Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Hansard source

I am pleased to have the opportunity to speak on these two customs bills before the House: the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. As the Minister for Home Affairs has explained, these are customs bills because customs legislation needs to be introduced to provide the administrative process that enables this agreement to become a binding treaty. Having said that, I will address some remarks to the nature of the free trade agreement itself and also to the circumstances surrounding the horticulture industry in Australia at the moment, because there is no doubt that horticulture is struggling badly with low or no water allocations, with collapsing markets and with misunderstandings of the nature of their enterprise by the Minister for Employment and Workplace Relations, who is placing them under serious pressure in terms of their workplace agreements.

I would have liked, in discussing these free trade bills, to give the horticulture industry confidence, hope and assurance that things are going to improve. It is not all bad news for the horticulture industry. Steps have been taken and advances have been made that will open up our horticulture markets to the ASEAN countries. I acknowledge that, but I want to quote specifically from some of the remarks that the Horticulture Market Access Committee made to the Joint Standing Committee on Treaties which I think better explain where they are coming from and their disappointment with this particular treaty.

I will go back to the purpose of the bill, which is to amend the Customs Act 1901 to define ASEAN-Australia-New Zealand free trade agreement originating goods and to amend the Customs Tariff Act 1995 to provide preferential tariffs for ASEAN-Australia-New Zealand free trade agreement originating goods. The concept of an ASEAN-Australia-New Zealand free trade agreement was floated by the Hawke-Keating government in the early 1990s. Formal discussion commenced under Minister Vaile in 1999 and the negotiations commenced in 2004 and continued under Minister Truss. An agreement was signed by Minister Crean on 27 February 2009.

These amendments proposed in the bills implement relevant parts of the ASEAN-Australia-New Zealand free trade agreement. Whilst the coalition supports the bills, it is disappointing to note that the government is pushing this legislation through with very little notice. I remind members that the free trade agreement was signed months ago by the Minister for Trade and his counterpart ministers from ASEAN countries and New Zealand. It was signed on 27 February. The agreement was tabled in parliament on 16 March this year and it was referred to the Joint Standing Committee on Treaties, which recommended in its report, tabled on 24 June 2009, that binding treaty action be taken.

The government is proposing to introduce and presumably pass these bills in the House today, Wednesday, 15 September, and I understand would like the bills to pass through the Senate on Thursday, 16 September—tomorrow. This, I gather, would enable the Minister for Trade to attend the East Asia Summit on 25 October 2009, where he anticipates that at least New Zealand and four of the ASEAN countries will also have completed their internal arrangements. That will mean that the free trade agreement is able to come into force on 1 January 2010. All the signatories are, in any case, required to advise of progress with their internal arrangements by 2 November 2009. We in the opposition understand that it would be embarrassing for the Minister for Trade if Australia’s arrangements were not finalised by that date, and presumably that is why the government has tacked this important legislation on to the end of the sitting week before a four-week break from parliament.

I simply make the point that the opposition is not impressed. Given that the Joint Standing Committee on Treaties report was tabled on 24 June 2009, there has been ample time to introduce and pass the legislation in an orderly fashion. This certainly affects our ability to go through the comprehensive arrangements that we have on this side of the House involving consultation with our members—particularly members who represent electorates and industries that would be affected by this agreement—and discussions at our various committees and so on. But, despite this, the coalition does agree that the free trade agreement will provide greater access to the Australian market for goods originating from ASEAN countries and New Zealand and, importantly, provide greater access for Australian goods in the markets of the ASEAN countries and New Zealand.

It was noted in the national interest analysis of the agreement that, as a group, ASEAN and New Zealand constitute a larger trading partner for Australia than any single country. ASEAN member countries and New Zealand together account for 21 per cent of Australia’s total trade in goods and services. It is worth noting that total trade in goods and services between Australia and ASEAN and New Zealand combined was $103 billion in 2007-08. The coalition believes that the ASEAN-Australia-New Zealand free trade agreement will also support economic integration in the region and enhance Australia’s participation in the region’s evolving economic architecture through commitments in a range of areas, including trade in goods, trade in services, investment, intellectual property, temporary movement of persons, electronic commerce and economic cooperation. Clearly it is to Australia’s advantage to take the proposed treaty action.

My colleague, the shadow minister for trade, who as I noted earlier was intimately involved in the original negotiations for this agreement, will have more to say on the trade aspects from the coalition’s point of view. While I have the opportunity, I would like to return to the issue of horticulture, which very much affects rural and regional Australia, including my electorate of Farrer, at the moment. I will quote from report 102 from the Joint Standing Committee on Treaties, about treaties tabled on 12 and 16 March 2009. The report makes the point that:

The ‘prudential’ basis of Australia’s negotiating position discussed in detail above seems to have lead to a focus on macro level tariff outcomes. For example, the Department pointed out that the AANZFTA achieved a higher degree of tariff elimination at the macro level than achieved in other free trade agreements with ASEAN:

                  …              …              …

In relation to specific tariff lines, however:

Clearly, you may have circumstances where, on an individual product, the degree of liberalisation achieved in a specific FTA with another dialogue partner may be greater—certainly in the example of mandarins and a range of other horticultural products, particularly with China.

The horticulture industry is represented in this area by the Horticulture Market Access Committee, and they made statements that:

…the horticulture tariff outcomes under AANZFTA … are in significant cases below optimal outcomes and lock Australian horticulture either temporarily or permanently into certain inferior trading positions against Australian horticulture’s competitors into the ASEAN market.

The report noted:

Their specific concerns in relation to the outcome for horticulture are as follows:

• the AANZFTA does not match the horticulture outcomes in the ASEAN – China free trade agreement;
• tariff outcomes in the AANZFTA that are worse than the tariff outcomes in previous bilateral free trade agreements with ASEAN members;
• applied tariff outcomes in the AANZFTA that are above the globally applied Most Favoured Nation rate; and
• the effectiveness of Australian negotiators in representing the interests of the horticulture industry.

Certainly the ASEAN-China Free Trade Agreement affects our producers in a considerable way. The report stated:

Chinese horticulture exports to ASEAN are subject to near zero tariffs across the board. This has resulted in exceptional growth in Chinese horticultural exports to ASEAN member states. Chinese horticultural exports have grown by 132 per cent in the four years to 2007/08.

                  …              …              …

From the point of view of the HMAC, in a situation in which China enjoys zero tariffs on most horticulture lines into most ASEAN countries, and Australia does not and will not for the term of the AANZFTA, Australia’s competitive position will suffer for many years. According to the HMAC:

It is a very sensitive issue for vegetable growers because basically we have lost a lot of our markets in South-East Asia to Chinese competition. When you are trying to talk to vegetable growers about becoming export orientated, they see China getting unfair advantages in, say, these free trade agreements vis-a-vis Australia. The expectation out of all this was that Australian vegetable growers would at least be able to compete on an equal footing with Chinese vegetable growers in these markets. That is where the disappointment comes.

                  …              …              …

In relation to Thailand, the HMAC is concerned that Australia did not take the opportunity to improve on the result of the Thailand – Australia FTA.

              …              …              …

The tariff for a number of horticultural tariff lines in the AANZFTA is higher than those contained in the Thailand – Australia Free Trade Agreement. As previously discussed, in such circumstances, the free trade agreement with the lower tariff outcome will prevail.

I note that two, possibly three of the recommendations of the Joint Standing Committee on Treaties can be referred or related to the horticulture industry. Certainly, recommendation 1 is one that we in the coalition will be holding the government to account on, and I quote:

The Committee recommends that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry—

We stand by this industry in their time of need. We feel for them in their disappointment. It is not all bad news. They have had advantages. But for individuals in particular sectors, such as mandarines, those advantages may not mean anything to the bottom line.

The other recommendation that I want to note is recommendation 4, which is:

The Committee recommends that the Department of Foreign Affairs and Trade prepare a report for the Committee examining mechanisms to allow negotiators to directly consult with industry representatives during the negotiation process.

The Horticulture Market Access Committee certainly were not specifically critical of the negotiation process; in fact, they made the point that they were generally very happy with the quality of Australian negotiators. But they also made the point that those negotiators cannot possibly know the ins and outs of every single horticulture industry in Australia as well as those who represent that industry locally can. Particularly when it came to vegetables, they felt that that industry was not given the credence that it warranted. Their suggestion, which I think is a good one, was that industry representatives be included in some of the negotiations or be available to provide industry expertise to those involved in the negotiations. There does not have to be physical travel to the region—they could be consulted via email or telephone—but they do need to be involved in any situation where government-to-government trade negotiations on agriculture take place. You should involve the growers or the representatives of those growers because there are so many intricate details of production that they know and which a negotiator cannot possibly know. They are the experts on international treaties and law, but they cannot possibly know the finer details. So we really support recommendation 4.

With those remarks, I would like to return to the pain that the horticulture industry in my electorate is feeling. There will be a cost explosion for wine grape growers if the loadings of between 150 per cent and 250 per cent become law. I know that a case is being presented to the Industrial Relations Commission by the Horticulture Australia Council to vary the horticulture industry award. We thank the Deputy Prime Minister for her acknowledgement of the particular circumstances of that award, but I believe that we need to go further. We need to recognise that this industry is entirely different from a manufacturing, process line or service industry. It relies on the weather, the seasons, the harvesting window and also on casual work, which is often done by people on temporary visas or backpackers or locals who are quite happy to work under the arrangements they have been working under for quite some time.

Although it is does not relate directly to this legislation, I want to speak for Murray Davies from Burtundy Station in my electorate of Farrer in far-west New South Wales. He has sent me a short email that captures his frustration with the state of play at the moment. It states:

We grow 400ac wine grapes.

Prices we receive are directly related to world price per litre of wine.

We have to be competitive on the world market.

The grape Industry operates at night because its is cooler generally under 30 Celsius

Over 30 Celsius grapes start to ferment in the bins and fruit would be rejected at the winery and dumped. Growers are already operating below production costs, any extra burden would finish growers

Grape harvest helps keep young people in our community by supplying extra work, we are not talking about city people, we are talking about people in Sunraysia and Riverland. Both communities are under pressure. 40% of vineyards have closed down in the last few years. Is it the intention of the government to close the whole industry down?

If the industrial relations commission goes ahead with this increase in award for the wine industry we would have to leave the industry with in 12 months.

I do not think you can put it any plainer than that.

In bringing in this customs tariff legislation implementing this free trade agreement, I want to conclude on recommendation 1, which is:

… that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry.

We desperately need to support our growers in their time of need. I thank the House.

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