Kristina Keneally (NSW, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on the Customs Amendment (Product Specific Rule Modernisation) Bill 2019. Labor has consistently argued that free trade should be fair trade. At a time when the government should be doing everything to build the public's confidence in free trade, they're exempting a key part of Australia's free trade framework from this parliament's scrutiny with this bill. This runs a real risk of damaging the public's trust in the issue. Whilst this bill has some merit, the government's attempt at its implementation is dangerous.

The bill proposes what's described as a streamlined implementation of product-specific rules of origin, otherwise known as PSRs. The bill applies to six of Australia's 11 free trade agreements: those with Chile, New Zealand, the United States, Korea, Malaysia and Thailand. PSRs are an essential component of free trade agreements. Each trade agreement has a PSR annex, implemented domestically. If goods meet the requirements, they are essentially deemed to have originated in the agreement party country and are entitled to the preferential treatment on customs duty imports into Australia. Five-year revisions on the Harmonized Commodity Description and Coding System, an international naming system for the classification of traded products, usually requires FTA parties to update their PSRs. This bill purports to streamline that process but, in doing so, has the potential for decreased parliamentary scrutiny. It's all too easy to get caught up in the technicality and legalism of PSRs and forget the importance of this very complex web of free trade principles. The parliament should be very cautious in treating complexity as a licence to pass the buck and have a public servant as the sole handler of these matters.

Labor has worked hard to maintain a healthy and productive bipartisan approach to international trade. While that approach has been further justified by economic headwinds during and after COVID-19, the parliament must be disciplined in our scrutiny of the executive power, now more than ever. The trouble with this bill as it stands is that, under it, PSRs and future changes in the regulations would not be tabled in black and white in the parliament. By amending the Customs Tariff Act to directly reference the agreements themselves, the bill denies senators oversight and scrutiny of the important legislation.

With that in mind, my colleague Madeleine King, Labor's shadow minister for trade, wrote to the former trade minister Senator Birmingham last year. In that letter, the shadow minister said: 'In a democracy like Australia, all parliamentarians should always be sceptical about any attempt to reduce parliamentary. More broadly, Labor is committed to practical rules in international trade that will free up our businesses to contribute to our economy.' Regrettably, though, the then minister's response was unsatisfactory and did not meet the outcomes and requirements outlined by Labor. We did our job. We sought assurances, and the government failed to provide them.

Our concerns remain this year as much as they did last year, when this legislation was introduced. The parliament has a duty to provide scrutiny of our free trade deals and arrangements. As the Labor senators' minority report in the Senate Legal and Constitutional Affairs Legislation Committee stated:

Poorly drafted or ambiguous Rules of Origin, for example, can be an opportunity for firms in third (non-party) countries to gain unfair benefits through an FTA. Any such activities by third parties are likely to undermine the community's confidence in free trade agreements.

PSRs belong in the public debate because they're an important part of Australia's international trade story. While efforts to simplify arrangements are generally welcomed, there is no strong demand for these significant changes, and I'll expand on those matters shortly. If product-specific rule changes are in our national interest, all the better. But without a guarantee of parliamentary scrutiny it's just another issue open to potential blunders and secret failures somewhere in a department or office. It's far more important that we assure our community that anti-dumping rules are in play, that our pandemic recovery in trade is robust and that Australians aren't getting ripped off. These are failures that all Australians would have to pay for, and if they occurred we would need an accountability mechanism.

The most efficient way to assure the Australian public that they are consistently getting a good deal is by running PSRs through regulations under the Customs Act. A disallowable instrument currently comes before the Senate every time the government implements a PSR change. Labor's amendment seeks to protect parliamentary oversight through retention of a process that includes a disallowable instrument. You would think that this government wouldn't—or shouldn't—try to pull one over Australians and escape further scrutiny. This government avoids answering questions on notice. They say that important matters are 'in the bubble' and they shrug off scrutiny at every turn. But they can't pass the buck when it comes to Australia's trade system. By leaving the Senate, including government senators, out of the process, especially on Australia's main window into the global economy, they would intentionally leave in the shadows the specifics of Australia's place relative to that of our trade partners. Labor's amendment seeks to provide certainty to small and medium-size businesses that their interests are front of mind for the parliament.

The alternative put by the government is twofold. First, they have pointed to amendments to the Customs Tariff Act that the parliament can seek every five years. Second, they have suggested that individual members of the Joint Standing Committee on Treaties could seek to form an inquiry PSR. Further, they have suggested that PSRs can be open to scrutiny in the joint standing committee's inquiry into treaty making processes. But our founding assumption should be that Australians want us protecting their interests. There's a meaningful difference between the right to have an inquiry, or putting amendments twice a decade, and the ongoing scrutiny of decisions that must be tabled in the parliament for all to see.

As Australia prepares itself to ensure that global trade works in our national interest when this pandemic is over, Australians deserve assurances that they are not getting short-changed. It shouldn't take an inquiry to make that happen, and people shouldn't have to rely on amendments that may or may not pass every five years. As the shadow minister for trade pointed out in her second reading speech, Australians expect assurances that where Australia signs up to a free trade agreement it is fair and in the interests of working families. We want our free trade agreements to be on the side of working families.

There are times when the parliament can be all too keen to keep important but tough decisions out of the parliament, behind closed doors. The government is now asking that we leave key decisions about Australia's preferential treatment of goods at the border and outside of the parliament. This is part of the complex story of modern trade. But surely that's reason enough to keep this issue in the public eye and in the public's parliament. We can make international trade even easier for local business without excluding the parliament. The curious part of this debate is that the Senate inquiry received only three submissions on this bill: one each from the Australian Border Force and the Department of Foreign Affairs and Trade, in favour of the bill, and one from the Construction, Forestry, Maritime, Mining and Energy Union, against the bill. No industry groups or companies volunteered their support for excluding the parliament from the conversation.

Government submissions to the Senate inquiry identified two reasons for the changes: (1) workload issues and (2) the fact that domestic implementation of PSRs in the latest Harmonized System nomenclature can be several years behind Australia's domestic terror updates. Given the limited public awareness of these highly complex but important arrangements, parliamentary scrutiny is more important than ever. These are commonsense objectives, but they are no reason to exclude future parliaments from the oversight of our trade relationships, especially when it would not slow down positive changes.

Efficiency in the legislation around trade doesn't have to come at the price of scrutiny, and it's unfortunate that our amendment is required at all. I remind the government that Labor's amendments are another opportunity for this parliament to demonstrate the bipartisanship that is expected of us during this recovery. Any senator who dismisses these valid criticisms is failing the constituents they represent, their place and their role in the Senate and in Australia. As Labor has done during the COVID-19 pandemic, a time when this parliament's decisions are more important than ever, we will fight for constructive amendments that will serve the national interests of Australia and be on the side of working families in Australia. Labor's amendments fulfil our commitment to the public. We will support free trade when it is fair trade.