other thing that I want to touch on, and the member for Melbourne referred to this, is in relation to the labour market. I want to make absolutely and abundantly clear that nothing in this agreement weakens or lessens the requirements or the skills testing involved in anyone wanting to come and work in Australia. They will apply at the national level and they will apply at the state level. I commend this bill to the House.
The last speaker is absolute proof that, if you don't know what you're talking about, you'd better sit down and shut up. It's one thing to be a fool; it's another thing to get up and prove yourself to be one. I very vividly remember getting out of bed and listening to Paul Keating state that Australia would no longer be a giant sheep run and an elongated coal pit; we would be the freest economy on earth. There would be no impediments to products coming into Australia and that would make us strong economically. I picked up one of my boots, threw it at the wall and said: 'Bloody hell'—excuse my language, Madam Acting Speaker Bird—'Now I've got to look after the workers as well! It's hard enough looking after the farmers and rural people; now I have to look after the workers and the trade unions!' That started the very strong relationship I have with the trade union movement. We can see his handiwork and we can see the handiwork of the Public Service and what they've done to our country. We can see it now clearly.
I'll tell you another little story. There was a little kid and his daddy had bought a Holden motor car. It was the 12th Holden motor car to come into Queensland. His daddy walked around the car and he said, 'Australians built this car!' He was almost jumping up and down. 'Look, it's got clearance for the country roads in Australia. We don't have many bitumen roads. Look, it's got room for six, because we have big families in Australia. None of the frilly polished wood you get in the British cars or the big Yank tanks. This is a car for the people. This is an Australian car. Australians built this car.' He was filled with pride for his nation. That bloke was my daddy and I happened to be that little kid watching this performance. Australia can't build a motor car. We built our last motor car. Australia's built its last fridge. And who was responsible for this? The people sitting in this House. They are the people responsible for this. They launched on free trade.
If you have free trade—and I heard Paul Keating say this—there are only two possibilities. You go down to the wage structures of your competitor nations, namely the Asian countries—China and India and these countries—or you close down your industry. They are the only two possibilities. Not surprisingly, we've closed down the motor vehicle industry. We've closed down the white-goods industry—the last factory closed in Orange three years ago. I was campaigning in Sydney, which I'll be doing again shortly. The glassworks had gone in the area I was campaigning in. The Bonds underwear factory had gone. There were a huge number of people employed there. The meatworks had gone. That is before the government's free trade, and I won't go into that. The motor vehicle parts industry had gone. The aero-engineers had gone—4,000 jobs gone overseas. That's the result of your free trade policies.
I defy anybody in this place to point out to me a single nation on this earth that free trades. Let me be very specific. The last landmark study done by the OECD on agriculture set the value of government to farmers at 41 per cent. That meant farmers throughout the world get 41 per cent of their income from the government. No-one was below 37 per cent. All of them were pretty close to 40 per cent in their support levels for their farmers—41 per cent of their income coming from the government. There were only two exceptions: Australia and New Zealand. Interestingly, the country that was on 36¾ per cent was Canada. You have to say, well, the colonial spot marks are showing here, aren't they, in flashing neon lights—the three British colonies are the only countries on earth! They trained us to be colonial genuflectors and mendicants. They trained us that way. Flip a 20c coin, and on the back of it is the picture of a lady in England. She might be a lovely lady. I'm no republican, but I don't know what an English lady is doing on our coins. It's about time we started growing up. It's about time we started growing up and becoming Australians.
Let's have a look at Mr Keating's handiwork. I've spoken about Sydney. I'll speak now about North Queensland, my electorate. The free marketeers deregulated the tobacco industry. Now there is no tobacco industry. We lost over 2,000 jobs at Mareeba. At Myrtleford in Victoria they lost over 3½ thousand jobs. What for? In the dairy industry we lost 1,500 jobs. We lost $1 billion in export earnings as a result of the deregulation of the dairy industry, and my area suffered the loss of 1,500 jobs. We were getting 59c for our dairy product; after deregulation we're getting 41c. Woolworths and Coles wrote a letter of thanks to the government and the Prime Minister of Australia saying, 'Thank you, we just made another $1 billion a year.' The price went up 25 per cent for the consumers and down 30 per cent for the farmers. Fishing—partially free trade; partially our green friends, at it again. We lost 1,200 jobs in fishing. We lost 2,000 jobs in timber. Whilst some will argue, again, that it was the closure of the timber industry by the Greens, it was also the fact that we can't compete against the timber coming in from overseas. The timber industry is gone. We deregulated the wool industry. When it was regulated, by Doug Anthony, that great man, the price for wool throughout the world—we were the world's wool industry—went up 300 per cent. When Keating undermined and then abolished the marketing system, the price dropped to one-third of what it was before. What a coincidence! Well, I did economics at university, and it's not a coincidence. In each case you are selling into an oligopolistic marketplace. There are only two people to sell food to in Australia—Woolworths and Coles—and there are only two people to buy it from. And you preach to us about free trade! Well, go and preach it to Woolworths and Coles and then go and sue your university for the stupid education it gave you. Seventy per cent of the sheep in our wool industry have now gone. We have no wool industry. And yet, when Keating deregulated that industry, it was our biggest export item. It was bigger than coal. We were on $6,000 million a year in the wool industry and coal was on $5.9 billion a year. So, with his policies, Keating single-handedly destroyed the industry.
Now, if you dumb politicians are not getting the message, I can tell you that the Australian people are going to start giving it to you, big time! All I can say is: in my homeland, where six or seven per cent of Australia's population live—North Queensland—we're giving it to you right now. You're down to 30 per cent, both of you, and we're up to around 25 per cent. In fact, with One Nation we've got more than 30 per cent, more than you blokes. So it's only a matter of time before the rest of Australia starts to understand what you have done to your nation. Australia has made its last refrigerator. Australia has made its last motor car. Hundreds of thousands of Australians have lost their jobs. You must understand that if you want to buy your biros, your glasses, the leather in your shoes and the cloth in your suit from overseas then you've got to sell something, and this country's got nothing to sell now. You've destroyed it. There are only two things that we sell now: iron ore and coal. And thanks to the education system and the brainlessness of this place, 60 per cent of Australia wants the coal industry closed down. When I say that, I'm not plucking figures out of the air. The coal industry is worth about $100 billion a year to the Australian economy in export earnings. The iron ore industry is worth about $120 billion. The next item down might be gold, beef or aluminium; they're all about $12,000 million. But they're nothing compared to the big two. So it's quite right for me to say this country only has two exports now, and 60 per cent of the nation wants one of those exports closed down completely.
My colleague in Queensland, Shane Knuth, a member of parliament for our party, said, 'Mr Beattie told us that if we deregulated the electricity industry there would be competition in the market and the price of electricity would go down.' Well, the price of electricity in Queensland had been $670 for 11 years, similar to Victoria and similar to South Australia. New South Wales hides the figures; we can't get the figures out of New South Wales. But for 11 years the price was $670. For the next 11 years it soared from $670 straight up through the roof to $2,400, and it's not stopping there. Well, surprise, surprise! We were producing it at cost. It was a government owned facility, and we produced the electricity at cost and passed that cost onto the consumer, which was $670. Now the electricity industry of Australia is owned by four people. Forty per cent of it is actually owned by a foreign government! The Chinese government owns a number of companies that own 40 per cent of the Australian electricity industry, and quite frankly they can put the price of electricity up to whatever they feel like putting it up to. It is a deregulated industry with only four people in the marketplace. When I went to university, I was told in an oligopoly there would be no price determination by the interplay of market forces. The price would be set by the oligopolists at whatever price they felt like setting it at. So this oligopoly has to set it at $2,400 instead of $670. Well, surprise, surprise! I mean, jeez!
It was going to bring down the cost of food, remember that? 'Once we deregulate and the farmers can no longer get a fair price through their marketing boards'—those greedy farmers!—'then you'll get cheap food.' Well, well, well. I've only got the smallest commodities here that I could get in the time I had. Milk went from 85c to $1.99, so we didn't get a good deal on milk. The farmers got 30 per cent less. They were on 59c and they went down to 41c. They get 30 per cent less. The consumer was paying 85c, now he's paying $1.99. It seems to me that it's gone up by about 300 per cent, or 200 per cent—whatever the hell it is. Potatoes were 99c and now they're $2.44. When I submitted this in 2008 before a government committee, I picked six of the most common items. I couldn't get the figures for bread or meat, because they were too complicated, but I could get them for eggs. The farmer was being paid $1.40 for his eggs. The consumer was paying $4.85 for his eggs. (Time expired)
It is my great pleasure to speak in favour of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, because they will allow the ratification of the TPP-11, which is one of the most comprehensive trade deals ever negotiated. It will eliminate tariffs and allow us to trade in a much more beneficial manner with 11 countries with a combined GDP of $13.8 trillion, and it will give us better access to 500 million customers around the Americas and Asia—in Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Many people have spoken in this chamber already, and I'm very pleased to hear that our colleagues in the opposition have seen fit to promote and support this legislation. The member for Blaxland's comments were noted quite eagerly. Common sense, business sense, history and analysis show that trade delivers jobs. Australia is a trading nation, and this TPP-11 will give a massive boost to people in this country who trade, like our farmers, our manufacturers, our service providers and our small-business men and women. All exporters are big winners. Exports means Australian jobs that involve exporting are a lot more secure and jobs will grow when trade grows. History is full of examples. If you go back through the history of time, in the Mediterranean there were the Phoenicians and the Egyptians. In the Middle Ages there were the Venetians. The Dutch built great empires out of trading. The United Kingdom traded and became very wealthy as a result.
Trade delivers income for our nation and it delivers growth in jobs. In 2017, nearly one-quarter of Australia's exports, worth $92 million, went to TPP-11 countries. So this agreement and this ratification process, which is enabled by these two bills and another one before the House, means that we will get better access and a reduction in tariffs. History has shown that trade delivers growth, wealth and jobs for the nation that's trading. There has been extensive modelling demonstrating exactly that. Analysis by Brandeis International Business School, Johns Hopkins University and the Minerals Council and many other business and economic modelling demonstrates that we will see an increase of $15½ billion in net annual benefits to our national income by 2030.
There are people in Australia who don't really appreciate what exporting does for our nation. We are a net exporter of all the raw food products that people depend upon around the world, whether it's beef, sugar, dairy or grains—you name it. We export food stuffs practically all around the world. If we weren't exporting, there is no way that the Australian market could cope with the amount of food and fibre that we produce.
The coalition has been supporting free trade, as you know. We've had agreements with Japan and Korea. They have been enormously beneficial for people who are exporting. You don't have to be a big individual business that is seen as an exporter. Beef producers and dairy producers in my own electorate of Lyne are exporters. Whether they're exporting through Wingham Beef Exports or meat processing or cheese producing in Wauchope, they're all able to export on more beneficial terms because of this agreement.
The words that we've heard coming from members of the Greens and Centre Alliance are not reassuring, because it just demonstrates that they don't understand the benefits of trade. We have sugar millers and sugar producers up and down the east coast of Australia. Improved access to Asian markets and the big new ones, Mexico and Canada, will be exponentially beneficial to people in the sugar industry. My colleagues in Page, Dawson, Capricornia and Flynn—all these people will have business men and women producing sugar that will get better access.
I've got winemakers in my electorate who export into the Asian markets. Better access into Canada and Mexico will open up greater export opportunities. As for wool producers, the member for Kennedy mentioned in former times that trade and tariff reductions ruined the wool industry. I think he's been misguided in his analysis. We have had some industries that have become uncompetitive, but I would respectfully advise the member for Kennedy that free trade is not the cause of the demise of some of our industries; it's us becoming inefficient because of green tape, industrial tape, red tape and, as he also mentioned, an increase in electricity. But, for our raw product exporters, free trade is the lifeblood that they depend upon.
It's not just raw product producers but also service industries that will benefit from this agreement. It's so important that we ratify it. People that run IT, data management, architecture, engineering and service industries in mining and agriculture will get better access to the emerging nations in Asia and, as I mentioned, Canada and Mexico. Recent reforms in the professional services sector in areas such as Vietnam will allow us better access than other countries that aren't party to this deal. Legal and architectural services in particular are getting a really great deal out of this. For mining equipment services and technologies, which are our bread and butter because we have some of the best mining engineers and mining and engineering service companies, Mexico is changing its regulations. This will give them preferential access into that new expanding market.
In this deal, as I mentioned, individual producers of cotton, sugar, beef and dairy are in effect exporting, because it's not all consumed in Australia, but other services in the small and medium-sized enterprises get access on preferential terms to those that aren't part of this wonderful TPP-11. Service industries that could potentially export exist in my area. We have a lot of young IT companies in Taree that are developing services that they could export into this area.
As I mentioned, there has been some reluctance from members of the Greens and Centre Alliance and from the member for Kennedy. This agreement has been analysed by four committees. Several of them have reported already, in a favourable sense. The whole world analyses these trade deals because it understands that trade brings wealth. Exporting goods brings wealth into our nation, and it means that those businesses can employ and grow, and that's what Australians want. They want us to have a strong economy because the economy delivers the income, for governments state and federal, that provides all the services that we depend upon and the funds for our pensions. It's so important that we grow our exports, and this agreement will do that.
There was some reluctance from the member for Blaxland. He mentioned labour market testing in his speech. I just want to make a few comments about that. I can understand where he's coming from. If you're in an industry in regional Australia, the hassle of trying to get overseas workers to come to your area is considerable. There's nothing in this agreement that means anyone will get a lower wage or have different standards of qualification; all those things have to be met. There is labour market testing. Every company advertises jobs. The first place they go is to the local market. They only turn to overseas workers if they can't get people in regional Australia or people with the skills that they need for their job. In effect, there is always practical labour market testing rather than hamstringing the agreement by putting in things that our trading partners don't see as free and equitable trade terms. It's interesting to see that since we've signed these trade deals with China, Japan and Korea, where this issue that there'd be a flood of overseas workers was brought up, the number of overseas 457 workers has actually reduced.
The nature and timing of this agreement are important. If we don't get this ratification process through promptly, we will deliver a competitive advantage to other people who have signed up. We need to get these ratification processes in train. That's why we need to understand that time is important, because I want my dairy producers, my beef producers, my nearby sugar producers and all my service industries to be able to compete on favourable terms. As you know, we are a competing nation with New Zealand for dairy exports. They're party to this agreement as well. We wouldn't want to lag behind our nearby neighbours in competing in the dairy space, for instance. Our beef producers from Wingham are big exporters. Most of it goes to Japan and Korea.
The terms we already have in the existing agreements get improved by this. Nothing is worse. I can't see why anyone would have any reluctance, when you really appreciate the massive growth of trade and wealth for the nation, to support this bill. The agreement will come into force 60 days after ratification, and several countries have already ratified it. We need to get on board and get our processes in place.
The last comment I'd like to make is about the ISDS provisions, which a lot of the opponents of free trade throw into the mix to justify not going ahead with free trade agreement. The ISDS provisions have existed in all our trade agreements in shapes or forms since we've started having trade agreements, because they protect people from Australia who are trading in those countries as much as people trading in Australia with our regulations. It puts a level playing field in there. The other thing that is thrown up to oppose this is that it will change the way our Pharmaceutical Benefits Scheme and intellectual property rights in Australia will change and that the PBS system of getting subsidised medicines would change. Those provisions won't change. It has been very well negotiated that our Pharmaceutical Benefits Scheme won't be adversely impacted by trade sanctions under the ISDS. It was a red line that none of our trade agreements would ever cross.
So I say full steam ahead. It's an excellent deal for Australia. It's an excellent deal for people who are exporting. It will increase trade and it will increase the wealth of the nation, because trade brings jobs. A strong economy makes the wonderful services that all our people depend upon. Their health services, their education services, their pension and all the other things that governments provide come from taxes that we raise from our economy. We need a strong economy. We've been delivering massive jobs growth, in part because of these earlier trade deals. I commend this bill to the House.
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.
I rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill before the House. This government has already negotiated, signed and delivered a number of free trade agreements right around the world with Japan, China, South Korea and Peru. We continue to advance an aggressive trade agenda because on this side of the House we know that trade means jobs. More trade means more jobs. We are a trading nation.
In my contribution today, I want to make this more personal. In particular, I want to talk about some individuals in my electorate: a gentleman by the name of Enio Troiani—better known as ET—David Pickering, Giuseppe Barazza, Rob Zahn, my good friend Leone Aslett and my very good mate Scott Collins. I can see you're wondering where I'm going here, Mr Deputy Speaker Vasta, so let me make the link for you. As part of the TPP-11 agreement, we have negotiated a very good outcome for the sugar industry, which for me is personal. This is something that I've been involved in for decades. In fact, my family are still harvesting contractors in the Bundaberg region. I have been involved in the sugar industry for as long as I can remember, literally. I was an apprentice and then a tradesperson inside the sugar industry. I've worked as an engineer and as a manager. I've had all sorts of different positions over many, many years. However, I now find myself in the federal parliament talking about a deal which will be of benefit to them.
Enio Troiani and David Pickering, who was actually a couple years older than me when I started my apprenticeship, were tradesmen. Leone Aslett started her career as a clerk. Giuseppe Barazza was a chemical engineer. Robbie Zahn was a fitter and turner who came through the system, as was Scott Collins. These were local people who took up the opportunity for an apprenticeship, a traineeship or similar positions with Bundaberg Sugar. Enio Troiani is now the general manager for Bundaberg Walkers foundry. David Pickering is the general manager for Bundaberg Sugar. Leone Aslett is the chief financial officer for Bundaberg Sugar. Giuseppe Barazza runs the Bundaberg refinery. Robbie Zahn is the mill manager for Bingera mill, and my good mate Scott Collins is a mill supervisor at that same mill. These were local people who took an opportunity for training and worked their way through the system inside what, at the time, was a large company, with roughly 1,600 employees across 15 different business units operating around the state of Queensland.
Mr Katter interjecting—
The link is this: these individuals have their jobs because of trade. The sugar industry is overwhelmingly an export industry. Without those exports, these people would not have been able to get a position, pay for their house, pay for their children's schooling and work their way to some of the top levels of this individual company, Bundaberg Sugar, which is providing jobs in my electorate. It happens because of trade. The TPP-11 will be of great benefit for the sugar industry.
As we continue, if we look at seafood, Urangan Fisheries' Nicky Schulz is a long-time fisherman in Hervey Bay. He was born there, he lives there, works there and now owns Urangan Fisheries, which is famous for things like Hervey Bay scallops, which I'm sure you've heard of, Mr Deputy Speaker Vasta. Australian Ocean King Prawn Company is owned by the Murphy family, who have gone on to develop a slipway in Hervey Bay, doing maintenance for the different ships and boats which progress around the bay area. All of them are involved in exports, and seafood will get a great advantage from this.
But if we do not continue in these opportunities for trade, to do these agreements, to ensure into the future that they are ratcheted down, tied up and locked up, we may find ourselves in the position that others are in. If we look at what is happening between the US and China right now, they are in a trade war, let's be frank. Australia is protected by agreements like this. We need to build those agreements because, at a personal level, it is a what provides jobs for our people, particularly in the regional centres.
Locally, we've had expansions with an organisation called Pacific Tug. Pacific Tug have announced that they will open an operational slipway—
Mr Katter interjecting—
and a 1,200 tonne ship lift in the town of Bundaberg at the Burnett Heads port. They will have hundreds of employees doing maintenance, using local providers, local skilled tradespeople and individuals from the service industry. They will be able to service the Pacific fleet from this location. Trade allows all of these things to occur. Trade delivers one in five jobs in this country. The stronger our trade position, the better we are as an economy, the better we are as a nation and the more opportunities we have for our people.
What is the alternative? The alternative is the one put up by the Leader of the Opposition. He wants to put the economy into reverse; he wants to jump in the car and go backwards. In fact, he has stated that he doesn't think the TPP should move forward. He wanted to run away and put up the white flag. He wanted to surrender. We did not take that view. We dropped down a gear, we put the car into four-wheel drive and we charged on, and we have delivered the TPP-11. I acknowledge that the US are not included, but the door is always open.
Mr Katter interjecting—
I would say to those in the US who may well be listening: the door is not closed for you. You can obviously come in and join the TPP-11, and I would encourage you to do that. I'm sure Mr Trump is listening very closely to our presentations here in the House today.
As I've said, a quarter of our economic growth over the last five years has relied on trade. The last lot of GDP figures are well over three per cent growth. That is an outstanding result for this country. It is the best we have had in many years, and trade is one of the main drivers for that success. We have delivered over a million jobs in the last five years, as we said we would. Trade is a huge component of those opportunities. In my electorate, you only have to look at the macadamia industry. Bundaberg is now the largest producer of macadamia nuts in this country. That was not the case 10 years ago. That market has to go somewhere, and that product has to be sold somewhere. We must recognise that we are a nation of just 25 million people. For those of us who travel overseas—I know many in the chamber take those opportunities—in China, we wouldn't even be a tier 1 city, or we would only just be a tier 1 city. We effectively have the equivalent of the population of Shanghai, or a little bit more. We cannot sustain all of our operations in this country if we simply close our doors and rely on those opportunities for our local people.
We are a trading nation. We must continue to trade. Regardless of whether you look at agriculture, resources or the coal industry out of Queensland, it is an enormous driver of regional economies and regional jobs. Can I note that the Queensland Labor government absolutely take those opportunities through royalties. I don't hear any noise from people like Annastacia Palaszczuk about putting away the royalties from coal because it's just such a terrible word for some of those individuals in the Queensland state government. In my view we should continue to open mines, in particular in the Galilee Basin. The Galilee Basin has the potential to deliver tens of thousands of jobs over the lifetime of the mine. Its potential is enormous. Right now Australia is exporting record levels of its resources. We should continue to use those resources for our benefit. We can continue to sell to the world, but we should use the resources for our benefit, for our people, and for Australians, in particular those who are looking for apprenticeships and traineeships.
I know the now cabinet minister, in a former role, had put forward a plan by this government to deliver 300,000 apprenticeships and traineeships around the country. As a very fortunate recipient of an apprenticeship, I can tell you that it gives you that opportunity to learn and develop skills which you otherwise would not have had. Those are skills that I still use now, even though I find myself here. The process of delivery, the process of planning out a job, of identifying where you need to finish from where you need to start and the steps in between, is an incredibly important part of life, and it can be taught as a skill to an apprentice or a trainee. You don't have to go to university to be successful in this country.
The TPP-11 will eliminate more than 98 per cent of tariffs for 11 countries with a combined GDP of more than $13.8 trillion. That $13.8 trillion is an enormous amount of GDP, and we want a part of it. We have the opportunity now, with the free trade agreement with Canada and Mexico, which we have never had before.
One of the points I would like to make is to thank the team in the Department of Foreign Affairs and Trade. I think all members of this House should take that opportunity. There are thousands of public servants who work incredibly hard to deliver these deals, working very long hours. As a former assistant trade minister, I can tell you that you find yourself in some very interesting parts of the world, but, no matter what time of the day or night you open your door to go to work, there is a member of the department standing outside. I thank them for their commitment to our country and for the work that they do. The lead negotiators for these trade deals do it very, very tough. They work incredibly long hours in difficult circumstances because—once again, let's be frank. What do we want? We want to pinch someone else's domestic market. What do they want? They want to pinch ours. If that is the starting point for a trade negotiation, we can imagine how this goes.
We have been successful in a balanced outcome which will be of enormous benefit to this country. We continue to fight for our local sugar producers, our seafood producers, our macadamia nuts, our agriculture, our resources and our services.
In my electorate of Hinkler one of the other very important parts of the economy is tourism. For tourism there is no better place in Australia to go—I know I'm biased—than to travel to Hervey Bay or Bundaberg or Childers or Woodgate and see the wealth of opportunities for tourists in that region. It is worth tens of millions of dollars to our region and thousands of jobs. When we get expansion in infrastructure around motels, around opportunities to see the reef, to see the whales, to see the turtles at Mon Repos—I know, Mr Deputy Speaker Vasta, that you will take the opportunity when you can. The loggerhead turtles nest in very few places around the world, but Mon Repos beach at Bundaberg is one of them. It attracts tourists internationally. It is a world-renowned, environmentally friendly facility, well worth seeing. I will continue to advocate for anyone who wants to come to our region, spend a few dollars, stay a few days and see all of these opportunities.
Trade agreements provide those opportunities, particularly through services arrangements, right across the board. If we look at our arrangements with China, we now have open-skies arrangements into Adelaide, for example. Adelaide is seeing a real benefit from the ability of tourists to travel directly there. It's not just the capital cities. The regional areas within a two- to three-hour drive get that opportunity as well. These international tourists want to see our regions, and everywhere in Australia is a unique opportunity. Anywhere you go in this great country is a fabulous place to visit. I know that those in South Australia are taking advantage of that. They tell me there's some great wine down there. We are actually exporting enormous amounts of that now, particularly into China. I know they have a great advantage for our sugar products exported into South Korea. The last time I looked at those numbers we held around 75 per cent of the entire market into South Korea. We have better arrangements now into Japan.
If we look our sugar industry and we look at the world market price right now, it is down to 11.18c a pound in US dollars on the New York Stock Exchange. In recent years that has been above 20. Unfortunately, when I was in the industry it got as low as 4½. However, it is a fluctuating, cyclical industry. Every time that we can sign one of these trade agreements, which gives an advantage to our people in terms of the tariffs and the forward-facing price, that is good for that industry and that is good for the people that they employ.
When we look at the way that this is tied together from agricultural producers and from individuals all the way through the sugar-milling process to the refinery and to the raw export markets, that is jobs. It is jobs at ports, jobs in mills and jobs on farms. It is future training and a future opportunity for our people. The TPP-11 is an incredibly important trade deal and, as I said earlier, the door is still open for the US. The door is still open for the United States, if it wants to join in on the TPP-11.
We are negotiating trade agreements right around the world—for example, with the EU. We're now talking to the United Kingdom in terms of their Brexit opportunities. I have lots of people in my electorate who recall, with great fondness, the arrangements in the early seventies with Britain, particularly for our wheat exporters, our sugar exporters and our dairy exporters. I'm sure we're looking to provide those opportunities again. If we are out there delivering better trade opportunities, then we are out there delivering better job and training opportunities and we are improving the future of this country.
I say to those opposite: congratulations on supporting the TPP-11. I know this is a longstanding practice, in terms of trade and foreign affairs, but it's important, as a nation, that we continue to grow our trade opportunities, because more trade means more jobs and more strength to our arm.
Labor supports the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the amendment. The reasons have been ably expressed by my colleagues in this House this morning. I'd like to take this opportunity to thank Jason Clare, the member for Blaxland, for the work that he has done in the consideration and consultation involved in dealing with this very important issue. Serious issues still exist with the CPTPP. Labor have committed to dealing with these issues should we have the privilege of forming government.
Trade agreements these days have become far more complicated than early agreements that focused on tariffs as the main trade barriers. They are now complex, deeply detailed documents that have become more about the rules of trade and have created more barriers, in some ways, to trade than merely breaking down tariffs. Whilst I recognise the need to engage with global markets on trade and that international trade is vital to our future and economy, there needs to be very deep vigilance in a transparent and accountable way about what these trade agreements actually contain. They need to be accountable to those in this country who stand to be affected, either positively or negatively. We all seem to understand that there are winners and losers in these processes. They need to be accountable in a way that allows all stakeholders—businesses, farmers, workers and their unions, public service providers and civil society—to be consulted. Trade agreements should have, at the heart of their intent, not only the intent to protect profits and business interests but the intent to raise living standards for all people of all the nations involved in these agreements.
I note that the CPTPP has a labour clause. This has been hailed as a great advancement in these agreements. Whilst, yes, it is good to have a labour chapter, the labour chapter that is in this agreement has very few teeth. It does not refer to any of the ILO conventions. There are very few enforcements for violations of any of these clauses and these things that are necessary, supposedly, to support and protect workers' rights. For example, there are no enforceable penalties for violations of enforced labour or child labour; it merely recognises the goal of eliminating forced labour. We can use these agreements to improve the lot of everybody involved, of all citizens, if we are prepared to negotiate openly and transparently and give such things as labour chapters real teeth.
Closer to home, it should mean that these agreements should show that they do not encroach on the aspects of society that are dearly held and valued by our communities. Many trade agreements have come to do just that. They encroach on parts of the economy that are vital to our wellbeing. They have come to encroach on the realm of governments in making their own laws and decisions in the best interests of their citizens, giving special rights to corporations through ISDS clauses. They encroach on the rights to access and deliver state-run essential services like health care, education and water. They encroach on the delicate and important management by governments of national immigration policy. They encroach on the ability of governments to properly and carefully regulate their labour markets and the skill standards of our professional workers. They encroach on our sovereign rights to determine how we protect our environment. They encroach on the need to determine Indigenous rights in things like land rights for First Nations peoples. These things should not happen. Our concerns with the CPTPP go to many of these issues.
I'm pleased that a Labor government will address the harmful aspects of trade negotiations by introducing new rules for trade negotiations generally and by dealing with some of the more harmful aspects of this particular agreement. Let's take the ISDS as an example. This agreement includes an investor-state dispute settlement provision which gives foreign corporations the ability to sue the Australian government. These provisions have been wound back from those in the original TPP, but they are still there. Australia has been sued under one of these agreements, the previous trade agreement, over our plain packaging on cigarettes. In very poor countries like El Salvador, those governments have been sued by corporations over mining interests. These are countries that can ill-afford the long, tedious and expensive court cases that unfold—court cases that are held in courts that are not necessarily run by the rule of law.
Labor and the broader labour movement will oppose the inclusion of ISDS provisions in trade agreements. A Shorten Labor government will not sign agreements that include these provisions, and will negotiate to remove these provisions from agreements where they have been included by the Liberals. We know we can do this because a precedent has been set by the New Zealand government under Prime Minister Jacinda Ardern.
Labour market testing is another area of contention and concern with this agreement. It waives labour market testing for contractual service suppliers for six countries: Canada, Peru, Mexico, Brunei, Malaysia and Vietnam. Labour market testing is incredibly important. It means that local workers can have access to jobs before overseas workers, who, we know, are unfortunately relentlessly treated with fewer rights and have concerning conditions of employment. Their local conditions are undermined because they are exploited. As we have heard so often in the media, they're exploited right around this country through being underpaid and through what can often be termed 'modern slavery' conditions. A Shorten Labor government will not sign trade agreements that waive labour market testing for contractual service providers. We are committed to negotiating to reinstate labour market testing for contractual service providers with all countries where the Liberal government has agreed to waive it.
Independent economic modelling is another issue that is incredibly important. I note the member for Macquarie focused on this in her contribution. Despite calls from business and recommendations from the Productivity Commission and various parliamentary inquiries, like the Harper review, the government has refused to commission independent economic modelling for this agreement. We know broadly, from the Productivity Commission, that these sorts of agreements at best have very modest or small benefits to Australia and at worst have negative effects. A Shorten Labor government will commit to conducting independent economic modelling for all trade agreements before they are signed.
Some members of the Labor movement have raised serious concerns that the agreement will waive the skills assessment requirement of Australia's immigration system. A Shorten Labor government will enforce mandatory skills-testing requirements in this agreement and not waive them in future agreements it signs. Mandatory skills testing is important to maintain the standards and safety of Australian citizens, and trade agreements should not trade things like this away.
Lastly, on the issue of accountability and transparency, it is important that all stakeholders know what is being negotiated. As I said earlier, we have a right to know where we fit into a category. Are we a winner or are we a loser? Is there any way that we can consult and improve the outcome for many of us in this country when it comes to negotiating these agreements?
I'm pleased to say that a Labor government will legislate to create an accredited trade advisers program where industry, union and civil society groups can provide real-time feedback on the draft trade agreements during negotiations, and a Labor government will strengthen the role of the parliament in trade negotiations by increasing the participation of the Joint Standing Committee on Treaties, or JSCOT, by providing the government's statement of objectives for negotiation for consideration and feedback and giving JSCOT briefings at the end of each round of negotiations. I am pleased that a Labor government will change the rules of trade negotiation. These new rules will actually mean, I believe, that Australia will have better benefits from international global agreements, which, as I said, should benefit everybody and should raise the living standards of all concerned.
It's often accepted as a statement of fact in the world of politics and the media that trade is undeniably a good thing. People will say that it's very important that we embrace freer and more open trade, and they'll tell us how important it is. But it's one thing to say something's important and another thing to actually prove it, because people feel the impact of this debate in different ways in the community. People aren't necessarily accepting that freer trade of itself is just something that is undeniably good for them. They experience it in different ways and have for many years.
At any rate, in some parts of the country—and having grown up in a working-class family, especially as the son of a metalworker—the whole issue of freer trade has been one that's been pretty contentious. People have had to, over the course of the eighties and the seventies, I think it's fair to say, go through the booms and busts. We used to have situations where there were periods of time where people were out of work for long stints, digging into their own family savings and probably only having one breadwinner in the place bringing in the income. Then they saw the economy take off again, got the jobs and travelled far to conduct that or do those jobs themselves, only to wait for another 18 months, two years or maybe three years before things went back to the usual cycle of a bust. We've seen that happen.
As a teenager, I saw what Prime Minister Hawke and Treasurer Keating were doing in trying to change the way that we undertook trade in this country. They said that trade liberalisation and opening up the country would be important, and it is. It is important in a market where we've now got 25 million people being able to find more people interested in our goods and services, which is an economic priority. Being able to make that happen is important. But, having said that, as people were going through the process of opening up our economy to provide for freer trade, they were understandably concerned, and you certainly saw that there were people—again, I'll come back to the case of metalworkers—who would wonder whether they were competing against others who were doing the same job for less. That is a big concern to people. They wonder: 'Is this sustainable? Will I lose pay because I'm competing against someone who's working at half my rate and doing the same sort of work that may not necessarily'—in their minds—'be the same quality?' These are the types of arguments you have to confront when it comes to the whole issue of trade.
But you'd also see, as that process opened up, Australians here working through their companies with other companies in other parts of the world on joint ventures. People would be performing jobs or parts of work where they would contribute their part in a joint venture to team up with another company operating in our region. You'd see them being able to do that work, and you'd see the economic value reach out across borders. We've seen export markets open up where local firms employing local people have been able to supply products internationally, and that has seen those firms sustain those jobs a lot longer.
I guess the question is: when you look back at over 25 years of constant economic growth in this country, has it been a fluke? No. There were a lot of changes that had to be made, and one of the ingredients of that was trade. It is no accident that we've had the stretch of economic success that we've had. Some big decisions have had to be made, decisions that people have questioned and wondered about: 'Are they worth it?' But the reality is that those decisions have seen things change, and for the better. Trade reform has been a big part of that.
While I myself am pro-trade, I'm not necessarily pro the way that these agreements have been done in the past and even up to the point of this agreement. The types of ideas that the shadow trade minister spelled out to this chamber earlier today, captured in the second reading amendment that he's put forward, are really important. As I said, you might think it's important that we, as a nation of 25 million people, have a way to trade our products on the international stage in a much freer way. But the way that those things are underpinned through these agreements and the way those agreements get reached—that system has got to change, and we've been saying that a number of things need to happen.
A lot of these agreements land in this place, and there is very little chance to change the outcome. The negotiation has gone on for a considerable period of time. No-one knows the framework in which the negotiations took place. No-one knows what priorities were placed within the negotiations. No-one knows what we said we would stand by no matter what and what we would be prepared to negotiate on. And, by the time the agreement gets to this chamber, it is a take-it-or-leave-it proposition with little room to move.
In this agreement that we're talking about today, the Trans-Pacific Partnership, there are a number of things that people would have deep concerns about—for example, the ability for firms from Canada to use investor-state dispute settlement provisions to extract an outcome against Australian firms. That would concern a lot of people. A lot of people on the Labor side of politics are completely opposed to ISDS provisions and have been saying that these should be weeded out. In this agreement, those provisions have been opened up to Canada.
The other element of this that we've got deep concerns about is in relation to labour market testing. The ability of six countries now to send in workers to—
Mr Katter interjecting—
You're big on freedom of speech except when someone else has a different view.
Thank you. The issue of labour market testing and the ability of six countries now to bring in people instead of testing whether or not a local worker is able to perform that job is of deep concern.
Mr Katter interjecting—
And again, Member for Kennedy, people constantly have to listen to you in silence; I don't need you yammering while I'm making a contribution, thank you.
Mr Katter interjecting—
Thank you. So the point that I make is this: in other parts of the world, countries do stand up for local workers being able to perform that work. In November, for example, during my visit to Singapore, I learned that the Singaporeans, under the free trade agreements that they've struck, have systems set up to ensure that, before local workers are overlooked, they're given the chance to (1) know the job is there, (2) apply and (3) be trained up to meet the need of international firms operating in Singapore. This is not something that is radical or different to what is happening on other parts of the planet. It should be something that happens here. This government has been quite prepared to wave away labour market standards as they pertain to the protection of local Australian jobs. We've said that this is something of deep concern to us. We have been saying that we need to ensure that this changes into the future.
These are the types of things, these elements in the agreement, that we have said need to be changed. We've said that the parliament and the public should be updated after each round of negotiations on trade agreements—which is what we're arguing in our second reading amendment—and that economic modelling should be commissioned for all new free trade agreements. This is important. As I said earlier in my contribution, it is one thing to say that trade is good, but it is another thing to actually prove it. We have been saying for ages that international economic modelling should underpin these agreements. It hasn't been done for this one.
As the shadow trade minister indicated in his contribution earlier today, there have only been a few places where this agreement has been tested, including through the Victorian state government, which has tested the agreement and said that on balance no sector should lose out and has been able to provide some evidence on this agreement. But it shouldn't be left to individual state governments to do this. This should be part and parcel of any trade agreement that is being put forward to the nation's parliament and, importantly, to the Australian community, so that their confidence in trade can be increased rather than there being constant questions about whether free trade is fair trade. So economic modelling as a condition is very important.
We do need to see the types of things that the shadow minister outlined—for example, establishing a system of accredited trade advisers by drawing from business, unions and the civil sector, who can provide much more real-time feedback on how trade agreements are looking to shape up or what they're likely to have an impact on and be able to deal with those things early on; having an independent national interest assessment conducted with every new trade agreement; and strengthening the role of parliament in trade negotiations themselves. Instead of having our parliamentary committees look at these things after the agreement is done and dusted and we've gotten to a point where we're pretty much told to take it or leave and we don't have scope to influence the agreement, having them involved a lot sooner is important. For too long we've just accepted that that's the way things should be done. Yet parliaments in other parts of the world have been prepared to take a much bigger stand on being told through the course of negotiations what's being done and what's being pressed for in terms of the national interest and then testing how the national interest has been served through trade agreements. This is the stuff that has to change.
The opposition has put forward, I would say, one of the most far-reaching reforms to the way we do trade agreements—because, again, it is one thing to say that trade is good; it is another thing to prove the benefits. We do need to see that change; otherwise, we will see more and more, in the public debate and the political debate, the fringe groups get up and, as is often the case, work off fear and anxiety to get people worked up about the way things are going, in order to build up their political capital, to build up their political strength and to gain a voice on the floor of parliament—because they've managed to spook the heck out of people by making claims about trade that don't necessarily stack up to the evidence. The only way to deal with that is to have the proof, to be able to take people along with us and be able to say that it's in the national interest and demonstrate that it actually is in the national interest, instead of seeing people being ripped off or believe that they are being ripped off.
I would also make the point that trade has been a very difficult issue for our side of politics—and it has been for many years. When we on our side of politics were going through these reforms in the eighties and nineties, we never took the position that said, 'We can't do this because our base doesn't support it.' We argued the case that it was in the national interest and it was the job of parliamentarians to go out and argue the case and win people over. The contrast with the other side of politics is interesting. Their example of this is on the issue of climate change, where they've argued, on issues relating to that, that they can't possibly see certain things done because their base wouldn't cop it. If you want any further proof of that, look at the member for Warringah's book, Battlelines, in which he goes on a regional tour and hears the comments of Liberal Party members about the issue of climate change. The weather vane on climate change himself changes his position numerous times, but in the end he lands on a position not because it's in the national interest but because it's in the political interest.
The contrast couldn't be clearer. We certainly were aware of how sensitive this issue was, especially for working-class families, but we needed to be able to put in place measurers to help people on the way through. We recognise that, as a result of the changes, we've seen over a quarter of a century of economic growth come through, in part because we changed the way we did business with the rest of the world. This stuff is important in the longer term. You can either have the type of consolation that the member for Kennedy will reach out for that will give you the short-term comfort that doesn't do the longer term interests of the country any good, or you can be fair dinkum about saying: 'Yes, this change is going to have an impact on the way through. People do need to be looked after. We can do things better and we can get a better outcome as a result of it.' As I said, the fringe groups that we see in this place that will try and spook the heck out of people don't sustain us in the longer term and should not be the ones we should necessarily lean or gravitate towards. Ultimately, we should be realistic about what people's concerns are, deal with them and make sure the country is better off in the long term as a result.
I rise to speak on what is known as the enabling legislation for the Trans-Pacific Partnership, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, and the shadow minister's second reading amendment. Previous speakers have spoken about why Labor has agreed to support this bill. I'm not going to go to that; I'm going to go to my deep concerns about elements that are within the free trade agreement and why it's so important that Labor have committed to fix those things when we're in government. This agreement yet again demonstrates that this government is intent on giving away the sovereignty of this nation. It is intent on trading away things that matter to the vast majority of Australian people for gains for certain sectors.
I will first go to investor-state dispute settlement clauses. This agreement extends to Canadian companies the right to sue the Australian government if the Australian government makes policy decisions that impact on their profitability, a right that Australian corporations do not have. The extension of ISDS must be opposed. It restricts the sovereignty and the ability of this place and the Senate to legislate for the welfare of all Australians. We only have to see what happened when Philip Morris challenged Labor's plain-packaging tobacco laws through the Hong Kong free trade agreement.
ISDS is a cancer. It's a cancer that attacks the sovereignty of democratic governments. It's a cancer that other governments around the world are standing up to. I welcome and applaud the move by Jacinda Ardern's Labour government in New Zealand to work to remove the ISDS clauses in free trade agreements. I welcome the EU's very strong stance on it and the fact that the EU has ruled that any trade agreement that has ISDS has to go through ratification of all EU parliaments because it is such a significant attack on the sovereignty of those parliaments. So I am deeply concerned that this government seems intent on giving away ISDS and empowering foreign corporations to have power over this parliament, because that's what ISDS does.
My other grave concern around the Trans-Pacific Partnership Agreement is around labour market testing. The labour mobility clauses really diminish the ability of this parliament to regulate immigration policy. This is another trade agreement where this government is trading away immigration policy in return for gains for particular sectors.
Mr Katter interjecting—
I'm hearing interjections from the honourable member for Kennedy. He would be slightly more credible if he didn't continue to offer confidence to the government that gives away those rights. If the member for Kennedy were really serious about getting more progressive trade policy, he might think about why he continues to back this government. That demonstrates the inconsistency of the member for Kennedy on this matter. Only the impotent are pure.
Thank you, Mr Deputy Speaker. I talked about the member for Kennedy continuing to offer confidence to a government that has sold out this nation by including labour market testing exemptions in this trade agreement and that's a matter of fact. That's a fact. This is incredibly worrying that we see an exemption from labour market testing being rolled out to six countries—Canada, Peru, Mexico, Brunei, Malaysia and Vietnam. This diminishes our ability to regulate temporary skilled migration in our country and that is very worrying. It is driving massive job insecurity. We have over a million people in this country who have work rights on temporary visas.
I support permanent migration. Permanent migration has made this nation. I'm a proud child of migrants but they should be permanent migrants with all the rights that native-born Australians have. They should have all the rights—the right to strike, the right to unionise, the right to get the same pay—and those rights aren't afforded to those on temporary skilled visas. Those workers have no rights because they have no bargaining power. At a flick of a thumb, an employer can basically sack them and they get deported overseas. That's why it's so important that, before we allow temporary skilled visas to be issued, the employer does three things: first, they demonstrate the position cannot be filled by an Australian at the market rate of pay—not the minimum rate of pay but the market rate of pay; second, they pay the migrant, the visa holder, the market rate of pay, not minimum pay; and, third, they actually invest in training so an Australian can fill the job in the long term. This agreement undermines that by exempting labour market testing for visa applicants from those six countries.
Just as worrying is skills recognition. This agreement means a Peruvian electrician's qualifications must be accepted as the same as an Australian electrician or a Chilean or a Mexican electrician or a Canadian electrician. It is abhorrent that we don't have skills testing because that goes to a safety issue that both the industry group for the electoral industry and the trade union representing the electrical industry, the ETU, have raised a huge concern over. This, yet again, is this government giving away our immigration policy. This is a party that is supposedly so strong on border protection, but it's giving away our immigration policy for gains for certain sectors, particularly its supporters in the agricultural and resources industries, and its giving away our immigration policy to reward its mates in mining and agriculture, and I think that's deeply problematic. And that's why it's so important that Labor has given a commitment to end this.
Labor will do two things. If we're privileged enough to win government, if we are lucky enough to win government, the new minister for trade, the member for Blaxland, will immediately start to renegotiate this agreement. He will negotiate side letters with the six nations that have this labour market testing exemption to get that removed so that we can continue to apply labour market testing to temporary skilled migrants coming from those six countries and he will also negotiate with Canada to remove the ISDS clause. This can be done with side letters. I'm very encouraged that the minister for trade in a future Labor government—if we're privileged enough to be elected—will work on that very quickly and directly. That's an important step to fixing up this Trans-Pacific Partnership, something this government won't do, something this government cares nothing about.
The second measure which I'm even more enthused about is that a future Labor government will implement the most progressive trade policy this nation has seen in the last 40 years by undertaking a number of measures. They include a legislated prohibition on future trade agreements containing waivers of labour market testing, prohibiting future governments from negotiating trade agreements that waive mandatory skills testing and prohibiting future governments from including ISDS clauses in trade agreements. That is incredibly important.
Mr Katter interjecting—
I'm hearing gibbering from the cheap seats over there. The truth is Independents can't deliver this. The member for Kennedy can't deliver this. The member for Kennedy has been in this place since 1990 or 1993. I honour his long service to the nation, but he hasn't changed a trade debate one iota because he can't form government. He had a three-year window in a minority government when he could have done something, but yet again he didn't do something about it. That's why I'm so proud that a future Labor government will end this.
Thank you, Madam Deputy Speaker. I seem to have hit a sensitive spot with the member for Kennedy. The truth is that a future Labor government will ban the negative parts of this Trans-Pacific Partnership and what we saw in the China free trade agreement. A future Labor government will prohibit any trade agreement from containing waivers of labour market testing, waivers of mandatory skills testing and inclusion of investor-state dispute settlement clauses. That's a very important improvement. I welcome the shadow trade minister's initiative.
The shadow trade minister also indicated that a future Labor government will implement other reforms that will improve the trade debate in this country. He will legislate, if he's lucky enough to be elected, to establish a system of accredited trade advisers from industry unions and civil society groups which will provide real-time feedback on draft trade agreement text during negotiations. It's true that we have the most opaque trade negotiations of any advanced nation. Look at the system in the US. There are regular briefings of congress during the negotiations, accredited trade advisers and a panel that is briefed about trade negotiations and provides feedback on trade negotiations as they progress, and that doesn't undermine their negotiating position; it informs their negotiating position and improves the outcome for those nations.
A future Labor government will also legislate to require an independent national interest assessment to be conducted on every new trade agreement before it's signed to examine the economic, strategic and social impact of any new trade agreement. And, if we're privileged enough to be elected, a future Labor government will also strengthen the role of parliament in trade negotiations by increasing the participation of the Joint Standing Committee on Treaties by providing JSCOT with a statement of objectives for negotiation for consideration and feedback and providing JSCOT with a briefing at the end of each round of negotiations. Again, these are important reforms that will improve trade policy in this nation.
In conclusion, I remain very concerned about aspects of the Trans-Pacific Partnership—aspects that go to the sovereignty of this nation and aspects that go to whether we can provide secure, well-paying jobs for all Australians. I am relieved that a future Labor government will fix those issues in both this trade agreement and all other agreements. That's really important. I want to finish by contemplating again the impact of attempts by people to move cheap amendments that don't do anything. Those amendments can't apply to a trade agreement that's negotiated between 11 countries. The hard decision here was about whether to support a trade agreement—whether to support it and try to fix it or vote it down. That was a very hard debate held within the Labor Party room and it was witnessed here today in the chamber. But I'm confident that a future Labor government will pursue a progressive trade policy that will improve the results for Australia from these trade agreements, protect fundamental worker rights and maintain the sovereignty of this parliament and future parliaments, and that's incredibly important. You can be pro trade liberalisation without agreeing to every trade agreement. That's why I'm so heartened by the shadow minister's commitments around future legislative reforms in this area.
You claim to be misrepresented. I'd like to remind the member for Kennedy why I didn't accept your interjection before. You cannot interrupt the debate of another member addressing the House. The matter that you're about to be raise cannot be debated, but you have the call to talk to us about how you feel you have been misrepresented.
Thank you very much, Madam Deputy Speaker, and we respect your judgement. The previous speaker said that an Independent or a small-party person cannot influence the trade arguments and policies of this nation. I was blamed—or congratulated—for putting Kevin Rudd into the seat of power and removing Julia Gillard. One of the major reasons I did that was because—
Mr Conroy interjecting—
Mr Khalil interjecting—
Please, Madam Deputy Speaker, you shut me up when I was interjecting.
Thank you. Within three weeks of having taken that decision—which cost me greatly, I might add—the live cattle market was reopened into Indonesia, doubling the price of cattle. The major agricultural industry in Australia is the beef industry. So that is one example. Secondly, all of them—
He said I couldn't influence. None of these people had spoken out against the TPP until I had discussions with the unions and said, 'What the hell are you blokes doing sitting on your backsides whilst this mob are out there voting for free trade?'
The Trans-Pacific Partnership, or TPP, is not a quality agreement. Unless its significant flaws can be addressed, I and my colleagues in the Senate cannot support the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and related bill when they go to the Senate. Australia has long been a trading nation. The greater proportion of our wealth and standard of living have been generated by having access to export markets for products in which we excel and reducing the barriers to import to benefit Australian consumers and businesses that import intermediate inputs.
I might just say as an aside that you can have all the free trade agreements in the world, but my growers have a challenge once we access those markets because it is prohibitively expensive for small farmers to access international markets, and then there are non-tariff barriers to trade, particularly around biosecurity, that make it incredibly difficult to access. We have been fighting in my community to be recognised as a pest-free area for a long time, and I've got to say government is absolutely deaf on this. I will say that they have given the Tasmanian government a lump of money to address fruit fly issues in Tasmania, but South Australia has been lost in this. We are the mainland state that has always been considered fruit fly free. Anyway, I digress.
Centre Alliance support the principles of free trade, but we do not support the principle of preferential trade. Despite the badging, the TPP is a preferential trade agreement, not a free trade agreement. Layer upon layer of bilateral preferential trade agreements have created this so-called noodle bowl that spans the Indo-Pacific, adding deep complexity and economic-modelling challenges that simply cannot be untangled. In short, it can be hard to quantify the benefits of a bilateral approach to trade, as the so-called Australia-US Free Trade Agreement—actually a preferential free trade agreement—so aptly demonstrates.
According to a 2015 investigation by Dr Shiro Armstrong, of the Australian National University, 10 years of data on the effect of the Australia-US Free Trade Agreement concluded:
The evidence from a large panel dataset using the gravity model of trade deployed by the Productivity Commission suggests that Australian and US trade with the rest of the world fell—that there was trade diversion—due to AUSFTA after controlling for country-specific factors. Estimates also suggest trade between Australia and the United States fell in association with the implementation of AUSFTA—also after controlling for country-specific factors. The existence of trade diversion suggests that trade between Australia and the United States could well have fallen even further without AUSFTA. These results add to the evidence about whether or not preferential trade agreements increase net trade—with the body of evidence currently suggesting that they do not and if anything lead to a contraction.
Let's decode that dense conclusion for a moment. The Australia-US FTA led to trade diversion rather than trade creation, meaning that it resulted in trade being diverted from more efficient exporters and towards less efficient ones. Although we may have traded more with the US than we otherwise would have, the overall trade flows between our countries did not increase as a result of the agreement.
However, the most damning conclusion is that the current body of evidence suggests that preferential trade agreements do not increase net trade and likely lead to a contraction in net trade. I'm not cherry-picking my academics here; even the initial forecast benefits by Australian academics of the Australia-US Free Trade Agreement were low, in the range of an increase to Australian welfare of $44 million to $127 million. That may sound like a lot but not when you realise that the Australian economy is over $1.3 trillion in size. The study commissioned by the Department of Foreign Affairs and Trade while it was negotiating the Australia-US agreement, which forecast billions of dollars of benefit, was famously described by famed economist Ross Garnaut as 'not passing the laugh test'.
Our starting point in assessing the TPP is that there is not necessarily a strong track record of success with preferential trade agreements, even with a major trading partner such as the United States. However, we can take some solace that megaregional agreements like the TPP are less likely to impose costs from trade diversion. At the global level we have seen that the 'nothing is agreed unless everything is agreed' formulation of the World Trade Organization's Doha round has failed. In an increasingly multipolar world, with President Trump leading the charge against global economic integration, Australia cannot rely on the larger economies to work towards the mutually beneficial win-win outcomes of the past.
Centre Alliance thus supports the principle of megaregionalism in trade. We initially held some hope that the TPP could end up being a quality agreement. Yet it is now apparent that the economic benefits, whilst solid, are not tremendous. The costs to Australia's sovereignty and workforce are simply too great.
On the benefits: to my knowledge, the Australian government have not commissioned detailed independent modelling of the economic benefits expected to accrue specifically to Australia. Instead they are relying upon studies that assess the TPP in its entirety, such as the study by renowned professors Peter Petri and Michael Plummer, which was published in January 2016 when the United States was still part of the TPP. The broad conclusions of that study likely still hold, but the detailed country-specific analysis should still have been undertaken before the parliament could be expected to vote on this enabling legislation. Centre Alliance have asked the government for this analysis, but we have yet to receive it. This appears to be because the analysis has not even been done. The Petri-Plummer analysis estimated that the Australian economy stood to benefit by $15 billion by 2030. The report commissioned by Australian industry groups and authored by the same academics concluded that the benefit to the Australian economy would, with the exit of the United States, be reduced to $12 billion by 2030. This is significant and substantial but not overwhelming compared to the size of the Australian economy.
Now to the costs. The most notorious concern is the investor-state dispute settlement clause. This grants unprecedented power to corporations to sue national governments, and it will undermine our democratic sovereignty. As I have indicated before in this place, that sovereignty stems from the will of the Australian people, and it should not be diminished or delegated lightly.
Australia has been the canary in the coalmine in the Philip Morris case, where the cigarette giant used an obscure clause in the 1993 Hong Kong-Australia trade agreement to sue the Australian government over its plain packaging laws, laws that were overwhelmingly supported in our democracy. Australia ultimately defeated Philip Morris in that case, spending more than $39 million in the process, which was only revealed through the sustained utilisation of freedom of information laws by my former colleague Senator Nick Xenophon and my current colleague Senator Patrick. I think Australians are deeply opposed to the possibility that foreign corporations could overturn the sovereign will of the people and pay huge amounts of money to lawyers to retain that privilege. This is not democracy. We should not be bargaining away our right to self-determination to companies with the deepest pockets.
Another great area of concern and unknown costs to the TPP are the provisions that waive market labour testing for contractual services suppliers. Quoting the additional comments from the Labor Party in the joint standing committee report on the TPP, more than 450 professions could currently be covered by the term 'contractual service supplier' which includes electricians, plumbers, carpenters, nurses. No other country has provided Australia with such generous reciprocal visa rights, and it is unclear why such concessions would be given by our government. Yet the Labor Party are waving this legislation through the parliament on the promise that they will fix things after. However, I don't believe that that can be defended as a proper position of process either in government or in opposition.
The effects upon labelling, especially Australian made type food labelling, also remain an open question yet to be fully resolved. I listened to the member for Shortland, and I hope that Labor will work with the Senate crossbench to make sure that we can provide those protections to Australia around the ISDS clauses and also with respect to labour market testing. The member for Shortland seemed particularly concerned about labour market testing and the implications for those workers. You can't just talk about a future Labor government, that you will sort it out, kick the can down the road. Why not work with us in this parliament to make this better?
In summary, if the government want my support and the support of Centre Alliance, they need to put before us the full and proper evidence and analysis because we are simply not willing to wave through the legislation on the vibe of the thing without clear country-specific analysis that clearly outlines the full costs and benefits to Australia, to every Australian. We will not be able to support this bill in the Senate.
I speak in support of the amendment to the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. The TPP-11 is not a great trade agreement, certainly not from Australia's point of view. If you want to understand why it's not a great deal, you only need to look at the process; it was badly done. The trade and economic benefits are minimal and it has some very serious shortcomings that speakers in this debate have identified. It has some regional plurilateral benefits as an agreement that binds together countries in the Pacific, but it could have been so much better.
As we debate it and we consider the way forward, we should not be adopting a kind of barracking approach which we sometimes see from the government that tries to suggest that all free trade agreements are in and of themselves wonderful things that we have to patriotically sign up for. Trade agreements can and do consist of all sorts of things all mixed up together. It's the responsibility of the government and the parliament to get that mix right, to make those agreements as strong as they can be. At the moment, our process for forming these agreements is not good enough. I want to acknowledge the work that the shadow minister for trade has done to set a path forward for us, for Australia, for a Shorten Labor government, if elected, to really improve the deficiencies in the process as it stands.
We talk about free trade agreements. We should get the language right. This is a plurilateral agreement that puts in place some preferential arrangements between countries to that agreement. It's an uneven set of arrangements. It's not the case that all participating countries sign up to a common set of changes or concessions.
It's vitally important, when we talk about trade agreements and trade and investment agreements, that we start from the position of recognising they encompass a lot more than just what you would consider traditional matters of trade. First and foremost, the TPP-11 does deal with tariffs and market quotas—those are the sorts of traditional trade bits and pieces. The agreement does deal with rules of investment separate from trade, which includes the investor-state dispute resolution mechanisms that so many people have talked about. The TPP-11 deals with labour market access. Therefore, it bears upon and has implications for our migration framework. The agreement does deal with labour rights and environmental protection standards—that's a good thing—but, if you want to be realistic, you have to look at the way in which it gives away labour market access protections and skills-testing protections. It gives away those things holus-bolus. It gives away those things unequivocally. The labour standards and the environmental protections are, you would say, aspirational. I'm glad that they're there. I'm glad that there's a framework for participating countries to perhaps strengthen those things in future, but let's not be mistaken in thinking that there is some equivalence between the pernicious aspects of this agreement on the one hand and the things that are potentially beneficial on the other hand.
On the trade side of things, there are gains in this agreement for Australia. There's no doubt about it. If you find the right sector, they will sing its praises, because they stand to benefit from it. It's going to eliminate tariffs on cheese exports to Japan. It's going to improve butter and skim milk quotas for exports to Japan. Our exports will be able to enter into some countries at a lower cost and be more competitive. We will get greater access in the form of quota expansion in some cases. Tariffs on all seafood exports to Canada, Vietnam, Mexico and Japan will disappear over time. The 15 per cent tariff on packaged wine exports to Japan will wind up by 2021.
So, of course, there are producers in this country that will get some benefit from the TPP-11, but what's the overall aggregate economic benefit? It's hard to know. It appears to be very slight: 0.5 per cent GDP over 10 years. That's not a massive positive impact. Even when we look at those projected benefits, we should start by recognising that the projected benefits for agreements in the past have not generally been delivered. As part of the way we look at this and improve our process over time, if any government is so convinced of the benefits of any trade agreements that it strikes, it should be prepared to go back, as time progresses, and check its projections against the reality. The reality, in almost all cases, is much less beneficial than we were led to expect.
There hasn't been any independent analysis of this agreement done at all. The national interest analysis is done within the department and the department negotiates the agreement. Do they think it's worth entering? Surprise, surprise, they do. That's one of the changes that Labor has committed to. The Joint Standing Committee on Treaties is a committee with a government majority and a government chair. I've been a member of that committee. Every time we look at trade agreements we have recommended to government that they commission independent economic analysis. The government keeps coming back saying, 'We're not going to do that.' It's hard to understand. The Productivity Commission report looked at trade agreements under the previous Labor government, and some equivalent organisation will do so under a Shorten Labor government, if elected.
Some independent analysis done for the World Bank suggested that the impact of the original TPP would cost 39,000 full-time jobs in this country. There wasn't separate analysis done on the jobs impact of the TPP-11. We know, in terms of the pernicious aspects of the agreement, it gives away labour market testing for six countries. Why? They are lopsided concessions. They're not being given for something. They're not being traded. They're being given away because they suit the agenda of the government. The government has a labour market deregulation agenda that it can't get through this place, because it knows it doesn't wash with this parliament and it doesn't wash with the Australian public. It has been using trade agreements to advance its labour market deregulation agenda. The United States as a matter of principle does not include labour market arrangements of any kind in any trade agreement. They just do not do it. That is a province for their domestic congressional processes and for their migration and temporary-labour-market-access arrangements. That's how they deal with them. This government has been looking around to give away labour market protections wherever it can by executive prerogative. That's how it has used trade agreements.
ISDS is crazy. I'm glad that Labor for some considerable time has committed to getting rid of ISDS arrangements where they exist and ensuring that we never enter into them. Why should foreign companies have rights that Australian companies don't have? Why should foreign companies be able to bring legal action against Australian government policy? The lack of understanding about ISDS is astounding. I think it was the member for North Sydney before who claimed that we'd won the case against Philip Morris that they brought under the obscure Hong Kong investment agreement. He claimed that we'd won that case and it showed that the ISDS mechanisms were fine. We didn't win the case; it was put aside as a matter of standing or some sort of jurisdictional technical issue. The actual substance of the case under that ISDS clause was never tested.
We had a lawyer appear before the JSCOT who acts in this place and acted for Philip Morris. I put it to him that, if they had had the opportunity to have the case heard on its merits and the substance of it tested, they may well have won. He seemed to suggest that he thought that was probably true. When I asked him how sensible it was to have foreign multinationals going around the world essentially affecting the democratic processes and the sovereign rights of nation-states, he said: 'You know, the world has evolved. Nation-states themselves aren't that old. Once upon a time there weren't nation-states. We've had nation-states for a while. Now we have global multinationals. Maybe that's the next shift.' He said: 'You're a parliamentarian. You've got an interest in retaining the decision-making power in these matters, but that's because you're a parliamentarian. Who is to say that global multinationals aren't in a position to make policy for all of us on this planet better than parliaments?' What an astounding, frightening view that is. But that's what ISDS mechanisms potentially hold for us.
Remember that, while Philip Morris was bringing that case against Australia that cost us millions and millions of dollars to see through, New Zealand did not go ahead with its own plain-packaging arrangements, because it didn't want to be exposed to the costs that would occur if the ISDS tribunal had found in Philip Morris's favour. So for several years an incredibly valuable public health policy measure that New Zealand was looking to introduce following from the pioneering work here in Australia was held up because of that chilling effect that happens when multinationals roam the earth using these ridiculous tribunals to have their way over the legitimate processes and proper decision-making and legal frameworks that democracies put in place.
The last thing I'll point out is that there are some ticking time bombs within the TPP-11. The US are not in the agreement, but they could come back. If they did, one of the things they would insist upon is monopoly right protections for biologic medicines. That's the other thing you've got to remember about trade agreements: those of the laissez-faire, free marketeer persuasion should remember that a lot of the things that go into these agreements are not about making economic activity more free and less fettered; they're about protecting vested interests. The United States want greater monopoly rights protections for biologic medicines because their big pharmaceutical companies want to be able to charge more money for as long as they can. If we committed, in effect, to extending those monopoly protections from five to eight years, that would have a cost to the PBS of hundreds of millions of dollars a year. That is something that could occur if the US come back into the TPP-11.
So let's not ever in this place get into that kind of black-and-white, good-cop bad-cop, 'we're for trade; you're not for trade' kind of rubbish. These agreements are incredibly important. They should be looked at much more closely. We should be able to be much more forensic in how we look at them, but, if that's to occur, the process has to change. We need independent modelling. We need stakeholder engagement. We need the government to listen to the JSCOT when it makes recommendations.