Tuesday, 7 February 2017
Foreign Affairs, Defence and Trade References Committee; Report
I present the report of the Foreign Affairs, Defence and Trade References Committee on the Trans-Pacific Partnership Agreement together with documents presented to the committee.
Ordered that the report be printed.
by leave—I move:
That the Senate take note of the report.
The Trans-Pacific Partnership is a broad-ranging regional trade deal between the governments of Australia, Brunei, Dar es Salaam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The committee's inquiry found that the TPP would have included significant trade and investment outcomes which would potentially have assisted Australian injury industry, business and consumers. However, a number of very troubling aspects were raised by the submitters including: the lack of independent economic modelling which indicated Australia would actually benefit from the agreement; the high risks associated with the investor-state dispute settlement provisions, which would allow foreign corporations to sue the Australian government in some circumstances; provisions undermining labour market testing requirements in Australia; again, the lack of enforceable commitments to labour and environmental standards; further, ambiguity regarding data protection for biologic medical products; and provisions which would lock in Australia's intellectual property regime.
A significant level of community concern regarding the TPP was apparent during the committee's inquiry. Thousands of emails were received from individuals urging that the TPP be rejected. In particular, people emphasised their concerns regarding the potential of that ISDS provisions contained in the TPP to undermine the Australian government's capacity to act in the national interest.
However, the committee's inquiry has been taken over overtaken by events. In January, President Trump signed an executive order withdrawing the United States from the TPP. Due to the structure of entry into force provisions in the TPP, it is now unlikely the agreement will enter into force in its current form. So due to these circumstances, the committee has made the decision not to hold public hearings and to complete the inquiry on the papers. A revived trade deal may be arranged by the remaining participating countries in the future and, should this occur, a new inquiry will be required.
Recently the Australian government has indicated that it may still attempt to ratify the TPP through introducing implementing legislation into the parliament. However, the trade minister has also stated he is liaising with his counterparts to lock in benefits from the TPP without the United States if need be. If the Australian government is actively seeking alternative trade arrangements with the remaining countries who participated in the TPP, it is not clear to the committee why ratification should be a legislative priority. Achieving access to the substantial markets of the United States was a key objective and justification for the TPP agreement. A new regional trade agreement would contain significantly different arrangements and commitments. So, accordingly, the committee has recommended the Australian government should defer undertaking binding treaty action until the future of the TPP is clarified through further negotiation with Australia's major trading partners.
A significant aspect of the TPP consideration by the Australian parliament was two recommendations for reform to the treaty-making process made by the Joint Standing Committee on Treaties and these were that the Australian government should consider: firstly, changing its approach to free trade agreement negotiations to permit security cleared representatives from business and civil society to see the Australian government's positions being put as part of the negotiations; and secondly, implementing a process through which independent modelling and analysis of proposed trade agreement is undertaken by the Productivity Commission or equivalent organisation and provided to the joint committee alongside the national interest assessment to improve the assessment of agreements. They are two very succinct, comprehensive, common-sense objectives: do not have a secret deal—open it up to civil society and business; and cost the benefits of the trade deal independently—assess it.
The committee supports these recommendations. They reflect the growing consensus regarding the need for reform of the treaty-making process, which was also evident in submissions received by the committee's inquiry. The TPP was perceived by many to be emblematic of the problems in this area. A broad range of submitters highlighted issues with the transparency of treaty negotiations, the one-sided nature of consultations with stakeholders, the lack of adequate and independent assessment of trade agreements, and the challenges the current treaty-making process presents to Australia's democratic values. The joint committee's recommendations also align with the committee's recommendations for reform made in 2015 in Blind agreement: reforming Australia's treaty-making process. At that time the committee's recommendations were not accepted by the Australian government. The committee considers these proposals for reform should be reassessed.
The joint committee's report into the TPP outlined a concern that Australia's long-term commitment to free trade, from which Australia benefits immensely, is currently at risk from a resurgence of nationalism and isolationism internationally. However, this is not evident in the submissions to the committee's inquiry into the TPP. Instead, there is a wide acceptance of Australia's approach to trade as a vehicle for economic growth, job creation and rising living standards. Broad support was expressed for the development of fair trading relationships with all countries and the need to regulate trade through the agreement of international rules. Both in Australia and overseas, a key aspect of community opposition to recent trade agreements has evolved from a lack of transparency and consultation in the treaty-making process, the extension of trade agreements into broader policy areas beyond tariffs and customer arrangements, and a perceived democratic deficit in the treaty-making process.
The committee has recommended that the Australian government should prioritise action to respond to the growing bipartisan and community support for reform of the treaty-making process. A reformed treaty-making process will be an important measure to ensure continued public support for Australia's future trade agreements. I commend the report to the Senate.
I also rise to speak to the report as presented by the chair, Senator Gallacher, and make the point that the coalition senators placed additional comments but did not dissent at all from the primary report. We had no difficulty with the recommendation on deferring undertaking binding treaty action, because, as the chair has said, the United States of America has at this moment, disappointingly, withdrawn from the process, but we hope that will not be a permanent decision. As to the second recommendation, that of expediting widely supported reforms, I point again to that comment made by Senator Gallacher. As a member of the Joint Standing Committee on Treaties, we endorse two particular areas in the treaty-making process. The first is the approach to free trade agreement negotiations to permit security-cleared representatives from business and civil society to view the government's position as part of negotiations—remembering that it is within the capability of people here in the parliament by signing a confidentiality agreement, as indeed is the case with the United States and other legislatures. It has been offered, but not accepted, by some members of the committee. The second one, as illustrated by Senator Gallacher, is the provision of independent modelling and analysis of the proposed trade agreements. Coalition senators endorse both of those recommendations.
But in so doing, I want to make the very strong point that this a trading nation. We are a population of 24 million people in a land mass equal to that of continental USA with the exception of Alaska. We have always relied on external trade. We will continue to rely economically, socially, community-wise and employment-wise on our capacity to trade internationally. It is where we are expert. We are regionally so phenomenally well placed now in the fastest growing area in the world, the Asian region. The 12 partners that undertook these TPP negotiations for five years account for some 40 per cent of world economic activity. Have those who are opposed to the progress of these negotiations on Australia's behalf stopped to think about where Australia might be if we were denied the opportunity to participate in that 41 per cent?
But even since the Senate directed the committee to look into this issue, we have now had in the United Kingdom the decision by the UK community to depart from the EU, through what is called Brexit, and that is going to open up both enormous challenges and enormous opportunities for Australia. We need to be flexible and we need to be innovative in our capacity to maximise what were once very lucrative trading opportunities with the UK before they went into the EU. One need only think of the circumstances with the sale of horticultural products out of Senator Polley's home state of Tasmania, with the export of apples and pears that went to the UK markets pre the EU, so there are tremendous opportunities there.
We know that the new President of the United States, President Trump, has at this time taken the United States away from the TPP, at a time when the entire US Congress—Republicans and Democrats, Senators and members of the House of Representatives—were in favour of a Trans-Pacific Partnership. I want to draw attention not to the Asian representatives of the TPP, not to New Zealand, with whom we already have a very strong trading relationship, but to our opportunities in Central and South America, our opportunities in Mexico to radically improve free trade between our two countries. We know where the benefits are and will be between ourselves and Mexico: in horticultural products, in dairy products, in wine, in mining products and services, in oil and gas, and in TAFE and higher education. I for one am very strongly, privately and publicly, urging the trade minister to continue what has been started—by this particular chamber, in fact—to actually see where our opportunities lie with Mexico. And of course Peru and Chile are also participants in the TPP.
For example, concern is expressed about some of the standards. Well, I think the best way to see standards of labour relations, occupational health and safety, and environmental advancement in many of the countries with whom we relate would be through a TPP so that countries like Brunei and Vietnam would have the opportunity to improve in those areas. The investor-state dispute settlement process is one that exercises the minds of a lot of people. Well, I say again, as I have said in this place before: when you have yourself done business and traded in other countries without some degree of protection, the ISDS provision not only exists for others wanting to do business with Australia but also gives Australian business the protection that is necessary when trading and dealing in other countries. That never, ever seems to come to the fore.
And great discussion went on previously in ISDS relations about the capacity of a tobacco company to take the Australian government through the processes and to get compensation. Well, it is amazing how quiet everybody went when indeed those matters were dealt with and under the ISDS provisions that company failed. For those who are interested, our joint standing committee met in Perth and we had evidence from the lawyer who represented the tobacco company in all of those negotiations. And for those who really genuinely do want some information on ISDS and how it works, his evidence to the committee and his submission is enlightening, and he certainly came away with the view—very strongly, although he represented the other side in that dispute—and the advice to the committee that these are very sound provisions to have in the process.
So, I conclude my remarks by saying that coalition senators concur with the recommendations that have come through from the report but very, very strongly want to place on record that Australia's interests lie best in continuing our trading relations with other countries. And we need look no further than to the advances and the benefits that have been made in recent times through the excellence of negotiations of then trade minister Andrew Robb in the China-Australia Free Trade Agreement, the Japan-Australia Economic Partnership Agreement and the agreement with South Korea. We are already seeing enormous benefits, which are flowing through to employment, to trading activity, to economic benefit and to further investment. I commend the report.
I rise to speak on the report of the Foreign Affairs, Defence and Trade Legislation Committee in relation to the TPP. Let me firstly state the obvious: that the Trans-Pacific Partnership is dead. It is dead in the water, and it is time this government accepted that it was a bad deal from the beginning, and it should not in any way try to be revived. And let me say that Australia is a trading nation. But when you look at our trade deficit, you have to wonder what on earth this government and successive governments have been doing to our trade arrangements for the last decade. In 2016—last year—our trade deficit hit $36 billion. So, we are not getting a very good deal at the moment from our negotiators on the government benches in relation to our trade deals—$36 billion in deficit. This is the legacy that is currently being carried by the government.
And the TPP was only going to add more pain to that. We hear all about the fact that it was meant to create jobs. Well, that is a load of absolute garbage, because we know that no independent assessment has been conducted by the government to back up those claims. In fact, what we have seen instead is analysis that has been conducted by others showing that we would not even get to 0.7 per cent of growth over the next 13 to 15 years. Now, surely that is a rounding error at best. It was going to be bad for Australian jobs and bad for Australian consumers, and it was going to push up the cost of cancer medicine in this country, because who negotiated this trade deal, in secret, behind closed doors? It was the big multinational corporations, stitching this deal up for themselves and wanting it delivered for them as well.
We know that this deal was designed to meet the needs and desires of the big corporations. It had nothing to do with creating a job-rich economy back here in Australia. It had nothing to do with putting the community at the centre. And I must say, it is quite welcoming to hear from the Labor Party that they are willing to talk about opening up and looking at how we reform the treaty-signing process and how we go about signing trade deals, because it is high time we stripped away the secrecy, high time we started putting people and communities back at the centre.
We hear our trade ministers and our Prime Minister from time to time go on and on about how these trade deals are wonderful; they are going to make Australia rich, boost job growth. They never have the facts to back up those statements. In fact, it is the exact opposite: a trade deficit of $36 billion. And the TPP was going to deliver a rounding error at best, over the next 13 to 15 years.
One of the most insidious parts of this deal was those ISDS clauses—those clauses that were going to allow big multinational companies to sue governments, here in Australia or elsewhere, if a government dared to act in a way that might impact on their profits. We have seen examples of this before: big tobacco coming in and saying, 'How dare the Australian government start saying that they want to do something about cutting down the amount of cigarettes that Australians smoke because they are worried about the health impacts on the community.' How much public money was spent fighting that in the courts because big tobacco were so upset that their profits were going to be hurt by those regulations? What would happen if we wanted to introduce proper, genuine food labelling in this country—whether it was to say how much sugar, how much fat or how healthy or not a product was? What would happen if we wanted to put a genuine made-in-Australia stamp on the front of packets of food? They could then be compared to those foreign products pretending to be made in Australia—when we know, pretty much, that the produce comes from elsewhere. What would those big multinational food corporations say then? 'Oh no, the Australian government and the Australian parliament cannot introduce laws for proper labelling of food, because that might impact on our profits.' So they drag the Australian government through years and years of a court process, sucking up hundreds of millions of dollars of Australian taxpayers' money to fight that out in the courts, even when the parliament has perhaps acted on something that the Australian community wanted.
Those ISDS clauses are inherently and fundamentally undemocratic, and we had this government, the Abbott-Turnbull government, signing Australia up and begging Donald Trump to keep the TPP alive and on the table, despite the fact that it was not going to deliver growth for Australia, that job numbers were not going to go up and that we were going to be trading away our sovereignty, because we would be letting big corporations have the power to sue the government of Australia. Why on earth would the Prime Minister of Australia think that is the one topic to go and beg the new President of the US over? Heavens above, there are a lot of other things coming out of the Trump administration right now, and the one thing that Malcolm Turnbull is desperate to change his mind on is to revitalise and bring back to life the zombie of the TPP. Priorities are absolutely in the wrong place and the wrong order with this Prime Minister. There was no independent analysis. The government have not been able to back up their claims. In fact, every time there was analysis done they wanted to dismiss it. 'Alternative facts' are running riot through the government benches, trying to bring back to life the dead-in-the-water TPP.
There is still some suggestion from Malcolm Turnbull that we could unscramble the omelette and put the TPP back together in some other way without the United States. Anyone who has looked at this agreement knows you just cannot do that, because the deals are all done on the basis that what people would get and what other countries would get is inherently linked to what concessions the United States would give. It is ludicrous and delusional to think that you could just reinvent the TPP with the US removed.
So, back to the drawing board. Everything else now needs to be put back on the table. What kind of trade negotiations do we want to see from here on in? We should be seeing trade negotiations that are open, that are transparent to the public, that are backed up by fact, not 'alternative fact', and that have an independent analysis on what impact an agreement would really have on the Australian economy, on Australian jobs and on consumers. We should not be letting our government go into any negotiation meeting without saying, 'We will not agree to any inclusion of the ISDS clauses.' Any government worth their salt who brings in an ISDS clause and agrees to that— (Time expired)