Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

I thank the House for the opportunity to respond to the minister’s statement. Today’s statement has brought us up to date in relation to some of the trade developments, an interesting travelogue of the minister’s latest trips, and discussions about some of the meetings that are underway. I am a little disappointed that the statement seeks to rewrite history. This seems to be the week of the Labor Party rewriting history to accentuate its own role in the important events of the world and to take credit for anything worthwhile that has happened this century. Certainly the minister has shamelessly sought to reinvent history and to accentuate his own role in the progress that is being made—almost a eulogy written by himself. In an area where there has been a degree of bipartisanship in relation to trade policy, I think that it is appropriate for a minister to give recognition that these sorts of discussions go over very long periods of time and that some credit deserves to be shared around. It does not all belong to one individual. The more important thing, however, is not to talk about who should gain credit: whether there is any credit due is also a matter open to conjecture.

I would like to talk about some of the issues and in particular the arrangements and the progress being made towards the Dohar Round. If it is in fact true that countries are really committed to bringing the Dohar Round to a conclusion, it is important that the government take on board some of the key concerns that there are in this country about the current state of negotiations. I think this is the third, fourth or maybe fifth time that the minister has come into the House with a ministerial statement telling us that we are just about to achieve the outcomes in Dohar. We have heard all about the important progress, injection of momentum, intensifying efforts—those are all phrases I suspect he has used four or five times himself in ministerial statements to this parliament. I have used some of them myself in earlier statements. It has been going on for a while. But now we are at a stage where he says we are coming to the endgame.

The sad fact is that we are coming to the endgame because there is nothing left on the table. The Farm Institute was right, frankly, when it raised questions about whether the deal was still worth doing. If we are at the end of the game, it is because there is little or nothing left. The ambition of the Dohar commitment has been lost. All of the ambition of the Dohar Round has been lost. When the coalition committed to this process we had strong and ambitious goals in mind, as did the other parties who entered into these discussions. We expected real, genuine breakthroughs in relation to trade. We expected a real reduction in subsidies in both secondary and primary industry. We expected real gains in services. We expected that there would be not only reductions in subsidies but also reductions in trade barriers—real reductions that actually meant that world trade could flow freely.

We were hoping to achieve objectives that would have delivered billions and billions of dollars to world trade and to the growth in world economies, not just what is left at the present time. We are being asked now to grasp thin air, to be grateful for some water being taken out of the tariff systems. But in reality there is so, so little left on the table that people are saying they might be able to get to some kind of an endgame. Is this a merciful end, or is this an end that is actually going to be worth while to the participating countries?

I note that the minister says that this is a hard-won outcome. What is the hard-won outcome? More talks and more meetings. I know you have got to have meetings. We have been meeting for seven, eight or nine years now in relation to these issues, and it takes time talking to achieve results. But sadly the results have been achieved, the progress has been made, by inventing new tricky words, developing new exceptions, removing some key things off the table altogether. So in reality we come to a position where there is just so, so little on the table.

The minister said in his statement that we have solved the round—80 per cent of the major issues since the breakdown in July last year. How many of those issues have been solved simply by backing away, by backing down, by taking them out of the agenda altogether, so that in fact there is so, so, so little left? I am concerned that, instead of providing a new boost of political momentum into the Dohar Round, we are in fact walking further and further away from the real objective that the leaders in Dohar set for themselves, and that was a genuinely reforming world trade agreement. It would deal with some of the issues that were overlooked at Uruguay or could not be fixed at Uruguay so that we would end up taking a substantial step forward.

The Farm Policy Journal makes some very key points, as the minister said in his statement. In his statement he said that Australian farmers should take comfort from what is already on the table in relation to the Doha Round, and he identified cuts of up to 70 per cent on developed country tariffs. But those are not real cuts. Those are not cuts in the applied rate; they are cuts in the bound rate. In fact, they still leave space for some tariffs to even go up. The reality is that there will be very little real benefit in actual reduction of tariffs. The minister has changed his rhetoric a little over recent times to say that the benefit of doing this is that tariffs will not be able to go up so much in the future. So we have given up on the ambition of reducing tariffs; we are now thankful that they are not going to go up quite as much as they might otherwise have been able to go up.

Then he said there are going to be reductions of between 70 and 80 per cent in domestic supports via the subsidies from countries like the EC countries, Japan and the US. Again, that is not an actual reduction of 70 or 80 per cent in their subsidies; there will still be options for them to even increase support in many instances, and certainly the drafts open up new, creative ways to enable countries to increase their subsidies. So it is simply flippant to try and placate intelligent farm industry commentators by suggesting that they are going to get 70 or 80 per cent cuts to tariffs and support when in reality that is not going to happen. There is just so much space in the agreement, there are so many exceptions, so many special provisions for sensitive products and special products, that many of the biggest subsidies in the world, many of the strongest tariff barriers, will remain unchanged—and unchanged permanently.

The other comment is that there would be a complete elimination of export subsidies by the end of 2013. That, of course, was agreed years ago in Hong Kong. It has not stopped the subsidies in the interim. We see them re-emerging at the present time. If we were able to get rid of all export subsidies, that would be a worthwhile achievement, but you cannot then turn around and negotiate a whole stack of special provisions and the like—exceptions to the rule—and think that you have achieved anything.

The other thing that we need to take into account is that, even if the Doha agreement were negotiated and agreed on its current text, according to the minister’s statement the Director-General of the WTO has said the round would bring benefits of $150 billion per year. I have heard him make that statement, and he has been making that statement now for 12 months or so. So, as the round stands now, watered down as it is, the benefits that could come are $150 billion per year. Let us put that in a little bit of perspective. That compares with world trade in 2007 of $17 trillion. In 20 years time, when the Doha Round is fully implemented—and that is provided that there is not more watering down between now and the end of 2010—world trade, without any intervention, will probably be about $30 trillion, so we are talking about a $150 billion benefit on $30 trillion worth of trade. So all of these eight years, all of these negotiations, will deliver less than half a per cent of benefit to world trade. That is hardly a triumph. That is a triumph for the talkers and the negotiations and the diplomats over the traders. That is not going to deliver massive new benefits to the world economy.

When the Labor Party and the Prime Minister are talking about Australia’s government’s $300 billion debt, which they are committed to, that is some small, manageable amount—$300 billion is seen as a small, manageable amount for a country of Australia’s size to be able to pay back. But the total benefits to the entire world of the Doha Round are projected by the director-general to be only $150 billion. When the Minister for Trade is talking about $150 billion worth of trade benefits, that is a huge benefit, but, when they have $300 billion worth of debt, that is a small, trifling matter that nobody needs to worry about. Of course, if there is anyone who has a vested interest in talking up the outcomes of the Doha Round it is Mr Lamy, who is in his second term now as director-general. It has been his lifetime’s work. It has been an important work. But even he has to acknowledge now that the best he can hope for from the agreement, assuming there are no more backdowns, is half a per cent to world trade. I wonder, if we had put this amount of effort into many other things, whether we could have achieved that much benefit or maybe even more. Therefore the Farm Institute has a right to say: ‘Let’s have a look at some of the structural factors. What best can we do to make sure that the world is able to move forward?’

I do not think there is any doubt that all of the trade ministers now sitting around the table know in their hearts that we have to find a better way in the future to progress these sorts of issues. The bilateral agreements can sometimes make progress, but in other instances they have actually gone backwards and therefore cannot assuredly be a reliable path. Regional agreements also, in some instances, such as the Australia-New Zealand-ASEAN free trade agreement, have actually led to some backtracking from where we otherwise could have been. We need to be making constant progress, and I acknowledge that this is not easy. I acknowledge that the task is thankless and that the progress is incredibly slow, but what I grieve about today is how much momentum has been lost, how much ambition has been lost and how little there will be if in fact there is an agreement at the end of all of these activities.

I will also comment, in relation to these issues concerning trade, that the minister referred to his meetings in Delhi, Bali, Paris, Singapore, Bangkok and Pittsburgh, six visits to China, four to Indonesia and numerous other events around the world. His frequent flyer points score is certainly going up, and it is the job of a trade minister to be in those places. But we also know that it is important that we recognize that good trade policy also begins at home. If we are going to be able to take advantage of any gains that might be made in Doha and any gains that might be made in other trade agreements, we have to put in place an environment in Australia that actually encourages industry, that gives us an opportunity to grow our exports.

While the minister was overseas, or while he was here, his government tried to force through an emissions trading scheme, which will place a huge burden on Australian exports and make our costs more expensive than those of other countries. He talked about the importance of agriculture and the comments of the Farm Institute. This same institute has done some excellent work on the impact of an emissions trading scheme on Australian exports; the fact that Australian food processors will have to pay carbon taxes, where other food processors will not, and the fact that the cost of exporting out of this country will be so much greater.

In his statement he spoke about productivity reforms, but while he has been out of the country the unions have taken back the running of the workplace. Today, the wine industry is the latest to express concern about the government’s new award modernisation process, which will increase the cost of picking grapes by up to 200 per cent. We are proud of our wine industry; it is one of our major exports, and one of the areas where I hope the minister might still hope to get some gains out of the Doha Round. And yet he is imposing these heavy cost increases upon them through the government’s new industrial relations arrangements.

Then, of course, there are new taxes, particularly the increase in the export inspection charges, which are likely to go up by as much as 1,300 per cent. If the trade minister were really interested in ensuring that Australian traders had the best opportunity to participate in world markets, he would talk very sternly to the Minister for Agriculture, Fisheries and Forestry about his proposals to increase export inspection charges.

The minister knows what the impact will be on world trade and Australia’s capacity to export as a result of these changes. A division of his own department, Austrade, has just made a submission to the Senate Rural and Regional Affairs and Transport References Committee inquiry on the removal of the rebate for AQIS export certification functions. The issue is that the minister with responsibility for Austrade was, no doubt, aware of this submission, which takes a scathing approach towards the government’s plans to remove the rebate for the Australian Quarantine Inspection Service export fees. If the minister has not seen the damning comments from Austrade, let me place them on the record. This is from Austrade’s submission to the Senate inquiry just this week:

Austrade notes that the removal of the 40 per cent fee rebate for the Australian Quarantine Inspection Service export certification function increases costs for Australian exporters and, ultimately, could impact on trade growth in established markets and in new market opportunities.

Later, it talks about the cost recovery arrangements:

These changes have the potential to impact those Australian industries which regularly, reliably meet high export standards. These industries, in effect, provide the basis for Australia’s sound reputation for quality goods and services.

The worst-hit industries as a result of these quarantine inspection fee increases will be the very agricultural exporters the minister claims he is trying to help through the Doha Round discussions. They will have to pay substantial fees—in many instances, thousands or tens of thousands of dollars—that their competitors around the world will not have to pay. The subsidies on export inspection fees in other parts of the world will remain untouched as a result of the Doha Round, but our government now seeks to turn export inspection into a revenue-making function.

Let us talk about the uncompetitive position Australia is being placed in by this decision. Austrade notes in its submission that exporters in the US pay a flat fee of $50, while export certification in Canada is free. Our competitors sending beef or dairy products or fruit from Canada to the rest of the world pay no export inspection fees, but the Labor government is proposing to introduce fees which will cost thousands and thousands of dollars. That is not the kind of incentive that a trade minister who is concentrating on building Australia’s trading capacity could allow to go unchecked.

I congratulate Austrade, the premier organisation for promoting Australian trade around the world, for being bold enough to tell the truth to the Senate committee so that they are aware of the real impact of this cost. They are the front-line people on the ground, who know what is necessary to break into markets around the world. They are telling the government and telling the Senate inquiry that the imposition of these high costs will have an enormous impact on our export capability. I call on the government, if it is at all sincere in endeavouring to boost our trade performance, and if it really cares about eliminating barriers and putting Australian exporters on a level playing field with other countries—not Third World countries but Canada and the United States—to look at our export inspection fees compared with those in other parts of the world.

While I am talking about the importance of the issue that ‘good trade policy begins at home’, let me remind the minister of the Mortimer review on export policies and programs. That was completed well over a year ago, and we were promised a response by Christmas of last year, but we are still waiting.

These are key issues that an attentive trade minister needs to give direction on whilst he is in Australia. On his rare visits to Australia, let him look after some of the Australian industries that provide the products he is trying to sell around the world—give them a fair go and put them on a level playing field so that we do have an opportunity, if there is some new trade agreement negotiated, to at least be able to pick up any crumbs that might be left on the table.

I think that trade agreements have, in the past, delivered very substantial benefits to Australia, and they can do so in the future. I do not subscribe to the disgraceful comments of the then shadow trade minister and now Prime Minister, Kevin Rudd, who said in July 2006, ‘Doha is as dead as a dodo.’ I hope that the current Minister for Trade reminds the Prime Minister of his scepticism in 2006, and does it often. It was somewhat bizarre.

I think the minister should listen to the genuine concerns raised by the Farm Policy Journal article rather than devoting the time of the House to seeking to rebut them in this chamber. No-one could accuse the Australian Farm Institute of being anything other than supportive of trade. What they are critical of is what has happened to the Doha Round, the way it has drifted away to nothingness. It has drifted away to an empty table. The endgame is near because there is nothing left to fall off the table. There is nothing left to talk about. What we want is a real benefit with real gains to Australian industry.

May I conclude with an analogy. Dennis Lillee used to run a long way up to the bowling crease. Once he ran all the way from the fence. But, in the end, he did deliver the ball and he delivered it with great potency. The Doha Round has certainly had the long run-up, but I fear that what we get at the end is, at the very best, a powder puff, a no ball, something that has not delivered anything for Australian trade. If the minister wants to come back here and claim credit for a Doha Round, let him come back with real gains for Australian industry, not more backsliding and weak responses.

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