Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

I am pleased to speak on the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and cognate bill on behalf of the people of the electorate of Ryan, whom I represent in the Australian parliament. This legislation is all about exports and jobs and creating economic prosperity for the people of Ryan as well as, of course, our fellow Australians who, through the length and breadth of this country, are involved in trade, commerce and business. On 27 May 2008 the Australia-Chile Free Trade Agreement negotiations were concluded. On 30 July 2008 the agreement was signed. Both sides are aiming for entry into force of the agreement on 1 January 2009. Australia has commenced the domestic processes to ratify the treaty.

In December 2006 the former Howard government agreed in principle to commence a bilateral negotiation process with Chile with a view to developing a comprehensive free trade agreement to strengthen and deepen the trade relationship. In the first half of 2007 officials conducted a series of consultations with Australian industry, state and territory governments and other interested stakeholders to assess barriers to trade with Chile that could be addressed by a free trade agreement. Australian officials also met with Chilean officials to determine the scope for achieving a comprehensive, fully liberalising trade agreement. In July 2007 Australia agreed to enter into FTA negotiations with Chile. Four negotiating rounds were held between August 2007 and April 2008 along with two intersessional meetings in March this year to advance negotiations in particular areas. Negotiations were concluded at the end of May 2008.

This will be Australia’s fifth free trade pact and our first with a Latin American country. The agreement will deliver new trade and investment opportunities to Australia and it will be an important milestone in our growing engagement with the wider Latin American market. The FTA covers trade in goods, services and investment and is truly liberalising, with commitments that go beyond both countries’ WTO commitments. This is consistent with Australia’s policy that free trade agreements should support and complement our efforts to promote further multilateral and regional trade liberalisation. It is a WTO-plus initiative. The Howard government when in office was not exclusively of an ideological mindset that it would only pursue free trade agreements. It was very much a team that batted for multilateral trade liberalisation but took the view in government that it could not stake everything exclusively on the Doha Round’s completion. Anyone with an interest in international trade will know that the Doha Development Round has spectacularly failed and prospects for its success in the near future are grim indeed. The Howard government shone the spotlight on regional trade agreements, some of which have been very effective, and I will come to those in a moment.

This legislation is consistent with Australia’s general trade policy. It introduces a high-quality FTA into the APEC region—a model for other bilateral and regional trade and economic integration efforts among APEC members. Australia is a very important member of APEC and Prime Minister Rudd will go to Latin America to participate in the next APEC meeting, which will be hosted by Peru. The FTA delivers the most comprehensive outcome on goods in any such agreement negotiated with another agricultural producing country since the CER agreement with New Zealand, our very close friend and neighbour, who now has an even stronger advocate in new Prime Minister Key for more liberalised trade with the wider world.

Tariffs on all existing merchandise trade—in both directions—will be eliminated by 2015. The vast majority of Australian goods exported into Chile—and Chilean goods exported to Australia—will enter duty free from entry into force of the FTA which, as I touched on earlier, is expected to be 1 January 2009. Chile is Australia’s third largest trading partner in Latin America. It has a population of 16.6 million and a GDP of US$164 billion. I note the latter figure in order to compare it with Australia which, as the 13th largest economy in the world, has a GDP of some $1.1 trillion plus. Chile is seen to be Latin America’s most stable and transparent market, a commercial and dynamic place to do business. It is a country that buys our coal. We have a lot of engagement in the engineering area with civil engineering equipment, specialised machinery and vehicles.

Australian merchandise exports to Chile totalled some $200 million in 2007. Chile is a country that buys our services exports, valued at some $120 million in 2007. It is an area that we very much hope will expand. It is a country with over 70 Australian, or Australian affiliated, companies, mainly in the area of mining services, gas distribution and power generation. It is a country that has significant natural resources as well. Two-way trade between Australia and Chile is growing fast—up from some $574 million in 2006 to some $856 million in 2007. Our nation is the fourth largest foreign investor in Chile with around US$3 billion of direct investment. All this is very positive and it provides a base, I think, from which we can expand. It is an investment which we hope will encourage all those who engage in free enterprise, all those who want to see Australia on the global stage in international business, to seize these opportunities with one of Latin America’s most dynamic countries.

The free trade agreement will offer Australian exporters opportunities across the board. This will be particularly valuable in the areas of services and investment in mining and energy technology, engineering and consulting services, franchising services, education and training, information technology, tourism and infrastructure. It is, of course, generally known that the Asia-Pacific region is a part of the world that is very much plugged into our education system. We should acknowledge and value that, but we should also have one eye to diversity. We should also try to diversify the markets and the regions of the world by bringing in students from those parts of the world to be exposed to our values and the quality and excellence of the Australian education system—students from not only the likes of Asia, the subcontinent and the Middle East but also places in Latin America. Chile is, I think, a good place in which to start an aggressive campaign. I am sure that many of the fantastic entrepreneurs of our country will take advantage of this FTA agreement.

Other areas that will benefit include the areas of coal, LNG, renewable energy—hopefully—and agriculture. Our country has a superb reputation in agriculture and we must do what we can to ensure that the perception—and reality—of Australia as a clean, healthy place where agriculture flourishes must be maintained. It must be expanded upon and promoted so that the consumers of increasingly prosperous parts of the world, and increasingly prosperous parts of the developing world, can with confidence continue to buy products—such as our dairy products and meat—which will give our people extra revenue and which will benefit the country overall. Let me not forget wine. The Australian wine industry is one that is increasingly becoming one of global regard. All of us, in both formal and informal capacities, should continue to be advocates for the wine industry.

I want to touch on the FTAs that Australia successfully negotiated during the time of the Howard government, because I think that they provided a terrific platform for the Australia-Chile Free Trade Agreement that has now been successfully concluded. The Singapore-Australia Free Trade Agreement is one which, for those of us who are for freer trade with the region and with Singapore—one of our strongest allies and friends in Asia—we can be proud of. SAFTA negotiations were launched following an announcement by both countries at the APEC leaders meeting in November 2000. Ten full rounds of negotiations were held between April 2001 and October 2002. On 17 February 2003, SAFTA was signed. I had the pleasure of being at the occasion of the signing and I recall having an opportunity to discuss the success of the agreement with the then Singaporean Minister for Trade and Industry, George Yeo. George Yeo is now, of course, Singapore’s Minister for Foreign Affairs. The final agreement was subject to a parliamentary consultation processes and entered into force on 28 July 2003 following an exchange of diplomatic notes.

The other agreement that I think should be complimented is the Thailand-Australia Free Trade Agreement, a major document that opened access for Australian businesses to the Thai market. That agreement has substantially improved the area of environmental business. I know of some businesses in the Ryan electorate that have a very fine record in environmental technology and are doing business in Thailand, and I am delighted with their success. Australian businesses are urged to take a close look at the opportunities created by the Thailand-Australia Free Trade Agreement. The reduction of Thailand’s high tariff barriers, which for some tariffs were up to 200 per cent, means that exports may now become viable for a range of products. Opportunities are increasingly there for service providers, investors and Australian manufacturers.

The Australia-United States Free Trade Agreement was hotly contested. It is a comprehensive agreement that covers goods, services, investment, financial services, government procurement—importantly—as well as standards and technical regulations, telecommunications, competition related matters, electronic commerce, intellectual property rights, labour and the environment. The key outcomes of the agreement include that, upon entry into force, the United States eliminated duties on Australian goods on 82-plus per cent of its tariff lines. By 2010, this will rise by an additional 4.1 per cent and by 2015 a further 10-plus per cent. So that is very positive indeed. By 2022, it is expected that nearly 99 per cent of tariff lines and 99.9 per cent of imports will be duty free. The US remains the most significant country and the world’s most significant economy. The global financial crisis has shown us that what happens in the United States economy affects pretty much every country in the world—from the great and the good to the middle powers of the world to, unfortunately, developing economies that depend on a stable global economic framework.

I want to briefly touch on the free trade agreements being negotiated at the moment. The Australia-ASEAN-New Zealand free trade agreement is of immense significance. ASEAN, with a population of some 550 million people, is not a market to be sneezed at. It is one that we must engage in more than we have even in previous decades. That part of the world will, in decade’s time, show its collective strength. Of course, the countries that make up ASEAN are diverse and at different stages of development, but no-one should underestimate the political will within the ASEAN nations and no-one should underestimate the psychological and emotional determination of the people of ASEAN to improve their economies and to create opportunities for their people, as they rightly should.

The Gulf Cooperation Council is another part of the world that we are talking to. Japan is a country that Australia has had a very strong and very warm relationship with since the end of the Second World War, and it is a country that we should always count amongst our best friends in Asia. Australia has a relationship with Malaysia, which  is Muslim but which has a very strong view about how its people can be plugged into the world economy. Last, but certainly not least, on the Australia-China free trade agreement that continues to be discussed, I have said both publicly in the media and privately that I am proud of the fact that the Prime Minister of the country I am a citizen of has the capacity to speak Chinese and has strong links with this very significant country. I hope that his links and his language skills will be an asset for our country. I encourage him very strongly to use that priceless asset to promote a successful conclusion on the Australia-China free trade agreement because it is something that is in our country’s interest.

I think I am the only member of the House of Representatives with part-Chinese heritage and, for the record and for the benefit of the people of Ryan, the marriage of my personal background and my professional position is one that I am pleased about and one that I would like to take advantage of to play a role in pushing for Australia’s 21st century prosperity and our place in the region. In all the great debates of the 21st century—be they about energy, the environment, the geopolitical area or whatever—China will be front and centre. It is absolutely in the interests of this country to sit right by the leadership of China. I congratulate all Australian businesses that are doing fantastically well in China and in the rest of Asia. I also compliment the Chinese businesses that are investing in our country. It is in the mutual interests of both of our countries and for the prosperity of both of our peoples.

In the couple of minutes left to me I want to make some observations about global trade generally. The Australia-Chile Free Trade Agreement is one that I wholeheartedly support and I congratulate all those involved in concluding it. It goes to a broad philosophy that we all share in this parliament—that is, having an open world economy, having a freer world economy and having opportunities for Australians to engage with the world. That is in our interests and also in the interests of alleviating global poverty. Countries that close their economies, that close their peoples off to others, give themselves no benefit whatsoever. India is developing but, like China, will stand front and centre in the world. In 1960, life expectancy in India was limited. It has risen by more than 20 years. Closer to home, in South Korea illiteracy was once widespread but is now pretty much nonexistent because it has engaged with the world; it has become a global country.

No country that has succeeded in the past five decades has succeeded or made progress by ignoring the signature theme of our times: globalisation. Whether we like it or not, we live in a globalised world and we live in globalised times. Our country is one of some 21 million people. We are thousands of kilometres from any large developed market. There are no two cities in Australia with a population of over one million that are closer together than 600 kilometres. By way of comparison, the state of California has a population of some 35 million in an area around one-twentieth of the size of Australia. That gives a taste of how vast our country is and of the distance between our country and others of economic and political significance. It is absolutely in this country’s interest to be plugged into the international community, to be on the world stage and to be an advocate for freer trade, for open economies and for a greater engagement with the world around us. (Time expired)

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