Wednesday, 17 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; In Committee
I want to go back to a question that I would have liked to ask last night but ran out of time. Could the minister confirm that there are 22 suspended provisions in the TPP that relate to previous US involvement and clarify the status of those provisions if the US rejoins the trade deal and what the process would be at that stage? Does it need to come back to parliament for ratification if a new member joins and new clauses are added to the TPP or are we de facto voting for the contingency that they may be reinstated if the US joins? What actually are we voting on today?
Yes, as I confirmed several times yesterday, there are 22 suspended clauses. As I said several times yesterday as well, they could be reinvoked if the United States rejoins and all parties agree to that.
I understand that's what you said, Minister, but I'm seeking more information than that. What is the process for a party like Australia to agree to (a) the inclusion of the US in the deal and (b) the activation of those 22 clauses? Is it a process where the executive and the minister sign a document that says it is okay for the US to join and those clauses to be added, or does it come back to a sovereign parliament, like this chamber, for ratification?
Thank you very much for that question, Senator Whish-Wilson. My understanding is JSCOT has already considered those clauses; however, if the United States does rejoin the process, all the other parties would then also need to agree to those 22 being reinstated. My understanding is that while JSCOT has already considered those, it would come back to JSCOT.
So JSCOT has considered those clauses but they are not in this enabling legislation that we're passing today—at least they're not in there physically. But they are suspended clauses. JSCOT, as we discussed yesterday, Minister, is essentially a rubber stamp for the executive, which has already signed the deal. I won't say the same about the FADT inquiry process, because the opposition tends to control that. So if the US rejoins, the minister signs the re-activation of those 22 clauses, and then it goes to JSCOT. JSCOT presumably produces a report. Does that come back to parliament for ratification?
Senator Whish-Wilson, we've been through this process several times. Again, I can keep giving you the same answer; however, I would point out, as Senator Carr has pointed out very clearly as well, that these are customs amendment bills. These are not a re-prosecution of something that has been addressed very extensively in the community. There have been 1,000 consultations. The parliament has had a look at it at least five times in committees. As you said yesterday, you have been through these issues many times over many years in many estimate processes. So if you would like to keep asking the same question over and over, you will keep getting the same response on these customs amendment bills.
As I said, there are 22 clauses; they have been revoked; however, if the United States does come back in, those 22 have been examined and reported on by JSCOT. You and I both know well the process for treaties here in this parliament and also for consideration. But again, that is the process if the United States comes back in, but it would be an issue for Australian negotiators at the time. Of course, if there are any changes, it would come back to JSCOT. In terms of that, there is no more information I can provide at this time after having gone through it several times now.
If I could just finish this: Minister, you still haven't answered the most important part of my question, which I will repeat for a fourth time. After going to JSCOT, will it come back to parliament for ratification? That's what we're doing now, right? We are ratifying enabling legislation. Will there be separate enabling legislation for those 22 clauses? Will it come to parliament for ratification?
Senator Whish-Wilson, you've asked the question. I will answer it—again and again. It follows the exactly the same standard treaty processes. JSCOT has looked at the current 22 clauses that have now been revoked. If—and again this is a hypothetical—the United States joins and all parties agree to proceed, then it would come back to JSCOT, but again it is hypothetical because, at that re-negotiation at some time in the future, the clauses could be amended, they could be updated, they could be changed. They would go through exactly the same standard treaty process that this has gone through in the first place.
I'm not sure how much clearer I can be that this is a—
I just want to add to what Senator Whish-Wilson is saying. I just want to point out to the minister that the name of this bill is the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill. This is the only opportunity for the parliament in its formal sense in the chamber to deal with the enabling of the TPP, and so I would ask that you give substantial latitude and be very cooperative. We're not talking about a customs act; we're talking about the acts of parliament that are required to enable an agreement that has taken a long time to negotiate and has been controversial. To come in here and then try to narrow this down to,' This is just a customs act' is in some sense disingenuous. I just wanted to state that.
Following up from Senator Whish-Wilson's question so as not to create a hypothetical, would the actual terms, as they currently stand—and I understand you've been very helpful by saying it comes back to JSCOT and goes through the process—require some enabling legislation for the treaty to enter into force notwithstanding it comes back to JSCOT? Is there some enabling legislation, not hypothetically, but with the current terms?
Senator Patrick, I'm very grateful for that somewhat patronising explanation of these bills. These are both very clearly customs tariff amendment bills and they are customs bill. I would note—as I've noted on multiple occasions now with Senator Whish-Wilson—that the arguments have mostly been in here, and we have spent several hours now on these same issues over and over again. These are issues that don't go to the substance of the bill.
It is absolutely your right to keep trying to re-prosecute the TPP-11 itself. There are other opportunities in estimates next week to go through these issues in more detail, which is probably the more appropriate forum, so that the Senate can get on with other business. However, the substantive question that you've just asked is a complete hypothetical because, as I've explained several times, it depends on: if this did come forward again, the United States joined and all parties agreed, they would have a look and reconsider these 22 clauses. If there are changes, they would come back through the process and go to JSCOT. If there was eventually legislation that came back here as part of those negotiations to change the agreements, of course it would come back through here because it would require the customs bills to be amended. But, again, I have nothing more to add to that because it is hypothetical and the normal parliamentary processes would apply.
This just shows what an absolute disgrace this whole process is that we can't even debate the TPP in the chamber today. That's what the minister is telling us: 'No, nothing to see here. You can't have any influence over it, so I'm not going to answer questions or deal with it properly in this place. Go and deal with it later in Senate estimates after the bill has passed.' No, it's not good enough, Minister.
The Australian people have a right to have these questions answered before the chamber passes this legislation. It may be that the government feels very comfortable because the Labor Party has rolled over and backed in the TPP, so they've got the numbers. That does not mean that the public and the taxpayers deserve to be treated like mugs, and yet that is precisely what the government has tried to do throughout the three days of debate on this bill so far. Senator Whish-Wilson, Senator Patrick and I have all asked specifically what happens to these 22 clauses if the US comes back to the table. If it's a hypothetical, Minister, why are they simply on ice and not deleted?
There is no need and no reason for these clauses to be suspended if, indeed, they're only hypothetical. They're sitting there on ice, ready to be warmed up the moment the US enter the fray. We all know that. That's what the public commentary from nations has been about across these negotiations. It'd be timely now to have some honesty, truth and courage from the government, to tell people the facts. The Australian government are prepared to see these clauses back in the TPP negotiations because they're not prepared to tell the US to pull their head in.
I think a little bit of history and perspective on this is really important. I think it's commonly accepted that the US—at least stakeholders and interests in the US—initiated the TPP. In my speech on the second reading, I talked a little bit about the failure of the Doha rounds and of multilateral trade deals leading towards 2006. When the TPP fell apart, the idea of a separate multilateral deal being led by the US in the Pacific region was initiated. It was supposed to be finished by 2012, but that was really when it actually started getting interesting, and here we are in 2018 with a version of it. But this was a US led deal. Obama put his signature on this and, of course, led it in the US Congress. He was its biggest champion. And, of course, President Trump made an election commitment that if he got elected—and let's be honest, most of us thought he wouldn't, but he did—he would tear up the TPP, which he has done.
To ignore that this is not a US-driven and US led multilateral trade and investment deal and to say that it's hypothetical that the US might or might not rejoin this deal at some time in the future really is ignoring history. Add that to what Senator Hanson-Young just pointed out: there are suspended clauses in the trade deal—how often do you have suspended clauses in a trade deal, especially a trade deal this size, that are sitting there, waiting?
May I just talk on some of the most egregious aspects of the original Trans-Pacific Partnership agreement, especially in relation to things like intellectual property and monopoly pricing for medicines. Even the previous trade minister, Andrew Robb, took the US to task on the kinds of provisions they wanted to put in on the monopoly pricing of medicine. So those clauses are sitting there suspended, waiting to be re-engaged. It is an absolutely critical question to be asking the government at a point, here and now, when we're about to vote on the enabling legislation. Are we basically voting on a contingency for these to be automatically reactivated if the US rejoins the trade deal or, as the minister has pointed out, does it have to go through a process that ultimately involves a sovereign parliament? Remember, we were elected by the people of this country to make the laws and to scrutinise what the government does. That's what the Senate does. That's what we're doing here this morning, and it's extremely important.
Minister, your own government has stood up in here ad nauseam during question time for years talking about how big this deal is—the biggest trade deal in history, the biggest multilateral trade deal, 40 per cent of our economy is covered by it et cetera. As I said, there are 29-plus-plus chapters in the Trans-Pacific Partnership agreement that literally cover every aspect of our life in this country. Just about every industry and every community is impacted by the TPP, and yet, as I pointed out last night—and I did lose my temper in here—you act as though you're insulted that we're asking questions. Considering the gravity of how important this bill is, how big this deal is and how it's taken 13 years to get to this point—it's extremely controversial, extremely complex and there are thousands of pieces of paper covering an incredible amount of detail—I personally think we could be in here asking you questions for days on this, considering how much detail there is and how many unknowns there still are.
I think you've made it very clear, Minister, that this will come back to parliament if the US rejoins the TPP. I did hear you say in your last statement to Senator Patrick 'only if there's legislation'. I want to narrow that down. I'm being very specific with my questions here. Will it require legislation? I know they may change the clauses and there may be negotiations with our negotiators about the 22 suspended clauses but, if those clauses stand, will they require legislation to be put into any new form of the TPP with US involvement? Will that require coming back to parliament or are we voting on a contingency now for them to be automatically re-engaged, as they are if there are no changes?
Senator Whish-Wilson, you have asked this several times. I have already answered it several times. Again I will reconfirm—hopefully, for the last time because I've now gone through this several times and I don't think it could be any clearer—that this process follows exactly the same treaty processes that the government has done for decades.
I'll explain it to you. If you don't understand why your question is a hypothetical, let me walk you through why it is a hypothetical built on a hypothetical built on a hypothetical. The first hypothetical is that the United States will re-engage. That is a hypothetical. Then it requires all 11 parties to agree that these provisions will be reactivated and then it requires another hypothetical—that we would agree to any changes negotiated in the process from there. Again, it is the standard processes we have gone through under the current TPP negotiations and the TPP-11. It's no different to now. If legislation is required to amend custom tariff rates, legislation will come through. I cannot say it any clearer. What you are asking over and over again are hypothetical questions that cannot possibly be answered if and until all in this series of events arise.
Mr Temporary Chair, I want to ask a simple question. What is the question before the chair? As I read it, none of the matters on the running sheet have been moved. If that is the case, then I think there is a procedural provision that would require you to put the question to the chamber. What is the procedure that you are following? At the moment there is a general discussion where the same question is asked repeatedly and people are doing nothing but filibustering.
I'll take that interjection. This is an extremely important matter, Senator Carr. We're talking about supposedly the biggest trade and investment deal in this country's history. Just because you don't want the detailed answers to questions that we do! I won't let myself be distracted by that.
Minister, speaking about hypotheticals, I haven't asked you if the US is going to rejoin. I haven't asked you if they are going to change their 22 suspended clauses. They would be hypothetical questions. I have actually asked you what the process is if they do. That is not a hypothetical question. It is an absolutely critical question. I have asked you about the status of these clauses as they are now. Perhaps I will phrase it a different way, Minister. Why are there 22 suspended clauses in this legislation that relate to the US? Why do we have suspended clauses? Why haven't they been removed?
(1) Clause 2, page 2 (cell at table item 2, column 2), omit the cell, substitute:
I bring the chamber's attention to the Greens amendment on sheet 8529, and I'd like to ask some questions of the Minister in relation to that. But, Minister, first, I'd like an answer to the question put by Senator Whish-Wilson. I asked a very similar question yesterday and did not get a response. Why are those suspended clauses there at all? Why have they not been deleted? Did Australia argue for them to be deleted? If not, why not?
We're going to go on all day about this, Minister. We're not going to let you off the hook. Can you ask your staff to provide the answer that you provided yesterday to that question or at least give us some guidance on where we can find that answer? Senator Hanson-Young assures me you didn't provide an answer to that question yesterday.
It would assist the chamber if you could answer the question again, because we believe that you didn't answer the question. All we're asking for is a simple explanation as to why those clauses are even in the TPP.
Senator Whish-Wilson, that has been asked and answered, on my count, at least five times. Again, if you do not recall the conversation from yesterday in this chamber, I point you to the Hansard.
Senator Whish-Wilson, again, I point you to the copious amount of debate we've had on that in the last two days in discussion in the chamber. I'd again point you to the Hansard for answers to your questions.
Minister, I know it's not your fault that you've been put up to answer these questions without much background in the TPP and what's happened over the last decade or so, but I really think you should be more cooperative because people are watching you right now and it's clear you can't answer the question. You actually don't know the answer to that question, which is very embarrassing. Prove me wrong by actually answering the question; I'm very happy for you to do that. We have people looking at it right now and I'm very happy to keep talking until I get a copy of the Hansard and I can show you up for what you are. You have not answered that question.
Senator Whish-Wilson, I thank you very much for that condescending and very patronising question. However, it does not change the fact that that has been asked and answered in many ways. It is not relevant to these customs amendment bills, yet we have spent several hours now answering the same questions over and over and over again. I can assure you that I have not been left in the lurch. I am very confident and very happy to be moving these bills through the parliament. You can keep wasting the committee's time with these questions, as is your right, but, again, I know these questions have been asked and answered, and I refer you to the Hansard.
I want to bring the committee's attention to the Greens amendment that I moved a few minutes ago. This amendment deals with these most important issues that are lacking in the TPP. As has been pointed out numerous times by me and my colleagues in second reading speeches and also through the committee stage today and yesterday, we are extremely concerned that ISDS provisions remain in the TPP. We also are worried, of course, about the failure to include proper protections for Australian workers through labour market testing.
So this amendment says that, until these issues are dealt with, the TPP would not be able to come into effect. It is the bare minimum that should be required by this chamber—the absolute bare minimum. We've just heard question after question after question that was put to the minister not being answered because of an even more concerning sign that there are 22 other clauses that are incredibly controversial, such as making cancer medication too expensive for cancer patients to access. That is the type of clause which has been simply left there on the side, ready to be activated at any point, and the minister is refusing to answer questions about why Australia allowed those clauses to stay in place. If the minister is going to continue to not answer those questions, we could at least get to fixing what should be the bare minimum for the TPP, and that is removing those ISDS provisions and putting in place some proper protections for Australian workers, which is what this Greens amendment on sheet 8529 does.
Interestingly, these two particular issues—ISDS provisions and the labour market testing—are two things which we know the opposition say they are worried about, yet they are prepared to simply tick this TPP legislation through the chamber today without fixing them. There is a hollow promise that somehow, if Mr Bill Shorten were able to become Prime Minister, this would be magically dealt with. We know that that's not true. We know that the government of the day is not able to simply amend the TPP. We've heard the minister say that already today, that changes would need to be renegotiated across all parties. Australia would have to withdraw from the TPP before anything could be fixed. That's the truth. We've had that confirmed previously by the minister for trade. Here we have the Labor Party trying to wind up debate in this place today, shut down debate, because they're embarrassed that their own position is an absolute furphy. Their own position on this legislation is an absolute furphy. Why? Because they've got some in their party who think this shouldn't be a problem, that ISDS provisions are not a problem and that labour market testing is obviously not a problem, and they've got plenty of people inside their own camp who know that it is.
This amendment put forward by the Greens would fix these things. We don't have to wait for Bill Shorten to become Prime Minister. We could fix it today. Of course, we're going to have Senator Carr jump up in a minute and be very angry at me for pointing this out. You watch. There will be bluster and fury. He's very good at thumping the desk when he is a bit grumpy about how things are going in this place. So I suspect that will happen, because the Labor Party have sold out Australian workers, because the Labor Party have rolled over to back in the TPP, to keep these insidious antidemocratic ISDS clauses in the TPP. They're lying to the Australian people by pretending that somehow it can be fixed if and when Bill Shorten becomes Prime Minister. It's a lie. It's a furphy. Not just the Australian union movement know it; but workers across the country know it too.
I look forward to hearing the justification from the Labor opposition as to why they won't vote for this Greens amendment when it is part of their own party's national platform. I would like to also ask the minister, in light of this amendment, how the government is going to manage the chilling effect on regulation, given the existence of ISDS clauses in the TPP.
I've been called upon to respond, and I'm only too happy to respond. After all, it is only every second day that the Labor Party gets accused of being made up of liars! And Bill Shorten is accused by the Greens of seeking to mislead the Australian people. Of course, this is the party that has voted with the Liberal Party to undermine the entire environmental structures of this country. We could have had some decent environmental politics in this country; we could have had that—nearly 10 years now—if we had a party here that actually had some real principles and some real understanding of the way power is exercised in this country. But no: we're talking about the Australian Greens. We know just how irresponsible they are when it comes to jobs. We know just how extremely opportunistic they are when it comes to the welfare of the Australian working people, because that's the history of the Australian Greens. As we well know, the Australian Greens are centred on the most wealthy people in this country now. They've got the best social conscience that money can buy. What would you expect from people who live the life? They're only too happy to tell everyone else, with great moral authority, that they know more about how to live the good life than anyone else does.
When it comes to the question of the ISDS provisions, Labor does not support the inclusions. We've made that very clear. We have made it absolutely clear that this government has made a fundamental mistake in including these provisions in this agreement. We've made it very clear that this is a customs bill, that the treaty has been signed. And under the current procedures of this parliament, which we want to change—which we actually want to do something about, by getting a Labor government elected—we want to be able to transform the way in which treaties are undertaken in this country. But we have to acknowledge this fact: that under the current legal framework the treaty has been signed by the government, and what we have before us is a tariff bill that talks about the provisions with which we can change the tariff arrangements themselves.
We've also said that in the future we will prohibit—make legislative changes to stop—the inclusion of ISDS clauses in trade agreements. We will follow the example of the New Zealand Labour government and negotiate side letters to have these clauses removed and reinstate labour market testing should we be fortunate enough to get elected. And we make no assumptions about that. I've heard the Greens talk here as if the election's been already held and already resolved. We don't make any assumptions about those questions. What we do say is that we will be highly competitive at the next election, whenever that is, and we say it should be held very, very soon, because this country simply can't afford to have this government continue in office. But what we will not do is act in an irresponsible manner that is contrary to the national interest.
When the Liberals have made this terrible mistake with regard to this treaty arrangement, our manufacturers, our universities, our winemakers and our farmers shouldn't be made to pay for that mistake. Senator Hanson-Young's proposition would punish them for that mistake if we were to accept these propositions. We have a simple matter here, and I've made this point, but I guess there are some folks for whom you need to repeat things, because it takes a little while for it to sink in. In South Australia there are iron and steel workers at Whyalla who understand the importance of not being undermined by their political representatives. Their position in relation to Canada would be undermined by the proposition that you have put forward. There are, of course, workers in the wool industry. There are meatworkers across South Australia. There are people who work in the pork industry who, of course, would be faced with the advantage that would be given to Mexico under your arrangements, which would give Mexico a 20 per cent advantage in pork. There are people in the cotton industry, not to mention the South Australian wine industry, who would be seriously disadvantaged. I could go on. There's the seafood industry, which is particularly important in South Australia; horticulture; and, of course, cereals and grains. In all of these, advantages would be provided to the Canadians if we were to accept these amendments.
You don't want the Canadians to get an advantage? You'd prefer the New Zealanders? You think this is a responsible course of action to take. You would provide the New Zealand cheesemakers with an advantage over Australian cheesemakers in this transitionary period. Do you want to put the Canadian and New Zealand beef farmers ahead of Australian beef farmers or workers, the people in those industries who are seeking to get access to the Japanese markets? Abattoirs are seeking to get access to the Japanese markets under these arrangements.
What the Labor Party says is pretty simple. This is a very flawed agreement. We acknowledge that. We are in the business of getting that fixed, but we won't do it at the expense of farmers, winemakers, cheesemakers, blue-collar workers, manufacturers or our universities. We want to see those people enter international markets on the same basis as their competitors in New Zealand and Canada. I would have thought that would be a pretty straightforward proposition.
So, when it comes to the question of why the Labor Party won't accept these irresponsible stunts that you're putting forward, I think it's very clear. There is no way the Labor Party is going to join with you in these stunts to undermine the living conditions of Australian workers in the manner which we've become all too accustomed to from the Greens. You think this will go unnoticed? You're making a bit of a mistake.
Yes, they have. Again I will refer you to Hansard. We've now had nearly eight hours of debate and questions on this issue, these customs amendments.
Senator Hanson-Young interjecting—
Senator Hanson-Young, I think that, if you go back through Hansard, you will find that the words 'chilling effect', along with all the other Greens buzzword bingo words, came out yesterday. Again I will just refer you to Hansard yesterday. There is no chilling effect, because Australian sovereignty still remains, and the Australian government's ability to legislate and to deal with these issues remains completely unaffected.
I want to get back to the question that I had for the minister that she still hasn't answered yet, but before I do I just want to say to Senator Carr: I know that you did stand up for workers in the automotive industry going back over a decade ago, when the tsunami of free trade was heading for this country, and I know that you personally have been involved with seeing thousands of workers and their families losing their jobs and their communities on the back of the free trade deals that this country has signed in the last 10 years. I know you're aware that there might be benefits to trade, but there are also costs. You're aware of that personally. What we're trying to do here today is minimise those costs.
The amendment that Senator Hanson-Young has put up does that up-front, but we know that if anything gets amended then the deal's off, which is really the irony of this whole situation. We're doing our job in here as senators, yet, because this deal is signed and sealed by the executive and by the government, often for political purposes, through a treaty process that's a couple of hundred years old and desperately needs to be upgraded, we can't actually amend this deal or make it better, because we would lose the whole thing.
Minister, it's extremely important that you answer my question from earlier, and I'll put it to you again. You haven't actually answered this bit. I'm asking about the process. It's not a hypothetical question. There are suspended clauses. I can't find any examples of where suspended clauses have appeared in any other trade deals, like they have in the TPP. If the US rejoins and the clauses are not changed, so they stay as they are, will there be a legislative process where it comes back to parliament for our ratification, or are we voting on the contingency of those clauses being immediately reactivated if the US rejoins? It's a critical question. Fine, legislation is required to change the customs duties and tariffs—we're all aware of that. But, as they are, these are in there as suspended clauses. If they're not changed and the US is happy with them, will there be any kind of legislative process where a sovereign parliament, in a country like Australia, will get to ratify those clauses becoming part of the TPP, or are they de facto already part of the TPP? It is the most important question I can ask you here today. Unfortunately, I don't have more time; I could do this for days, but I really want to know the answer to this question.
Just because you don't like the answer doesn't mean it won't be the same answer I've now given seven, eight, nine times. Again, I cannot make it any simpler than I already have, but, hopefully for the last time, this will be very clear. We have the 22 clauses that have been suspended. If—if!—the United States rejoins and if all 11 parties agree to what's already been agreed to in those clauses, it will come back to JSCOT, but then it would require, as I've had reconfirmed, custom amendment changes. And, as I've said previously, if that were the case, it would come back to parliament, as it has now. You can keep asking me the same question, Senator Whish-Wilson, but the answer will be the same. And, if you ask the same question again, I will refer you to Hansard, because this has now been asked and answered several times.
I predicted fire and fury from Senator Carr, and we got that, so obviously the Labor Party are still very tetchy about their position in relation to rolling over with the Morrison government on the TPP. I find it extraordinary that something that is Labor Party policy is now being decried in this place as irresponsible. This is the Labor Party's own policy, but they're selling out their members, they're selling out the unions and they're selling out Australian workers. We know that, because they think it's so bad that if they were to come into government they'd try to fix it. The problem is they can't. Once the TPP is in, it is in. We've already had confirmation from the minister that, in order to fix any of this down the track, Australia would have to withdraw and renegotiate. And that is simply the truth of the matter. It doesn't matter how many times or how angry or how embarrassed the Labor Party are, that's the fact. They can make as many promises as possible to fix things, but they are hollow and they are lies. With that, I ask that the question be put on my amendment so that we can get on to debating the next sections.
Just before we do that, I need to correct an assertion you made there, Senator Hanson-Young. We do not have to withdraw. That was never suggested by ministers.
Senator Hanson-Young interjecting—
Senator Hanson-Young, we do not have to withdraw. Neither I nor Simon Birmingham, as the minister, has said that is the case.
Yes. Getting 10 other countries to agree to removing things, including labour testing for employment and ISDS, would be incredibly difficult when they actually want it in the deal now. Minister, can you confirm that if Australia insisted on the removal of ISDS from the TPP, and insisted on labour market testing for foreign workers, it would voluntarily have to withdraw from the TPP if it refused that or changed legislation in Australia that made that impossible?
A report that has been put out by the Parliamentary Library says it has been raised that these provisions mean that, when Australian governments make new laws or policy in the interests of Australian people, foreign investors can sue our government in international tribunals if they consider that those laws harm their investments or disadvantage them in some way. So you are saying it goes to a tribunal, that it does not go to an Australian law court whatsoever. Can you tell me and the Australian people whether that tribunal will amount to only three people making the decisions?
The process itself is actually in the treaty text and Australia would have to agree to that process and that arbitration panel. It is not actually a tribunal; it is an arbitration panel and it would comprise three members.
If you don't mind, Senator Hanson, I have a supplementary question to that. Minister, can you confirm that, for a panel member, there is not the requirement of being a judicial officer or former judicial officer and whether or not it can simply be a lawyer?
It is my understanding that it can simply be a lawyer, but I will wait for your answer. Obviously, this panel has the ability to award significant damages against a sovereign state in the event that a corporation is successful. Are there any bounds on the compensation amount that might be awarded against a sovereign state, understanding that some claims have amounted to billions of dollars?
Senator, I'm seeking further advice on that, but it depends on what's in the treaty itself. We'll get some more information on that. One thing I would like to point out and remind the chamber of in relation to the ISDS—something that we've discussed in great depth here over the last couple of days—is that this is reciprocal. Senator Hanson, this might allay some of your concerns. This is equally important for Australian businesses engaging overseas. For example, Australian mining companies want ISDS provisions in any future Indonesian free trade agreement because they provide certainty for those businesses themselves. Again, I think it's important to remember that this is not just an issue for others; it is an issue for us. In fact, in the negotiations on the Indonesia-Australia free trade agreement, the Indonesian government said that they want to have the ISDS to provide foreign investors, including Australian investors, with greater certainty in terms of doing business in Indonesia.
It's my understanding—and I'm not an expert on this—that concerns over the constitution of these panels have been raised. My understanding is that there are moves afoot internationally to wrap some greater controls around these panels. I'm wondering if you could provide some details on what is happening there and, indeed, whether Australia is a party to the discussions in respect of that.
Senator Patrick, thank you for these questions on the panel itself. You've clearly got a lot of background knowledge on these panels, so, if you would like to, it might assist the efficient business of the Senate—rather than drip-feeding questions that we need to seek further information on—to provide us with all of the questions up-front. We can take them on notice and seek further information from you to fill in the obviously already extensive knowledge base that you have in this area.
The final question I might have on ISDS is a question I raised with Senator Birmingham, and he was working towards an answer. In the event that a corporation here in Australia feels that they have been, in some way, disadvantaged because of a change of public policy or a change of law—I just want to make it very clear—I understand that they have the right to go to our courts to seek a remedy. This question does not relate to companies' rights to go to a court. It's clear under the ISDS provisions that a multinational corporation here in Australia can invoke ISDS provisions. My question is specifically related to an Australian company that feels that they need to be compensated in some way. Can an Australian company invoke an ISDS application in respect of a change of public policy, equal to what an international company can do?
That leaves the situation where we create in some sense a discrimination against an Australian company that feels aggrieved in respect of a change that has occurred. In the discussions that have led the government to this point, has it thought of any remedy to a situation whereby we give an international company that is operating in Australia a right that we don't give to an Australian company?
This treaty was signed in March. Currently before this chamber are two customs and customs tariff amendment bills. While I appreciate your desire to go off into some discursive discussion about the treaty itself, I would suggest that these questions might be more suited to estimates next week, where you will have the minister at the table and also the department to talk more about and unpack the process itself and any policy underpinnings of that. You can keep asking these questions in this place, as is your right, but they are not relevant to the legislation at this point. If you would like to have some discursive policy debate and discussion, we can continue to do so, but it is not relevant to the bill at hand, and many of those issues have been dealt with in now over eight hours of debate and discussion on these two customs bills.
I would like to ask a couple more questions with regard to what you've stated is a panel of three. I want to know their background. You should know the make-up of who is going to be on that panel. I want to know if there is an international interest on it or whether there are just Australians making decisions for a multinational company that may be suing the Australian taxpayer, who will have to pay out the end result. Who is on the panel, and is there an international interest on that panel?
Thank you very much for that question. As I have said, again, in answer to your and Senator Patrick's questions, these are ad hoc panels that are established under the terms of the treaty itself. It is a complete hypothetical, because these panels don't exist and would be established under the terms of the treaty. There is no panel yet. Again, as I've said to Senator Patrick, we will take it on notice and provide some more information on the wording of the treaty itself, but at the moment it is a complete hypothetical, because one hasn't been established.
I'm sorry, that's not good enough. You have made an international treaty with 10 other countries, the TPP. If this government has not made a decision on who is going to be on that panel then it is pathetic and this whole treaty needs to be questioned fully. You are saying it's hypothetical. You have put it in there. That's what I heard yesterday: 'It's hypothetical. This may never happen. We've had these agreements for the last 20 or 30 years, we've been challenged only once and that was not successful.' If that is the case then why have we signed up to it, when the New Zealand Prime Minister has written a side letter to say that they are not going to be bound by the ISDS, yet Australia is adamant on having this in? If it's not that important then write a side letter and don't allow any multinational company to sue us in the case that they may be able to.
I would point you and perhaps your staff to chapter 9 of the TPP document, which we can provide or is available on the internet. It explains the processes in detail. I think one of the misunderstandings implicit in your question is that this is not a standing panel or body, so it does not exist. It is a process that can be invoked, should it be needed and Australia and whatever other party were in agreement that this panel would be set up. At that point then they would go through a process of agreeing to and appointing panel members, but the panel does not yet exist; it is just a theoretical process. Again, if you like, we can provide you with chapter 9, the investment chapter. The process for this is clearly laid out in that chapter. That goes to the heart of Senator Patrick's questions as well. Senator Patrick, you're clearly, by the tone of your questions, very well aware of that chapter and the provisions within it. So, again, we can provide it to both of you, but it is publicly available information on how that process would be invoked if it were ever necessary. That's why it is a hypothetical, Senator Hanson—because it is just something to be invoked should both parties agree in future.
Just on the hypothetical, obviously there are rules around who can sit on a panel. Maybe I as a nonlawyer would not meet whatever the particular requirements are. In some sense, we're interested in the rules. My concern is we have a situation where, if it is in fact just a lawyer that makes the decision, we will have lawyers making decisions that could bind Australia to payments of billions of dollars. That's the concern that I'm raising.
Senator Patrick, I think you said it in your first sentence: you are asking a hypothetical question for a discussion that, I think, is best suited to having outside of this chamber at this time.
Senator Hanson, again, when you were in the chamber yesterday these questions were asked and answered in great detail. That does come under the labour market testing provisions of the treaty, which again we can provide to you. Experience is very important. These labour market testing provisions are not new. They are already in a number of other treaties. I understand community concerns. This is certainly an issue that the unions are very vocal about. But, when you have a look at the facts, for the Japan, China and South Korea free trade agreements, which are subject to LMT provisions, the evidence is that 457 visa numbers for those three countries actually dropped by 10 per cent after the introduction of those LMT provisions. So these are not new. The processes are the same, and, despite fears that this will lead to Australian workforces and workers being overrun, the evidence is simply not there.
Minister, you may say that there is no fear, and of course your 457 visa numbers have actually dropped. Yes, I agree with you that they have. But the thing is, if you say it's not a problem, why put it into the treaty? If it goes on labour market testing and if we need the workers, then why was it necessary to put in the treaty, as with the Indonesian treaty and the China free trade agreement as well, that they could actually bring in 5,000 workers over a period of time? If it is based on labour market testing, why put any numbers in it at all?
Senator Hanson, as I answered in response to questions from Senator Hanson-Young and Senator Whish-Wilson—and I believe you were in the chamber for some of that yesterday—because this is a treaty, these are reciprocal arrangements, so they apply equally to Australians working in companies engaged in arrangements with some of our treaty partners. This is not just an issue about workers coming into Australia. It is also important because we cannot request that or expect that of our own workers, for our own companies, if we don't have some reciprocal arrangements.
I do have some further detail for you, Senator Hanson, in relation to your question about what the commitments are. Australia's temporary entry commitments are limited to businesspeople from parties to the TPP-11, and they provide similar access to Australian businesspersons in equivalent categories. So Australia has committed to providing access for TPP-11 businesspersons to stay and work in Australia, but, again, they are quite defined categories. For contractual service suppliers it's one year, with a possibility of extension. For investors and independent executives it's up to two years. For intracorporate transferees, which is a fancy way of saying executives and senior managers, it's an initial four years, with a possibility of extension. For specialists it's a two-year stay, with the possibility of extension; and for installers and servicers it's up to three months. Spouses and dependants are granted entry to accompany executives and contractual service suppliers. So it is very specific, it is very limited and it is focused on business and executives and their spouses. It's not a free-for-all. It is very specific. And, as you can see, there are different time frames for different categories of business visas and engagements.
Thank you very much for that answer. I have with me the customs tariff amendment comprehensive TPP bill 2018. I'm reading through this and I'm trying to find answers to this. The whole customs tariff book is based on the customs tariff, because it is customs tariffs. But all it says is—I'll pick one out, item No. 80: 2710.19.53, and it's got $0.412/L. It doesn't say anything about what it actually is. And then you've got here in tariffs, from 1 January—all free. It doesn't state what's free. It doesn't tell me anything, looking at this book—what is free. So, we've got pages and pages of items coming into Australia, no tariffs—it's free. Where do I get the answer to this? What impact are these imports going to have on Australian producers, farmers and manufacturing industries in this nation? How much more industry and manufacturing are we going to destroy in this country by getting rid of tariffs—the one thing that actually helped our businesses here to compete with countries that are paying only a few dollars a day to their workers?
Thank you, Senator Hanson. As you can see from my glasses, my eyesight is not that great, so can you just clarify for me what document you're reading from? I'm presuming it might be the Customs Tariff Act 1995?
It says '2016-2017-2018, The Parliament of the Commonwealth of Australia, House of Representatives, presented and read a first time, Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, No. , 2018'.
That's the bill itself. There are two bills before the chamber. There's one amending the Customs Act and the Customs Tariff Act. I think, from the questions, that you're actually asking about the changes being made to the Customs Tariff Act. Would that be correct?
This is the book that was put out by the government. I presume it's about the tariffs—'Trans-Pacific Partnership originating goods'. It doesn't give you much information. That's what I'm saying. There's hardly any information here at all. It tells me nothing. So I can't relate back to my constituents and people of Australia what we have actually signed away. You can sit there and tell me that we don't have to worry about the ISDS, because we're going to send services to other countries; we're going to have Australian involvement in other countries. But you haven't really told me or the Australian people what's in exchange. What are these other countries going to be able to get out of Australia, or what imports are they going to be able to send to Australia? What impact is that going to have on our country?
Thank you very much for that clarification, because I now understand what document you've got before you. I've got some specific information, because now I understand that you're talking about the amendments to the Customs Tariff Act. But what I would say is that there's a number of documents that can help you and your staff in relation to this. The first one is the explanatory memorandum, which does actually provide the detail, because the bill is—as you say, it is a very technical amendment to the act itself. The explanatory memorandum does have that information.
But I think I can short-circuit some of that more detailed information for you. The customs tariff amendment bill will make the following three major changes: first, it provides preferential rates of customs duty for all goods, excluding excise equivalent goods, that are determined to be originating within the new part of the act; second, it inserts new schedules to provide for excise equivalent rates of customs duty on certain alcohol, tobacco and fuel products and for phasing rates of customs duty in accordance with our treaty obligations; and, third, it amends certain concessional items in schedule 4 of the Customs Tariff Act to maintain customs duty rates in line with applicable concessional items. I would refer you to the explanatory memorandum, because that is the technical explanation of the technical bill that you're having a look at. What you're looking at is quite technical, because it is actually the wording to amend the act, whereas the explanatory memorandum explains it. I would also refer you to the Legal and Constitutional Affairs Legislation Committee report on these bills, which goes into some detail about what the customs amendment and customs tariff amendment bills are all about.
In respect of the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, I move Greens amendment (1) on sheet 8530:
(1) Clause 2, page 2 (cell at table item 2, column 2), omit the cell, substitute:
Given the failure, sadly, of the amendment just now because the Labor Party refused to be an opposition and voted with the government to tick through the TPP—despite the fact that that amendment was simply instating the Labor Party's own policies; take that as you will—this amendment ensures that any need for funds to fight an ISDS clause would have to come before the parliament. It also ensures that there is proper transparency around how taxpayer funds are being spent in defending our sovereignty and our laws and regulations against multinationals. Given we now have a TPP agreement with locked-in ISDS provisions, it is absolutely essential that the Australian people know what this is costing us and what the impact is, and that transparency prevails. This is about ensuring that the government can't paper over what they've just agreed to; that the Labor Party, either in opposition or in government, can't pretend that this isn't having a chilling effect; and that taxpayer money being spent on it is accounted for, and sunlight is shone in places where, we know, both sides of this place would prefer it not to be.
While I've been on my feet speaking, it has been just fascinating to see the minister in negotiations with the Labor Party. It just proves what a cuddly, convenient relationship we have now between the two parties in this place, with the Labor Party and the coalition selling out Australian democracy: selling out the rights of the Australian people to have laws and regulations that protect their health, protect the environment and look after their best interests. Meanwhile, Labor and the coalition are passing legislation that puts the interests of big multinational companies first. That's what they're more interested in doing. How can they shut down debate today? How can they make sure that power remains with the big corporates rather than with the Australian people?
I urge all in this place to support this amendment now that the Labor Party have rolled over with the government to lock in these provisions which would allow multinational companies to sue the Australian people over regulations and laws that perhaps the public want because they know they are in their best interests. At the very least, the government of the day needs to be transparent about how much this is going to cost and what is on foot. It's a transparency measure. There should be nothing to be afraid of. But, of course, the proof will be in the pudding. We'll see the Labor Party and the coalition vote it down because they don't want the public to know just how bad this TPP deal really is.
I want to reflect on the comments that were made previously by Senator Hanson, who raised a very good point. In these trade debates, if you like to call them debates—in the spin around promoting free trade deals, which has happened since Mr Tony Abbot was elected in 2013 and we've seen an avalanche of bilateral trade deals; bilateral trade deals being trade deals between two countries—it is fascinating how the government will line up. They come in here at question time and quote their numbers—and Senator Carr has just done it in his statement to the chamber—about all the benefits that our exporters are going to receive when foreign countries allow increased access to their markets. But never in the debate do we talk about the costs of free trade deals. There are costs. Every economist acknowledges it. Those costs need to be weighed up in the debate, in the matter of public interest, against the benefits. That's how we assess whether a trade deal, or a trade investment deal like the TPP, is in our national interest.
It's fundamentally dishonest that we never talk about the impacts of these deals on our local producers, on our local manufacturers and on our local farmers. I can tell you that campaigns such as 'buy Australian', 'buy Australian beef' and 'buy Australian seafood' have triggered state-to-state dispute settlements in previous trade deals like NAFTA, where US beef and Canadian beef—pardon the pun—had a major beef over a 'buy local' campaign. These trade deals make it extremely difficult for us to support local businesses or for governments to subsidise or provide assistance to local businesses and local industries. That's why we saw the loss of tens of thousands of Australian car workers. It has mainly been a slow decline, but it has been very rapid in the last five years as this Liberal government has signed an avalanche of free trade deals—mostly to get a headline and a press opportunity. I haven't seen any evidence that these deals have benefited our local exporters, but I can tell you that I hear all the time about how difficult it is for local farmers, producers and manufacturers to compete with cheap foreign products. That is what Senator Hanson asked. What access are we giving away and selling down the river? Who are we selling down the river?
You may remember that the Korean free trade deal was called by the media, very cynically, 'the cars for cows deal'. In other words, we sold out our car industry to get increased access for our beef farmers. Let's just look at that example. If that's true, and I believe it was the case, who makes that decision? Who is the high, almighty arbiter of the fact that we are going to kill the car industry, its intellectual property and the decades of communities and workers who have grown up in those communities, as well as the ability to make our own cars and all the other ramifications that go with that? Who makes the decision that we sell out an entire industry and that we will trade that off against increased access for our beef farmers?
When you deal with bilateral deals, any economist will tell you that any simple input-output model, or any other economic model, can't accurately predict the benefits of those deals. That's because you end up stealing trade off other countries who you don't have bilateral deals with. I'm not going to give everyone in here a lecture on economics, but that's why, in theory, multilateral deals—like the deals we saw through the WTO, which fell apart after the Doha rounds—are the only kinds of deals that do bring net economic benefits. These bilateral deals and these multilateral deals don't. It is a really important point when we're about to vote very soon on this massive sellout of Australian interests—and for what? We need to consider the costs. They need to be properly quantified. No-one wants to talk about it in the public debate. It's absolutely our role here in the Senate to bring balance to this debate and to raise these issues with you, Assistant Minister.
I had a couple of quick questions for you in relation to the environmental chapter. It was welcome when the environment chapter in the Trans-Pacific Partnership agreement was negotiated. The environment chapter is chapter 20. There's a section in there that relates to the protection of cetaceans. I just wanted to ask you, given the importance of protecting cetaceans under Australian law, what ability we will have in the use of the TPP—presuming it's going to be ratified by this parliament very soon—and how that chapter will enable us to stop Japanese whaling in the Southern Ocean, considering Japan has been the leader of this TPP-11 that we have before us here today. When the US pulled out, it was the Japanese Prime Minister, Prime Minister Abe, who reignited and reinvigorated the push for the TPP-11.
We saw, just a week or two ago, that the Japanese government was threatening to pull out of the International Whaling Commission, a rules based order around whaling that Australia showed leadership in over 35 years ago by banning commercial whaling. How will we be able to use this environment chapter in the TPP to hold the Japanese government to account if they go down to our Southern Ocean and start slaughtering whales on an industrial, commercial scale? That is what their stated intention is. I'd like to know how we can actually use this chapter to stop that from happening.
I think I've just discovered why some of these questions are coming from my Greens colleagues. You said that this will be ratified shortly. This is actually a treaty that was ratified back in March of this year, and these are two customs enabling bills. You just said it hasn't been ratified yet. Well, it has been ratified. That might perhaps explain the misdirected nature of some of these questions. Again, as you acknowledged, this is in chapter 20 of the treaty. You obviously have a copy of the treaty and of that chapter. These questions have absolutely no direct relevance to these two customs bills at all. So perhaps, Chair, I might ask, in that case, if I could just get your opinion of whether these questions are in order, because they relate to a treaty that was ratified in March of this year. We have now spent nearly 10 hours on debate in this chamber on the same questions over and over again—on questions which actually relate to a treaty that has been ratified and which are not relevant to the bills here today. Chair, if I could ask for your guidance.
The CHAIR: It is a broad-ranging debate. The senator was asking for your view on the impact of that treaty on a free trade agreement, and I believe that you've answered that question.
I would say they're trying to distract away from that question. This is chapter 20. I won't say you deliberately misled the chamber then, Minister, but what we're doing today is ratifying this in parliament. You've signed this deal. Your executive has ratified it, but parliament hasn't ratified it yet. That's exactly why we're here today. That's what I would say a vote on the legislation is. But it's an attempt to actually distract away from the critical issue about which I asked you, which, by the way, is a question that hasn't been answered. And I'm sure you'd expect me, as a Greens senator, to be asking this question.
This environmental chapter was put in the TPP to try to bring civil society on board with the TPP. I've been following it long enough to know that's the case. It was designed to bring in environment groups, as were the other chapters in there around slave labour and wildlife trade. There's a whole array of stuff in here. As I mentioned earlier, it covers just about every aspect of life in every country that's signing up to this, and it is part of what we are ratifying as a parliament. You are giving effect to the customs and tariff side of this. That's what actually makes this treaty come into effect. But it is all the same. So this is absolutely critical, and I ask you again: is there a binding clause in here? Is it the purpose of this environmental chapter that Australia can take action against the Japanese government if they go down into the Southern Ocean this summer or next summer and resume commercial whaling, which has been banned for over 35 years? Will this actually allow us, as a country, within our relationship in the TPP-11, to take action against the Japanese government?
Senator Whish-Wilson, if you're going to ask me a question, please allow me to answer the question. Again, I'll provide the same answers that I've provided over probably seven hours of questioning on the same issues. This is a treaty that has been signed. We are now dealing, before this chamber, with the customs bills to fully enable our agreements. In relation to the issues in chapter 20 that you're talking about—the environmental considerations—the parliament has had ample opportunity to debate this. Over the course of the last two years, the provisions of the TPP have been debated, and I've gone through the various inquiries in this chamber already. I think there have been at least five parliamentary inquiries. There have been over a thousand consultations with 485 separate organisations, which is incredibly comprehensive. It is the most comprehensive engagement and parliamentary debate on any treaty that Australia has ever been party to.
We've already dealt with a range of these issues over and over again in over seven hours of debate in this place. You and I both know that the questions you just asked are far more appropriate for next week's Senate estimates process. But, again, go back and have a look at your own remarks in Hansard, Senator Whish-Wilson. You have already acknowledged that you have raised these issues in multiple estimates committees over multiple years, so it's not like you and the Greens have not had ample opportunity to get engaged and involved and to debate these issues. You have. We can sit here for the next several hours—I think it's taken 10 hours of the Senate's time already—and it's your right to keep us talking about the same things over and over again, but, ultimately, you are reprosecuting a treaty that was signed in March. These are customs amendment and customs tariff amendment bills. There is nothing that I have not repeated over and over again. If you keep asking the same questions, I will keep giving you the same answers, because the answers do not change, even if you do not like them.
If you don't like what's in the 29-plus chapters of the TPP, your opportunity to stop it is to vote against it in this chamber. We can vote against this enabling legislation, which would mean the whole thing falls apart. Minister, why would I want to prosecute the case in estimates next week, when the deal would have already been voted on and passed into law? Now is the opportunity for these issues to be raised. By the way, I actually haven't read the final text, because it has changed so many times. I was involved in this for the previous TPP. Senator Hanson-Young has done a fantastic job as our trade spokesperson since then. I am asking you now. I have looked at this and I'm looking at the detail right in front of me. I would like you and your advisers to tell me how this chapter will help us hold the Japanese government to account if they begin illegal commercial whaling in the Southern Ocean. Considering there is a section on mammal and cetacean protection, do we have binding agreements in here? What action can we take? Is it a state-to-state process? What is the process that we can use? Or is this environmental chapter, essentially, just platitudes? Is there nothing in here that we can actually use to bind another country's actions around the protection of mammals like whales, which, as you know, are very important to the Australian people?
Senator Whish-Wilson, I think you've just said it: you haven't actually read it. I think it would have been helpful to engage in this level of debate having actually read the document first. That said, I find it inconceivable that you don't understand that these are two separate processes. The treaty process is one arrangement, and there is nothing in that that precludes Australia from continuing its activities on the international stage in discussion with Japan. They are two separate processes. I'm sure you well know that.
I said I had read it. I said I wasn't involved in all the estimates questions that you referred to earlier. I must say you're doing a very good job on avoiding answering the question, with your little, granular details on this or that. I asked you: what can we use in this chapter of the TPP? We're about to enter into an agreement with Japan, along with 10 other countries in our region, that covers a whole range of impacts. What in here will allow us to hold the Japanese government to account? If you don't believe that's the case, then just say so. Please answer the question.
I did answer the question. You didn't like the answer. I'm finding it difficult to put it any more simply for you, Senator Whish-Wilson. The fact is that they are two separate processes.
Senator Whish-Wilson interjecting—
Senator Whish-Wilson, please don't feign ignorance. You know the difference. You are probably more familiar with the international whaling activities we take and the processes than just about anybody else in this chamber. They are not linked. They are two separate processes.
Of course the International Whaling Commission is a separate process. The TPP has a chapter so that 11 countries can cooperate on protecting mammals and cetaceans. That's my question: what in this chapter will allow the Australian government—hopefully—to put pressure on the Japanese government to stop killing whales? Why even have a chapter that includes the protection of whales in a multilateral agreement if it's not going to actually work? A corporation or a government can sue another government for a breach of rules and regulations around economic factors when it affects their profits. Why even have a chapter in the TPP if we can't have binding agreements that have consequences on matters in relation to things like wildlife trade and the protection of cetaceans?
Senator Whish-Wilson, I'm now convinced you are trying to have a lend of me in this extended filibuster, because this has been asked and answered. They are two separate processes. There is nothing in that that precludes us from doing what we are doing already or from taking any actions the Australian government wants to take in those fora. You can keep asking me the same question, but the answer will be the same. They are two separate processes and two completely separate issues, and there is nothing to preclude Australia from taking the action that we are already engaged in.
I will take your answer, and put it in the Hansard, that there's nothing in the TPP that will be useful for us to hold the Japanese government to account on the protection of whales. Let every Australian understand and know that—that this whole chapter is a furphy. Now I'm calling it out, as we're about to vote on it.
Senator Whish-Wilson, I will direct you to the Hansard. I don't want to delay this chamber any further, but you have completely misrepresented what I said, and I would draw you, and anybody else interested in this, back to the Hansard. That is not what I said.
I put on the record that I am very concerned about the signing and ratifying of the TPP-11. The United States and President Trump saw no reason to be involved in this and they've pulled out, so there are grave concerns. I will make comments on why I'm concerned about it. There was a free trade agreement with America signed by the Liberal Party in 2004 and ratified with support from the Labor Party. It came into effect in January 2005. Under that free trade agreement, from day one, Australia got rid of all its tariffs. America negotiated for its industries such as beef, horticulture and other areas to keep their tariffs on Australian exports into that country for between 11 and 18 years. That was for beef, horticulture, wine, steel, cotton and sheep. That was not a good deal for Australia. So it really concerns me when free trade agreements are signed off without being debated in this chamber and without the people of Australia being allowed to have a say in any of these treaties and agreements.
I can understand why you are saying it's a good thing—because we will be able to export our products to other countries around the world—and I'm sure a lot of people are very happy about that, especially in industry and the farming sector. My concern here is that in Australia we have a problem with multinationals paying their taxes. There are over 700 multinational companies in Australia that pay no tax at all. I hear the same old rhetoric from the government: 'We are addressing that and we are reining it in.' Under this free trade agreement, you are opening up the gates for multinational companies to come here, and they will be able to bring in their workers. My question to you is: if we are going to open it up to more multinational companies to come into Australia and work here, what is the government doing to ensure that they will pay their taxes here in Australia and not add to the over 700 companies already that pay no taxes in Australia, which costs the Australian taxpayer?
Thank you, Senator Hanson, for that question. I think most of that was a comment rather than a question, but, in relation to paying tax, I think that is a perfect question for Senator Cormann in question time, because any companies operating here would be subject to exactly the same laws and enforcement on taxation and all other regulations. The issue you raise is one of enforcement under Australian law and is not directly relevant to this bill here today, but it is a good question, and I would encourage you to take that up with Minister Cormann.
I want to talk a little bit about ratification, because I heard the exchange between Senator Whish-Wilson and the minister. I just want to repeat a point that Mr Mina of DFAT, who is an expert in this field, made in his public testimony:
The second point is simply to note that three countries—Japan, Singapore and Mexico—have all ratified. Three more need to ratify for the agreement to enter into force. Developments are gathering apace in five other countries—
and he mentions them. He continued:
It is very possible that, if Australia isn't an early mover on ratification, we will not make one of the first six … We do, therefore, commend early ratification to the committee, and we're looking forward to answering any further questions you may have today.
There seems to be some confusion. I put it to you that Mr Mina is an expert in this field. He is very well respected. But this treaty, I presume, hasn't been ratified on the basis of the testimony of Mr Mina.
Moving on next to the point about relevance to the bill, again, this bill is enabling legislation for a treaty and it's very normal in committee stage to deal with consequences of bills, including consequences that are not directly related to the bill. Pretty much everything is in order when we're talking about the TPP.
In the government's consideration of the agreement, once again, after many years I'm sure that the government has done its due diligence on this. It is clear, in respect of labour market testing, that there are about 450 professions that could be covered by the term 'contractual service supplier'. And I note that, for those contractual service suppliers, we don't have to have labour market testing. They can simply come to Australia under the agreement and take the role of an Australian worker without testing. What analysis did the government do in terms of the numbers of likely foreign workers that would come to this country without that testing?
Thank you very much, Senator Patrick, for your several questions wrapped up into the one. The first one I'd like to address is that article that you were talking about. Again, I think there is a bit of danger in reading bits and pieces, so what I'd like to do, perhaps, is go through with you the risks of not ratifying quickly and wrap up some of those issues. In that context, analysis reveals Australian industries would be at immediate disadvantage if we fail to ratify the TPP-11.
In terms of the process, it will enter into force 60 days after six countries have ratified the agreement. Japan, Singapore and Mexico, as I've said previously in this place, have all ratified. New Zealand and Canada are close to ratifying. They have almost finished their own domestic processes. After ratification, New Zealand and Canada would receive an 11 per cent tariff cut for their fresh beef exports to Japan next year, giving them a tariff rate of 2.2 per cent, which is lower than our current preferential treatment under our free trade agreement with Japan. This is significant given the value of all our beef exports to Japan is over $2 billion a year. That would be giving New Zealand and Canada a significant preferential advantage over our own beef producers right here in Australia.
Senator Carr has already identified this as well in the chamber, but I'm very happy to keep going through this with you. It is not only the beef industry. The New Zealand wine industry would gain an edge over our own domestic industry. The Canadian wine industry, which is growing, would also have significant advantages with the elimination of Canada's tariff, which on wine is currently 4.68c a litre, upon entering into force of the TPP. Again, that's a significant disadvantage to us potentially, because our wine exports to Canada were valued at nearly $200 million last financial year.
We've got beef, we've got wine and we've also got dairy. Under the Japanese free trade agreement the tariff rates on our cheddar cheese exports into Japan currently sit at nearly 30 per cent. On ratification of the TPP-11 New Zealand and Canada would have their tariff rates immediately cut to 27.9 per cent, obviously less than ours. Again, that gives them a competitive advantage over our dairy producers, because Australia's tariff rate would continue to remain at nearly 30 per cent.
We've got beef, we've got wine and we've got dairy. Also, Australian exports of iron and steel to Vietnam are currently worth $146 million a year. If Australia is not amongst the first six countries in the TPP-11 and Vietnam is, then Australian iron ore and steel exporters will be at a significant disadvantage to their Japanese steelmaking competitors—
I'll take that interjection. This is not hypothetical, this is a reality. That is what will happen under these agreements. Again, if Senator Whish-Wilson had actually read this material, he would understand that that is the case and this is an issue that is directly relevant to these customs and customs tariff amendment bills here today. But that's not it; there is more, Senator Patrick, in terms of disadvantage for Australia. Australia would receive enhanced quota volumes for wheat and barley. Canada would receive an additional 40,000 tonnes of wheat exports into Japan—again, a significant disadvantage for Australian farmers. Australia's exports of wheat and barley to Japan were worth over half a billion dollars last financial year. So, again, there will be tangible and specific disadvantages for a number of Australian industries if we are not in that first six. The TPP-11 will eliminate all remaining tariffs on Australian raw wool exports to TPP-11 countries from entry into force. Australian wool exports to TPP-11 countries are valued at $35 million and growing.
Finally, the TPP-11 links Australia with some of the world's major automotive producers, including Japan, Mexico and Canada, and we would not have preferential access to these markets for our steel products. Senator Patrick, again, the facts are very clear, and I welcome these questions on this issue because they are directly relevant to these bills and the consequence of not passing these bills.
Minister, you are talking about the consequences of this treaty entering into force, and that's a very appropriate thing to do in this debate. But we shouldn't just talk about the positives; we also need to talk about the negatives—and I think that's what we have been doing and trying to do. Minister, you indicated to Senator Whish-Wilson that the treaty has been ratified when in actual fact it hasn't.
Senator Reynolds interjecting—
No, I understand. It has been signed but it hasn't been ratified—and I note that, in your answer, you conceded that. I just wanted to make that relatively clear. We support free trade. We're just trying to deal with the unintended consequences—or maybe the intended negative consequences—and just trying to understand the magnitude of that consequence in order to make an informed decision about whether we allow legislation that would bring this agreement into force. I was asking questions about labour market testing. We know that, under this agreement, there are up to 450 categories of workers who may come in from overseas to fulfil a particular role for a multinational corporation. In the analysis and deliberations that took place, was there any measurement, modelling or calculation done as to how many workers per annum—assuming the treaty was being used effectively and benefits were flying on both sides—the government expects to come into the country as a result of this agreement?
I would again note a couple of things in relation to this. The labour market testing and the issues around that have been answered by you and others over many hours. So, in terms of the substance of that, I'll again point you to Hansard. Your specific question, which again is not relevant to these bills, relates to the debate before we signed the treaty back in March. Again, I'll point out that that is a discursive discussion better suited for estimates next week. However, as the senator well knows, that is almost a hypothetical, because it is market driven. So the government cannot tell you exactly how many, just as we couldn't with the Japanese, South Korean and Chinese free trade agreements because it is—
I know the Greens have no concept of what 'market driven' means, but Senator Patrick does. You know very well, Senator Patrick, that this is market driven. And you were in the chamber when I gave this answer to Senator Hanson. To get some indication, if you go back and look at the three free trade agreements—with Japan, South Korea and China—you will find that, since they were ratified, 457 visa numbers for those countries have fallen. While we cannot tell you a precise number, as you well know—because it is market driven—if you would like to go into the treaty policy analysis of cabinet, that is something you can ask the minister in estimates next week and have a much more discursive discussion, which is not relevant to these bills here today.
I do understand the concept of 'market driven'; I was referring to discussions that may have taken place during the deliberations in respect of the treaty. Surely the government, as they were going through the machinations of considering the terms of the bill, would have looked at this and said, 'What does that mean for Australia?' I don't necessarily expect them to be right, because, as you correctly say, they're market driven. But it is not so much a hypothetical as it is an issue of fact. During the deliberations, when the Australian government was working on this agreement, did it ever look at the numbers of workers that it thought might come in as a result of the treaty coming into force?
I'd refer you to my last answer and the many others before that. As you well know, those are questions about policy development and implementation that the parliament has had five opportunities that I'm aware of to ask and have answered, including in many Senate estimates, which I know you have been involved in. Again, you and I both know these are not questions for this session. If you want to keep asking about issues of policy that don't relate in any way to the substance of these customs bills, I can only keep providing the same answer: that is not relevant to this discussion, because, as you know, it is self-evident. No matter how calmly and nicely you ask these questions and pad them out, the answer is still the same, Senator Patrick: government considers these questions in the course of any treaty negotiation and process. The parliament has had ample opportunity over the last two years in this most debated, discussed and reviewed treaty process. If you want to ask questions about that process again in relation to these bills, I again suggest you raise them directly with the minister either in question time or, more appropriately, in estimates next week.
I'm trying to garner information for the vote that will be cast in relation to these bills. You must accept that they have quite significant consequences. It allows the treaty to come into force after six countries have ratified the treaty. Are you suggesting we shut down the committee stage just because we've had inquiries and Senate estimates? This is exactly what this stage of debate is about—making sure we have the details we require to make a good decision. If you're suggesting I hold off until next week, are you in a position to state that you would recommit the bills to a vote after these questions were answered at estimates?
Good grief! You are now having a lend of this chamber. You implied—in fact, you didn't imply; you said—I was seeking to gag debate in any way. We've had nearly 10 hours in this chamber in the second reading debate and probably at least seven hours on these same issues over and over again, which have been asked and answered many times. Many of the questions are completely irrelevant to this bill. You can ask these questions, as is your right. All of your colleagues in this chamber, the government and the opposition are according you the courtesy of allowing you to filibuster on this bill. And we will keep answering the questions. As long as you keep asking the questions, we will keep answering them, but the answers will be no different. You well know that these issues that you're raising now are not issues in relation to this bill or issues for this chamber at this time. But, of course, we will accord you the respect of allowing you to keep doing what you're doing. We're here to answer your questions as they're relevant.
Minister, you just accused me of being patronising a few minutes ago. Your idea is that somehow we are filibustering and trying to waste the committee's time by asking really important questions about supposedly the biggest multilateral trade and investment deal this country has ever signed. It has taken 13 years to get to this point. It has been highly controversial and extremely complex, and we still don't feel like we've got any answers out of this. I think you need to take on board that, if you're hearing similar questions repeated by various senators, it is probably because you didn't answer them in the first place.
The CHAIR: The question is that the amendment standing in the name of Senator Hanson-Young be agreed to.
by leave—I move Centre Alliance amendments (1) and (2) on sheet 8523 together:
(1) Schedule 1, item 3, page 8 (after line 6), at the end of Subdivision A, add:
153ZKUA Cessation of effect of Division
This Division ceases to have effect on 1 January 2020 unless all of the following come into force for Australia before that day:
(a) bilateral side letters exchanged between Australia and each other Party agreeing that Chapter 9 of the Agreement, which deals with investor-State disputes, does not apply in relation to an investment in Australia by an investor of the other Party;
(b) bilateral side letters exchanged between Australia and each other Party agreeing that labour market testing must occur in relation to contractual service suppliers entering, or proposing to enter, Australia from the other Party.
(2) Schedule 1, item 4, page 19 (after line 18), at the end of Division 4EB, add:
126AKM Cessation of effect of Division
This Division ceases to have effect on 1 January 2020 unless all of the following come into force for Australia before that day:
(a) bilateral side letters exchanged between Australia and each other Party agreeing that Chapter 9 of the Agreement, which deals with investor-State disputes, does not apply in relation to an investment in Australia by an investor of the other Party;
(b) bilateral side letters exchanged between Australia and each other Party agreeing that labour market testing must occur in relation to contractual service suppliers entering, or proposing to enter, Australia from the other Party.
I want to point out that the objective of this amendment is to include a sunset clause so that unless bilateral side letters are exchanged relating to ISDS provisions and labour market testing by 1 January 2020 this legislation is repealed. We believe that these amendments will allow the TPP-11 to enter into force but signal to other countries that Australia is planning to remove the ISDS clauses and reinstate labour market testing. If those arrangements haven't been made, the legislation will then be repealed.
These amendments give effect to the TPP. In that sense, they address the concerns raised by Senator Farrell in his statement yesterday, where he said that he was concerned that our exporters would miss out on a second tariff cut on 1 April 2019 for Japanese markets. That would give Canada and New Zealand an 11 per cent tariff cut on beef, making their rate lower than Australia's and hurting our beef producers. Our cheddar cheese producers would lose out to New Zealand, who would have a tariff rate four per cent lower than Australia's, et cetera.
Senator Carr, of course, raised some concerns about what would happen if we didn't enter into the TPP now. We respect those concerns. These amendments accommodate the Labor Party's announced intention to make sure that those provisions are removed, except that they provide a guarantee that is beyond Labor's control: if they are not elected next year, these sunset provisions will come into effect. That will, in effect, nullify our ratification and will keep their constituents—the unions and the hardworking Australians who vote for the Labor Party—happy. We would encourage Labor, in this instance, to support this.
I know a concern was raised by Senator Farrell that this may put in place an artificial deadline. Let's presume that the Labor Party were to form government next year and were to commence negotiations. If they felt that for some reason they weren't going to hit the deadline that was imposed by these amendments, I can then assure the Labor Party that we would be very open to a change. In good faith, they could come to us—or Senator Griff and myself, at the very least—and we would perhaps support a change to give more time for the Labor Party to have either these cancerous provisions removed or the labour market testing restored. In that context, I urge the Labor Party to support these amendments that not only are consistent with their national platform but are consistent with the plan that Mr Shorten has announced and made a commitment to in respect to their constituents.