Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Hansard source

It is with enormous pleasure that I rise to speak on Customs Amendment (India-Australia Economic Cooperation and Trade Agreement Implementation) Bill 2022 and the four associated bills, and to indicate the opposition's strong and passionate support for these bills. These bills represent the bookend, if you like, on the coalition's strong, aggressive and effective expansion of Australia's trade ties around the world—that our period in government was marked by success from its earliest days to its latest days in expanding the network of trade agreements that Australia has with the world and, in doing so, created a stronger and more open economy. The wealth of Australia, the record low unemployment Australia was enjoying when we left office and the opportunities for Australians were clearly enhanced by the trade network that we built.

In relation to these bills that touch on the Australia-UK trade agreement and the India-Australia economic cooperation agreement, I want to particularly acknowledge Dan Tehan who, as minister for trade in the final years of our time in government, concluded negotiations for these agreements. They're agreements that I have some personal satisfaction in seeing come to the fore as well, having launched the negotiations for the Australia-UK FTA and overseeing those through many of the negotiating rounds as, indeed, I pursued, in many different forums and discussions, options for how we may pursue agreement with India. I was delighted to see Dan able to execute one of those.

As I said, these are the bookend of a very adventurous and comprehensive range of agreements. Agreements were struck with the North Asia major economies—Japan, the Republic of Korea and China—in the early days of the coalition government. Agreements were then struck with Indonesia, Peru and Hong Kong, as well as regional agreements—PACER Plus, the Regional Comprehensive Economic Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. All of these created a far stronger and more vibrant network of agreements to enable Australian businesses to succeed in the world.

Together, these bills implement Australia's tariff obligations in particular. And whilst free trade agreements in the modern era encompass many different aspects, it is essential to remember that the core test of whether a trade agreement is a good trade agreement is whether or not it liberalises the movement of goods and services, investment and people—goods and services flows being the absolute core element. As the new government seeks to conclude the negotiations on the Australia–European Union Trade Agreement, I underscore that point: that the liberalisation of trade and movement in goods and services, as well as investment in people, is the core test for success of that agreement. We wish the government well in concluding that agreement, and we want to make sure that it's an agreement that is ambitious in all those elements.

Together, the agreements that will be enabled by this legislation put more Australian exports in front of some 1½ billion consumers around the world—across India and the United Kingdom. It increases Australian exports covered by FTAs to more than 80 per cent. Let me just pause on that point, Deputy President: when the coalition came to office in 2013, 27 per cent of Australia's exports enjoyed preferential market access around the world under free trade agreements. Once these agreements come into place, more than 80 per cent of Australia's exports to the world will enjoy preferential access. That is a seismic shift in relation to the advantage Australia has in trading with international partners, relative to other countries. These agreements demonstrate the ambition and capacity that we had to make a marked change. It was set out in our 2013 election policy and was delivered on successively by government throughout our term in office.

Australia's FTA with the United Kingdom, as negotiated and legislated here, is the most comprehensive and ambitious free trade agreement that Australia has with any nation other than New Zealand. On entering into force, tariffs on over 99 per cent of Australian goods exported to the UK will be eliminated, valued at around $9.2 billion. Under the agreement Australia will also eliminate almost all tariffs on goods originating from the UK, with a small number set to see tariff elimination over five years.

Australia's interim trade agreement with India strengthens our economic engagement with what is recognised as the world's fastest-growing economy—the greatest opportunity for Australia to diversify our trade network. Our aim in negotiating this agreement is to lift India into Australia's top three export markets by 2025.

There are five bills before us: two covering the preferential tariff obligations under the trade agreement with the UK and three covering our preferential tariff obligations under the India agreement, and a side letter relating to questions of double taxation. These bills, once passed, execute the legislative coverage required for Australia to advance ratification. What we see in relation to the Australia-UK FTA are changes that provide for rule-of-origin thresholds, enabling the application of agreed preferential tariff rates to customs duties. The bill implements the negotiated outcomes on rules of origin outlined in chapter 4 in annexes 4A and 4B of the UK FTA. The rules of origin specify which goods are eligible for preferential tariff treatment. This includes goods that are wholly obtained or produced in the UK or in the UK and Australia, enabling integrated supply chains and value chains across our markets. Product-specific rules outlined in annex 4B of the agreement determine the circumstances in which goods imported from the UK which have components or inputs from a third party are still eligible.

The amendments under part 1 define UK originating goods and will introduce a new division 1P in the Customs Act to cover for the origin arrangements. The bill seeks to eliminate almost all tariffs, on UK goods, on the agreement's entry into force. Only a small number of items will be phased out over five years. It ensures that an excise equivalent rate of customs duty applies to imports, as is convention, of alcohol, tobacco and petroleum to ensure parity of products produced domestically. In response to the UK's application of a safeguard tariff on Australian steel, the bill also introduces a safeguard provision that has the effect of maintaining the customs duty rate that applied to the commencement of the agreement while ever the UK has a comparable safeguard tariff rate in place on any Australian goods.

The UK's trade agreement with Australia was the very first trade agreement it reached following its exit from the European Union. The significance and scale of it should not be underestimated. We welcome the fact it's had wide applause from a range of industry groups—the National Farmers Federation, Seafood Industry Australia, the Australian Meat Industry Council, Sheep Producers Australia, Alcohol Beverages Australia, the Law Council of Australia, the Australian Chamber of Commerce and Industry, the Business Council of Australia and the Group of Eight universities, amongst many others.

We already enjoy a special and strong relationship with the United Kingdom, with deep-rooted business and people-to-people connections and very strong investment ties. It will only make Australian exports to the UK cheaper, once this trade agreement comes into force, creating yet more opportunities for businesses, workers and young people. It delivers a wide range of other trade and market access opportunities for exporters. Farmers and producers will have improved access to more than 65 million UK consumers—consumers who value safe, sustainably produced food and beverages with the strong provenance that Australia offers.

Around $43 million in customs duties will be removed from Australian wine when the agreement enters into force. Australian wine is already amongst the most consumed in the UK. From recollection, I think one in every five glasses consumed in the UK is a drop of fine Australian wine. This will only serve to make it more competitive and profitable for Australian winemakers. For beef, the tariff-free quota of 35,000 tonnes at entry into force grows to 110,000 tonnes; for sheepmeat, the tariff-free quota of 25,000 tonnes grows to 75,000 tonnes per annum; and for sugar, a tariff-free quota of 80,000 tonnes grows to 20,000 tonnes. Australian households and businesses will also save an estimated $200 million a year as tariffs on UK goods are almost universally eliminated on entry into force.

Professionals from Australia will have the same access to the UK's job market as their European competitors, providing Australian jobseekers with a fantastic opportunity to diversify their experience. Young Australians will have more time to travel to the UK for a working holiday and be able to stay longer, with eligibility to participate in working holiday opportunities raised from 30 to 35 years of age. Australian businesses will have the guaranteed right to bid for a greater variety of UK government contracts in a procurement market worth an estimated half a trillion dollars, and UK business will be more encouraged to invest in Australia thanks to best-practice investment rules, including being encouraged to set up regional headquarters in Australia to leverage that expansive network of free trade agreements that I spoke about at the beginning.

Under the Australia-India Economic Cooperation and Trade Agreement we, again, see significant benefits. There are important steps, in relation to the treatment of income, through the definition of 'royalties' under the double taxation avoidance agreement and how the amendments to that will bring the tax treatment of Indian residents into line with Australia's approach, but this is also a boundless opportunity in terms of India. In 2020, when I led the last major trade delegation to India, our two-way trade was valued at $24.3 billion and India was Australia's 7th largest partner at that time. The aspiration with this agreement is to take that even further.

Tariffs will be eliminated on more than 85 per cent of Australian goods exports to India, rising to almost 91 per cent over 10 years. Australian households and businesses will also benefit, with 96 per cent of Indian goods imports entering Australia duty free on entry into force. Sheepmeat tariffs at 30 per cent will be eliminated on entry into force, providing a boost for Australian exports that already command nearly 20 per cent of India's sheepmeat market. Wool will have the current 2½ per cent tariff eliminated on entry into force. Tariffs on Australian wine will be reduced. Tariffs of up to 30 per cent on products such as avocados, onions, broad beans, kidney beans, adzuki beans, cherries, shelled pistachios, macadamias, blueberries, raspberries—you name it—will be eliminated over seven years. Tariffs on almonds, a key export to India, along with lentils, oranges, mandarins and pears, will also be reduced. On the agreement's entry into force, the resources sector will benefit from the elimination of tariffs on coal; alumina; metallic ores, including manganese, copper and nickel; and critical minerals. LNG tariffs will be bound at zero per cent, on entry into force, and tariffs on pharmaceutical products and certain medical devices will also be eliminated.

Australian service suppliers in 31 sectors and subsectors will be guaranteed to receive the best treatment accorded by India to any future free trade agreement partner, including across higher education, business services, tourism, travel and a range of other sectors.

There'll be new access for young Indians to participate in working holidays in Australia, helping to strengthen our tourism market as well.

This interim deal likewise has been welcomed by a range of industry sectors, including the NFF, Australian Grape & Wine, wool producers, the Minerals Council, Apple and Pear Australia Ltd, ACCI and many others.

Deputy President, passage of these bills will enable Australian officials to move swiftly towards ensuring full implementation of these agreements. We urge the government to do all possible in their diplomatic efforts to ensure that the United Kingdom and India, equally, move as expeditiously as possible to meet the processes required to achieve entry into force. The sooner these agreements take effect, the sooner the benefits will be realised for Australian businesses and businesses in the United Kingdom and India. The sooner that occurs, the earlier all of the gains that will accrue over the seven- to 10-year period of implementation will accrue to businesses in Australia, the UK and India. So we urge the government to make sure that in all of their dialogue it is a priority to get these agreements done quickly. We support their passage through the parliament promptly and look forward to seeing this final legacy item of the coalition's trade policy deliver great benefits for Australia into the future.