Dave Sharma (Wentworth, Liberal Party) Share this | Hansard source

Let me thank the member for Brand for her comments in support of the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill and the Customs Tariff Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill. At a time of growing global economic uncertainty and mounting trade tensions, countries like Australia need to stand up for the principle of free trade and shore up the foundations of the global trading system.

Trade and economic growth go hand in hand. Since the end of World War II, it has been the growth in global trade that has driven increased living standards around the world. In 1945, exports were a mere five per cent of total GDP. Today, they are 25 per cent. As the IMF updated in its World Economic Outlook last week, it's the slowdown in global trade growth that is very much driving the slowdown in the global economy. Global trade growth is now down to one per cent, its lowest level in seven years, and this is leading, in the IMF's words, to a 'synchronised slowdown' in the growth of the global economy.

Countries that have embraced the opportunities of global trade and opened their economies have seen the most dramatic improvement in their fortunes. China's embrace of trade and openness from the late 1970s onwards propelled China's development and lifted literally hundreds of millions of people out of poverty. But the proposition that links growing trade with rising prosperity is, unfortunately, under threat from protectionist sentiments, from increasing trade tensions and from growing deadlock within the World Trade Organization.

Australia has been a huge beneficiary from the liberalisation of the global economy. The ability to trade freely around the world on the basis of transparent and predictable rules has delivered us improved living standards, better jobs, higher wages and greater choice. That is why it is important for Australia to stand up for the global trading system, to stand up for free trade and to play our part to maintain and improve the liberal and open character of the global trading system. On average, Australian businesses that export hire 23 per cent more staff, pay 11 per cent higher wages and have labour productivity 13 per cent higher than non-exporters. That is why trade contributes to our economy, creates more jobs and higher-paying jobs and adds to our capacity to pay for the essential services, health and education that Australians rely on. This government's ambitious trade agenda has already resulted in more Australian businesses exporting—more than 53,000 exporting in 2017-18, which is up 18 per cent since 2013-14—and more jobs, with one in five Australians employed in trade related employment. It's estimated that more than 240,000 trade related jobs have been created in the last five years.

Australia has concluded three important free trade agreements since 2018—with Indonesia, with Peru and with Hong Kong. The bills before this House today will amend our legislation to allow ratifications of these agreements, to allow these agreements to enter into force and for Australians to reap the benefits of these agreements. Each of these agreements will open new markets, provide greater opportunities and protections for Australian exporters and Australian investors. They will help protect the Australian economy from growing global economic headwinds by diversifying and growing our export markets.

Coverage of exports by free trade agreements in Australia has gone from 26 per cent to 70 per cent over the past six years, and these three agreements will take this further. This government's goal is to ensure that around 90 per cent of Australia's trade is covered by FTAs by 2022, including by implementing these agreements signed with Indonesia, Peru and Hong Kong and pursuing strong export agreements with the European Union; the Pacific Alliance, consisting of Mexico, Chile, Peru and Colombia; the Regional Comprehensive Economic Partnership Agreement, or the RCEP; and, when they're ready, the United Kingdom.

Each of the agreements with Indonesia, Peru and Hong Kong will also strengthen relations with important partners, and each of these agreements will help buttress the global trading system and underwrite free trade at a time when it is under threat. Our agreement with Indonesia, the Indonesia-Australia Comprehensive Economic Partnership Agreement, has the potential to transform our economic relationship and lift it to a level that better reflects the strategic importance of our two countries to one another. Beneficiaries include Australian grain and citrus growers, cattle producers, mining-equipment providers, mining-services providers, vocational education suppliers—all these groups stand to benefit from improved market access.

Under IA-CEPA, once implemented, over 99 per cent of Australia's goods exports will enter Indonesia duty-free or under preferential arrangements. Key market access gains include: frozen beef and sheepmeat exports, which will have their tariff halved from five per cent to 2.5 per cent upon entering into force and eliminated entirely after five years; removing all remaining tariffs on dairy exports to support Australian dairy producers; and improving market access outcomes on services and investment, which will give Australian businesses increased certainty and confidence in the Indonesian market, including in areas such as vocational education, mining and related services, and tourism.

The Indonesia-Australia Comprehensive Economic Partnership Agreement also lays the foundations for a comprehensive economic partnership with our largest and most significant northern neighbour. It will tackle emerging issues in trade such as non-tariff barriers, the digital economy, connectivity, competition policy and regulatory transparency. It will improve the business and investment environment, including through modernised investor-state dispute settlement provisions. It will support Indonesia's own growth by supporting Indonesian capacity in key areas and by positioning Australia as the supplier of first choice. Indonesia is one of Australia's highest priority relationships, and this agreement with Indonesia will help grow our ties in a part of the relationship that has been historically under-done.

The agreement with Peru has concluded with one of the fastest growing economies in Latin America over the past decade, an economy comparable in size to Vietnam. It builds on the liberalisation we have already achieved in the comprehensive and progressive Trans-Pacific Partnership or CPTTP. Our trade with Peru has been growing in the order of 20 per cent annually, and Peru is an increasingly attractive investment destination for Australia. From 10 Australian companies investing in Peru in 2003, there are now over 90 companies in Peru, especially in the mining and mining equipment sectors. The Peru-Australia Free Trade Agreement will ultimately eliminate over 99 per cent of tariffs on Australian goods to Peru, expanding on the TPP 11 agreement. It will also include the elimination of tariffs on beef cuts after five years, the instant elimination of tariffs on sheepmeat and wheat, instant duty-free access on 7,000 tonnes of dairy products and immediate elimination of duties on all pharmaceutical tariffs. It will also include the recognition of Australian degrees in Peru. I would like here to thank the work of the embassy in Peru and our ambassador at the time, Mr Nicholas McCaffrey, for all he did to help conclude this agreement.

Our agreement with Hong Kong, the Australia-Hong Kong Free Trade Agreement, provides a comprehensive and ambitious agreement to govern the trade and investment relationship. Our economic and trading relationship with Hong Kong, one of Asia's most advanced economies, is already well established and advanced. This agreement largely codifies existing trade and market access arrangements, providing certainty for investors and exporters into the future. It modernises the treatment regime for foreign investors, making investor-state dispute settlement mechanisms more transparent and more constrained, improving safeguards for governments wishing to adopt legitimate public policy measures in areas such as tobacco control. The modern e-commerce rules governing free data flows across borders are included in the agreement as well as guaranteed access for service supplies into key sectors including: financial services, education, transport, tourism and professional services, and guaranteeing that tariffs will remain bound at zero per cent.

This is a good agreement on its merits with Hong Kong, but we must also be mindful of the political situation in Hong Kong, something that we in this House and the government continue to watch closely. It is certainly my view that the maintenance of the one country, two systems formulation which has governed Hong Kong since the handover in 1994, under the basic law, is important, and this agreement helps shore up the status. We've concluded this agreement with the authorities of Hong Kong, and this agreement helps re-affirm the unique status under the one country, two systems formulation.

The Joint Committee on Treaties found that IA-CEPA, the Indonesia-Australia Comprehensive Economic Partnership Agreement, and the Australia-Hong Kong FTA represent substantial gains for Australian industry, agriculture and business and, therefore, for the Australian economy. JSCOT recommended that we proceed to rapid ratification of both agreements. I thank fellow members of the Joint Standing Committee on Treaties, as well as the deputy chair, for their work in enabling our productive deliberations on these issues.

I want to touch upon some issues that the member for Brand raised in her comments regarding these agreements. The first is investor-state dispute settlement. These three agreements, with Indonesia, with Hong Kong and with Peru, strengthen our existing ISDS provisions with all three countries. The ISDS provisions in all three agreements allow the government to regulate on issues of national importance, including public health and the environment. Australia has pre-existing ISDS mechanisms in force with all three countries. Those with Peru and Hong Kong will be terminated upon entry into force of these agreements. I note that the trade minister has advised that Australia will now be pursuing termination of the Australia-Indonesia bilateral investment treaty, something the Joint Standing on Treaties recommended, and I welcome that announcement.

There are no new waivers of labour market testing under these three agreements. It's important to emphasise that point: there are no new waivers of labour market testing. Nothing in these agreements changes Australia's workplace laws, nor do the agreements allow for the exploitation of working holidaymakers. All workers in Australia, whether they are Australian nationals or foreign workers, are treated equally under Australian workplace laws. This is exactly as it should be. Nothing in these agreements allows for foreign workers to work without the necessary licensing or registration or qualifications, and the government will continue to take steps to ensure that working holidaymakers are not exploited and, if required, are qualified for any work they undertake. The government has confirmed that it will not use the provisions of article 12.9 in the Indonesia agreement, or any other provisions in that agreement, to propose, create or extend any additional labour market testing waivers for Indonesian contractual service suppliers.

Finally, I go to privatisation. As the member for Brand said, these agreements do not create an obligation to privatise any Australian public services, nor do they restrict any future decision to acquire public assets, and nor do they imperil schemes such as the Pharmaceutical Benefits Scheme, or Medicare for that matter.

In conclusion, these agreements serve Australian interests. Securing better access to export markets for Australian producers is one of our best forms of protection against global economic headwinds. These free trade agreements do just that, so I commend this enabling legislation to the House.

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