George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and related bill, Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009, implement the ASEAN-Australia-New Zealand Free Trade Agreement by amending the Customs Tariff Act to provide for the elimination or reduction of customs duties for many goods that qualify as originating in Australia, New Zealand or ASEAN nations.

The coalition has a long and proud record of supporting free trade agreements, including important regional free trade agreements such as this. The concept of an ASEAN-Australia-New Zealand Free Trade Agreement has a long history. It was initially floated in the period of the Hawke-Keating government in the early 1990s but formal discussion towards such an agreement did not commence until the Howard government, when they were initiated by the then Minister for Trade, Mr Vaile, in 1999. Formal negotiations commenced in 2004 and continued under his successor Minister for Trade, Mr Truss. An agreement was finally signed by the current Minister for Trade, Mr Crean, on 27 February 2009. The text of the agreement was tabled on 16 March 2009.

The FTA provides for reciprocal tariff reductions for motor vehicles, textiles, clothing and footwear and for a range of other manufactured goods. All Australian tariff rates on agriculture imports will be reduced to zero on and from the commencement, with only marginal concessions to be phased in from the other signatories. Concessions on the services area are also marginal. The horticulture sector is particularly disappointed with the outcome of the FTA. The FTA was referred to the Joint Standing Committee on Treaties, which reported on 24 June 2009. The JSCOT recommended that binding treaty action be taken but was critical of the treatment of the horticultural industries. The JSCOT made a number of recommendations to improve the negotiation process, to which I will return shortly. The bills will result in a loss of revenue of $971 million over the four years from 2009-10 to 2012-13. There will of course be other benefits from the introduction of free trade in the scheduled goods and services.

The bills were introduced in the House of Representatives yesterday. The minister sought the agreement of the opposition to pass the bills as noncontroversial in the Senate today. This will enable the minister to attend the East Asia Summit on 25 October where he anticipates that at least New Zealand and four of the ASEAN countries will also have completed their internal arrangements, thereby enabling the FTA to come into force on 1 January next year. All the signatories are in any case required to advise of progress with their internal arrangements by 2 November 2009. It would clearly be embarrassing for Australia if the minister were not able to certify the finalisation of our domestic arrangements by that date, which is why the opposition is happy to facilitate the expeditious passage of the bills through the parliament this week.

Given that the JSCOT report was tabled on 24 June 2009, it must be said that the government has had ample time to introduce and pass the legislation in a more orderly fashion. However, the opposition, as I said a moment ago, will facilitate its passage this week, given that the minister has provided assurances that the government will accede to four recommendations of the Joint Standing Committee on Treaties. They are as follow. The first recommendation is:

… that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry.

The second is:

… that, in the absence of other measures designed to improve free trade, a free trade agreement negotiated by Australia should not include a tariff outcome on a tariff line that is worse than the existing tariff on that tariff line.

The third is:

… that in future free trade agreements, Australia should negotiate for the binding tariff rate to be the lower of either the rate at the time of binding, or the Most Favoured Nation tariff rate at the time the free trade agreement comes into force.

And the fourth is:

… that the Department of Foreign Affairs and Trade prepare a report for the Committee examining mechanisms to allow negotiators to directly consult with industry representatives during the negotiation process.

In view of these assurances, the opposition supports the bills, which, notwithstanding the brief parliamentary time set aside for their consideration due to their noncontroversial character, are in fact very, very significant legislation facilitating a most important international trade agreement.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary for Social Inclusion and the Voluntary Sector) Share this | Link to this | Hansard source

I thank Senator Brandis for indicating the opposition’s support for this important set of bills. As he said, the amendments give effect to the agreement establishing the ASEAN-Australia-New Zealand free trade area that was signed on 27 February 2009.

The agreement covers some 20 per cent of Australia’s total two-way trade in goods and services, worth $112 billion in 2008. As Senator Brandis described, there were 16 negotiation rounds, and the agreement is the most comprehensive trade agreement that ASEAN has ever concluded, covering goods, services, investment, intellectual property, competition policy, economic cooperation, movement of natural persons and electronic commerce. There is considerable potential for the agreement to create new trade opportunities and contribute to boosting Australia’s modest investment relationship with ASEAN, and the use of regional rules of origin available under the agreement will help Australian and ASEAN industry develop greater linkages into regional supply chains.

The agreement provides for the progressive reduction or elimination of tariffs facing Australian goods exports to ASEAN. Tariffs will be eliminated on between 90 and 100 per cent of tariff lines in the more developed ASEAN markets and in Vietnam, covering 96 per cent of Australia’s current exports in the region. The agreement will reduce or eliminate tariffs across a region that is home to 600 million people and a region with a combined GDP of A$3.2 trillion. That means greater job opportunities here in Australia.

Senator Brandis reported on the agreement to respond to the report by the Joint Standing Committee on Treaties into the agreement establishing the ASEAN-Australia-New Zealand Free Trade Agreement. The government has committed to formally responding by the end of this month, Senator Brandis. Prior to that formal response, the trade minister has advised that the government is positively disposed to the thrust of the committee’s recommendations, which for the most part are broadly consistent with Australia’s free trade agreement objectives and processes. The free trade agreement is expected to enter into force on 1 January 2010, upon the conclusion of domestic processes by Australia, New Zealand and at least four ASEAN member countries. I commend the bills to the Senate.

Question agreed to.

Bills read a second time.