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

I want to begin my remarks by expressing my disapproval at the way in which the government are managing this legislation. It is, frankly, disgraceful that the bills were made available to the opposition late yesterday and that we are being asked to debate them immediately upon presentation in this House. The government even want this legislation to be treated as non-controversial and pushed through the Senate tomorrow—in two days. That is simply an inappropriate way to do business. The government’s appalling treatment of the processes of the parliament can be further accentuated by recognising that the agreement to which we are giving effect today was signed on 27 February 2009. They have known about this for many, many months.

The text was kept secret because the Minister for Trade was embarrassed about certain elements of it, where he was initially unable to reach agreement. We had all these big press statements about a wonderful new agreement being signed, but he would not release the text. And we know the reason he did not release the text: he was still trying to stitch up a sweetheart deal for the motor vehicle industry.

The text was finally tabled on 16 March 2009. The Joint Standing Committee on Treaties reported on this matter to the parliament on 24 June 2009. The committee reported at the end of June, and yet the government are demanding that we deal with this bill in two days. They had six months to bring it into the parliament and they failed to do it. They cannot really expect this level of cooperation when their own behaviour with regard to this legislation has been simply substandard.

Let me also make the point that the JSCOT report was highly critical of this free trade agreement. True, it recommended that binding treaty action be taken, but there were a number of serious reservations raised by JSCOT in its consideration of this particular treaty, especially in relation to horticulture and a whole range of agricultural industries but also the services sector. The government have not even responded to the concerns of the committee, yet they are asking us to deal with the legislation today. This government expect the opposition to agree to rapid passage of this bill through the Senate on the basis that it is noncontroversial but, if they are not prepared to respond to the recommendations of the committee, it will be controversial.

This treaty process ought to be regarded as a serious part of Australia’s international agreement-making arrangements. We have to take into account the parliamentary process. The days of the old Keating government, when he would come home and announce we had just agreed to an international agreement without any parliamentary scrutiny, are gone. The Howard government moved immediately to reform the process. I hope that this government is not going to retreat to the days of previous Labor governments. The parliament deserves to have the opportunity to scrutinise these agreements which can have such an enormous impact on the lives of so many Australians, particularly since the High Court has given such importance to these international agreements. So this will not be non-controversial legislation in the Senate unless the government is prepared to respond meaningfully to the legitimate complaints that have been raised about this agreement by JSCOT.

I also want to express concern about the national interest assessment that is attached to this agreement. This particular national interest assessment cannot be described as any kind of objective assessment of the impact of this legislation. There is no economic analysis. There is a long list of reasons given in defence of the government action, but there is no commentary at all about Australian industries that will be disadvantaged by this treaty or the costs there will be to the Australian economy. The reasons given for Australia to take the proposed treaty action—and I am taking these words from the national interest assessment—are that: it will create greater certainty for Australian exporters and investors; there will be a safeguard for Australia’s market position against the risk of tariff increases on much of our current trade; it will deliver certain benefits in goods trade through regional rules of origin that will promote greater certainty and transparency for Australian service suppliers and investors; it will provide a solid framework and platform for ongoing economic engagement and integration with ASEAN; Australia’s competitiveness in the region will not be undermined as ASEAN member countries continue to develop their own economic community; and, finally, it will enhance Australia’s participation in the region’s evolving economic architecture. But there is no evidence in the national interest assessment about how those objectives will in fact be achieved. Frankly, the document is not worth the paper it is printed on as a national interest assessment. For a national interest assessment to be proper and worth while, it must weigh up the advantages and disadvantages and then make a conclusion in one way or another, and this document has failed to do that.

The facts are that this free trade agreement will have a significant impact on Australian industries. The previous member referred to the direct cost, which will be around $1 billion over four years in lost tariff revenue. But there will also be a $20 million aid program to help other countries crash into our markets. There is no assistance for Australian industry to take up any new opportunities that might happen to arise through the ASEAN-Australia-New Zealand Free Trade Agreement. There is no help for them. In fact, the government are actually trying to put new taxes on Australian exports through increases in quarantine charges. They are proposing to put new taxes on Australian industry through their emissions trading scheme. They are making it harder for Australian industries to compete, but they are going to put a special assistance program in place to enable other countries to make a big impact in the Australian market.

This, as has been pointed out, is a free trade agreement which covers a significant proportion of Australia’s trade—around 21 per cent. Goods and services in the 12 countries of the ASEAN-Australia-New Zealand Free Trade Agreement had a trade of about $103 billion in 2007-08. There are around 600 million people with a GDP of $3.2 trillion. Australia is about one-third of that. So it is an important agreement. It is one that the previous government initiated discussions on and it is one that we thought was important to conclude.

It was in October 1999 under the previous government that ASEAN, Australian and New Zealand ministers established a high-level task force to examine the feasibility of an AFTA-CER free trade area. In October 2000, the Angkor agenda: report of the high-level task force of the AFTA-CER free trade area supported the establishment of an AFTA-CER free trade agreement. In September 2002, the AFTA-CER was established. In November 2004, leaders from the 10 ASEAN countries, Australia and New Zealand agreed in Laos to launch negotiations on a comprehensive FTA covering goods and services as well as investment. In March 2005, the then AANZFTA negotiations began in Manila. Since then, there have been some 16 rounds of negotiations. They were mostly under the previous government but have been taken up seamlessly by the new government. Finally, this led to the signing of an agreement on 27 February.

However, it needs to be said that, in spite of all of the language about the biggest trade deal and about how ambitious the government is in relation to its trade agenda, this is a poor agreement. This is a poor deal for Australia. It is so disappointing that all the rhetoric of the government, about how it is going to fight for Australian industry and get better opportunities, is drifting away. The minister seems to be prepared to do a deal at any cost, to trade away the interests of Australians in order to be able to have a signing ceremony.

We are being asked in this deal and in the national interest assessment to be thankful that as a result of this deal tariffs might not go up as much as they otherwise would. We are asked to also be thankful that in these sorts of negotiations there may be some opportunities in the distant future. But the opportunities available in the short term are, in fact, in many ways particularly disappointing, and for some industries, frankly, a tragedy. JSCOT referred to this in their report, saying:

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;

So what we have is a new tariff agreement that is worse than the deal that ASEAN has done with China and other trading partners. It is worse than some of the deals that the previous government did with Thailand, and it is worse than the deals that many of these countries have offered on most favoured nation status to other countries. So it cannot be seen as a good deal; indeed, it trashes the minister’s reputation as a trade negotiator, because it is quite clear he has not been prepared to stand up for Australian industry and has been willing to give away any advantage or opportunity that we might have to use access to the Australian market as a lever to achieve a similar response from our trading partners.

I know that there are some advances in the Australia-ASEAN-New Zealand Free Trade Agreement, but they certainly fall well short of what would be considered a good deal for Australia. We have given away far more than we will receive in return. Under the agreement, Australia has agreed to reduce 96.4 per cent of its tariffs to zero at the beginning of next year. That compares with 47.6 per cent at zero in the base year of 2005. Of the 12 countries that are party to the agreement, only Singapore will have lower tariffs in 2010. And, of course, Singapore has a range of other restrictions on trade with Australia—particularly in services, which is the main part of its economy—and which are not improved as a result of this agreement. That means that there will be barriers to the proper exchange of trade and commerce between Australia and Singapore. Indeed, this agreement does not go further than the Australia-Singapore Free Trade Agreement in so many areas which are of great importance to us. Under that agreement, there were a lot of zero rates already in place.

Under the arrangements that have been negotiated in this agreement, three countries will have less than five per cent of their tariffs reduced to zero by 2010. Australia is going to have 96.4 per cent. Laos will have none at zero even by 2013. Cambodia, Vietnam and Burma do nothing before 2013. There is no improved access to any of those countries under this agreement before 2013. Even New Zealand will only reach 84.7 per cent of its items moving to zero by 2010. It is also of interest to note that in 2013 around 10 per cent of New Zealand items will still not have been reduced to zero. So Australia is making substantial concessions immediately, where other countries are trailing along at a much slower rate. It will be 2020 or 2025 before tariffs will be eliminated for some key Australian industry sectors. But for others they will never be removed under this agreement.

From the first day of this agreement all Australian tariffs on agricultural imports will be reduced to zero permanently. All agricultural items coming into this country will have no tariff protection whatsoever, and the zero rating will be locked in permanently. On the other hand, Australian farmers will continue to face major tariff barriers when they seek to export agricultural products to ASEAN countries. So Australia’s very generous opening offer in relation to the full range of agricultural products—we have emptied the entire larder on day one—is not being reciprocated by other countries.

It is also interesting to note the double standards in this agreement. While agriculture has zero tariff rates from day one, certain other industries will only have a tit-for-tat style of tariff reductions, particularly—surprise, surprise—motor vehicles, clothing, textiles, footwear and a range of other manufactured goods. In many of these industries Australia will reduce its tariff protection in a similar style to what is happening in other countries. If that was good enough for the car industry and for the clothing, textile and footwear industries, why hasn’t it been good enough for other industries? Why aren’t other industries entitled to that same kind of assistance? What kind of a fight did the minister put up for agriculture? He said that he fought tough and hard in the best interests of the local car industry. But he did nothing, it seems, about the impact this agreement would have on other sectors—he did not even care.

There is going to be a slower phase-out of arrangements for tariffs on vehicles manufactured in Indonesia, Malaysia and Thailand, as we demanded reciprocal arrangements with those countries. Why didn’t we get something for the agricultural tariffs and the horticultural tariffs which we have removed? As I mentioned earlier, there are many key products that will receive little or no improved access, especially in agriculture. Rice has been excluded from any tariff reduction commitments or improved market access offers by Indonesia, Malaysia and the Philippines. Maize has been excluded from the tariff commitments by Indonesia, and Indonesia and Malaysia have excluded wine and spirits. Vietnam has excluded 41 mineral lines from tariff commitments. Malaysia will continue to restrict access to Australian milk.

There is one product that I would particularly like to mention, because this was the highest priority for the horticultural sector, and that is mandarines and their access into Indonesia. Here again the minister has been a dismal failure. Even though this industry has been facing predatory tariffs for some time, Indonesia will make no reductions in citrus tariffs until at least 2025 and probably 2028. At that time there will be a reduction of just 6.4 per cent. So the barriers will remain in place for citrus even though that was a priority negotiating position that was taken into these talks. The minister simply rolled over.

Let us turn to sugar. I turn to sugar particularly because the minister made a big thing of the failure of the Australia-US agreement to include concessions for sugar. He said in March 2005, ‘We cannot allow that sort of thing to happen again.’ In May last year he said, ‘Unlike the previous government, we’re not selling out Australian agriculture to pursue an FTA at any cost.’ He has failed on his own rhetoric, because he sold out the sugar producers. Let us make this point very clear. ASEAN countries take about a third of Australia’s exports of sugar, so it is particularly important to the sugar industry. Yet the minister has delivered very little in this agreement in relation to sugar. Most of the signatories to the agreement have made no concessions at all on sugar. Some already have a zero tariff, and that naturally stays in place. But where concessions have been made they are from the smallest of the ASEAN countries and most of these improvements will not happen until 2023. Indonesia, the Philippines and Thailand have said that they will do absolutely nothing. In fact, Thailand actually delivered more for sugar under the Thailand-Australia Free Trade Agreement negotiated by the previous government than it has done under this deal. So this minister could not even replicate the concessions for sugar that the previous government had negotiated in relation to its free trade agreement with Thailand. This is a humiliating outcome for Australia.

In other areas such as services, there are major disappointments for Australia. The use of a positive list means that there will be very few areas where Australia will be able to make significant advances in relation to services exports as a result of this deal, and yet that is such an important element of our economy.

It is clear that, unfortunately, this is a disappointing agreement for Australia. How ambition has fallen. The government talks about its ambitions but it has done a deal which opens the door to almost every product to come into Australia, free of tariffs, from the beginning of next year. But Australian exporters will not have that same privilege. In most instances they will have to wait until 2025 to get significant reductions.

In addition, the rules of origin that have been loosened in this agreement will provide an open door for products that are not even manufactured in ASEAN countries or which have a very small element of local content. They will be allowed into Australia with these tariff concessions. This opening of the rules of origin laws will provide a funnel for products produced in other parts of the world, with comparatively limited value-adding within the 12 countries, to come into Australia tariff free.

This is legislation that puts in place an agreement which is a poor one for Australia. This is perhaps the first free trade agreement that will actually deliver a negative outcome for our country. (Time expired)

See this speech in context