Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Hansard source

Labor supports the passage of the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 and the Customs Tariff Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014. These bills are an important part of the implementation process of the Japan-Australia Economic Partnership Agreement. Labor supports stronger trading relations within our region and the world. Former Labor trade ministers Simon Crean and Craig Emerson contributed to the progress of negotiations on this trade agreement with Japan. Those negotiations were part of Labor's embrace of our region. The former Labor government's 'Australia and the Asian Century' white paper mapped out the opportunities and the challenges for Australia in our region. It is a bit hard to find the white paper these days—the incoming government junked key white paper initiatives and banished the document itself from the website of the Department of Prime Minister and Cabinet—but anyone who can get a hold of a copy will appreciate the seriousness with which the former government embraced the task of preparing this nation for the coming Asian century.

In relation to trade, the white paper identified the following pathways to help navigate our way: 1) working persistently to reduce barriers to trade and investment through existing multilateral and regional forums such as the World Trade Organisation, the G20, the Asia Pacific economic cooperation forum, the Association of South-East Asian Nations and its free trade agreement partners and also through bilateral arrangements; 2) working towards a free trade agreement for the Asia Pacific region by encouraging competitive liberalisation and regional agreements through our ongoing participation in negotiations for the Trans-Pacific Partnership Agreement and participation in negotiations for the Regional Comprehensive Economic Partnership; 3) promoting rules of origin in trade agreements that lower business compliance costs and facilitate trade; 4) assessing the benefits of joining the Pacific Alliance of Chile, Colombia, Mexico and Peru as part of our efforts to position Australia as a connecting rod between Latin America and Asia; 5) working to increase access for Australian investment in Asian markets; 6) continuing to advocate market based reforms in Asia that promote stable, efficient and open financial markets, for example through further work towards the establishment of direct trading between the Australian dollar and the Chinese renminbi in mainland China; and 7) supporting efforts towards complementarity of financial market regulations within the region to open up market opportunities, for example through APEC's financial market integration efforts including the Asia region funds passport initiative.

These pathways were part of a whole-of-government plan to encourage and support Australian businesses operating in and connecting with growing Asian markets. The white paper notes that Australian businesses and their employees can be big winners from the Asian century with new and expanding opportunities for our miners, our manufacturers, our farmers and our service providers. It notes, however, that Australian businesses—no matter how competitive—cannot participate in the Asian century if they are locked out of markets. That is why in addition to pursuing multilateral and plurilateral agreements, the former Labor government was committed to concluding high-quality bilateral trade agreements with South Korea, China and Japan amongst other trading partners. The key phrase here, of course, is 'high-quality'.

In the assessment of many the Japan-Australia Economic Partnership Agreement fails to meet that test. In almost every area of activity cynicism about what this government is doing is warranted. The conclusion of bilateral trade agreements negotiated according to arbitrary time lines and concluded to coincide with available photo opportunities are no exception. Australian industries were short-changed to facilitate an announcement of the conclusion of negotiations on the Japan-Australia Economic Partnership Agreement during the Prime Minister's visit to Japan in April. That is not just a Labor observation. The National Farmers Federation, the Minister for Trade's old employer, said that the agreement

… falls short of the mark. It does not improve or marginally improves market access and terms of trade for a number of sectors such as dairy, sugar, grains, pork and rice.

Australian Pork Ltd described the agreement as 'substandard and a missed opportunity'; canegrowers called it 'another kick in the guts for Aussie cane growers'; the Ricegrowers Association was extremely disappointed; the Australian Dairy Association observed 'our words fell upon deaf ears'. These judgements are from industry organisations that rely on governments to advance their trading interests abroad.

After time to review the full agreement and the opportunity for inquiry and report by the Joint Standing Committee on Treaties, Labor and many others have formed the view that, on balance, the agreement is in the national interest. Labor welcomes the modest market access concessions it achieved. These concessions represent a crack in the door for many exporters, especially for Australia's premium agricultural products and our advanced, high-quality service sector. The Japan-Australia Economic Partnership Agreement will enable Australian exporters to establish and build strong quality and reliable brand names in households throughout Japan. This will be crucial in order to hold on to the first-mover advantage provided by this agreement. We know that other competitors, including Canada and the European Union, are negotiating their own preferential bilateral trade deals with Japan. The agreement with Australia includes favourable review mechanisms and most-favoured nations provisions, which hold promise for wider and deeper market access. We urge the government to proactively utilise these mechanisms to gain further market access to Japan, especially for those export sectors dudded by the Abbott government in its haste to announce a deal.

Labor welcomes the liberalisation in investment agreed to in the Japan-Australia Economic Partnership Agreement. Lifting the Foreign Investment Review Board's threshold to over $1 billion for non-sensitive investment from Japan treats Japanese investment the same way as non-sensitive sector investment from the United States, New Zealand and South Korea. Australia has always relied on foreign capital growth. Lifting the threshold for Japanese investment is a good thing. What is not a good thing is the government's pandering to the National Party by lowering the Foreign Investment Review Board's threshold for agricultural land and agribusiness. It is simply unrealistic to think Australia can scale up to the level needed to meet demand for our premium agricultural products without the help of foreign investment. Additional barriers to investment do not encourage additional investment.

Labor welcomes the absence of an investor-state dispute settlement provision in this agreement. In contrast to other agreements negotiated by the minister over recent months, the Japan-Australia economic partnership agreement does not provide foreign investors with greater rights than domestic investors. Labor strongly opposes the inclusion of investor-state dispute settlement provisions in investment in trade agreements. We note with some concern the investor-state dispute settlement review mechanisms embodied in them. It is difficult to understand why the signing of a future agreement with another country containing investor-state dispute settlement provisions should trigger a review of Australia's agreement with Japan.

Last week the government announced that it had concluded negotiations on a preferential agreement with China that unfortunately includes investor-state dispute settlement provisions. Pursuant to the terms of our agreement with Japan, Australia must commence a review within three months following the date the Australia-China agreement enters into force with a view to establishing an equivalent investor-state dispute settlement mechanism under the agreement with Japan. This is most regrettable. The folding of the Abbott government on investor-state dispute settlement provisions in the Korea-Australia free trade agreement, and now in the China agreement, has not been warmly welcomed by the Australian community. It is clear that such provisions, notwithstanding the inclusion of so-called safeguards, are not desirable and present significant risks.

The Gillard government showed global leadership in this area in 2011 when it announced that it would not agree to provisions in investment and trade agreements that confer greater rights on foreign businesses than domestic businesses or provisions that constrain the ability of the government to make laws on social, environmental and economic matters. Labor has not supported a private senator's bill in this parliament that sought to grow the treaty making powers of the executive. But no sensible government can or should ignore the concerns of many Australians, including the Chief Justice of the High Court of Australia, regarding investor-state dispute settlement provisions.

Today Labor again urges the Abbott government to rethink its decision to include investor-state dispute settlement provisions in trade agreements. In relation to the Japan-Australia economic partnership agreement, we caution against the backdoor introduction of investor-state dispute settlement through the agreement's review provisions. A future Labor government would exercise Australia's right as a party to the agreement to propose the excision of any subsequently included investor-state dispute settlement provisions.

In relation to the movement of people provisions in the Japan-Australia economic partnership agreement, Labor is disappointed by the lack of balance and reciprocity between the parties, specifically with respect to contractual service providers. As with the Korea-Australia free trade agreement, the government has given up the right to undertake labour market testing ahead of granting 457 visas to categories of foreign workers. These visas allow foreign residents to work temporarily in Australia. In most cases, there is a requirement for labour market testing to demonstrate local skills shortages. We are particularly concerned about the government's decision to deny itself the capacity to undertake labour market testing with respect to contractual service providers from Japan.

Good trade agreements should support and create jobs for Australians. Australians should have the opportunity to fill job vacancies where they have got the capacity to do the job that is required. Exemptions from labour market testing in this and other agreements do not support that objective. No doubt we will get some assurance from the government that the Japan-Australia economic partnership agreement will create more jobs for Australians and no Australian worker will be displaced as a result of the exemption from labour market testing. If that is the case, we ask the government to put in place measures to more accurately track visa entrants based on trade agreement provisions, including exemptions from labour market testing requirements. This will allow us to more accurately measure their impact and devise future policies that better support Australian businesses and workers.

I want to say a few words about the China-Australia free trade agreement announced by the government last week. While we welcome the finalisation of long-running negotiations, Labor is concerned that the deal struck by the government to meet its self-imposed timetable will deliver sub-optimal outcomes. We cannot make an assessment of the quality of the agreement because the government has not seen fit to release the text. Consistent with recent tactics from a government that is well versed in political spin, all we have seen is a bunch of press releases and glossy pamphlets. Last month my colleague Senator Penny Wong, the shadow minister for trade and investment, set out clear benchmarks for a high-quality free trade agreement with China. We will closely examine this deal against those benchmarks. We urge the government to release the text of the agreement so that Labor, the parliament and the Australian community can assess its quality.

Japan and Australia have a good, strong and stable relationship. We welcome the opportunities provided by this economic partnership agreement to further build on that relationship. We have been reliable trading partners for many decades. In 2013 Japan was our second largest trading partner, with two-way trade valued at $70.8 billion. We are also reliable investors. Japan has been a long-term investor in Australia, with investment stock of $131 billion at the end of 2013. This investment has been critical to enable Australia to capitalise on the demand for our resources and provide jobs and economic growth.

Australia has also invested in Japan, with Australia's stock of investment in Japan at $50 billion at the end of 2013. Japan is Australia's second largest agricultural market, with approximately $4 billion in exports in 2013. Australia's agricultural industry is significant for Australia's future economic and job growth. Currently the red-meat sector alone employs more than 200,000 workers, most of whom are in small local government regions. Dairy is forecasting jobs growth in excess of 6,000 skilled workers next year. Australia is the first major agricultural exporter to conclude an economic partnership agreement with Japan. This gives Australian exporters a real competitive advantage.

Japan is also Australia's second largest partner for non-agricultural goods, with over $42 billion in export trade in 2013. This agreement opens the way for significant export growth and jobs in these sectors. On services, this agreement opens the door to expand service exports to Japan—in particular, legal, education, telecommunications and financial services. Australia's service sector employs four out of every five workers. So we believe that the government could and should have secured a more comprehensive and inclusive agreement with Japan. Nevertheless, we believe that, on balance, this agreement with Japan provides benefits to Australia and is in the national interest. We support the Japan-Australia economic partnership agreement and we support the bills before the House. This support is not however without reservation. For the reasons I have outlined, I move:

That all words after 'That' be omitted with a view to substituting the following words: 'whilst not declining to give the bill a second reading the House urges the government to:

(1) not agree to any inclusion of investor state dispute settlement provisions in the Japan-Australia Economic Partnership Agreement;

(2) enact policies to ensure that Australian workers benefit from jobs growth created under the Japan-Australia Economic Partnership Agreement; and

(3) utilise the review mechanisms in the Japan-Australia Economic Partnership Agreement to seek further market access gains, especially in agriculture.'

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