Angus Taylor (Hume, Liberal Party) Share this | Hansard source

I rise to speak on the Japan-Australia Economic Partnership Agreement Implementation Bill 2014. Imagine if I said to you that I had discovered a one-shot caffeine hit for the Australian economy—a boost that would drive jobs, investment, productivity and real incomes; a boost that would strengthen our best sectors and organisations and create opportunities for growth in massive new markets. That is exactly what good free trade agreements do. And, after years of procrastination, we finally have a government that is prepared to get on with negotiating quality free trade agreements.

I came into this parliament because I believed that a more open, more outward-looking Australia would be a better Australia. I came into this parliament because I believed that the massive and fast-growing markets to our north offered unprecedented opportunities for Australia. But the previous government had no idea how to realise this potential. Australia is in fact far less open than we often think. Our exports amount to little over 20 per cent of GDP, and many of our competitors are far ahead of us: the UK at 32 per cent, Korea at 57 per cent, Canada at 30 per cent, New Zealand at 29 per cent and China at 27 per cent.

I saw time and time again in my career prior to entering the parliament how opening up an economy to these sorts of opportunities, the sorts of opportunities that we are implementing in this bill, is absolutely transformational. The start of Australia's strong economic history began with a trade agreement with the UK for wool in the 1830s, and soon after we saw a similar sort of agreement with the UK in gold. After the war we saw an agreement with the Japanese for coal and more recently, in the late sixties, we opened up our massive and now extraordinarily beneficial iron ore industry with the Japanese. We all know well the story of the iron ore boom in Australia's north-west which began in the early 2000s and which we are still benefiting from, and if we look a little further afield we see the boom in the South Island of New Zealand driven by white powder—milk powder. I know that these opportunities have an enormous amount to offer us, and I saw some of the most recent of them, particularly around iron ore and milk powder in New Zealand, at very close quarters.

I learnt very early on that these opportunities are easily missed. It is easy to find an excuse to avoid pursuing them, it is easy to put roadblocks in the way and it is easy to listen to the naysayers who will tell you that this is fool's gold and that there are so many different trade-offs you have to make that you never get a deal done. Fortunately we have a minister who has executed on these deals and would have none of this naysaying. We have seen three transformational agreements this year, as we said we would—with Japan, with Korea and with China. Of course the one we are talking about today in this bill is the one with Japan, and we look forward to a similar agreement with India. This bill is intended to support the Japan-Australia Economic Partnership Agreement. We know that negotiations began in 2007 and did not conclude until April 2014—by an extraordinary coincidence, it seemed that not very much happened in that period between 2007 and 2013, when Labor was in power. The bill amends the Customs Act 1901 to introduce new rules of origin for goods imported into Australia.

The benefits of free trade agreements are not always well understood, and I want to focus on the benefits for a moment. Not only do these agreements bring lower prices for the importing countries and better access and higher prices for the exporting countries but also they do something else very important—they allow us to specialise, allow us to focus on our great strengths. Adam Smith worked this out several centuries ago when he talked about the pin factory. He noted that by specialising, by allowing people to focus on what they did best, by breaking up a task into its smaller components, we could drive enormous levels of productivity. In fact, the industrial revolution was built around that very simple insight. We are seeing exactly the same thing happening right now in the global economy. An iPhone has 451 components, and the 10 most valuable come from six different countries. That is specialisation, that is what we are seeing in the global economy at the moment, and that is exactly why these trade agreements are so important—because we need to back our strengths. We need to focus on our strengths, and nowhere is that more important than when we look at agriculture. The naysayers quote from a Productivity Commission report that was done a number of years ago and say that these agreements do not really deliver. Let me tell you what is so important about all three of these agreements with Japan, Korea and China—agriculture is a big part of them. Agriculture is one of our great strengths. These are large countries, large importers, and they offer great potential for us to focus on our strengths. As importantly, these agreements not only include agriculture but also extend to resources and services. We know that is where the economic growth will come for us beyond the current commodities boom.

In the time I have left I want to focus on some clear benefits I am already seeing in my electorate from this strengthening relationship with Asia. I was recently involved in the opening of the Hilltops abattoir at Young—an export beef facility which will employ, once at full capacity, 380 people. There has been millions of dollars of investment focused entirely on exporting meat up into Asia. We are already seeing the benefits of these deepening relationships. Brumby Aircraft out at Cowra have entered into a 40-year joint-venture with AVIC, a Chinese aircraft company, initially involving the export of 280 small aircraft up into China. The benefits from these free trade agreements, and in particular this Japanese free trade agreement, will be enormous. I commend the bill to the House.

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