Monday, 15 October 2018
Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018; Second Reading
In the last few minutes left of my speech, I'd like to summarise for the chamber that the Trans-Pacific Partnership agreement, an agreement that has taken nearly 13 years to get to this parliament, has come to symbolise just about everything that is wrong with a globalised, neoliberal, trickle-down approach to our economies, to our societies and to our communities. It was triggered by the GFC and the collapse of the multilateral Doha rounds. It was initiated by big corporations, nearly 300 of them, who pushed politicians in different countries around the world, many of them in political parties that they donate to, to start a new round of negotiations to create a megadeal that essentially gives them whatever they want. Remember that these companies operate in different countries all around the world. Civil society and parliaments didn't have access to these secret meetings. They were all deemed commercial-in-confidence. Finally, we got thousands of pages of documents on deals on trade, services and investments right across just about every facet of our society—from digital rights through to education, health care and the environment. What we have before us today is a set of rules and regulations synchronised amongst 11 countries written by big corporations.
This is exactly the wrong direction for this parliament and this planet to be going in. This TPP will drive privatisation. It will continue to ratchet up the effects of smaller government on our lives, giving more power, not less, directly to big business, especially the toxic Trojan horse clauses—the investor-state dispute settlement clauses—that give corporations special new rights to sue sovereign governments for the decisions we make. This is the wrong path for us to be going down. We have an opportunity here today to say no to the Trans-Pacific Partnership agreement, to say yes to free trade and to say yes to a new treaty-making process that actually gives parliaments and all stakeholders—unions, workers, environment groups and social equity groups—a say in any deals if they're going to be signed and ratified by a parliament. It is absolutely critical that, after 13 years, we say no to this push to revitalise globalisation— (Time expired)
Centre Alliance are a supporter of fair trade. I need to state that up-front. However, we do not support the agreement in its current form. It contains some cancers that must be cut out of it. As such, we won't be supporting the enabling legislation unless one of the amendments that I have circulated is passed.
There are a number of downsides to this agreement. Two are of particular concern. My colleague, Senator Griff, will raise some other aspects of the agreement that need to be thought about as well in his speech a little bit later. The first one I'd like to talk about is ISDS. As we heard, Senator Carr stood up in the chamber and made some very good points about the ISDS clause and why we should remove that from this agreement. In fact, Senator Hanson-Young also stood up and laid out some cases whereby countries have been subjected to litigation for changing public policy. So I won't repeat that. I also note that Senator Carr pointed out that the Productivity Commission, a pretty rigorous and thoughtful body, has also indicated that it finds ISDS a little bit disturbing. I note that the Europeans are walking away from it. Senator Hanson-Young, once again, pointed that out in her speech. I might point out that the United States, in NAFTA, have now walked away from ISDS. Whilst we're walking towards this particular set of provisions, most are walking away.
We, of course, had our own experience with ISDS when Philip Morris, having failed to overturn legislation in relation to plain tobacco packaging in our highest court, simply went to Hong Kong and initiated an action against the Australian government. I supported the Australian government in their defending of the matter but, nonetheless, that particular ISDS litigation cost the Australian taxpayer $39 million. The government wasn't up-front in providing me with those details. Former Senator Xenophon and I fought for a couple of years to get access to how much had been spent, such was the government's embarrassment. It went all the way to the AAT, and finally the government realised they were going to lose the exemption case and the number was revealed—$39 million.
We need to understand that the ISDS provisions allow corporations to sue governments should they be affected by a change in public policy. In effect, it transfers what we typically know as sovereign risk from the corporation to the taxpayer, and that's totally unacceptable. It's interesting that Australian companies can't use those provisions here in Australia. So, in some sense, it even discriminates against corporations that may wish to invest here. They have no recourse other than through our court systems.
The second problem area with the current arrangements is labour market testing. It's been waived. We will have a situation where foreign companies bring in workers and they won't have to test the local market to see if there's an Australian here who can do the job. They can simply bring those workers in and there's not much we can do about it. Countries which we could find workers coming from are Canada, Peru, Brunei, Mexico, Malaysia and Vietnam. It's an assault on Australian workers.
In terms of benefits—I don't want to be completely negative here; there are some benefits; always look to the benefits—in this case, the best case is a modest gain, if anything at all. The gain over the next 12 years will be 0.5 per cent of GDP. That's according to the Johns Hopkins University. We must remember that the Productivity Commission looked at some of these estimates in the past and found them to be somewhat exaggerated. They actually don't live up to what was claimed initially. We've been able to measure that empirically.
Senator Whish-Wilson interjecting—
Spin has been indicated to me by Senator Whish-Wilson. Of course, as has been mentioned by a number of speakers, there has been no independent modelling commissioned by the Australian government focusing on the national advantages and disadvantages for Australia in particular. We're relying on international analysis. Like Senator Carr, I too would like to know where Senator Birmingham got his numbers from when he made his statements to the media yesterday.
I was almost going to stand up and simply repeat Senator Carr's speech, because he clearly articulated the problems with the ISDS provisions and labour market testing being waived, but, unfortunately, his speech came to a different ending from mine. The Labor Party still intend to support this. They're crying wolf on these provisions. They're saying, 'They're bad; we don't want them in there,' but, given the opportunity to get rid of them, they're simply not. Their plan is to change things when they get into government. Firstly, I think that's arrogant. Maybe they won't get into government after the next election. Their modus operandi now is to let everything go through and wait until they get into government. I suspect we'll see that, hopefully, with every other piece of legislation. Is that how it works, I wonder? Once again, there is no guarantee that they will gain government, and, if that is the case, they've definitely sold people out.
I acknowledge that a private member's bill was introduced into this chamber today by Senator Carr, but the reality is—and we all know this—this private member's bill will sit in the Senate; it will be parked here. It's not like the amendments that I'll move in the committee stage, which are attached to a government bill and which have to go back to the House of Representatives to be voted on there. This is a private member's bill that will simply sit in this chamber.
In that sense the Labor Party are committing a fraud on their union comrades. They're committing a fraud on their constituent base. I will read what Sally McManus, the President of the ACTU, said. She is 'disappointed by the ALP's decision to vote for the TPP enabling legislation'. Allen Hicks, the ETU National Secretary said:
It beggars belief that the Labor caucus would sign off on ratifying the TPP given it's against the party's own policy. The TPP-11 is a disaster for Australian workers.
I will repeat that, 'The TPP-11 is a disaster for Australian workers.'
Even if you wanted the TPP to pass today, because you really wanted it to come into effect, the funny thing is you simply haven't used your negotiating position here. You've got the numbers with Pauline Hanson's One Nation, the Greens and the Centre Alliance voting against the enabling legislation. You sit in the box seat. You could have a conversation with the government and you could work to get to a better situation. Have you done that? No. You've simply come into the chamber, moved a private member's bill and said a few things, but you're not acting on it.
I will be moving a commencement amendment and, if that is successful, the treaty won't come into force. In fact, the effect of the amendment will be that it won't come into force until such time as the ISDS has been removed and labour market testing has been restored. It wouldn't require another vote of the parliament. Simply, once those are removed, those two cancers, the agreement could come into effect.
In the event that that fails I'm moving a sunset provision. This would allow the treaty to come into effect right now, as soon as the parliament sign off on the enabling legislation. The Australian government would be able to notify all of the countries involved in the TPP and it could come into force, but then the enabling legislation would sunset at the end of next year. That's absolutely consistent with what the Labor Party want to do. The Labor Party want to allow this through. They've stated that they then wish to negotiate the ISDS provisions out and the labour market testing back in. So I'll be very interested to see if Labor support that, because that's what they've said outside this chamber that they intend to do. They intend to allow this agreement to come into force and then negotiate these bad provisions out. The nice thing about the sunset clause is that it provides an insurance in the event that Labor don't get into government after the next election. The sunset clause will sit there and it will provide an insurance that will allow for the Labor Party national policy platform to be implemented.
In closing, what needs to happen here is Bill Shorten to stand up and show the courage of his conviction. We have an opportunity to draw a line in the sand. We have an opportunity to send a signal to DFAT and those who are involved in these negotiations that Australia will not accept ISDS provisions anymore and that we do require labour market testing. Time and time again these agreements are negotiated, the enabling legislation comes before the parliament, and time and time again the Labor Party complains about the provisions and nothing happens. This time around, you have the numbers. This time around, with the Greens, with Pauline Hanson's One Nation and with Centre Alliance, if you vote against the TPP as it stands, it will not come into effect. There are some very sensible, measured, reasonable amendments that Centre Alliance has put forward. There are some other amendments that have also been circulated today. It's an opportunity, and it really is going to be a situation where we will see what Labor really stands for.
I rise to speak in support of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which comprise the package of bills to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I want to put on record why—despite some important reservations that Labor has with these bills that have been outlined by the representing shadow minister, Senator Carr—it is important that the Senate passes the bills that are before it.
I'll come to the economic arguments in favour of passage shortly, but I want to start by putting this debate into a strategic context. Fundamentally, shared and growing economic prosperity contributes to the alignment of strategic interests, and our country has a deep interest in stable, settled and consistent trading arrangements. First, Australia benefits from economic engagement with the world. Second, open and consistent trading arrangements enable greater economic engagement between nations and greater convergence of interests. Third, Australia's relative economic size means we have much to lose from trade conflict that is predicated on a win-lose binary, where economic weight and the capacity to inflict economic harm become the primary determinants of outcome.
In relation to the first point, it is clear that trade matters to Australia in both a direct and an indirect economic sense. Exports and imports account for over 40 per cent of Australia's GDP, and trade is inextricably linked with Australian jobs. Research has shown that some 2.2 million jobs, or one in every five Australian jobs, are associated with trade. Exports account for 1.6 million jobs—that is, around 14 per cent of all Australian jobs. Two-thirds of mining jobs are export related, and 59 per cent of agricultural jobs, 41 per cent of manufacturing jobs and one in three transport and storage jobs—more than 650,000 Australian jobs on top of those I've outlined in relation to exports—rely on imports. This is why, as I have said before, Labor's support for trade can be summed up in a simple proposition: trade benefits working people. Trade benefits working people by contributing to economic growth, trade benefits working people by improving productivity and trade benefits working people by creating better paid, more rewarding and more secure jobs. And, of course, it benefits working people by delivering lower prices and greater choice for consumers. We know trade raises average living standards. As a nation of some 25 million people, the size of our domestic market means that, to have the standard of living Australians desire, we must generate income from other markets. So I support trade, not despite being a progressive but because I am a progressive. This is why Labor has had a proud history of supporting trade.
The most substantial decisions to reduce Australia's trade barriers have all been made by Labor governments. In 1973, the Whitlam government cut tariffs by 25 per cent and Prime Minister Whitlam made clear that, whilst the short-term aim of the tariff cut was to reduce inflation, its longer-term aim was to improve the efficiency of the Australian economy. A more efficient economy was the primary motivation for the 1988 and 1991 tariff cuts by the Hawke and Keating governments. But, just as Whitlam was conscious of the impact of tariffs on the costs of living for the Australians we represent, prime ministers Hawke and Keating also recognised that tariffs were pushing up the price of clothing, whitegoods, cars and other basic consumer items. They recognised that there was nothing progressive about a policy which meant working people struggled to afford decent school shoes for their children, and they also drove the modernisation of Australian industry in the 1980s and 1990s.
Trade reforms were amongst the reforms that contributed to Australia enjoying nearly a quarter century of uninterrupted economic growth. Labor's commitment to trade liberalisation was continued by the Rudd and Gillard governments. Despite what we sometimes hear from the other side, under Prime Ministers Rudd and Gillard Labor finalised the ASEAN-Australia-New Zealand Free Trade Agreement—which has possibly the most difficult-to-say acronym in a crowded space—launched negotiations for a global trade and services agreement, and contributed to the WTO's trade facilitation agreement, which was concluded in Bali in 2013.
The second reason for supporting the agreement this package of bills implements is that locking in a high-quality regional deal furthers regional economic integration and cooperation. An open, rules based free trading system delivers strategic as well as economic benefits. It creates greater opportunities for the convergence of interests, which itself contributes to peace and stability. The CPTPP agreement is a plurilateral trade deal, which is consistent with Labor's policy preference for multilateral and plurilateral agreements over bilateral agreements. It is a WTO-plus trade deal, going beyond goods barriers to deal with 21st century trade issues of services, investment, competition policy and intellectual policy. It also creates a stepping stone to further regional agreements, leading ultimately to an FTA of the Asia-Pacific, which Labor continues to support.
These strategic benefits are consistent with Labor's long-term focus on our region and on Asia-Pacific trade liberalisation and economic integration, dating from the Hawke and Keating government's role in the formation of APEC and the Bogor declaration's goal of free trade in APEC. In an environment of rising protectionist sentiment and trade conflicts, the strategic benefits of greater economic integration are compelling. History has shown us that mercantilist, winner-take-all approaches to trade have contributed to international tension and rivalries. In the 20th century the role of beggar-thy-neighbour protectionism in the 1930s exacerbated the Great Depression and contributed to the tensions that ultimately led to World War II. It was in the aftermath of World War II that countries including the United States, and Australia under Prime Minister Chifley, supported the formation of the General Agreement on Tariffs and Trade, the precursor to the WTO, as they sought to establish a multilateral rules based trading system. Enhanced international economic cooperation and engagement promote understanding between nations, reduce tensions and increase the economic incentive to avoid conflict.
In contrast, protectionism and mercantilism foster tit-for-tat retaliation and hostility, which can put the wider system of international cooperation under pressure. These strategic aspects of trade loom large in our region. Our region is a locus of strategic competition, including around who makes the rules that govern relations between nations. The nature of the region and its arrangements, including on trade, are fundamental to Australia's future prosperity and Australia's future security. Australia wants a region which retains a system of institutions, rules and norms to guide behaviour, to enable collective action and to resolve disputes. We want a region in which those seeking to make or shape the rules do so through negotiation and not imposition, we want a region with an open trading system and investment transparency to maximise opportunity, and we want a region where outcomes are not determined only by power. The desire to play a constructive role in shaping open and transparent rules for trade in the region was an explicit rationale of the Obama administration in pursuing the original TPP. The CPTPP is important also because it goes to the nature and character of the region we want.
We should also pause to consider the benefit to our neighbours. We have an interest in their development and stability. Increased economic integration and trade will help increase incomes in some of the poorest countries in our region. Economic modelling shows that the gains from this agreement are larger for developing nations than for developed countries. It shows that this agreement would increase real national income by 3.1 per cent in Malaysia—5.4 per cent under a TPP-16 scenario—2.2 per cent in Vietnam, 2.2 per cent in Peru and 2.6 per cent in Brunei. There is a strong nexus between international trade, economic growth, development and poverty reduction, and any party committed to alleviating poverty and improving the lives of humanity in general, as Labor most certainly is, cannot ignore the benefits that will flow to hundreds of millions of people.
In addition to the growth benefits for developing countries in the region, the labour chapter will require reforms to workplace rights in the region. The requirements are designed to protect and enforce labour rights, improve working conditions and living standards, strengthen cooperation on labour issues and enhance labour capability amongst the parties. We do need to do more to ensure that ILO standards are more broadly observed and that workers in the region enjoy better wages and conditions. Whilst more remains to be done, the requirements imposed by the CPTPP are a step in the right direction. They will raise labour standards in the region, reduce the impact of unfair practices like forced and child labour, and reinforce international commitments.
This leads to my third point. The reality is that our relative economic size means that Australia has much to lose from trade conflict predicated on a win-lose binary, where economic weight and the capacity to inflict economic harm become the primary determinants of outcome. Australia has a direct interest in an open, rules based international order in which countries work together to resolve tensions and to tackle problems. Our power may not extend across the globe, but our interests most certainly do. To realise our interests we need both to shape emerging opportunities and to hedge against adversity. This is what constructive internationalism does. It deals with setback and disruption while at the same time generating opportunities. Trade can be an example of a constructive internationalism and also reinforce it in practice.
We need to support and advance an agreed international rules based order where those seeking to shape and make the rules do so through negotiation and not the imposition of will. Agreements such as the CPTPP are practical and constructive steps towards a world where rules, negotiation and cooperation are preferred to power and might. It is perhaps unsurprising that as shadow foreign minister I am drawn to the strategic rationale for supporting this legislation. But I should be explicit: there are sound domestic reasons for supporting this agreement and the legislation to implement it. The agreement eliminates more than 98 per cent of tariffs between signatory countries. For our farmers it will reduce and eliminate tariffs on beef, sugar, cheese, wheat, barley, wine and seafood, and expand quotas on butter, rice and skim milk. It will eliminate tariffs on iron ore, copper, nickel, butane, propane and LNG. And for Australian manufacturers it will eliminate tariffs on iron and steel products.
It will also enhance opportunities for Australian higher education providers in Brunei, Japan, Malaysia, Mexico and Vietnam. A number of independent economic analyses of the agreement have been undertaken, which found that it will provide relatively modest economic benefits in the short term, predominantly for agricultural goods, and that there is potential for more-significant economic benefits in the longer term, particularly if more countries in the region sign up to the agreement.
An analysis commissioned by a number of business groups has estimated that by 2030 the agreement would increase our national income by $15.6 billion, boost exports by just under $30 billion and lift investment in Australia by $7.8 billion. But it is the case that trade also places uneven pressures on our society. So, because I support free trade I also believe that we have to have proper social democratic institutions and progressive policies. That means insisting on high-quality trade agreements that maximise local employment, and this is a core element of Labor's track record on trade. We have always sought to ensure that the benefits of trade flow to Australian workers—the people we represent. We saw this in the ChAFTA—the China-Australia Free Trade Agreement—where we won concessions from the government to protect the interests of workers and to protect foreign workers who are on temporary visas from exploitation. I said at the time, as shadow trade minister, that Australians accept the need for a temporary migration system where there are genuine skills shortages and a lack of labour supply. But Australians do not accept a temporary migration system that is used to bypass Australian workers and to cut wages and conditions.
Despite resistance from then minister Andrew Robb, we managed to have significant safeguards put into law, including entrenching labour market testing under the Migration Act; imposing a market-salary-rate requirement on temporary visa workers to ensure that they are treated fairly and that temporary skilled migration does not undercut Australian wages and conditions; and creating new visa conditions for temporary work visas in occupations where holding a licence is mandatory under state and territory workplace, skills and safety laws. These conditions require temporary work visa holders in these occupations not to perform the occupation without holding the relevant licence, to obtain the licence within 90 days of arriving in Australia, to comply with any conditions imposed on the licence, not to engage in any work or duty inconsistent with the licence, and to notify the department in writing if their application is refused or they are granted a licence that is subsequently revoked or cancelled.
As with the China-Australia Free Trade Agreement, Labor continues to have reservations about the deal that the current government has signed. This is not the agreement we would have signed. The government could have done more and should have worked harder to protect the rights of Australian workers. The shadow trade minister, Jason Clare, has made it clear that Labor in government will not waive labour market testing in the trade agreements we sign, and we will also work to reinstate labour market testing for contractual service suppliers in countries where the Liberals have agreed to waive it. We will build on the protections we won in the ChAFTA agreement to strengthen rules around temporary workers to ensure that migrants are not exploited, Australian workers are not bypassed and the safety of Australians is not jeopardised.
This agreement also extends our ISDS obligations to one country, Canada. If we win the next election, Labor have made clear we will follow the approach of the Ardern Labor government in New Zealand. We will negotiate with the Canadian government to remove the application of this clause between our two countries by way of side letters. The New Zealand Labour government has signed side letters with four countries that are part of the CPTPP, and the effect of these letters is that the ISDS clauses in this agreement do not apply as between New Zealand and these countries. Australia has also signed a similar letter with New Zealand. What this shows is that it is possible to set these clauses aside, and that is what we will seek. Labor will also legislate to prohibit governments from signing trade agreements that waive labour market testing or include ISDS provisions, and I encourage those in this chamber who have concerns about these elements to support our legislation to this effect.
As I've said, this is not the agreement Labor would have negotiated. It can be improved and, if we form government, we will do so, but that does not mean we should reject the agreement. As the Labor Party's national platform puts it, more trade is a pathway to a high-skill, high-wage future for Australians. Labor members and senators do not pursue trade liberalisation out of any blind adherence to abstract theories. We pursue trade liberalisation because it delivers concrete benefits for the people we represent. We will be supporting the legislation to implement the CPTPP because it will benefit our trading partners, promote economic prosperity and cooperation in our region, and benefit Australian workers and Australian consumers.
I rise to speak against the legislation before us today, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill. For decades, the problem in Australia has been that large corporations wield far too much power over our democracy and economy. We've been told that, if we deregulate, cut taxes for big business, privatise anything that's not nailed down and attack unions' rights to protect working conditions for working people, suddenly we'll all be better off, that wealth will trickle down magically to all of us. Neoliberalism, market rationalism, economic rationalism—call it what you like, the reality is that we were sold the lie that what is good for big business is going to automatically be good for ordinary people. It's a lie.
The myth is that simply handing over more power to big corporations, as this deal does, will benefit Australian communities, Australian workers, people living on the land, farmers, people in service industries, people who want to get access to affordable medicines and, indeed, our precious environment. If you believe that handing over more power to big corporations is the pathway to do that then you've been asleep for the last 30 years, because for 30 years what we've seen is the outsourcing of our democracy to big corporations, and the effect has been economic inequality, environmental destruction and a community that pits neighbour against neighbour. The reality is that this is a bad deal. It's a bad deal because it hands over extraordinary power to corporations and takes it off sovereign governments.
Let's look at some of the specific issues contained in this agreement and go through them one by one to see exactly what will happen if Australia signs on to this deal. Firstly, there are the investor-state dispute settlement provisions, the ISDS provisions. In short, what they do is to give the extraordinary power to corporations to sue governments if a government passes a law they don't like. If a government blocks a mining application, a multinational corporation can come along, sue it and have their dispute heard in private. A government could foot the bill for any potential lost revenue simply because a government has decided to protect a local community or, indeed, the environment. For laws strengthening air pollution protections, again, companies can come along and sue governments. Raising the minimum wage could be seen as contrary to the interests of some of the corporations involved in specific proposals.
We know that this is possible because it has happened before. Australia was sued by a tobacco company for bringing in plain packaging, for goodness sake. We were sued because we introduced a law to protect the public health of our community. This complaint was levelled against the Australian government and action was taken. Fortunately, we won that case. Had we lost, Australia's plain packaging rules would have had to be repealed. These ISDS provisions are so bad that even John Howard, through the Australia-United States Free Trade Agreement, refused to include them as part of that agreement. Here we are, a decade on, with a modern Liberal Party—hardly a surprise—backing in this change. It is also now being backed in by Bill Shorten and the Labor Party.
Moving beyond ISDS provisions, you've got the issue of labour market testing. That is there to demonstrate that, yes, if we can't find workers to do a particular role or task in Australia, we have the opportunity of bringing in people from overseas. But the TPP-11 commits Australia to accepting unlimited numbers of temporary workers from Canada, Mexico, Chile, Japan, Malaysia and Vietnam. They are going to be workers spread across a wide range of professional, technical and skilled trades and occupations. That's because the agreement does not require there to be any labour market testing of whether there are people here who can do those jobs. These are workers who will be brought into Australia to work in jobs and on projects where there could be Australians in regional communities who are ready and willing to do the same job on the same project.
We know that there is danger when those migrant temporary workers remain tied to one employer for the course of their time in Australia. If things go badly, they face deportation. They face deportation if they lose their job for any reason whatsoever. It's an agreement that creates less bargaining power for that group of workers. We know this because the Fair Work Ombudsman reported that temporary visa holders accounted for only one in 10 complaints to the agency in 2015. This is what you get when you sign up to trade agreements that have been written by corporations for corporations and not for the Australian community.
When it comes to medicines, the TPP-11's intellectual property chapter contain a series of rules that lock in strong monopolies for patents on medicines. That puts affordable medicines out of reach. It extends the patents for a number of medicines, keeping the price artificially high. It is the first official trade agreement involving Australia to propose an additional, longer monopoly on data protection for biologic medicines. These are medicines that have the capacity to revolutionise the way we deliver health care in this country. Instead of reform that is in the interests of patients, what we're seeing is reform that is in the interests of huge pharmaceutical companies. This creates a dangerous precedent that treats the lives of Australians as a second-order concern behind the profits of big pharma. That's why MSF, Medecins Sans Frontieres, Doctors Without Borders, described TPP-12 in these terms:
The TPP is a bad deal for medicine: it's bad for humanitarian medical treatment providers such as Medecins Sans Frontieres, and it's bad for people who need access to affordable medicines around the world …
Of course, what we do know is that, when it comes to the benefits of these trade agreements, they consistently overpromise and underdeliver. They assume we get none of the downsides and all of the upsides. They make heroic assumptions of full employment. They assume perfect labour mobility and assume away any income distribution effects or trade balance effects. The US Peterson Institute for International Economics produced a study of TPP-12, which included the United States, and it estimated a very small increase in Australia's GDP after 15 years. It's essentially a rounding error—0.6 per cent. That's 0.1 per cent each year. Of course, on the downside, we saw a separate study that found that job losses in Australia would total 39,000 jobs lost after 10 years. You see, they always overpromise and underdeliver.
In this case, the benefits are so small because Australia's got free trade agreements with a number of the TPP-12 countries already. You ask somebody who works in agriculture right now about the promises that have been made with some of the free trade agreements we've seen and how they were supposed to revolutionise the industry and bring in rivers of gold. Most farmers are still doing it tough. Those trade agreements haven't made any difference to their lives. The reality is this is a bad, bad deal. It hands over huge power to corporations through the ISDS provisions. It abolishes the need for labour market testing. It makes medicines more expensive. It ensures that, rather than benefiting from free and fair trade with our neighbours, we hand over extraordinary influence to corporations over democratically elected governments. Politics is pretty crook right now, but the one advantage you have in a democracy is that you can vote people out.
Labor are trying to tell us that they don't support many aspects of this deal and that they're going to try and change it once it's been signed. Just think about that. They're saying, 'We're going to sign a contract today and then we're going to attempt to change it if we win the next election.' They've cited evidence of these side letters signed with countries like New Zealand. Let's be really clear about this. These were agreements that were struck before the TPP was agreed to in law. If you're going to engage in side deals, it's an acknowledgement that the deal itself creates all sorts of problems for you, and you fix them now before you sign away any leverage by signing this contract into law. You can't walk away from the bits of the deal you don't like after you've signed the deal or after you've entered into a contract. The Labor Party is being dishonest with its members, it's being dishonest with Labor Party supporters, it's being dishonest with the unions and it's being dishonest with the Australian people when it says that it can sign this deal and then change it after it has been signed. These provisions will be locked into law and will be with us indefinitely.
We know that this is part of the Liberal Party DNA. We know that, when it comes to corporations, they are hand in glove with the big end of town. We know they don't give diddly squat about the needs of people in regional communities, ordinary workers and people doing it tough. So it's no surprise that the Liberal Party would sign this deal and would be welcoming the opportunity to work with the Labor Party on it. But it's remarkable that we are less than a year out from an election with the Labor Party prepared to do a deal on this with the Liberals to sell out workers and to give more power to corporations at a time when people are saying: 'No. We've had enough. We've had a gutful. We are sick of a politics where corporations wield so much influence over our democracy that it's only the money that talks and people are locked out.' That's what this deal represents.
Bill Shorten says to trust him, that he'll walk away from the TPP—the bits he doesn't like—when he wins government. When you're in opposition and you're not being forced to sign it, if you're not going to stand up for the bits you don't like in this deal now, which is when we have to abolish the ISDS provisions—when we have to make sure that medicines aren't put out of reach of ordinary people and when we have to make sure that ordinary workers are being looked after—how on earth can we trust you to do it in government?
I say to people right around the country: we have consistently expressed concerns about the Trans-Pacific Partnership agreement. Of course, we support trade that's fair. We understand that trade with our neighbours has the capacity to influence and benefit all of us but it's got to be fair trade. It has got to be trade that is in the interests of the Australian community; not trade that does the bidding of big corporations. How on earth can you accept a deal that says to sovereign governments: 'You pass a law to protect public health, you pass a law to protect our environment and if a corporation doesn't like it we're going to give them the opportunity to take us to court. And if they win we're going to have to pay them compensation.' That's what this deal does. Why on earth would the Labor Party be supporting that?
We've given up on the Liberals. We know they're a lost cause, but here is your opportunity to stand up for people and not for corporations. Your big test is here today and it looks like you're going to squib it. It's a disgrace.
I am a supporter of measures that increase opportunities for trade and commerce between Australia and the rest of the world. As I noted in my first speech, my vision for our ongoing prosperity centres on our lucky proximity to and relationship with Asia. This led me to a career with entrepreneurial SMEs across Asia and selling products into Asia from Australia, which personally expanded my perspective and language skills.
The opportunities for permanent benefit from greater trade with our Asian neighbours is clear. In little more than a decade Asia is estimated to have a middle class of around three billion people—a 600 per cent increase in 20 years—whereas the middle class in Europe and the US combined will be 1.2 billion, which is just 40 per cent of that Asian amount. We have already seen dramatic examples of what deepening trade with Asia can bring to our economy and society: a 63 per cent year on year increase in Australian wine export to China, the growth of international education to be our third largest export industry and Chinese tourists doubling in the last five years to be our largest visitor market.
This is not just about China. Presently our two-way trade with South-East Asia exceeds that with China and opportunities of doing much more are strong. Our proximity to Asia and the inherent strengths of 'brand Australia' and perceptions there put us in a superb position. For a country rich in land and natural resources with a relatively small population, foreign investment is essential to our development. We must support more Australian companies and institutional investors to invest in Asian countries. Asia provides new markets for entrepreneurship and innovation in Australia, and particularly in my state of South Australia, about which I am passionate. This is the lens through which I view the bills now before us.
The Trans-Pacific Partnership agreement presents an opportunity to broaden our trade opportunities with 10 other Pacific rim countries, including six in the Asian region. It does this by providing new market access opportunities for Australian exporters of goods and services, as well as investors. I welcome the foreign and domestic benefits of free trade and specifically high-quality, open, rules-based architecture.
However, with regard to this agreement, there are several issues playing into my consideration. With regard to economic benefit, from a broad perspective, there are questions about how beneficial the FTAs that we have signed really are. Analysis of the Australia-United States Free Trade Agreement suggests overall trade flows between our countries did not increase as a result of the agreement. Trade diversion was greater than trade creation. Yet, at the time, projections of the benefits coming from that agreement were in the billions.
The Singapore free trade agreement has led from a trade surplus to a trade deficit, most recently of $2 billion. The Thailand free trade agreement has moved from a trade balance to a trade deficit of $11.6 billion. The ASEAN, Malaysia, Chile, Korea and Japan free trade agreements have had mixed results—some positive. On balance, Australia's trade deficit with these countries has marginally deteriorated since the signing of these FTAs. It has done particularly poorly with regard to the Australia-US Free Trade Agreement.
That said, with regard to this multilateral agreement before us, the absence of detailed, independent modelling on the economic benefits for Australia is incredibly concerning. Instead, the government have been relying on studies that assess the TPP in its entirety. These studies are then quoted by Australian industries, noting that:
The revised "Comprehensive and Progressive Trans-Pacific Partnership" will add US$12 billion per annum to Australia's national income in 2030, or 0.46% of forecast income, an increase described by the report's authors as "relatively modest". It is also forecast to increase overall foreign investment into Australia by just US$6 billion.
Another report noted that the new modelling shows that Australian agriculture stands to make zero gains in exports under the TPP-11. The agreement was said to boost exports by $30 US billion, without saying that it would also boost imports by exactly the same amount. The Productivity Commission's outgoing chair, Peter Harris, noted with regard to the benefits of trade agreements, that:
… no one ever mentions the additional imports that arise from them, despite the benefits of cheaper imported goods for Australian consumers and business.
On wages, the report indicated that wages would, after a decade, grow by the small amount of only 0.46 per cent per year or around $10 a year by 2030.
The Australian government did not let its own Productivity Commission examine the TPP deal. For something of such significance, this seems absolutely essential to providing our agreement to the deal. There is the Victorian government's high-level analysis undertaken by Grant Thornton focusing on certain industries for Victoria. Key concerns in that are that the gains in Australia's access to export markets for goods are modest and largely limited to agricultural exports, phased in over long periods. These gains will be outweighed, to some extent, by the altered competitive situation in some markets due to other TPP-11 countries exporting the same products as Australia, which will affect the current gains we have in current free trade agreements with some of the countries in the TPP-11. The above concern about independent modelling and then the likelihood of actual overall positive outcomes from Australia's involvement in the TPP-11 agreement are extremely telling in my consideration of this legislation which is before me.
There are also significant issues around the ISDS or investor-state dispute settlement provisions which grant corporations powers to sue government for changes of policy. We should look with great scepticism upon any measures that allow companies to override the democratic rule of sovereign governments. Here in Australia we have had recent experience with the realities of ISDS in free trade agreements. In 2011, cigarette company Philip Morris used the 1993 Australia-Hong Kong Free Trade Agreement to sue the Australian government over its plain-packaging legislation. We ultimately won the case, but it cost more than $39 million in legal fees and took six years to resolve. And all of this was because the government took action to address the scourge of cigarette use in our community.
As of November 2017, there were 819 known cases in which corporations were suing governments through ISDS provisions for damages. Australia and 15 other Asian countries alone have been subject to US$31 billion in claims, and there are currently three known threats of ISDS cases against the Australian government. Of particular concern to Australia should be the large number of ISDS cases related to mining, which were 40 per cent of those launched in 2016. International law firm Ashurst emailed their clients last year after the government announced its Australian domestic gas security mechanism, alerting them to the potential opportunities of using ISDS to challenge the government's policy, stating that:
Recent changes to Australian gas export and taxation policy serve as reminders that the protections afforded to investors under investment treaties are not only relevant to investors in emerging markets. Investment treaties are also relevant to investors in modern and developed jurisdictions …
that is, Australia. The implication from the email is clear—'If you don't like what the Australian government is doing, why not consider using ISDS provisions to stop them?'
On the other hand, ISDS clauses provide protection for Australian companies investing abroad and can help to improve investor confidence. As with many things we consider here, there are trade-offs and no easy answer. They also are nothing new. We already have ISDS provisions in six existing free trade agreements. However, that is not to say that we should be proliferating them further. On balance, I see the risks associated with ISDS as outweighing the rewards. Other countries have reached the same conclusion. The US, the EU, Brazil, Egypt, Indonesia, India and New Zealand have all turned their backs on ISDS, either refusing to ratify agreements that include ISDS provisions or renegotiating arrangements to remove them.
Former Liberal Prime Minister John Howard was also not a fan. He stopped ISDS from being included in the Australia-United States Free Trade Agreement. In this parliament, we have already heard a range of eloquent arguments on the issue. I note that the ALP has put forward a second reading amendment calling on the government to remove ISDS provisions from existing trade agreements. However, this does not fundamentally address the issue of the bills before us here today—and that is what should be required.
While I will support the amendment, there should be support for other amendments that would require the government to exempt Australia from the ISDS provisions of this agreement before the enabling legislation commences. I have concerns around the provisions that waive labour market testing for contractual service suppliers. Again, there is a lack of independent analysis of the potential impacts on the Australian labour market of the removal of labour market testing for temporary migrant workers from TPP-11 countries.
The joint standing committee report on the TPP had comments that more than 435 occupations could be covered by the term 'contractual service supplier', including electricians, plumbers, carpenters and nurses; yet Minister Ciobo noted that the waiving of labour market testing does not apply to unskilled or low-skilled workers. Reports on the temporary skilled migration program of 2017-18 showed three-quarters of visas were granted to managers and professionals and 21 per cent to trade workers. While that does sound promising on one level, the impact of the TPP going forward in these areas is not clear. It could lead to unforeseen impacts on our domestic workforce that must be further investigated. Independent assessment is required. Have other countries provided Australia with such generous reciprocal visa rights? There is also concern regarding the treatment of these workers, due to them being tied to one employer and subject to deportation if they lose their job.
With these factors in mind—and weighing up the above points regarding historical and projected economic benefits, ISDS provisions, and provisions that waive market labour testing for contractual service suppliers—I have significant issues with passing this bill. I will be supporting amendments put forward by other senators that prevent this legislation from commencing until agreement is reached to exempt Australia from ISDS provisions and to reinstate labour market testing in relation to contractual service suppliers.
I rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill, and associate myself with the comments made by my Greens colleagues. How is it that, time and time again, we come to this place and see bill after bill that the people of Australia never asked for and do not want? The sway that vested interests have on this government is truly horrifying; and I am even more horrified that this piece of legislation comes here with bipartisan support.
The TPP-11 will jeopardise our environment and it will erode the rights of Australian workers. The Trans-Pacific Partnership is all about putting corporations above people. That's the entire point of this legislation. It is devised in the boardrooms of corporations which have an insatiable appetite for profit at any cost. This is a trade agreement that gives corporations the power to sue governments for raising wages, for protecting the environment and for reducing the cost of life-saving medicine. Does this sound like a fair trade deal to you? Is this free trade? Of course it's not. And what is so bone chilling about this is how it has come about—the complete lack of transparency. This is a deal that has been stitched up behind closed doors in the boardrooms of big corporations. What about the people? Don't they have a right to know what you're signing them up to? We're told to just shut up and accept that governments and oppositions and their mates know what is best for everyone. Well, we are truly fed up with this game of mates. This is a trade deal written by big business for big business.
Unions, in particular, have come out strongly against this deal, and good on them. The Australian Council of Trade Unions has said:
The TPP puts globalisation before Australian workers and threatens the fundamentals of our democracy. By destroying thousands of Australian jobs and driving down wages we believe the TPP will lead to higher levels of inequality.
They go on to say:
The TPP is a toxic combination of globalization and more power to multinationals ahead of democracy for Australian workers.
Australia must turn away from trade that puts profit before people.
And they conclude:
Trade agreements should not undermine the ability of Governments to regulate in the public interest, particularly in regard to essential services like health, education, social services, water and energy.
Public Services International, which represents public sector workers around the world, note in their submission to the inquiry into the TPP-11:
… it prioritises the interests of private corporations over those of communities. The TPP-11 is not democratic; the negotiations were held in secret to the exclusion of communities and their elected civil society representatives (such as unions), hampers government regulation, and will allow corporations to sue democratically elected governments. The TPP-11, through these negative impacts, will hamper development and will hamper the regions capacity to meet the UN's Sustainable Development Goals.
… … …
Despite repeated claims that the TPP-11 does not affect public services it is clear that the intent of the TPP-11 … is to expand market access and liberalise trade in services, the key policy ingredients required to advance privatisation.
Australian Manufacturing Workers' Union national secretary Paul Bastian, said the TPP would be a 'disaster for Australian workers'. He said:
It beggars belief that the Labor caucus would sign off on ratifying the TPP given it's against the party's own policy.
I am particularly concerned about investor-state dispute settlement, or ISDS. The ISDS allows foreign companies and investors to sue the Australian government for changes in the law that damage their investment, not in our courts or under our law or even in their courts or under their law but in unaccountable international tribunals. This is an obscene inclusion. This isn't the first ISDS we have signed up to, but it is potentially the biggest one we're about to sign on to. Pat Ranald, a research associate of the University of Sydney, has highlighted some examples of current ISDS examples. For example:
Swiss Pharmaceutical company Novartis is suing the Colombian government over the plans to reduce prices on a patented treatment for leukaemia. The US firm Bilcon won its claim against the Canadian government for US$101 million after a provincial government refused to approve a quarry in an ecologically sensitive area. The French company Veolia is claiming compensation from the Egyptian government for a rise in the minimum wage.
Even if a government wins a case, defending it can take years and cost millions. The US tobacco firm Philip Morris shifted some assets to Hong Kong and used ISDS in an Australia-Hong Kong investment agreement to claim billions in compensation for Australia's plain packaging law. It took more than four years and reportedly cost A$50 million in legal fees for the tribunal to decide that Philip Morris was not a Hong Kong company.
This is a terrifying future.
I must say I don't expect any better from the Liberal and National parties. They are so morally bankrupt that for them everything has a price tag if they think that it can make a buck for their mates in big business. But I am so very deeply disappointed in the Labor Party today, the party that talks a big game about being a friend of the worker except, it seems, when its corporate mates come knocking on the door. Labor and Bill Shorten talk big but, when it comes down to a choice between workers and their deep-pocketed corporate mates, we know who they will choose. We know who will win every single time. We can stop this terrible trade deal today. It can be dead in the water today if the Labor Party develops a spine to do the right thing. I do recognise that there are members of the Labor Party who are deeply opposed to this and have been lobbying hard for the party not to end up here, but here we are with the bill before us about to become law. The time is here and the time is now. Once you let this genie out of the bottle, it ain't going back in. Bill Shorten's idea that you can sign off—
Thank you, Madam Deputy President. Opposition leader Bill Shorten's idea that you can sign off on the full agreement today and then put blind faith in your ability to renegotiate and remove ISDS clauses as well as introduce labour market testing is pretty ridiculous. That's not how it works, and, if that is how you think negotiations happen, then God help us all. If you want to change the TPP, now is the time to do it. The Greens oppose the Trans-Pacific Partnership because it is a dud deal. It is a rotten deal. Time and time again, we get sold out by the big parties with empty promises that rarely, if ever, come to fruition. 'Trust us,' they say. Every time, we are promised all the jobs and the wealth in the world, and, inevitably, the big end of town gets the benefits and the people bear the costs. We know we are being sold a lemon by this government.
Anis Chowdhury, former director of the UN Economic and Social Commission for Asia and the Pacific, notes that most TPP partner countries already have trade agreements with one another. Thus, additional trade from the Trans-Pacific Partnership agreement will be modest. Even the World Bank admits that the Trans-Pacific Partnership would boost Australia's economy by just 0.7 per cent by the year 2030 and at a real cost. The Tufts University report shows that Australia is likely to lose some 39,000 jobs in energy products, primary commodities, manufacturing and services industries. We could stop this today. We could say, 'No ISDS.' We could say no to putting the rights of corporations above people. All we need is the Labor Party to stop their reckless devotion to neoliberalism. You will very likely be the next government in this place, but, if you pass this legislation today, you will prove to millions of Australians who don't want the TPP forced down their throats that you are not listening, that you don't care and that you will always put your big business mates first.
The Trans-Pacific Partnership is a fraud. It is all about benefiting big multinational corporations and the wealthy one per cent. Thousands of jobs will be destroyed only to benefit the big end of town, yet we are told that we must support it for the greater good. What a sick joke! It is a sellout of Australian workers, it is a sellout of our precious environment and it is a sellout of our public services. I stand with trade unions, I stand with the community, and I stand with activists against this toxic deal. The real question is: why isn't the Labor Party? I'm deeply appalled that the Labor Party is joining with the Liberals when they know what this bill will do. The Australian people are sick of the two big parties selling them out time and time again in secret deals like this. Once the Liberals and Labor have signed and sealed this deal, it will be incredibly difficult to get out of. We know that big business will want more and more and more. If you can't stand up to them today, how will you do it tomorrow? Let's act to save our universal health care, our environment, our climate and our workers' rights. Let's stop this today.
This week could be a very dark week for many struggling families in Australia, because it looks like they are about to be sold out once again by the people they voted for to represent them. It looks like we will soon be witnessing one of the greatest betrayals of the Australian worker that this country has ever seen. It looks like the coalition and Labor have finally found some common ground in their shared love of the deeply flawed Trans-Pacific Partnership. The coalition has always been quick to put the interests of their Nationals mates ahead of Australian workers, but it is utterly shameful to see that the Labor Party is about to roll over and wave through this piecemeal trade deal. It seems that Labor's hypocrisy knows no bounds. They have betrayed the trust of their voters and the workers they so often claim to champion. They have happily taken union money and now they are laughing all the way to the bank as they sell them out. Honestly, after Labor politicians take their places in parliament, they treat rank-and-file union members like complete mugs. Let me quote what Senator Doug Cameron said on Wednesday, 26 September 2018:
Well I have had concerns about these so called free trade agreements for a number of years. They are not really free trade agreements. Technically they are bilateral preferential trade agreements, so people trade off bits and pieces and it's not true free trade and I have always been concerned that workers need to be considered, the social impact needs to be considered as well as the economic impact.
If you listen to Senator Doug Cameron now, you won't hear those words. The Labor Party are going against the core principles that they claim to stand for. I quote from the ALP National Platform:
Labor will oppose low-quality piecemeal trade agreements in favour of fair and transparent multilateral agreements. When multilateral trade negotiations are not making satisfactory progress, Labor will consider high-quality regional or bilateral trade agreements that are in Australia's national interest and that support the multilateral trading system. Trade agreements must be consistent with Australia's social and economic values, be based on widespread consultation, provide for appropriate minimum and enforceable labour and environmental standards, take account of social and economic impacts and allow sovereign governments to make decisions and implement policies in the interests of their citizens.
That doesn't sound anything like what Labor are doing in this parliament if they're going to support the TPP. I will say it again: the Labor Party are voting against their core principles. When you look at a party that does not stand by its core principles, what you see is a party of no principle. No Labor Party of my parents' generation would have allowed this trade deal to pass, but I suppose that should come as no surprise, because Bill Shorten's Labor Party is not the Labor Party we used to know.
I suppose that should come as no surprise, because the Labor Party that the opposition leader, Bill Shorten, is head of is not the Labor Party we used to know. Labor's proposal to fix this thorn in their side is a complete stunt and absolute farce. Even if we were to pass it here in the Senate, the coalition will block it in the lower house. It is a slap in the face of their supporters. If the TPP will cause Australians to lose their jobs then don't vote for it. Instead of fighting for the workers of Australia, the Labor Party is rolling over for opposition leader Mr Shorten's billionaire mates. This is despite the fact that he knows that the TPP will have a devastating impact on Australian jobs and workers. The Labor Party knows that the TPP will allow virtually unlimited access for workers from Canada, Mexico, Chile, Japan, Malaysia and Vietnam to flood the Australian job market.
These labour market concessions to foreign workers will be on top of the 5,000 workers from China we agreed to as part of the China free trade deal and the 5,000 workers that will come as a result of the Indonesian free trade deal, which Labor will probably wave through as well. On top of this we have skilled labour and holiday visa-holders who are able to work, as well as foreign students, all placing pressure on the Australian job market.
The Labor Party knows that this agreement will allow employers to overlook local workers. So if you are one of the millions of Australians who works, or would like to work, as a mechanic, a construction worker, a chef, a nurse, an electrician, a carpenter, a bricklayer or a tiler—to name just a few occupations—you should know that the Labor Party is about to sell you out. We know that this problem with the TPP undercutting the jobs market will be even worse in rural and regional areas, where youth unemployment is through the roof. But it seems that the major political parties in this place couldn't care less about these people, because they already have their jobs in this place and they seem to think that keeping their jobs in this place means doing the bidding of their multinational mates. We know that this trade deal will hurt Australian workers and Australian jobs—still Labor waves the white flag. If I were in the Labor Party, I would be absolutely ashamed. I am certain that, behind closed doors, many Labor politicians will be hanging their heads in shame.
This brings me to the coalition's part in this debacle. In their support of the TPP, the very worst aspects of the coalition are brought to light. They don't care about the negative impact this will have on Australian workers or Australian sovereignty. They know that this trade deal will open up the Australian government to legal challenges from foreign multinationals and will make it even harder than it is today to hold them to account. Let me take you back to 1998, when I spoke in the parliament about the multilateral agreement on investment which they were going to sign. That was about multinational companies actually being able to sue us for loss of profits. No-one knew about it. It was never debated on the floor of the parliament—until I spoke to a former member of the Canadian parliament who said we have every right to discuss this. He said it was discussed on the floor of the parliament in America and also in Canada. But no, the coalition kept it as a secret deal—until the other politicians found out what was going on, after I exposed it for what it was. And then it was actually shut down. That is the deal that is in this TPP. That has happened in America. A petroleum company sued for loss of profits. Off the top of my head, it was for in excess of $300 million. Are we are signing up to that? These are taxpayers' dollars.
Let me go to the free trade agreement with America that was signed here in this parliament in 2004, and was supported by the Labor Party as well. It came into effect in 2005. Under that free trade agreement, who got rid of their tariffs from day one? All Australia's tariffs were gone from day one, yet America kept their tariffs on for between 11 and 18 years on wool, horticultural products, steel, wine, beef—you name it. The coalition didn't do the deal for our country; they did the deal for the other countries. America still put quotas on the system; they kept their tariffs on. The Chinese free trade agreement is another one. What have you done? You have signed away our tariffs here, but China still has its tariffs on for four years—and they are going to look at the negotiations again after four years.
I don't see the politicians in this place working for the people of this country; I see them selling us out. And it is quite evident in this agreement. They are going to put ISDS into this agreement. It is nothing short of a multilateral agreement on investment, to allow multilateral companies to come in here and start controlling us and having their say. On 10 September 2018, Anthony Albanese said—
Mr Anthony Albanese said: 'The LNP should explain why they believe free trade agreements should include investor-state dispute settlement provisions, which undermine Australia's national sovereignty and the right of this parliament to determine the way that health policy and other policies operate here in this nation.' That is what Mr Albanese said. I cannot believe the Labor Party are determined to support this. They say: 'Let's just sign it. We'll get it through the parliament and we'll deal with it later. We can renegotiate it and do something.' I understand that the New Zealand Prime Minister didn't do that. She actually dealt with it now. She said, 'No, that's not good for our country.' She is prepared to deal with it. Besides, I don't trust any one of them to actually change it once it's passed here in this parliament. I don't believe that they're prepared to stand up for the Australian workers or against this ISDS that's in the agreement.
I will go to some of the comments from some of the unions. They're not supportive of the Labor Party wanting to sign this, I can tell you. This is the statement from the former ACTU president, and current Labor MP, Ms Ged Kearney:
The Turnbull Government's blind pursuit of the troubled Trans Pacific Partnership agreement will sacrifice workers and Australia's sovereignty for the profits of multinational corporations.
Steve Ciobo has said that the deal is "18 free trade agreements". The Australian people haven't seen the text of one agreement, let alone 18. This process is a mess and makes a mockery of our democratic principles.
Ms Cathy O'Toole, another Labor member in the lower house, said:
The current LNP TPP waives labour market testing and includes clauses that allow foreign companies to sue the Australian government. These clauses are known as ISDS provisions. To waive labour market testing does not put Australian workers first and, quite frankly, is absolutely nonsensical.
That's another Labor quote.
Let's go to the unions. The ACTU's president, Michele O'Neil, said:
We should have a trade agenda that puts working people and fairness at its core. But the Turnbull Government has only ever looked after big business in its trade negotiations.
Well, Labor is right beside you this time.
The TPP is a bad deal that hands more power to big business. It's bad for working people, it's bad for people who rely on affordable medicine, and it's bad for our sovereignty. The only winners are corporations.
We urge parliament to oppose unfettered corporate greed by voting against this deal, and to adopt a trade agenda that will deliver real benefits for working people.
… are disappointed by the ALP's decision to vote for the TPP enabling legislation.
This one here is a real beauty. I love this one. The ETU's national secretary, Allen Hicks, said that the ALP 'blindly support the deeply flawed' TPP. He said:
This dodgy deal is opposed by the majority of the Senate crossbench—
he got that right—
meaning it can only pass through the parliament if Labor gives it the green light … The opposition not only has an unprecedented ability to demand a better deal, failing to do so will see them forced to accept responsibility for the significant failings of this agreement. The TPP is all about looking after the big end of town, maximising profits for multinational corporations at the expense of what is best for the Australian public.
There are a couple more quotes here, but it's not just the Labor Party. These bills have been put up by the coalition and supported by the Nationals.
The Nationals claim to support Australian rural communities, but once again we have these bills that will rip the guts out from the jobs market and devastate many rural and regional communities, and the Nationals are waving them through. The Nationals know this trade deal will kill jobs in rural and regional Australia. The Nationals know that the TPP-11 puts the interests of multinational businesses ahead of working Australians, yet they still wave it through. As for the Nationals—wow!—what have they done? Over the years since my time in parliament, I've seen the destruction of the dairy industry. It's still happening. In Queensland, I've seen that we've gone from 1,500 dairy farms down to 385. We are not supporting them. We can't even give them a decent farm-gate price for their milk. They are not even working to actually make that come about.
I have seen the sugar industry on its knees. Who got the code of conduct for them? It was I and One Nation in this parliament. We did that to give them a reprieve from being shut down by a multinational company that was waved through to take over the mills in North Queensland, and it's still happening. What about the citrus growers? Many years ago, the trees burnt, bringing in free trade from overseas. What about the pork industry? That was another one that died. 'Oh, yes, a free trade agreement—absolutely wonderful. Let's take off the tariffs in this country and then destroy our own industries here'! I love hearing the government side. The government said, 'But it's going to bring in $15 billion by 2030.' I tell you what, the way we're going, we won't have any industries left here at all, because we will have either sold them to foreign interests or destroyed them, like the sugar industry and the dairy industry. All of these farming sectors are going under. It's like 'get big or get out'.
No longer do we have a way of life in this country where people can have a farm and know that they can look after their families. That's why the average farmer is 54 years of age and telling their kids to get off the land because there's no future for them. That's where we're headed, and that's all because of government policies. The National Party's supposed to be standing up and fighting for these people? I don't damn well see it. I wouldn't worry about how we're going to be in 2030; the farmers are shutting down now because they can't irrigate anymore, due to the cost of electricity. They are being absolutely devastated. I don't see any help for them whatsoever. You're talking about free trade agreements. Once our farming sector is gone, open up the floodgates, because we'll have all this product coming into Australia. A lot of it is absolutely rubbish. It's grown in human faeces and sewage. We talk about biosecurity in this country, where we force our farmers to have a decent standard of food production, yet we don't know what we're importing into Australia or what we are eating, and we don't protect our own farming sector. Biosecurity is going to be the next big problem here.
The unions are screaming at the Labor Party for actually going ahead and passing the TPP agreement, because they know it's not good for the workers. They are so right. The Labor Party, once they get in here and get their union fees and money from hardworking Australians—who can ill afford to pay the enormous costs of union fees on a weekly basis—come into this place and use the same old rhetoric. They think they're standing up for the workers of this nation; I don't see that whatsoever. These free trade agreements that they'll be passing here will lead to the destruction of hard workers. One Nation will keep fighting for them. I will ensure that there is a place for Australian workers. What have you done about the 457 visa holders coming into this nation? They were at their highest levels under the Labor Party, up to 130,000. All the coalition is doing is moving the goalposts around. The maritime engineers union, who are just about on their knees, can't get jobs for their own Australian workers, and are about to close down their training schemes in Newcastle and Fremantle. You can't support them, because we've got that many foreign workers on the ships here in Australia. You've got a lot to answer for.
The people don't know what to do. They put their trust into major political parties that they think are out there to look after them. If you pass this and you think that you're going to change it, you're lying to the Australian people, because you won't change it. You're going to be farcical and say, 'We're going to change it; we're going to put the amendments through,' but you know damn well your amendments will not get up in the lower house. Then you'll say, 'Well, we tried, but we didn't get it through.' Don't put it that way. Vote against it here on the floor of parliament. Show the Australian people, your supporters, the ones who voted for you and who trust and believe in you to make the right decisions for them. Don't support the TPP until you get it right. Make deals that are right for the Australian people first and foremost—not foreigners and not other people around the world—to ensure they have jobs and a decent standard of living. Look after your own people here, because they are screaming out for someone to stand up and speak for them.
Sitting suspended from 18: 29 to 19 :30
I rise today to briefly speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and a related bill and on the issues which need to be addressed before the TPP comes into force. As my colleague and I mentioned previously in this chamber, the Centre Alliance is not opposed to free trade agreements; however, we cannot support this implementation of the TPP. There are legitimate interests which need to be balanced against free trade. More importantly the sovereignty and integrity of our democracy cannot be delegated lightly. Chapter 9 of the TPP agreement, which deals with investor-state disputes, is of particular concern. I cannot support legislation that allows foreign investors to affect the ability of the Australian government to regulate on matters of public interest. If the agreement proceeds in its current form, it is only a matter of time before we will be liable for actions brought through ISDS provisions. We need only quickly look back to the Philip Morris case for an example of how a trade agreement can affect Australia. Even though the Philip Morris case was dismissed at a preliminary stage, the process was time-consuming and very costly. More importantly, this case arose from plain-packaging laws, which were so overwhelmingly supported by the public.
Whilst this may well have been the first case brought against Australia due to a trade agreement—in this instance due to an obscure Hong Kong-Australia investment treaty—we shouldn't get too comfortable in believing that, because this case was dismissed, the chances of a successful ISDS case against Australia are low. We need to assume and be prepared that, if the ISDS provisions are there, they will be used. Despite statements from TPP advocates that there are many safeguards in TPP-11, the fact that foreign investors can sue for compensation in international tribunals and totally bypass our own courts shows how biased against Australia this treaty would be.
Worldwide there are currently 855 known treaty based investor-state arbitrations involving public interest laws. Many of these are health related. During the joint standing committee's inquiry, Dr Deborah Gleeson of the Public Health Association of Australia stated:
We know that there is potential for corporations to use the threat of an investor-state dispute settlement case to deter governments from going down the path of introducing strong new public health measures, and that is a major concern.
One such potential issue is alcohol labelling. TPP-12 and TPP-11 both have provisions that any alcohol label from another country would not have to be changed if Australia implemented a requirement for health labelling. Instead the supplier would need only a supplementary label, which would not have the same prominence and, as some health experts have stated, could well deter governments from even considering implementing health warnings. Investment chapter article 9.16 contains five words—'otherwise consistent with this chapter'—which undermine what appears to be a safeguard and potentially give grounds for a dispute in a tribunal. Investment chapter annex 9-B, article 3(b), covering non-discriminatory regulatory actions, has the four-word get-out clause 'except in rare circumstances', which provides an incredible loophole for corporations to argue that their circumstances are indeed rare. These provisions have been used elsewhere, so it is highly likely that they will be used here in the future.
Another concern with the TPP is the provisions waiving labour market testing for contractual service suppliers. I simply could not support something that—in the midst of high rates of unemployment and low wages in Australia—would see jobs being filled by workers from overseas before first being offered to Australians. Labour market testing must occur in relation to contractual service suppliers entering or proposing to enter Australia, and these issues must be addressed before the TPP comes into force. We cannot rely on a promise that things will be fixed by the Labor Party after the fact. They must be addressed today.
Before I end this short contribution, I must make mention of the many—somewhat offending—suspended items in TPP-11, particularly those relating to patents. Why suspend? Why not remove them? Suspension means they can be re-enabled in the future with minimal effort and minimal consultation, something the overwhelming majority of us would not want to see happen.
To Labor, we will be supporting your amendment even though it means very little. It is obviously there to ease your conscience. If you truly care about the provisions you have flagged, now is the best opportunity to make them happen. Like us, oppose the bill until such time as these sensible changes are implemented.
I rise to speak tonight on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill. It's kind of like a parallel universe, because here we are debating a deal that has already been signed and that already has appalling provisions in it, including these investor-state dispute relation clauses, or ISDS clauses, as they are known. We have already seen quite a bit of discussion about them in the chamber and for good reason: it's effectively a corporate takeover of democracy.
ISDS provisions will allow foreign governments whose profits are restricted by any laws that this parliament might then pass—whether those laws increase health outcomes for the community, whether they protect the natural environment or whether they guarantee cheaper medicine—any of those decisions that might affect the profit bottom line of foreign companies will then be able to be challenged by those companies. The sovereignty of our very parliament will be at risk from these ISDS clauses and we will see foreign companies and multinational companies with a greater ability to control the laws that this parliament makes than we will have ourselves. You could not find a more ludicrous example of law-making. You could not find a clearer example of a corporate takeover of democracy.
It's repulsive, and yet both sides of parliament have taken this hook, line and sinker. They are both completely fine to continue on with these ISDS provisions. Labor have previously made some remarks that, 'Jeez, we are not that keen on these ISDS clauses.' Well, where are you now? It is very, very disappointing to see that you, most of all, have rolled over on this. I don't buy it. I don't think anybody else buys that Mr Bill Shorten thinks he can unilaterally fix this. It is too late. The deal has already been signed. We are discussing this bill tonight. It will be too late to fix. He is not God. He cannot rewrite stuff just because he says he wants to. It doesn't work that way.
It is a great disappointment to us that Labor have backflipped on this. They are letting down Australian workers, who will be adversely affected by this TPP deal. They are letting down the natural environment, because there will be a chilling effect on bringing in any new laws that in any way lift our environmental standards and protect this very planet that sustains all life. And it will have a chilling effect on any other regulation that might restrict corporate profits. It's so offensive that we are now letting foreign multinational companies dictate our public policy. That is really not what the Australian people expect of us.
I want to talk about the fact that other countries have backed away from including these ISDS provisions for precisely the reasons that I've just outlined, and yet Australia somehow does not have the wisdom to do that, or at least the major parties don't have the wisdom to do that. People know, and it was even mentioned by the government earlier, that we have already been sued using these clauses under other free trade agreements. The Philip Morris case is an excellent example. They were suing us over the plain packaging laws that this country wanted to bring in. The only reason that we didn't lose that case was due to a jurisdictional quirk. It turns out they changed where the headquarters where, and suddenly the relevant free trade agreement didn't apply anymore. The Australian government got off on a technicality. It doesn't change the fact we were being sued by a cigarette company for trying to restrict them advertising to kill more customers, and we would have lost were it not for some quirk of them changing where their headquarters were based.
These provisions are dangerous, and that's exactly why the European Court of Justice has found that ISDS is 'fundamentally incompatible with national sovereignty'—which is exactly why the EU have said that they're not going to include these sorts of clauses in their free trade agreements. I don't know why the EU gets it and Australia doesn't. What's so confusing about the fact that we should be in charge of the laws that we make for the good of our citizens, not foreign multinationals and their profit bottom lines? I don't find it confusing at all. And I am a lawyer. I don't have great expertise in this area, but it's pretty clear to me that that is a dodgy deal for Australians.
I talked a little bit about labour market testing. My concern is that the TPP-11 will simply override any sort of local labour market testing that we might otherwise like to have. I think this deal really sells out Australian workers, and I share the disappointment of the union movement that the Labor Party has completely rolled over, once again—just folded to this government in this bizarre, small-target strategy that they somehow think will win them support at the election. Well, I've got a newsflash for you: the Australian people want conviction. They don't want this small-target strategy that signs up to whatever neoliberal agenda the government is trotting out from its dinosaur backbench; they actually want some vision and some policies that improve people's lives and that protect the environment. But it's up to you. You're meant to be the opposition, so maybe you should start opposing something sometimes.
The other thing I want to mention tonight in just a brief contribution is the effect on agriculture. I've just been out to Felton Valley in the beautiful, rich Darling Downs region of my state of Queensland, and this issue of the free trade agreement came up. These were mostly grain exporters that I was speaking with. They were concerned about the impacts of the free trade agreement, and they were concerned that their bottom lines, which are already being hit hard, might be further restricted—and they've got very good cause for that concern. I want to mention some statistics from some modelling commissioned by the folk that the government would perhaps normally listen to, including the Minerals Council, the Business Council and the Australian Chamber of Commerce and Industry—some of the larger businesses that this government might normally take its marching orders from. That modelling has found that, in fact, agriculture stands to make zero gains in exports under the TPP-11. Our grain exports would not change at all, and all other agricultural exports could actually decline. How is this meant to be a good deal for our farmers? What are the National Party doing about that? Not much, by the sound of it.
And manufacturing will shrink by two per cent under the TPP-11. Any increased exports would be completely offset by increased imports. In fact, there will be less than half a per cent of GDP added in a decade's time as a result of this deal. That's about 1½ days worth of income for the Australian economy after a decade. And wages, after a decade, would grow by only a miniscule amount—0.46 per cent, or about $10 a year in 2030. I don't know who's benefiting from this deal, but it's certainly not Australian workers, it's not agriculture and it's not the environment. And it's not the sovereignty of this parliament to make decisions about the future of our country and our citizens. So why did the Labor Party agree to just follow on the coat-tails of the government on this one? And why do they think people will buy the lie that they can fix it after it's already been signed? How thick do they think we are?
This is a dodgy deal, and I stand by the comments of our spokesperson on this issue, Senator Sarah Hanson-Young, who spoke in a very impassioned way on this topic earlier. It's a dodgy deal. It benefits no-one except foreign corporations and big business—the very same groups of folk that make generous donations to both major parties, and also to the National Party. One wonders whether that's why we're in this position. This is a deal that benefits big business. Big business then goes on to contribute generously to the re-election coffers of the other political parties in this joint and—hey, presto!—they're all happy; everyone wins except you, dear public.
I rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill. Although there may be benefits for Australia and Australian produce in the long term, there will definitely be issues with the introduction of the TPP.
Lower tariffs for Australian exports enable our products to become cheaper and more competitive in overseas markets. We are competing with the United States in the Japanese market with our beef, for example. Japan is Australia's largest export market for beef, accounting for one-third of all export sales generally. Although we may get cheaper products from overseas, we must always be mindful when importing any agricultural produce from other countries to ensure the strictest of our biosecurity rules are in place to protect the unique Australian environment. We are proud that Australia's produce and agricultural products are clean and free of disease. This remains the major selling point for our agricultural products in overseas markets.
As an example, under the Japan-Australia Economic Partnership Agreement, JAEPA, Australia will continue to face high tariffs and limited quotas on Japanese-sensitive products. Under JAEPA, dairy products face ad valorem tariffs ranging up to 40 per cent and further specific tariffs. Beef tariffs, which are significantly reduced under JAEPA, could still be as high as 23.5 per cent after 15 years, down from 38.5 per cent. Other tariffs are still applied on wheat, barley, rice and sugar, and a range of tariffs also remain on other Australian interests in horticulture and seafood. My question, therefore, is: how could the TPP bring down tariffs for our producers and is it actually worthwhile?
I am further concerned about job losses where employers would be able to hire temporary migrants from six additional partner countries without first advertising these jobs to Australian workers. This is what the Labor and Liberal parties are supporting. TPP-11 will allow temporary workers from Canada, Chile, Japan, Malaysia, Mexico and Vietnam to work in Australia. These workers will be tied to one employer and be more vulnerable because they can be deported if these lose their jobs. We repeatedly witness exploitation of temporary migrant workers—in particular, those from non-English-speaking countries.
Other major issues include the investor-state dispute settlement—or ISDS—clauses. In the TPP-11 they'll allow foreign investors to sue the Australian government if they incur a loss of profits due to changes in domestic laws, such as labour regulations. Recent ISDS cases included cases against health, the environment and other public interest legislation. On public health, the Swiss pharmaceutical company Novartis sued the Colombian government over plans to reduce the price of a patented medicine to treat leukaemia. On workers' wages, a French company, Veolia, is suing the Egyptian government over a contract dispute in which they are claiming compensation for a rise in the minimum wage. On privatisation, Mexican transport company ADO has threatened Portugal with a 42 million euro ISDS case after it cancelled plans to privatise part of Lisbon's public transport network. Although tobacco control regulations are excluded from the TPP-11, ISDS could be used by other foreign investors to sue the Australian government over health, environment, labour and other public interest laws.
I am also asking the government why they are so reluctant to accept the Productivity Commissioner's offer to perform an economic analysis of the TPP's effect. According to the CBA, a report released by the World Bank in January 2016 analysed the effects of the TPP and said that other members of the TPP stood to gain a lot more than Australia, stating that Vietnam's economy would be 10 per cent bigger by 2030, Malaysia's would be eight per cent bigger, New Zealand's would be three per cent bigger and Singapore's would be three per cent bigger. Australia's economy was forecast to grow a mere 0.7 per cent by the year 2030. This is a very dodgy deal and this is why One Nation will not be supporting this bill.
I rise to make a contribution to this debate on these particular bills, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. It's not the first time that I've spoken on the failures of the TPP or against the TPP. Given the danger that it poses to this country's sovereignty, the danger that it poses for our labour workforce and labour market, and the very real danger that it poses to our environment and our economy, we do not support this legislation.
I come from a background—it's now getting on for quite a while ago—of the environment movement, where we fought long and hard to get better environmental regulation in this country. But under this process you can kiss some of that good environmental legislation and regulation goodbye. We've just had the most severe warning that we've ever had about the impacts of climate change on this planet. We are basically cooking this planet. So, if Australia in the future actually brings in much more effective legislation to protect our planet and to deal with climate change, such as an emissions trading scheme, better emission controls or a carbon price—or even legislation on land clearing if that were going to hold up a development, for example—that may be of interest to one of those multinational corporations. We don't even actually need to be taken to court, because what will happen is there'll be a chilling effect on the regulatory process in this country: the regulators and the government of the day will be too scared to make regulation change because they may be taken to court through the ISDS processes.
What this legislation does, and what the TPP does, is hand over control not to consumers or to workers, because they lose out, but to multinationals. Unelected, faceless multinationals will be making decisions that affect every single one of us in this country. That will put a chill on regulation. It will put a chill on any actions this country wants to take around climate change. I know a number of my colleagues have mentioned this, but the EU is no longer supporting ISDS mechanisms. New Zealand has had the guts to do side letters so there's an agreement that they won't be affected by these ISDS provisions.
Oh, but it's okay; if Labor gets into government they're going to save us from it! Anybody who believes that they'll do that has rocks in their head, because they'll find they won't be able to do that. I'm not accusing them of not having the intent or of not wanting to do it, but why support this flawed legislation with those provisions not in there and with those ISDS provisions still standing? Why would you support the legislation and not fix it now? It is because they don't want to have a cigarette tissue's difference between themselves and the government on this particular issue; they don't have the guts to stand up for protection for our environment and for our medical and pharmaceutical processes here in this country. They'd rather not be seen to be any different from the government on this particular issue.
We continue to have very serious concerns around what those provisions will mean for our environment and also for our labour market testing and our labour market in this country. This TPP commits Australia to accepting unlimited numbers of temporary workers from Canada, Chile, Japan, Malaysia, Mexico and Vietnam. These workers will be spread across a wide range of professional, technical and skilled trades occupations. And it doesn't require that there be any labour market testing to establish whether there are local workers available first. The government are saying on the one hand, 'There are too many unemployed people in this country, and they need to get out there and find work, and we'll punish you if you don't,' but on the other hand they are saying: 'It's okay to bring in all these temporary workers without doing any labour market testing beforehand.' This weakens our domestic labour market and is more than likely leading to exploitation of temporary workers. That seems like a lose-lose to me. Migrant temporary workers will remain tied to one employer for the course of their time in Australia and face deportation if they lose their jobs for any reason. Australia has benefited greatly from the contribution of migrant temporary workers, and they perform a vital role, but we have a right to expect that migrant workers will not be brought to Australia to fill roles that unemployed Australians could fill, without even trying to see if that is a possibility—particularly if Australians who already have those skills and experience are living in the same area and looking and ready for work.
The Fair Work Ombudsman reported that temporary visa holders accounted for one in 10 complaints to the agency in 2015. These risks of exploitation are not hypothetical; they are happening right now. I have relatives who work in the building industry who tell me endless accounts of that very exploitation and the work that unions do to ensure temporary workers truly get the money they are due. Modelling since the US withdrew from the TPP negotiations is very thin on the ground, but modelling prior to their withdrawal shows a very thin increase of 0.6 per cent in Australia's GDP after 30 years. This represents growth of between zero and 0.1 per cent a year—somewhere between nothing and a rounding error.
A separate study of the TPP-12 by academics at Tufts University in the US found that job losses in Australia would total 39,000 over 10 years. According to September 2018 economic modelling commissioned by Australian big business—including the Minerals Council, the Business Council, the Food and Grocery Council, the Australian Industry Group, the National Farmers' Federation and others—Australia's agriculture stands to make zero gains in exports under TPP-11. As my colleagues Senator Waters and Senator Hanson-Young have pointed out, grain exports would not change at all under TPP-11, and all other agriculture could actually decline under TPP-11. So it's great for agriculture—not! Durable manufacturing will shrink in Australia by two per cent under TPP-11. Any increase in exports could be completely offset by an increase in imports. TPP-11 will add less than 0.5 per cent to GDP in a decade's time, or around 1½ days worth of income to the Australian economy. On wages, the report is brief, but it states that wages would only grow, after decades, by the minuscule amount of 0.46 per cent a year, or less than $10 a year, to 2030 when we already have an appallingly low growth rate in our wages in this country.
The economic benefits are not there, and we would basically have multinationals put in charge of this country. If we pass regulation they don't like, what we're saying to them is that it's okay to take us to the cleaners as a country, as a nation. As I was saying earlier, we just won't regulate for these extremely important issues—and that's given that this country actually had leadership from the two old parties on climate change where we would see real legislation being put in place. I know I'm making a huge assumption there, but I'm always optimistic that we will in fact achieve good climate policy in this country. Our workers lose out, our farmers lose out, our economy loses out, consumers lose out and the environment loses out. It seems to me that this is a dud, it's not worth supporting, it shouldn't be supported and it should be thrown out and not passed by this chamber. We will not be supporting this legislation.
I rise to speak in support of two bills, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, that will implement Australia's obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as the TPP-11 for short. It's a free-trade treaty involving 11 countries. The treaty was originally negotiated when it included America. When President Trump decided to withdraw, probably because he'd been listening to the Greens, it left 11 members: Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam, along with Australia. Despite America's withdrawal, the treaty is largely unchanged. The TPP-11 will enter into force 60 days after the date on which at least six, or 50 per cent of the number of signatories, ratify it. It has already been ratified by Japan, Mexico and Singapore. More are expected to ratify by the end of the year or close to it. It will soon take effect.
Many countries are aware of the benefits of free trade agreements. A number are already showing an interest in joining the TPP-11. Even China is thinking about it as a possible counter to increasing trade barriers with America. The TPP-11 is a step towards realising the long-term vision of a free trade area in the Asia-Pacific. It is absolutely in the interest of Australians for more countries to join and for Australia to ratify the agreement. Free trade is an unqualified good. There are no circumstances in which it is not. Restrictions on trade hurt both sides of the trade equation, sellers and buyers. In the end, trade occurs only when it's voluntary and mutually beneficial. Ideally, free trade would occur without agreements. Australia's barriers to free trade hurt only Australians.
Since the world seems to think there has to be an agreement between countries before something that benefits both of them is allowed to occur, free trade agreements are increasingly common. Bilateral free trade agreements are okay as far as they go—better than nothing, perhaps—but multilateral trade agreements are far superior. They establish a broader base of trade in which multiple countries are all operating by the same rules. Australia has existing free trade agreements with some of the TPP-11 parties, but they've not fully addressed the barriers and restrictions in those markets and they limit the extent to which our goods and services exports can expand.
In addition, Australia does not have FTAs with Canada or Mexico, and our exporters are disadvantaged due to existing FTAs between these countries and our competitors. Canada and Mexico in particular provide significant new opportunities, because Australia has underdeveloped economic relationships with both of these G20 economies. The TPP-11 presents an opportunity to address both these issues. Through the FTA with Japan, Australia has secured increased access for many products already, but it continues to face high tariffs on, and quota limited access to, Japan's sensitive products. In dairy, products face tariffs of up to 40 per cent. Beef tariffs, while reduced, are still quite high, at up to 23.5 per cent after 15 years. Wheat and barley face tariffs. Rice is subject to a big tariff. Sugar, similarly, faces a high levy. A range of tariffs also remain on other Australian interests in horticulture and seafood.
Australia has two existing FTAs with Malaysia, the ASEAN-Australia-New Zealand Free Trade Agreement and the Malaysia-Australia FTA. Nonetheless, Australia still faces tariffs and quota-limited access into Malaysia on beer, wine and other alcoholic beverages. Pork faces tariffs of 25 per cent or 50 per cent. Liquid milk has tariffs of 20 per cent and 50 per cent. Australia has an existing FTA with Vietnam. However, that agreement did not eliminate Vietnamese tariffs on a range of products of interest to Australia, which include petroleum, which faces a tariff of 20 per cent; iron and steel products, on which tariffs are as high as 40 per cent; beer, where the tariff is at 47 per cent; wine, at 56 to 59 per cent; and spirits, at 55 per cent.
With regard to China and Canada, Australia faces a wide range of tariff barriers. We have no FTA agreement with either of those countries, as I mentioned. Access into the Canadian dairy market is currently significantly limited by quotas and high tariff arrangements. That's something, in fact, that provoked President Trump to threaten to pull out of the NAFTA agreement. Canada has agreed to renegotiate that, with America agreeing to re-sign it because Canada has reduced some of those barriers. Tariffs on dairy products range up to 369 per cent. There are also tariffs of 94 per cent for barley and tariffs of 20 per cent on wine, industrial products and so on. Those tariffs are largely eliminated for Canada's other FTA partners, of which Australia obviously is not one.
To finish this point: Mexico has tariffs of up to 67 per cent on wheat, 115 per cent on barley, 125 per cent on dairy, 25 per cent on beef and 20 per cent on wine. On industrial products, Mexico's tariffs can range from 15 to 30 per cent for automotive parts or mining equipment. They are key barriers faced by Australian services exporters and investors in TPP-11 countries as well. Service exports and investors are reduced as a consequence. Once the TPP-11 takes effect, most of these tariffs, quotas and barriers will either be removed or become negligible over time. Of course, Australia has very few remaining tariffs. However, to the extent that they remain, they will also be removed. This will be good for Australians, who will pay lower prices on imported goods and services.
The Liberal Democrats support free trade—that is, we support the free movement of goods, services and capital. Our support is without qualifications, apart from legitimate biosecurity precautions. I do mean legitimate concerns, not the confected concerns of those trying to keep out competition. In principle, we also support the free movement of labour, but, as the great libertarian Milton Friedman famously pointed out, you can't have unrestricted immigration while you have a welfare state, so we acknowledge a need for limits on it. What we don't support is so-called 'fair trade', unless we get to decide what 'fair' means. If anyone else decides, it won't be fair. What we might mean by fair is maximum choice in terms of quality and price for the benefit of consumers. It does not mean propping up businesses that can't compete; that's what others think fair trade means. Australia's suppliers of goods and services are generally world class and internationally competitive. Those that aren't, do not deserve to be protected. It is not the business of the government to keep uncompetitive businesses in business.
Finally, on the ISDS issue, I do not accept that this is a problem. In fact, it is Australian businesses that will benefit the most. Some countries simply don't have the legal structure to enforce contracts. The ISDS process ensures there is a rules based system that they can use. Australia does have a rules based system; it has independent and properly functioning courts. It's unlikely that it will ever be called upon within Australia but, for Australian exporters, the ISDS process provides them with commercial certainty. These two bills should pass. The TPP-11 is a good thing for Australia, and there should be more of it.
I'm very pleased to be able to rise to speak to oppose these two TPP bills, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. This legislation is appalling. It is atrocious. It is so damaging to Australia on so many grounds. We have been debating Trans-Pacific Partnership legislation for many years. We haven't yet signed off on a TPP agreement. It's no surprise, because it has been hugely controversial for many years. This latest iteration of the TPP agreement is just as bad as those that we have been debating over years and years.
This is fundamentally bad legislation. On the grounds that this is going to be a wonderful economic bonanza, we are being asked to trash too many things that Australians hold dear. Australians are having the wool pulled over their eyes, because they do not know what is in this legislation. It is a bad deal for ordinary Australians right across the country. It's a bad deal for workers. It's an appalling deal for our environment and for our future. But, of course, it's a good deal for the big multinational corporations, who are already taking Australia for a ride. That's the nub of it. That's why this legislation is being moved through this parliament. That shows who has the power. It's not the ordinary Australians, it's not the workers and it's not our environment or our future. It's the profits of these big multinational corporations that are dictating this legislation to the government and, very sadly, to the Labor Party. The really sad thing is, when you look at the evidence about the supposed economic benefits that are going to flow through to us, they are actually totally illusory: it's not even good for our economy. We've come to expect such bad legislation from this right-wing government that we've had to put up with for the last five years. We've come to expect that this right-wing government is in the pockets of these big multinational corporations. But it is very sad and it is very disappointing to see that the Labor Party have kowtowed to these same interests.
This legislation is also being supported by Labor. But, as we know, it's actually only being supported by part of Labor. We know that there are many ALP members, including senators in this place, who have vehemently protested about this legislation, who know the damage it's going to cause to the country and who are vehemently against this deal—but they've lost. They've lost in the Labor caucus. That's because of the numbers in the Labor Party and those people in the Labor Party who are also in the pockets of the same big corporations—who benefit from the same revolving doors; who do the bidding of the coal, gas and oil lobby; who do the bidding of the big pharmaceutical companies; and who do the bidding of the big agribusinesses. Sadly, those people in the Labor Party have won, and that shows you the state of the Labor Party today. You cannot rely on them to be doing what they say they're going to do—standing up for workers, standing up for our environment or standing up for the interests of ordinary Australians. No, they are happy to sell them out because of the pressure from those big multinational corporations and their shareholders.
The Greens support trade. We are an island nation. We cannot put up the shutters to the rest of the world. We rely on trade. The Greens support the exporting and importing of goods. But it needs to be fair trade. We don't have to tie ourselves to every trade agreement that comes along without proper scrutiny and without fierce negotiation—and on this trade agreement the negotiators have failed. This agreement is not in the interests of Australia.
Let's talk through its problems. Trade can sound very complicated. In fact, I know that the average Australian, when you start talking about trade deals, when you start talking about investor-state dispute settlement provisions, turns off. They think: 'Oh no, it's too complicated. We'll just leave it to the government to sort it out.' But they can't do that. Today the big news, which I heard just as I was coming in here, was that the Duke and Duchess of Sussex are expecting a baby. That was in the headlines and the notifications from The Guardian and The Age that came through on my phone. That's the sort of stuff this government is hoping will pique the interests of ordinary Australians. But let's not get them thinking about the TPP! Let's not get them thinking about what is going on in this chamber tonight! Trade can sound complicated, but what people need to realise is that it impacts on everyday decisions, on everyday activities, on the everyday wellbeing of ordinary Australians—much more than whether the Duke and Duchess of Sussex are having a baby.
There are two reasons, fundamentally, that this is bad legislation—two big areas where it fails. One is the inclusion of the ISDS provisions. The second is the lack of labour market testing. Let's talk about the ISDS provisions. Fundamentally, why we have been debating the TPP over many years is because of how appalling a deal it is for Australia to have ISDS provisions. These ISDS provisions strike at the heart of our democracy, of our ability to make decisions about what's in the interests of Australia, our environment and our future. ISDS provisions expand the right of multinational corporations based on legal concepts that are not recognised in our national system, and they offer advantages that are not available to domestic investors. That means that, where you've got ISDS provisions within a trade deal like this, those big multinational corporations—which I know are not making decisions based on what's in the interests of ordinary Australians; they are making decisions on what's in the interests of their shareholders and their owners—can sue governments who are making decisions that they have decided are in the best interests of their citizens and their environment.
It's not just the Greens scaremongering and saying, 'This is a problem.' There is already so much evidence in the public domain—hard evidence, hard examples—where ISDS provisions have been used by corporations to sue governments.
Yes, that case resolved in favour of Australia. It was only because the tribunal ruled that it had no jurisdiction to hear the case. And a huge amount of money was spent fighting that. The tribunal didn't say, 'No, the corporation hasn't got the right to do that.' No. It ruled that it had no jurisdiction to hear the case, not that the corporation was told that it didn't have the right to do it.
So, that was the Australian example, but there are so many other examples, and I know that my colleagues have already been through many of them tonight. But it's worth going through some of them. In 2016 the Swiss pharmaceutical company Novartis filed an ISDS dispute against the Colombian government over the government's plans to reduce prices on a patented treatment for leukaemia. Then there are the examples of 2017, where the Canadian Bear Creek Mining Company was awarded $26 million from the Peruvian government because it cancelled a mining licence when it realised that the company had failed to obtain informed consent from Indigenous landowners. So it followed through on its requirements to get that consent and to make good, quality decisions in the interests of the Peruvian people, and they were sued by a Canadian company to the tune of $26 million. And they had to fight that case as well. They had to spend millions of dollars to fight that case in the international courts. And we know there was a case in 2015 where a US company won millions because its application for a quarry development was refused for environmental reasons. It won millions of dollars because those environmental controls and that legislation went against the interests of that multinational corporation.
That's the problem with ISDS provisions, which is why they are extremely controversial and why the European Court of Justice made decisions in 2017 and 2018 finding that ISDS was fundamentally incompatible with national sovereignty. Consequently, in any trade deals that the European Union are making, they are not proposing any form of ISDS. We know that New Zealand doesn't support ISDS provisions in its trade deals, and Australia should not support those provisions. We've got the Labor Party saying, 'We don't support them either, and we're going to negotiate after we've signed the deal to get rid of them.' Come on! They're in cloud-cuckoo-land. They are not going to be able to do that. If the Labor Party are serious about not wanting ISDS provisions in the TPP, then they have to vote against this legislation. Otherwise they are trying to fool the Australian public and pull the wool over their eyes.
We know that you don't even have to go down the track of actually being taken to court. Just having the ISDS provisions hanging over the heads of governments—including Australian governments—creates that regulatory chill. It causes governments to delay or reconsider regulations and legislation, particularly environmental legislation, labour legislation, and health and safety regulations. It actually makes governments step back and say, 'Oh, I don't think we can change that because we might be sued under ISDS provisions.' Think about some of the legislation that needs to be changed in Australia, and the fact that having ISDS provisions would put us at risk of being sued. Think about the huge issue of the climate emergency that we are facing, in relation to which the IPCC said last week we need to take drastic action: that we need to reduce our carbon emissions to keep the planet to only half a degree warmer than it is now, and that we need to have drastic controls to rapidly get out of fossil fuels and rapidly increase the use of renewable energy. But, if we were to take the type of actions that are required, such as a price on carbon, an export tariff on coal, extra provisions to support the rapid take-up of 100 per cent renewable energy or an expansion of the Renewable Energy Target—the whole suite of policy measures that the Greens support that are going to be needed for Australia to play its role in reaching a zero-carbon economy—all of those actions would put us in the position of potentially being sued for changing our legislation.
If we think about our mining industry, we know that there is huge domination by multinational corporations of our mining activities in Australia. The Senate environment committee is about to report on our inquiry into rehabilitation of mining sites. I won't pre-empt what our report says before we table it this Wednesday, but I can tell you that it recommends some changes to the way mining operations happen in Australia. We need to have more controls. We need to make sure that mining companies are much better regulated, so we don't end up with the huge legacy problems of environmental disasters from abandoned mine sites, such as have occurred in the past.
These measures that legislation could put in place, following the recommendations of our Senate committee, are just the sort about which international mining companies, just like that Peruvian mining company, could say: 'Oh, no, we don't like the fact you're doing that. You are making life that much harder for us. You are going to be reducing our profits because we are going to have to spend more money in order to put more environmental controls into place.' We know that we would be opening ourselves up to extra litigation and to being sued. This is the fundamental and really dangerous road that we are going down by signing off on this Trans-Pacific Partnership with these ISDS provisions.
The second area of work is the fact that this legislation that we are being asked to support doesn't include provisions for any labour market testing and that the TPP-11 commits Australia to accepting unlimited numbers of temporary workers from Canada, Chile, Japan, Malaysia, Mexico and Vietnam. Again, although the Labor Party might say, 'We'll change that afterwards,' they will not be able to. They are kidding themselves and the Australian people if they think they're going to be able to change and renegotiate this after it's signed. These workers will be spread across a wide range of professional, technical and skilled trades occupations. The agreement does not require that there be any labour market testing to establish whether there are local workers available first. It will weaken our domestic labour market and exploit temporary workers at the same time. We know the problems with having a lot of temporary workers coming in and being tied to one employer. I was on the Senate inquiry that looked at temporary work visas. We know that it opens things up for exploitation of those very workers as well as denying Australian workers jobs. Those migrant workers remain tied to one employer for the course of their time in Australia and they face deportation if they lose their job for any reason.
Again, we are not against having migrants coming to this country and migrants working in this country, but there needs to be controls over it. We do not need to have a situation where there are unlimited numbers of temporary workers who would be available and able to come to Australia to fill these jobs without any labour market testing first. The Fair Work Ombudsman reported that temporary visa holders accounted for one in 10 complaints to the agency in 2015. These risks of exploitation are not hypothetical; they are happening right now. If, by signing this agreement, we open the door to vastly more numbers of temporary workers, that exploitation is going to continue to occur because it's structural. Where you have a temporary worker coming in and being tied to one employer, that employer has incredible power over that worker. That employer can say: 'You've got to do that, even though you think it's unsafe. You are going to work longer hours. You are going to be working in unsafe conditions.' If the worker dares to complain then he or she are out on their ear. The power imbalance means this is an inevitable aspect of having temporary workers coming in under these sorts of arrangements.
Finally, we have these huge problems, so why are we doing it? Supposedly it's because there will be huge economic benefits. I know my colleagues have gone through the complete lack of evidence as to what the economic benefits are going to be. If we sign up to this, after 15 years we're going to have an increase in our GDP of 0.6 per cent. That represents growth between zero and 0.1 per cent per year. That is absolutely less than a rounding error. It's somewhere between nothing and a rounding error. Then, as my colleague Senator Siewert has told us, the modelling shows job losses in Australia would total 39,000 after 10 years.
This is a shocking agreement. It's a shocking agreement that the government is putting up and it's shocking that the Labor Party are trying to ram it through as well. It's one of the most shocking agreements in a generation, and it's one so bad that there are many Labor MPs who think it's a terrible idea. It shows that the Labor Party, as well as the government, cannot be trusted to stay true to their values. The Labor Party say they will remain true to workers and then they sell them out to do a deal with the government over the TPP. The Labor Party say they care about the environment but then they refuse to condemn the climate bomb that's Adani. The Labor Party say they support refugees but then they are happy to keep on working with the government to lock children up in overseas detention. Right now, we have a situation where the big corporations are dominating and dictating to the government and also to the Labor Party what's happening. So, right now, the community needs more Greens in the Senate to keep both of these parties to account. We will not let the government and the Labor Party do what they want. (Time expired)
I am very pleased to rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which amend the Customs Act 1901 to implement elements of Australia's obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership 11, the CPTPP. I rise to speak noting that my colleague Senator Reynolds, who handles customs matters, will rightly conclude the debate. I also rise following the contribution by Senator Rice. Senator Rice could have done well to have (a) read the legislation before, (b) looked more closely at the terms of the TPP-11, (c) looked at the history of the benefits that have flowed from more open trade and access arrangements around the world or (d) listened to the opinions of Australia's farmers, businesses and others. But she, of course, is not alone in terms of the types of errant and incorrect contributions we've heard from the crossbench in the debate.
What I would like to do today is speak to the two bills in front of us but also, more broadly, the benefits of the TPP-11. The TPP-11 is one of the most comprehensive trade deals ever concluded, and, in doing so, it will eliminate more than 98 per cent of tariffs in a trade zone spanning parts of the Americas and Asia, with a combined GDP worth $13.8 trillion. Australians farmers, manufacturers and services exporters will benefit from new market access in terms of opportunities and economies with nearly 500 million consumers. It will provide better access for farm exporters, including beef and sheepmeat producers, dairy producers, cane growers and sugars millers as well as cereal and grains exporters. There will be new opportunities for our rice, cotton and wool growers, horticultural producers and wine exporters. That's why we have seen groups such as GrainGrowers, the Export Council of Australia, the Red Meat Advisory Council, the Winemakers' Federation of Australia and the National Farmers Federation all come out in support of the timely passage of these bills this week. They can see the benefits of Australia's involvement in this landmark agreement. They are the voices who, if those on the crossbench don't wish to listen to the government, the crossbench ought to be listening to.
The crossbench should also to be looking at modelling undertaken by economists from Brandeis International Business School and Johns Hopkins University, who quantified the benefits and showed that Australia is forecast to see some $15.6 billion in net annual benefit to our national income by 2030—annual benefits! This follows earlier modelling by the Peterson Institute for International Economics, which found the TPP-11 will boost Australia's national income by 0.5 and boost exports by four per cent. These gains are real gains; they are gains on top of what is already an incredibly strong economy. And they're boosts to our nation's economy and our income, which means there will be more jobs, higher wages and greater investment into further areas of business and jobs growth.
Let me give an example of how the TPP-11 will give our farm exporters an advantage over some of our toughest competitors. Within two years, Australian beef exporters under the TPP-11 will face tariffs 13 percentage points lower than the United States' competitors into the multibillion dollar Japanese market. That's a tariff advantage that will continue to widen over subsequent years. Our manufacturers also benefit from the elimination of tariffs on industrial goods. Our services exporters will have access to liberalise and improve regulatory regimes for investment, notably in mining and resources, telecommunications, and financial services.
TPP-11 is a comprehensive and truly next-generation trade agreement. For the first time in a trade agreement, TPP-11 countries will guarantee the free flow of data across borders, for service suppliers and investors, as part of their business activity. This movement of information or data flow is relevant to all kinds of Australian businesses—from hotels relying on an international airline reservation system to a telecommunications company providing data management services to businesses across a number of different TPP-11 markets. It's important to note in that context, though, that TPP-11 governments retain the ability to maintain and amend regulations related to data flows but have undertaken to do so in a way that does not create barriers to trade. This is the type of sensible balance that we seek to create in a world of free flowing of data to make sure that the protections that governments rightly put in place to protect the privacy of individuals or businesses are safe, strong and sound but that, equally, they don't inhibit the operation of businesses across borders or indeed the business opportunities created by such data flow.
TPP-11 also creates Australia's first free trade agreement with Canada and Mexico, giving Australian exporters preferential access to two of the world's top 20 economies for the first time. In 2016-17 nearly one-quarter of Australia's total exports, worth nearly $92 billion in 2017 terms, went to TPP-11 countries. The forthcoming entry into force of the TPP-11, we hope, will be a significant moment for open markets, free trade and the rules based international system. This is not just significant in terms of the opportunities that it provides in direct terms to Australia's farmers and businesses but also significant at this time, when the value of our longstanding international rules based approach to trade is being questioned. We see in the headlines, on a regular basis now, talk of trade wars and trade conflict. We see circumstances in which some countries appear to be rolling back the opportunities for goods to be sold to each other at lowest cost and the economic benefits that flow from that.
Our approach here in Australia has had—and in the passage of this legislation continues to have—bipartisan support. The TPP-11 is another demonstration of Australia supporting open, liberalised markets in the Asia-Pacific and around the world more generally. It's another example of Australia's support for rules based international trade that provides businesses and consumers with certainty and provides an environment in which we can see strong economic growth as we have seen to date.
It's important to note that the achievement of the final TPP-11 deal was far from guaranteed. When the United States withdrew from the original TPP in early 2017, the prospects of the groundbreaking deal being realised were far from certain. For Australia and its TPP partners, it was a test of resolve and judgement. There were those, including some here in Australia, who called loudly for everybody to give up. There was certainly no guarantee of success. Had we retreated, as some had called for, there would have been no new historic access to the Canadian market for our grain, refined sugar and beef exporters and no new access to the Mexican markers for our pork, wheat, sugar, barley and horticultural producers, or for our education service providers. There would have been no improved access to the Japanese market for our beef, wheat, barley and dairy exporters, and no improved access for our wine producers in the Vietnamese, Canadian, Mexican and Malaysian markets.
Thankfully, the Australian government—our Liberal-Nationals government—and our trading partners, led in particular by Japan, pressed ahead. I pay particular tribute to former Prime Minister Malcolm Turnbull and former trade minister Steven Ciobo for their work in ensuring that Australia remained resolute in working with those partners and in showing leadership, with Japan, to get to this outcome. As a consequence, our global trading system will be stronger with the coming into force of TPP-11 than would have been the case in the environment of uncertainty elsewhere in the world.
We are creating a beacon for nations who want to work within a rules based framework that is complementary to the global architecture provided by the World Trade Organization. We want the TPP-11 to grow in membership and we welcome other nations who wish to engage in discussions to join this trade agreement—nations who come to the table with the same principles of ambition and the same aspiration for a comprehensive agreement, which the TPP-11 is. We don't want the TPP-11 to be an exclusive, inward-looking bloc. We welcome the interest in TPP-11 shown by nations within and outside the Asia-Pacific. Given the significant contribution the TPP-11 will make to our trading future, it is important that Australia and its TPP partners reap the benefits of the deal as soon as possible.
The TPP-11 will enter into force 60 days after the first six member countries complete all necessary ratification procedures. To date, three nations—Mexico, Japan and Singapore—have ratified the agreement, and a number of other countries, including New Zealand, Peru and Canada, have indicated that they will ratify in coming months. The passage of this legislation positions us to be amongst the first to benefit from this trade agreement, and our government will be progressing this agreement through to ratification as quickly as possible. If Australia and five other countries can complete ratification before the end of October, then the TPP-11 will enter into force before 31 December this year. There's a particular benefit to that. It means that there will be two opportunities for tariff reduction in quick succession, the first occurring on entry into force and the second occurring, then, on 1 January 2019.
But, just as there are significant opportunities stemming from the ratification of this agreement, there are risks in the event the agreement cannot be ratified by Australia quickly enough. If TPP-11 were to enter into force this year without Australia, then our exporters would be at a significant competitive disadvantage. For example, New Zealand and Canada would gain superior access to the Japanese beef and dairy markets, better access to the Japanese cheese market and improved access to wine markets in Mexico. Now is not the time to stall or delay this landmark agreement. We would be doing Australian farmers and businesses a serious disservice if we did not lock in the benefits of this trade deal and did not ensure that they got the double benefit of ratification this year, and we would be denying the nation the estimated $15.6 billion in net annual benefits to national income by 2030.
While there are real upsides to ratifying the TPP-11, there are potentially even greater downsides to it not being ratified quickly enough, as competitors would get that advantage over our farmers and businesses in those key markets.
The TPP-11 offers significant advantage for our exporters, but these would become risks if our efforts were to be stalled in this place by naive amendments that would potentially block ratification. The risks are not limited just to agriculture. Australian businesses operating in a regional supply chain that includes TPP-11 countries will see their competitors gain a competitive advantage that comes with the early elimination of tariffs. Those who want to play an isolationist card by delaying, blocking or unpicking this agreement should listen to the farming and business representatives who are, instead, urging its swift ratification. Proposals for sunset clauses or delays would have placed the Australian government at a point of noncompliance with the TPP-11 and would unnecessarily delay the entry into force for Australia, with all of the detrimental consequences that I've just outlined. While some may put this forward as a favourable proposition, I doubt very much they would have the same attitude if another state tried to impose the same change of terms upon us. No state can faithfully claim to be in compliance with an international treaty if the implementing legislation requires further negotiations which seek to alter the terms of those agreements.
I want to quickly turn to a couple of the louder complaints made about the TPP-11—indeed, about trade agreements generally. Contrary to some claims here today, the investor-state dispute settlement mechanism in the TPP-11 will provide valuable protection to Australian investors overseas and will still safeguard our government or future governments' ability to regulate in the public interest and to pursue legitimate welfare objectives. Nothing in the TPP-11 prevents the government from regulating or reregulating services. There are provisions in the agreement that give the government flexibility in relation to the way in which it may regulate or reregulate public services, including exceptions for Australia to undertake the regulation of services in relation to health, education or environmental matters, in accordance with our own national interests. When you listen to the Greens speak, or to the Left speak generally, in relation to ISDS provisions, they are both misleading and inconsistent in their arguments. Misleading, because, as was exposed in relation to Senator Rice's contribution just before, these provisions have never been used successfully against Australia, not in the more than 30 years of history of operation across a range of different investment agreements that Australia has entered into. Their practical effect is far more to provide certainty for Australian investors operating in overseas markets than it necessarily is to provide certainty for investors in Australia, because we already have such a proven, robust and reliable legal system in place.
The Greens' arguments are inconsistent in the extreme. In every other sphere of public policy, it seems as if the Greens and the left argue for the internationalisation of courts and tribunals, for the adherence to international law and for the referral of powers to international treaties. The only entities, it seems, to whom the Greens wish to deny the right to test their case before any type of international fora are businesses, those evil businesses that the Greens demonise at every possible opportunity, notwithstanding that it is those businesses that create jobs for Australians and for others around the world. It is those businesses that create income, those businesses that generate the wealth that our taxes are collected from and our services are delivered through, and those businesses that provide the opportunities that have in many ways transformed our world, a point that I will return to shortly.
In terms of matters of the labour market, the government has been very clear that Australia did not make any commitments in the TPP-11 that would require any changes to the skills, assessment, licensing or registration processes for workers from overseas who are seeking to work in Australia. Many of the matters raised in this debate today are in domestic settings, separate to the pieces of legislation before us, which, as I said at the outset, are customs bills.
I do, however, want to acknowledge—across this legislation and all of the TPP negotiations—the constructive conversations that I have had with the shadow minister for trade and the shadow minister for foreign affairs respectively. I welcome the Labor Party's continuation of the long-held practice where we work constructively together, as parties of government, on foreign policy and trade policy. This constructive approach ensures that the risks of delay, which I spoke about before, should not be realised.
I recognise that for Labor this may not be the agreement that they ultimately would have signed. I recognise that if they were to be successful at the next election—and I certainly hope that is not the case—they may look to amending aspects of the agreement with TPP partners down the track. That would be a matter for a future government and those nations. Again, I do acknowledge that constructive approach that we have had to date. However, I would urge the Labor Party to maintain that approach on future trade discussions as well, to not pursue policies that would make it harder to enter into trade agreements and to disavow and step away from the extreme positions created by those of the left. I ask the Labor Party to think long and hard about that and to reconsider some of the positions they are increasingly taking.
Ultimately, open markets provide benefits. Trade is not just the shipping of widgets from one nation to another; trade opens up the flow of information, culture and knowledge. It provides benefits that are widely on display in our country and many others today. We ought to celebrate the fact that we live in a world with a vastly greater population than any could have conceived 100 years ago and yet the proportion of those in circumstances of extreme poverty or malnutrition is so much lower than it was 100-plus years ago. That is, of course, a testament to technology, health and a range of services, many of which are helped by growth in economies and by the exchange of knowledge and information that comes from open trading arrangements.
The deal that was signed on 8 March 2018 is one that fundamentally serves Australia's national interests, will create new opportunities and greater certainty for our businesses and will encourage job-creating foreign investment. It will make Australian exports more competitive so that our farmers can sell more produce, our professionals can provide more services and our manufacturers can make and sell more goods. Our involvement in the negotiation of this deal means that Australia played a key role in setting 21st century rules for commerce across the world's fastest growing region. This will help us and enable us to tackle new trade and investment barriers as they arise, helping our businesses to weather the increasingly challenging global trading environment.
These bills, as I said at the outset, will see the elimination of 98 per cent of tariffs from TPP-11 countries in a regional free trade zone that already accounts for over one-fifth of Australia's total two-way trade. They will effect a cost-saving impact on imported goods for Australian households and businesses and deliver material gains for our exporters. These bills and the TPP agreement have been through thorough parliamentary proceedings to date. I urge the Senate to support the passage of this legislation unamended. I want Australia to remain a leader among trading nations, one who is not afraid to show our trading partners through concrete actions that we support the principle that open and free trade creates circumstances for businesses, economies, national income and wealth to grow and, through that, for the prosperity of people to grow in respect of their incomes and the services their governments are able to provide them. I commend the bills to the Senate.
I'm pleased to have this opportunity to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and a related bill. The purpose of this bill is to amend the Customs Act to introduce new rules of origin for goods imported into Australia from a party to the Trans-Pacific Partnership, now called the TPP-11. The TPP-11 is a new treaty that incorporates the provisions of the original Trans-Pacific Partnership, which was signed in February 2016. That treaty was rendered inoperative by President Trump's decision to withdraw the United States from the agreement. The remaining 11 signatories to the new treaty are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. These countries will implement the TPP between them, with the exception of a limited number of provisions, which will be suspended. Suspensions will remain in place until the parties agree to end them by consensus.
The amendments contained in this bill will enable eligible goods that satisfy the new rules of origin to enter Australia at preferential rates of customs duty. The amendments will also impose obligations on exporters of eligible goods to a party to the TPP-11 for which a preferential rate of customs duty is claimed and on manufacturers who produce such goods. The related bill makes complementary amendments to the Customs Tariff Act 1995 to give effect to the preferential treatment of customs duty in accordance with the TPP-11.
Last month Labor announced that we would be supporting this bill. It's no secret that this announcement was preceded by a lively debate in the Labor caucus and in the wider Labor movement about whether we should support or oppose the TPP-11 as it now stands. It's no secret that many people have argued strongly that we should oppose this bill, including some prominent figures in the trade union movement. In this Senate the Greens and the Centre Alliance have said that they will oppose the bill, so I think it is important that we on this side give a clear explanation of our position on this question. I take this opportunity to acknowledge the leadership of our shadow trade minister, the Hon. Jason Clare MP, in developing our position. He has had the responsibility of addressing the many and various points of view that have been put forward and of formulating our policy.
Ever since Federation—and indeed before—one of the fundamental cleavages in Australian politics has been free trade versus protectionism. Before 1910 we had Free Trade and Protectionist parties in the parliament. Within the Labor Party were both free trade and protectionist tendencies. Broadly speaking, from the First World War until the 1970s, Labor was a protectionist, high-tariff party. This was one of the many sacred cows slaughtered by Gough Whitlam. In 1973 the Whitlam government cut all tariffs by 25 per cent, the first major move towards free trade after decades of bipartisan protectionism. This breakthrough was followed by the reforms of the Hawke and Keating governments, working in close cooperation with the union movement under the leadership of Bill Kelty. These reforms opened up our economy, further reduced tariffs and, along with the many other reforms of the Hawke-Keating years, are one of the reasons we now have had 26 years without a recession.
Since the 1970s Labor has accepted the view held by almost all serious economists that free trade creates jobs and leads to increased wages. Labor has learned the lesson of the Great Depression, which is that the ideology of protectionism is fundamentally wrong. Protectionism does not protect industry, and it does not protect jobs. High tariffs and beggar-thy-neighbour trade wars throttle economic growth and put people out of work. I might quote our shadow Assistant Treasurer, Dr Andrew Leigh MP, who said:
We had this debate when Whitlam cut tariffs and again when Hawke and Keating did. We can't go ahead with our broad-based Asia plans by opposing trade liberalisation.
Sadly, this is a lesson which some current world leaders seem to have forgotten, and I fear that they will relearn it through higher unemployment, lower growth, lower incomes and more business failures.
According to the Centre for International Economics, one in five Australian jobs are linked to trade. That means 2.2 million Australians work in a trade related job. Sixty-seven per cent of mining jobs and 41 per cent of manufacturing jobs are trade related. The evidence shows that increasing exports leads to an increase in jobs. Increasing exports also increases wages. The work by the Centre for International Economics shows that the action undertaken by the Hawke and Keating governments to cut tariffs has put almost $8,500 in the pocket of every Australian family that those families would otherwise not have.
I spent last week up in the Pilbara, looking at mining operations and LNG plants, inter alia. The ships leaving the ports up there are ceaseless. Thousands of jobs depend on that trade. Our economy does well because of that trade. The latest move towards free trade comes at a perilous time. The United States and China are lurching towards a mutually destructive trade war. A trade war in the Asia-Pacific region poses huge risks to Australia and to all of our neighbours. This makes it all the more important that Australia moves to secure access to a broad range of markets to protect and grow export jobs. Free trade is, in fact, the best form of protectionism, and this is why Labor supports the TPP. It will increase market access for our farmers, steel manufacturers, universities and miners. Independent modelling commissioned by the Victorian Labor government indicates that this agreement will deliver modest economic benefits in the short term and more significant economic benefits in the longer term, if more countries sign up to this agreement. We want exporters to be able to take advantage of these opportunities, because that means more jobs for Australians.
The withdrawal of the US from the TPP is something we should greatly regret. It is my belief that the world is indeed a poorer place if America is isolated. But it does have the positive effect of increasing export opportunities for Australia in the other TPP signatories' markets—markets from which the US is partly excluding itself by putting itself outside the TPP.
I recently had the opportunity of visiting two such countries, Mexico and Peru, as part of a parliamentary delegation of which Senator Leyonhjelm was also a member. These are both fast-growing and increasingly prosperous countries, with increasing appetites for high-quality agricultural and manufactured goods, such as those we export so successfully. Mexico is already one of the world's top 20 economies. Signing up to the TPP-11 will give us better access to both these emerging markets, and will make us more competitive at a time when the US is impeding its own exports by erecting trade barriers. As an example, having more students seeking education services here in Australia would enable our tertiary sector to have greater diversity in its fee-paying students, and that may be important.
None of this is to say that the TPP-11 as it currently exists is perfect. It is not. It has significant flaws. There are aspects of the agreement which are in conflict with Labor policy. But we do not accept the assertion that, because of these flaws, we should reject the whole agreement. There are many times in politics when we have to choose between alternatives that are less than perfect. This is one of those occasions. We cannot allow the perfect to be the enemy of the good. That is why we have agreed to support this bill, while at the same time making a commitment to renegotiate some aspects of the TPP-11 agreement if we are able to form government after the coming election. The Greens political party and others have asserted that this is impossible—that, once we have signed up to the TPP-11, its terms will be set in stone forever. This is simply not true. In government, we will follow the example of Jacinda Ardern's Labour government in New Zealand, which has successfully negotiated side letters with other TPP signatories to gain exemptions from certain objectionable aspects of the TPP. If New Zealand can do this I am sure Australia can as well.
There are two major aspects of the TPP-11 agreement which do not conform to Labor Party policy and which Labor, in government, will be seeking to change in so much as they apply to Australia. These are the investor-state dispute settlement mechanism, or the ISDS clauses, and labour market testing. ISDS is a mechanism which allows foreign companies to sue the Australian government for policy changes which they believe commercially disadvantage them. Labor does not support the inclusion of ISDS clauses in trade agreements. We oppose ISDS clauses, because these provisions provide foreign corporations with increased legal rights and can be used to sue governments for legitimate policy decisions.
It should be understood, however, that ISDS clauses are not a novelty which are being introduced for the first time by the TPP agreement. They are contained in 20 investor agreements and eight trade agreements to which Australia is already a signatory and has been, in some cases, for 30 years. During that time, only one case has been brought against Australia and that case was unsuccessful. In fact, under the TPP-11 agreement ISDS only applies to one additional country, namely Canada. Australia already has ISDS with the other signatory countries as a result of other agreements. The ISDS provisions in the TPP-11 agreement are narrower than those that were in the original TPP. Under this agreement, ISDS can't be used in cases where a company has a contract with the government or where it had an Australian government approval, which was subsequently withdrawn.
Contrary to some assertions the agreement does not stop the Australian government from changing policy or regulations in line with government health and education policy. Annex II of the agreement gives Australia the explicit right to adopt or maintain any measure for public services. The text explicitly mentions health, child care, public utilities, public transport, social welfare and public housing. ISDS, therefore, cannot be used in these circumstances.
Nevertheless, we remain opposed to the ISDS provisions in the agreement as the current government has negotiated them. In government we will follow the example of New Zealand, which has successfully negotiated side letters to remove ISDS clauses with four countries in the TPP. To do this we will set up a negotiating team whose job will be to remove ISDS clauses from this and, if necessary, from other agreements.
On the issue of labour market testing we will take the same approach. We do not support the right of employers to bring in workers from other countries without first testing the Australian labour market to determine whether there are Australian workers available to fill job vacancies. In government, we will work to reinstate labour market testing for contractual service suppliers with the countries where the current Liberal government has agreed to waive it.
Labor has also made a firm commitment to change the rules about the way future trade agreements are negotiated. A Shorten Labor government will fix the way we do trade deals to give Australian business and Australian workers a real say in that process and to be more open and more honest. We will act to prohibit future governments from waiving labour market testing and including ISDS clauses in trade agreements. We will also end the shroud of secrecy under which trade agreements are currently negotiated by strengthening the role of the parliament.
We will require governments to provide the Joint Standing Committee on Treaties with a statement of objectives for assessment prior to negotiations and a briefing after each round of negotiation. We will establish an accredited advisers' program, which will give stakeholders, including business, trade unions and civil society organisations real-time access to trade agreements. We will require governments to provide public updates on each round of negotiations and to release draft texts during negotiations where this is feasible. We will require governments to subject all new trade agreements to an independent national interest assessment examining economic, strategic and social impacts.
Labor has had challenges with this agreement. We had to choose between accepting a less-than-perfect agreement, which we had no say in negotiating and which contains major flaws, and rejecting an agreement which offers greater access for our exporters to some of the world's most important new markets, which will generate many jobs for Australian workers. We have decided to support the agreement, despite its flaws, while making firm commitments to rectify some of the agreement's flaws and also to reform the way in which we negotiate future treaties. I think this was the right choice. I recommend the bill to the Senate and I look forward to Labor returning to this agreement in government.
I too rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill. But, before I do, I'd like to address a number of the issues that have been raised by my colleagues in this debate today. I would note up-front that the majority of evidence didn't actually go to the specific provisions of the bill itself. Instead, much of the debate from those opposite, particularly from my Greens colleagues, raised matters that have been dealt with by five previous parliamentary inquiries into this matter, as did the speeches here today. Senator Carr acknowledged that these are Customs amendment bills, but then he did go on, for a substantial period of his speech, in reprosecuting some of the case.
I have to hand it to Senator Hanson-Young and her colleagues here today: I didn't think we'd hear so many Greens ideological buzzwords. It was almost 'buzzwords bingo' between the four of them here today. There was a lot of discussion about chilling effects, neoliberalism and economic rationalism. But, as the minister has just said, it was very clear from the debate today—as Senator Kitching has just acknowledged—that they haven't read the bill, and the debate would have been significantly enhanced had they actually addressed the detail of the bill.
There are four issues that I would like to briefly cover that were raised in the debate today. The first is the issue of modelling. Some of the speakers mentioned that they wanted more modelling to be done. But I do note the significant amount of modelling that has been done, which has been mentioned before in this place. Just because you don't like the outcome of the modelling doesn't invalidate it. We have heard from Senator Kitching on the Victorian government modelling which clearly showed there were significant short-term benefits and even more benefits in the longer term, so I think that's a real furphy and I'm glad my Labor colleagues have made that very clear.
The second issue that has been raised in the debate is consultation. Both Labor and Greens colleagues indicated that they didn't think there had been enough consultation. I can advise senators that there were 1,000 briefings with 485 stakeholders, so I'm at a loss to understand who wasn't actually consulted. In these 1,000 briefings with 485 stakeholders, all the states and territories were consulted, as were all federal government departments, all relevant peak bodies, and hundreds of companies, academics, unions and civil society groups. I'm not sure what more consultation those opposite would like to have seen.
The third issue that's been discussed at some length in this debate is labour market testing. It is very clear from the debate from both us and the opposition—while they have ideological views—that, as I think Senator Kitching acknowledged, this is not new and it is a reciprocal requirement. We can hardly ask people to do something we're not willing to do ourselves. Again, the evidence does not support what my Greens colleagues and some from the Labor Party have been saying about labour market testing. The evidence is very clear. Listening to those opposite, you'd think that, under our free trade agreements with China, Japan and Korea, 457 visas and other visas would have skyrocketed. In fact, for those three countries the experience has been that 457 visas have actually dropped by 10 per cent since those treaties were negotiated. Again, it is not new. It is something we have done for a long time, and there is absolutely no evidence to show that it would be any different under this agreement.
The fourth issue I'd like to briefly mention is this issue of ISDS. It is a complete and utter furphy. As Senator Kitching has just reminded us, it's actually a very good thing and it's something that's been very longstanding in a wide range of treaties that we have entered into. It is simply a Labor union ideological policy issue. There is no loss of sovereignty. Despite all the huffing and puffing from the Greens senators this afternoon, there is no loss of sovereignty, as the minister has very clearly said. I will foreshadow that, for those reasons I've just outlined, the government will not be supporting the three foreshadowed second reading amendments.
Moving on to the legislation itself, the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 amends the Customs Act 1901 to implement Australia's obligations under the TPP-11. These amendments are complementary to those contained in the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018. I'd like to take this opportunity to speak to the two bills that are in front of us here today, as they are very much related.
I'm very pleased to have this opportunity to conclude the debate on this important agreement. There is absolutely no doubt that the TPP-11 is one of the most comprehensive trade deals ever concluded by Australia. It will eliminate more than 98 per cent of tariffs in a trade zone that spans the Americas and Asia, with a combined GDP worth $13.7 trillion. Despite the arguments or the rhetoric from those opposite, particularly the Greens, Australian farmers, manufacturers and services exporters will benefit from new market access opportunities in economies with nearly 500 million consumers. It will provide better access for farm exporters, including for beef and sheepmeat producers, dairy producers, canegrowers and sugar millers as well as cereal and grain exporters. There will be new opportunities for our rice growers, cotton growers, woolgrowers, horticultural producers and great wine exporters. One manufacturer will benefit from the elimination of tariffs, for example, on industrial goods. Our services exporters will have access to liberalised and improved regulatory regimes for investment, notably in the mining and resource sectors, telecommunications and financial services.
TPP-11 is truly a next-generation trade agreement. For the first time in a trade agreement, TPP-11 countries will guarantee the free flow of data across borders for services, suppliers and investors as part of their business activity. I know from feedback from industry that that is a great thing for them. This movement of information, or data flow, is relevant to all kinds of businesses.
If Australia and five other countries can complete ratification before 31 December this year, there will be two opportunities for tariff reductions—the first on entry into force and the second on 1 January 2018. But, on the other hand, if—as those opposite and on the crossbench suggest—it is entered into this year without Australia, our exporters would absolutely and unequivocally be placed at a significant competitive disadvantage. That will benefit no Australian business and it certainly will not benefit Australian workers. For example, New Zealand and Canada would have superior access to the Japanese beef and dairy market, better access to the Japanese cheese market and better access to wine markets in Mexico. Why would we knowingly and willingly give our market competitors a leg-up over us?
The deal signed on 8 March 2018 is one that fundamentally serves Australia's national interest. Its scope and level of ambition cannot be underestimated. It will create new opportunities and greater certainty for our businesses and encourage job-creating foreign investment. That is very clear and, despite what those opposite have said, that will occur. It will make Australian exports more competitive, so our farmers can sell more produce, our professionals can provide more services and our manufacturers can make and sell more goods.
Our involvement in the negotiation of this deal means Australia plays a key role in setting 21st century rules for commerce across the world's fastest-growing region. This will enable us to tackle new trade and investment barriers as they arise, helping our businesses weather the increasingly challenging global trading environment. Here in Australia, this agreement has undergone a level of scrutiny that I suspect is almost unprecedented compared with any other free trade agreement. It has been the subject of five parliamentary committee inquiries, and, after the TPP-11 was tabled in the House of Representatives on 26 March this year, it was examined by the Joint Standing Committee on Treaties. On 22 August, the committee recommended that Australia take binding treaty actions in respect of the TPP-11.
For all of these reasons, I urge the parliament to support the swift passage of the TPP-11 implementation legislation because I and this government want Australia to remain leaders amongst trading nations—a country that is not afraid to show our trading partners by concrete actions that we are committed to a future of liberalised trade and investment. This is what these TPP-11 implementation bills represent. Our early ratification of the TPP-11 demonstrates Australia's leadership in pursuing liberalised trade globally, and I believe it embodies the government's strong commitment to maximising trading opportunities for Australian businesses, both large and small.
The TPP-11 outcome is a feature of an ambitious and confident trade policy—one that didn't turn back at the first hurdle. It is an audacious but pragmatic and successful approach. That, in my view, has been the hallmark of this government's trade and investment policy. I have great pleasure in commending these bills to the Senate.
Senators, other divisions are imminent, so I will ring the bells for one minute. The next matter is the second reading amendment to be moved by Senator Hanson-Young. Senator Hanson-Young, I understand you need to move your second reading amendment, but it will be put without debate as the minister has closed debate.
I move the Greens amendment on sheet 8527:
Omit all words after "that", insert:
", further consideration of the bills be postponed until the Senate passes a resolution that it is of the opinion that each of the following conditions has been met:
(a) the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation has been re-negotiated to include improved protections for labour rights and the environment;
(b) the Parliament has legislated a prohibition on including investor-state dispute settlement provisions in future trade agreements; and
(c) Australia has a settled climate and energy policy."
I did foreshadow this in my speech.