House debates

Tuesday, 16 October 2018


Customs Amendment (Product Specific Rule Modernisation) Bill 2018; Second Reading

6:32 pm

Photo of Shayne NeumannShayne Neumann (Blair, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | | Hansard source

I rise to speak on the Customs Amendment (Product Specific Rule Modernisation) Bill 2018. I say from the outset that Labor will support this bill. Australia is a trading nation and economic growth is underpinned by our ability to sell our goods and services overseas, particularly in our region. It's undeniable that trade creates jobs, with one in five Australian jobs linked to trade.

This bill amends the Customs Act to streamline the product-specific rules of origin, otherwise known as PSRs—product-specific rules of origin—for four of Australia's free trade agreements. These agreements include the Singapore-Australia Free Trade Agreement, SAFTA; the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area, AANZFTA; the Japan-Australia Economic Partnership Agreement, JAEPA; and China-Australia Free Trade Agreement, ChAFTA.

PSRs are essential components of free trade. They must be met by importers seeking preferential treatment for goods or products that include materials not originating in the territories covered by the agreement. For instance, you might have a piece of technology being imported into Australia that is made up of many components; however, some components are from territories not under the agreement. If the goods meet the requirements of the PSRs, they are considered to originate in the FTA party or country and are entitled to preferential treatment of customs duty, on import into Australia, under the Customs Tariff Act.

The PSRs are based on the Harmonized Commodity Description and Coding Systems. This is an international naming system for the classification of traded products. It currently covers thousands of commodity groups and is used by more than 200 economies as a basis for customs tariffs and the collection of international trade statistics. The amendments before the House seek to implement a functional and more streamlined system of PSRs. Each FTA has a separate PSR annex made of thousands of pages and is implemented domestically in rules-of-origin regulations for each agreement. However, there are also five-yearly revisions of the international harmonised system by the World Customs Organization. These revisions require countries that are signatories to free trade agreements to update their PSRs, which then means there are subsequent amendments to the rules-of-origin regulations.

The Customs Act recognises PSRs which were used at the time the agreement was negotiated, but then requires legislative change each time a new PSR is created. To combat this problem, the Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Act 2017 allows for changes to be made to the PSR without requiring additional legislative changes to the Customs Act. The bill before the House means that product-specific rules of origin can be updated without requiring subsequent legislative changes for the remaining free trade agreements Australia is a party to. The bill also has a number of subsequent amendments, including extending the recent update to the SAFTA to the chemical chapter origin rules. These minor amendments will ensure consistency between our legislation and the free trade agreement text in the Singapore, Thailand, Malaysia, China, ASEAN and New Zealand FTAs. I want to make it clear that the amendments before the House are technical amendments and do not have any impact on the budget over the forward estimates.

Whilst the bill before the House deals with PSRs for four of Australia's free trade agreements, I want to take this opportunity to speak about Labor's plans to fix trade, broadly, in the context of the legislation. The Liberals have eroded Australia's trust in trade by signing trade agreements that have been negotiated in secret. The Abbott-Turnbull-Morrison government have not considered enough input from parliament, industry, unions and civil society groups, or the community about free-trade agreements they've entered into and bound Australia by. They're out of touch and they've neglected to undertake independent economic modelling. They've waived labour-marketing testing, meaning that companies can bring in overseas workers without checking if there is an Australian to do that job. They have included clauses that allow foreign companies the capacity to sue the Australian government, such as ISDS provisions. These are the types of things that make Australians, particularly those from my electorate of Blair in South-East Queensland and all the way across to Perth, very upset and even rightly angry. If you want more people in Australia to support free trade and open markets, then the government of the day has got to be more open and honest and trustworthy.

This is why yesterday the shadow minister for trade and investment introduced a private member's bill entitled A Fair Go for Australians in Trade Bill 2018. The bill will permanently fix the way Australia does trade agreements by putting Australian workers first and will stop future governments from signing up to trade deals that include clauses that allow foreign companies to sue the Australian government.

Our commitment is to ensure transparency, and the analysis of trade agreements doesn't stop there. We will strengthen the role of parliament by briefing the Joint Standing Committee on Treaties at the end of each round of free trade agreement negotiations; legislate to establish a system of accredited trade advisers from industry, unions and civil society groups who would provide real-time feedback on draft trade agreement text during negotiations; provide public updates on each round of negotiations and release draft text during negotiations, where this is feasible; and legislate to require an independent national interest assessment be conducted on every new trade agreement before it's signed, to examine the economic, strategic and social impact of any new trade agreement. These are all measures to make future free trade agreements Australia is signed up to better and fairer, and I commend the shadow minister for trade and investment, the member for Blaxland, for his tireless work to ensure a fair go for Australians in trade.

In conclusion, we urge the current Liberal government to take more care in negotiating free trade agreements. If they don't, Labor is committed to fixing these shortfalls should we be elected to government. Labor believes in a functional and streamlined trade system generally which delivers for all Australians and Australian businesses. This is why Labor will support these largely technical amendments in the bill before the House today.

6:39 pm

Photo of Andrew BroadAndrew Broad (Mallee, National Party, Assistant Minister to the Deputy Prime Minister) Share this | | Hansard source

The Customs Amendment (Product Specific Rule Modernisation) Bill 2018 amends the Customs Act 1901 to streamline the way that the product-specific rules of origin of four existing free trade agreements are given effect in domestic legislation. The amendments in this bill apply to the ASEAN-Australia Free Trade Agreement with New Zealand, the Japan-Australia Economic Partnership Agreement, the China-Australia Free Trade Agreement and the Singapore-Australia Free Trade Agreement.

The amendments in the bill are technical in nature and enable the automatic updating of the product-specific rules schedules for the free trade agreements in domestic legislation immediately after they are adopted by the relevant parties, and after completion of any domestic treaty-making processes. These technical amendments will not affect the operation of any of the agreements that are the subject of the bill or the operation of the domestic legislation. The amendments will remove the need for regulation to prescribe the PSRs that already exist in the treaty text.

If the bill is passed, the Customs Act will apply the PSRs in each of the four FTAs by reference to the treaty rather than duplicating the PSRs themselves. As such, the bulk of the current rules-of-origin regulations, which total more than 2,500 pages, will be repealed, and a customs amendments regulation is proposed to commence if and when this bill is passed by the parliament. These amendments will specifically reduce the amount of time and resources that would otherwise be needed regularly to update the PSRs in these agreements. The bill also makes minor amendments to existing FTA divisions in the Customs Act to ensure consistency between our legislation and FTA text in the Singapore, Thailand, Malaysia, Chile and New Zealand FTAs.

The government is committed to the passage of these amendments in 2018 to facilitate through regulation the transmission of the PSRs scheduled. Failure to pass the legislation in 2018 would put Australia at risk of not being able to meet the commitments we have advocated to other parties. In passing the bill, the government honours the commitments made to its free trade agreement partners to ensure our agreements remain up to date, supporting our jobs and growth agenda as well as reducing red tape for Australian traders.

I also want to touch on the importance of trade. Trade does create wealth. We have a population of 25 million people, but we produce enough food for 75 million people. The electorate that I represent, the electorate of Mallee, is very much a food-exporting electorate. But we also benefit from trade. I know that nearly every member of the parliament will carry an iPhone or a Samsung phone. These are not made in Australia, and this is great technology we benefit from.

But trade also does something else that's important; trade ensures that people have closer interaction with each other, and interaction creates understanding. Countries that trade together very rarely fight. I'm very conscious of this through the legacy in the seat that I have the privilege of representing. I'm the fourth member for Mallee since 1946. Sir Winton Turnbull was the first member for Mallee. He was a prisoner of war in Changi—the horrors of Changi. In 1946, still with those war wounds in his body, he was walking around in the House of Representatives in the Old Parliament House, and yet he and the leadership of that day were able to develop the closer working trade relationship with Japan. The great legacy of that is that they were ultimately able to come from what was war to Japan being a major trading partner with Australia. The outworking of that is that Australia and Japan are close friends and we understand one another better than we ever have. We have never been in conflict ever again.

And so whilst we always spend a lot of time talking about what the economic benefit of trade is and how we ensure we get the best outcome for Australian businesses and Australian households—and that's something we should occupy our minds with—we must also remember that when we think of trade there is a human benefit. There is a benefit for the world. It does worry me that increasingly there are some in our political leadership across the world who think that they can put up walls and pull away from one another—that they can put their interests first and solely without thinking more broadly about the region.

I say that it is good that Australians value trade. I hope that the Australian population values what that brings to us. And I hope that members of this parliament always remember that when people share the goods they produce then they interact with one another and they grow in a greater understanding of one another. The real fringe benefits of trade are better standards of living for both countries and a more prosperous and peaceful world. I commend the bill to the House.

Question agreed to.

Bill read a second time.