Adam Bandt (Melbourne, Australian Greens) Share this | Hansard source

The economy exists to serve the people of our society, not the other way around. That means when we as parliamentarians are asked to decide whether to approve a significant economic agreement, like this free trade agreement between Korea and Australia, first and foremost in our minds should be what is in the interests of the Australian people. That is our job here. It is not our job to sign off on agreements that contract out the determination of what is in the best interests of the Australian people to a small panel of unelected lawyers who sit as an arbitration panel. It is not in our interests to contract out the decision of what is best for the Australian people to multinational companies which are able to override our parliament and our government.

But that is what the Liberals and Labor are about to do by supporting this bill. What is being put forward here is a free trade deal that has some good components; I will talk about those in a moment. But for the first time it takes a significant step and says that if our parliament and our government is doing something in the interests of the Australian people, but which might possibly impinge on the profits of a multinational company or a company that is subject to this agreement, then they are able to take the government not to court but to a panel of self-selected arbitrators, who will be able to decide if Australia's laws should be struck down. That is significant, and this is the crossing of a threshold. We should not allow that threshold to be crossed. I will come back to that in a moment.

Part of the reason that we find ourselves in this situation is the secretive and undemocratic process that is associated with these kinds of agreements. The Greens believe in fair trade and there is scope for this bill, and the Korean trade agreement it legitimises, to be fantastic for this country. The Greens support many of the measures that it provides—for example, trade of beef, wine and agricultural products. If we could, we would be prepared to work constructively to make this a trade agreement that works for everyone. But it does not, and as it currently stands there are some serious, critical failings that make it impossible for the Greens to support. Because the government has locked out the possibility of an amendment from anyone in parliament, our hands are tied. As with all trade agreement negotiations, the secretive process that the government has undertaken with this agreement locks out not just scrutiny but cooperation. Parliament has been excluded from improving this trade agreement. The government does not believe that parliamentary scrutiny by MPs and senators could result in a better, stronger and fairer trade agreement. It has hidden this agreement from public scrutiny. The government negotiated the agreement in secret; cabinet signed the agreement in secret and then has taken it to the parliament for MPs to rubber-stamp—not to debate; not to discuss; not to analyse; not to ask questions; only to rubber-stamp. We can only vote either for or against this bill, but we cannot change it. That makes a mockery of every single member in this place. What this bill does is turn the parliament into nodding donkeys because we have no opportunity to improve this agreement. Cabinet is effectively being given precedence over the parliament. Parliament is meant to be the highest authority in this country. The Australian people are denied access and their representatives are denied scrutiny, and all we are left with is the Prime Minister and the trade minister saying, 'Trust us; this is good for you.' That is not good enough. That is unacceptable.

If we could, the Greens would refer this bill to a committee so that it could be independently evaluated, as has been recommended by the Productivity Commission. The Greens and the Productivity Commission are not traditionally good friends, but even the Productivity Commission says that agreements like this should be subject to a test to work out whether it is in Australia's interest, and there should be some independent review. Instead, such an evaluation has been disgracefully abdicated by the Joint Standing Committee on Treaties, which has singularly failed in its oversight function with respect to this agreement. Instead, what will happen is that, yet again, the coalition and Labor will be in lock-step on this bill and will vote for it, while being out of step with the community. The Greens will be left as the party that stands up for our national interest.

In December last year the Senate passed an order requiring the government to table the final draft of the Korea-Australia Free Trade Agreement two weeks before it was due to be signed. The government refused. This puts the government and this trade deal in contempt of parliament. In 2005 the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America said it was alarmed by the lack of adequate research being undertaken prior to Australia committing itself to trade agreements and called for proper scrutiny and debate. In 2010 the Productivity Commission said that there should be independent and transparent agreement of the final text of trade agreements before the agreement is signed. Despite this advice, with this agreement that has not happened. Even the JSCOT found:

… the predicted benefits to the overall Australian economy from the implementation of KAFTA appear minimal …

The committee's report also described an impact of the agreement as a 'regulatory chill'. What this means is that the government may want to introduce protections in good faith but will be scared off from doing so because of potential reaction from overseas investors. What it means is that this trade agreement neuters the government and outsources the national interest to the balance sheet of overseas private companies—and it gets worse.

While the Greens believe in fair trade, perhaps the most toxic aspect of the agreement is the ISDS mechanism—the so-called investor-state dispute settlement component. Just for the record, so that everyone in this place knows, ISDS gives foreign corporations the right to sue sovereign governments like ours if they feel that changes to national policy or laws negatively impact on their profits. As far as the Greens are concerned, this subverts the democratic principle. This puts the financial interests of private companies above the national interest and above the democratic rights of every Australian. What this also means is that this agreement, this bill and the Abbott government introducing it mean that they are saying that private profit is more important than people's democratic rights.

What does it mean in practice? There is a good example happening right now. The big tobacco pusher and donor to the Liberal Party, Philip Morris, is currently suing the government after the previous Labor government introduced plain packaging legislation. I should point out that unlike the Greens, the Liberal Party continues to accept tobacco donations—but I digress. The reason that Philip Morris is allowed to sue the government is because of an ISDS clause in an investment agreement that this country has with Hong Kong. Imagine if the government loses the case. Taxpayers could pay damages to a private tobacco pusher because the government tried to reduce the incidence of cancer by introducing plain packaging legislation. What this government is saying by including the ISDS in this agreement is that Philip Morris's profits are more important than public health, than the public interest. How can that possibly be in our national interest?

The government could have removed all ISDSs from the Korean trade deal, but it did not. Instead, by including them, it is providing a mechanism for private companies to sue the government, potentially even this Abbott government, if a new law threatens the profits of a private South Korean company. The government claims it is fine because it says it has included so-called safeguards in the agreement. The trade minister has said that these so-called safeguards mean there is no prospect of an ISDS allowing another Philip Morris type case arising if it suits the government, but this has been contradicted in evidence that was before the committee. Professor Luke Nottage made it very clear, when he was asked if the wording in the agreement would preclude a Philip Morris type case occurring again, he said:

The answer is 'no' under the current wording. If that sort of claim by tobacco companies is a particular concern, the obvious way to preclude it completely is to have a carve out for measures in relation to tobacco.

But, of course, no such carve out exists in this bill or in the agreement. The government has left the ISDS mechanisms in. In fact, there is scope for another Philip Morris to sue the government based on this advice. Only the government can say why it wants ISDS mechanisms left in and why it wants to give licence to foreign companies to sue the Australian government.

The Greens introduced a bill into the Senate to ban ISDS mechanisms from all future trade deals, but this was rejected by the committee. Minister Robb clearly is not interested in producing a model investment treaty or going back and looking at previous agreements because he does not see ISDS as a problem. The Greens and many others do. I note, in this respect, the member for Fremantle and others in this chamber have spoken out against ISDS mechanisms. Now is the opportunity for your party to vote against it. Now is the opportunity for Labor to stand with the Greens and vote against this and send the government back to the drawing board to negotiate an agreement without an ISDS in it.

The question of intellectual property is also important because when it comes to the impact, negative or positive, of this free trade agreement on the country's intellectual property industry the government is flying blind. There has been no cost-benefit analysis produced. JSCOT's regulation impact statement and the national interest analysis make no mention of what the impact of the IP chapter of KAFTA could be on our IP industry. Could it harm Australian IP, could it help it, could it do both? No-one knows. What we do know is that JSCOT has again abdicated its responsibility as an oversight protection on these critical questions.

The Productivity Commission said in 2010 that Australia should not include IP in trade agreements without proper economic and public interest analysis. This has not been undertaken. KAFTA's chapter on IP entrenches IP with rights holders and no consideration is given to the public interest. What this could mean, for example, for people who need affordable medicine, the government cannot say.

One of the key untold stories of the demise of the country's car making industry is the role of KAFTA in helping destroy it. When Toyota announced in February this year that it would stop making cars in the country, it said:

… with one of the most open and fragmented automotive markets in the world and increased competitiveness due to current and future Free Trade Agreements, it is not viable to continue building cars in Australia.

Toyota got out while it could because it knew that the influx of cheap South Korean cars would make the already highly marginal car making market here unviable. So here we have one of the country's leading former car makers blaming the Australia-Korea Free Trade Agreement—not the carbon tax, as the government tried to spin it, but the free trade agreement. The free trade agreement itself, it said, dealt the final blow—and again we come to the national interest. We need to make an assessment about whether importing cheap cars at the expense of making cars here and all the related industries that depend on it is in the national interest.

The role of this agreement in killing off car making has been woefully underreported, although an article in December last year in the motoring newspaper supplement 'Drive', presciently titled 'South Korea Free Trade deal could crush car industry', said:

… it could be the death of the Australian car manufacturing industry.

Richard Reilly, head of the Federation of Automotive Products Manufacturers, whose members supply components to Toyota, Holden and Ford, said in that article:

Anything that potentially sees more imported cars sold here is absolutely not good for local manufacturers …

… The government needs to be extremely careful if this deal goes ahead …

The deal did go ahead, and we know the state that the automotive manufacturing industry finds itself in now.

We need to have a sensible discussion and an open discussion, fully informed by the facts, about the future of manufacturing in this country and the impact of these free trade deals on it. In the south-eastern states, which do not benefit in the same way from the mining boom as the resource rich states, there are massive pressures on employment and on the future of industry. Even now the government wants to end the assistance that is being given to those sectors early, which would put tens of thousands of jobs in the component sector at risk.

Let us have an open and informed debate in this country about whether we want a manufacturing sector and, if so, what it looks like and how we support it in these difficult times. Instead of having that debate, under the guise of secrecy and including through agreements like this, we are delivering blow after blow.

I conclude by saying this: we have an opportunity now to send this government back to the drawing board. I know there are many people on the Labor side who believe very strongly that ISDS provisions are wrong. That is part of the reason why this agreement had not been signed under the previous government. Now we have the opportunity to send the government back to the drawing board and come back with a better agreement that works in the interests of all Australians.

See this speech in context