Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

I am pleased to have the opportunity to speak on these two customs bills before the House: the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. As the Minister for Home Affairs has explained, these are customs bills because customs legislation needs to be introduced to provide the administrative process that enables this agreement to become a binding treaty. Having said that, I will address some remarks to the nature of the free trade agreement itself and also to the circumstances surrounding the horticulture industry in Australia at the moment, because there is no doubt that horticulture is struggling badly with low or no water allocations, with collapsing markets and with misunderstandings of the nature of their enterprise by the Minister for Employment and Workplace Relations, who is placing them under serious pressure in terms of their workplace agreements.

I would have liked, in discussing these free trade bills, to give the horticulture industry confidence, hope and assurance that things are going to improve. It is not all bad news for the horticulture industry. Steps have been taken and advances have been made that will open up our horticulture markets to the ASEAN countries. I acknowledge that, but I want to quote specifically from some of the remarks that the Horticulture Market Access Committee made to the Joint Standing Committee on Treaties which I think better explain where they are coming from and their disappointment with this particular treaty.

I will go back to the purpose of the bill, which is to amend the Customs Act 1901 to define ASEAN-Australia-New Zealand free trade agreement originating goods and to amend the Customs Tariff Act 1995 to provide preferential tariffs for ASEAN-Australia-New Zealand free trade agreement originating goods. The concept of an ASEAN-Australia-New Zealand free trade agreement was floated by the Hawke-Keating government in the early 1990s. Formal discussion commenced under Minister Vaile in 1999 and the negotiations commenced in 2004 and continued under Minister Truss. An agreement was signed by Minister Crean on 27 February 2009.

These amendments proposed in the bills implement relevant parts of the ASEAN-Australia-New Zealand free trade agreement. Whilst the coalition supports the bills, it is disappointing to note that the government is pushing this legislation through with very little notice. I remind members that the free trade agreement was signed months ago by the Minister for Trade and his counterpart ministers from ASEAN countries and New Zealand. It was signed on 27 February. The agreement was tabled in parliament on 16 March this year and it was referred to the Joint Standing Committee on Treaties, which recommended in its report, tabled on 24 June 2009, that binding treaty action be taken.

The government is proposing to introduce and presumably pass these bills in the House today, Wednesday, 15 September, and I understand would like the bills to pass through the Senate on Thursday, 16 September—tomorrow. This, I gather, would enable the Minister for Trade to attend the East Asia Summit on 25 October 2009, where he anticipates that at least New Zealand and four of the ASEAN countries will also have completed their internal arrangements. That will mean that the free trade agreement is able to come into force on 1 January 2010. All the signatories are, in any case, required to advise of progress with their internal arrangements by 2 November 2009. We in the opposition understand that it would be embarrassing for the Minister for Trade if Australia’s arrangements were not finalised by that date, and presumably that is why the government has tacked this important legislation on to the end of the sitting week before a four-week break from parliament.

I simply make the point that the opposition is not impressed. Given that the Joint Standing Committee on Treaties report was tabled on 24 June 2009, there has been ample time to introduce and pass the legislation in an orderly fashion. This certainly affects our ability to go through the comprehensive arrangements that we have on this side of the House involving consultation with our members—particularly members who represent electorates and industries that would be affected by this agreement—and discussions at our various committees and so on. But, despite this, the coalition does agree that the free trade agreement will provide greater access to the Australian market for goods originating from ASEAN countries and New Zealand and, importantly, provide greater access for Australian goods in the markets of the ASEAN countries and New Zealand.

It was noted in the national interest analysis of the agreement that, as a group, ASEAN and New Zealand constitute a larger trading partner for Australia than any single country. ASEAN member countries and New Zealand together account for 21 per cent of Australia’s total trade in goods and services. It is worth noting that total trade in goods and services between Australia and ASEAN and New Zealand combined was $103 billion in 2007-08. The coalition believes that the ASEAN-Australia-New Zealand free trade agreement will also support economic integration in the region and enhance Australia’s participation in the region’s evolving economic architecture through commitments in a range of areas, including trade in goods, trade in services, investment, intellectual property, temporary movement of persons, electronic commerce and economic cooperation. Clearly it is to Australia’s advantage to take the proposed treaty action.

My colleague, the shadow minister for trade, who as I noted earlier was intimately involved in the original negotiations for this agreement, will have more to say on the trade aspects from the coalition’s point of view. While I have the opportunity, I would like to return to the issue of horticulture, which very much affects rural and regional Australia, including my electorate of Farrer, at the moment. I will quote from report 102 from the Joint Standing Committee on Treaties, about treaties tabled on 12 and 16 March 2009. The report makes the point that:

The ‘prudential’ basis of Australia’s negotiating position discussed in detail above seems to have lead to a focus on macro level tariff outcomes. For example, the Department pointed out that the AANZFTA achieved a higher degree of tariff elimination at the macro level than achieved in other free trade agreements with ASEAN:

                  …              …              …

In relation to specific tariff lines, however:

Clearly, you may have circumstances where, on an individual product, the degree of liberalisation achieved in a specific FTA with another dialogue partner may be greater—certainly in the example of mandarins and a range of other horticultural products, particularly with China.

The horticulture industry is represented in this area by the Horticulture Market Access Committee, and they made statements that:

…the horticulture tariff outcomes under AANZFTA … are in significant cases below optimal outcomes and lock Australian horticulture either temporarily or permanently into certain inferior trading positions against Australian horticulture’s competitors into the ASEAN market.

The report noted:

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; and
• the effectiveness of Australian negotiators in representing the interests of the horticulture industry.

Certainly the ASEAN-China Free Trade Agreement affects our producers in a considerable way. The report stated:

Chinese horticulture exports to ASEAN are subject to near zero tariffs across the board. This has resulted in exceptional growth in Chinese horticultural exports to ASEAN member states. Chinese horticultural exports have grown by 132 per cent in the four years to 2007/08.

                  …              …              …

From the point of view of the HMAC, in a situation in which China enjoys zero tariffs on most horticulture lines into most ASEAN countries, and Australia does not and will not for the term of the AANZFTA, Australia’s competitive position will suffer for many years. According to the HMAC:

It is a very sensitive issue for vegetable growers because basically we have lost a lot of our markets in South-East Asia to Chinese competition. When you are trying to talk to vegetable growers about becoming export orientated, they see China getting unfair advantages in, say, these free trade agreements vis-a-vis Australia. The expectation out of all this was that Australian vegetable growers would at least be able to compete on an equal footing with Chinese vegetable growers in these markets. That is where the disappointment comes.

                  …              …              …

In relation to Thailand, the HMAC is concerned that Australia did not take the opportunity to improve on the result of the Thailand – Australia FTA.

              …              …              …

The tariff for a number of horticultural tariff lines in the AANZFTA is higher than those contained in the Thailand – Australia Free Trade Agreement. As previously discussed, in such circumstances, the free trade agreement with the lower tariff outcome will prevail.

I note that two, possibly three of the recommendations of the Joint Standing Committee on Treaties can be referred or related to the horticulture industry. Certainly, recommendation 1 is one that we in the coalition will be holding the government to account on, and I quote:

The Committee recommends that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry—

We stand by this industry in their time of need. We feel for them in their disappointment. It is not all bad news. They have had advantages. But for individuals in particular sectors, such as mandarines, those advantages may not mean anything to the bottom line.

The other recommendation that I want to note is recommendation 4, which is:

The Committee recommends that the Department of Foreign Affairs and Trade prepare a report for the Committee examining mechanisms to allow negotiators to directly consult with industry representatives during the negotiation process.

The Horticulture Market Access Committee certainly were not specifically critical of the negotiation process; in fact, they made the point that they were generally very happy with the quality of Australian negotiators. But they also made the point that those negotiators cannot possibly know the ins and outs of every single horticulture industry in Australia as well as those who represent that industry locally can. Particularly when it came to vegetables, they felt that that industry was not given the credence that it warranted. Their suggestion, which I think is a good one, was that industry representatives be included in some of the negotiations or be available to provide industry expertise to those involved in the negotiations. There does not have to be physical travel to the region—they could be consulted via email or telephone—but they do need to be involved in any situation where government-to-government trade negotiations on agriculture take place. You should involve the growers or the representatives of those growers because there are so many intricate details of production that they know and which a negotiator cannot possibly know. They are the experts on international treaties and law, but they cannot possibly know the finer details. So we really support recommendation 4.

With those remarks, I would like to return to the pain that the horticulture industry in my electorate is feeling. There will be a cost explosion for wine grape growers if the loadings of between 150 per cent and 250 per cent become law. I know that a case is being presented to the Industrial Relations Commission by the Horticulture Australia Council to vary the horticulture industry award. We thank the Deputy Prime Minister for her acknowledgement of the particular circumstances of that award, but I believe that we need to go further. We need to recognise that this industry is entirely different from a manufacturing, process line or service industry. It relies on the weather, the seasons, the harvesting window and also on casual work, which is often done by people on temporary visas or backpackers or locals who are quite happy to work under the arrangements they have been working under for quite some time.

Although it is does not relate directly to this legislation, I want to speak for Murray Davies from Burtundy Station in my electorate of Farrer in far-west New South Wales. He has sent me a short email that captures his frustration with the state of play at the moment. It states:

We grow 400ac wine grapes.

Prices we receive are directly related to world price per litre of wine.

We have to be competitive on the world market.

The grape Industry operates at night because its is cooler generally under 30 Celsius

Over 30 Celsius grapes start to ferment in the bins and fruit would be rejected at the winery and dumped. Growers are already operating below production costs, any extra burden would finish growers

Grape harvest helps keep young people in our community by supplying extra work, we are not talking about city people, we are talking about people in Sunraysia and Riverland. Both communities are under pressure. 40% of vineyards have closed down in the last few years. Is it the intention of the government to close the whole industry down?

If the industrial relations commission goes ahead with this increase in award for the wine industry we would have to leave the industry with in 12 months.

I do not think you can put it any plainer than that.

In bringing in this customs tariff legislation implementing this free trade agreement, I want to conclude on recommendation 1, which is:

… that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry.

We desperately need to support our growers in their time of need. I thank the House.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I thank the House for the opportunity to speak on the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and cognate legislation. I commend the Minister for Home Affairs, the Hon. Brendan O’Connor, for his work in this particular area. I note that in the remarks of the opposition member who previously spoke on this bill, it was seen that we have somehow rushed this legislation through. That is a bit incredulous given that this process started in the Hawke-Keating years and continued all the way through the Howard years. Now, after 18 months in government, we have taken action and implemented something that was probably long overdue. As the shadow minister understands, there are a number of imperatives in getting this legislation signed off and approved by this parliament to enact those agreements that we have in place that cover a whole range of countries.

I am very pleased to have the opportunity to speak on what is a historic milestone for Australian trade negotiations. The agreement is in fact the largest free trade agreement Australia has concluded. It will provide Australia and the other 11 parties to the agreement with, among other things, preferential access to each other’s goods—something that is well understood in terms of free trade agreements and something that is successful in ensuring that Australian producers are not disadvantaged in any particular way through the tariffs that are placed upon our export goods. It will reduce or otherwise eliminate tariffs across a region that is home to some 600 million people and that has an annual GDP of A$3.2 trillion. This presents a huge opportunity to Australian exporters and to Australian industry.

The agreement will deliver new opportunities right across the board. ASEAN and New Zealand together account for 21 per cent of Australia’s total trade in goods and services—something which was worth $103 billion in the years 2007-08. ASEAN as a group is a larger trading partner for Australia than any single country, accounting for 17 per cent or $81 billion of Australia’s goods and services trade in the period 2007-08.

The ASEAN-Australia-New Zealand Free Trade Agreement, the AANZFTA, is a free trade agreement established between Australia, New Zealand and ASEAN, whose member countries are Burma, Brunei, Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam—all countries within our immediate region and countries that we already trade with. Of course, moving to this sort of a platform will be a huge advantage to many Australian exporters. There is of course a cost to Australia, which is something I will talk about in a moment.

This is the first free trade agreement Australia has signed since the onset of the global financial crisis. This is a perfect example of Australia and its neighbours’ strong commitment to opening up markets in the face of the global recession. It is clearly the right course of action given our knowledge and experience of history and the knee-jerk reaction that you might expect when there is a global crisis—people close the door. We have done the opposite. It is commendable not only to Australia but also to our partners in the region, those countries I have mentioned, that they still see the opening up of trade in difficult economic times as a worthwhile act. It bodes very well for their progress and development as well as ours. It also shows that progress in trade can be made if there is political will to do so.

The Rudd Labor government has shown the will to progress Australia’s interest despite the global challenges that we face today and despite the cost of this action to the budget. It is a cost that is worth while and a cost that will be recouped over time. In fact, there will be a net benefit to Australia. While we heard some comments in relation to this from the previous speaker, I would say that, like in so many other areas, this action is in stark contrast to what we saw under the previous administration. We have chosen to act quickly and, as you have heard many times, Madam Deputy Speaker, decisively to make sure that we do the things that are necessary in Australia’s national interest and in the interests of our region.

What this means for us and for Australian exporters is an opening up of markets in a range of areas where there were some significant issues and disadvantages faced by Australian exporters. This agreement, I note, is the first plurilateral free trade agreement that Australia has signed and, as I said earlier, it is also the largest and is quite significant. It will commit those member countries that have signed it to either eliminate or reduce tariffs applied to goods and services imported from other countries that meet the agreed rules-of-origin criteria. It will mean that more than 90 per cent of goods and services traded between those countries can expect to be tariff free by 2013. It is a worthwhile and worthy goal and something that we are working towards. There are some exceptions in that there is a longer transition period for a number of countries. It has been agreed that there will be a longer transition period for Vietnam, Burma, Cambodia and Laos to reflect some difficulties and challenges that these countries face in meeting their obligations. They will not remove tariffs altogether until 2024 but will be progressing towards that goal.

There is a cost to Australia. Treasury has estimated that we will lose $971 million in revenues from tariff reduction up to the 2012-13 financial year—something that we will recoup, though, in increased exports, better access to markets and more opportunity for Australian exporters. The report from the treaties committees is, of course, commendable. They received a number of submissions. The bulk of those submissions were supportive of Australia ratifying the AANZFTA and, in particular, a submitter supported the creation, through this, of greater transparency and certainty for Australian investors in the region—something they did not have up until the signing of this particular agreement, when you look at the vagaries in some places with tariffs, tariffs that could have been raised at any particular point in time. It binds those countries to a path of certainty through either reduction or elimination of tariffs or through holding of tariffs in place at the 2005 levels. It is a worthwhile process and commitment.

The submitters also supported Australia ratifying the agreement in areas such as intellectual property. We have heard in this place many debates about intellectual property rights. Australia is a large player on the global stage. This will go towards providing more certainty and better understanding of agreements and legal obligations between countries in terms of intellectual property. (Quorum formed)

I do find the unacceptable behaviour of the opposition and the member for Aston in calling for a quorum in the middle of what is an important debate most childish and tedious—something that both sides of the House support—and it is quite sad to see that the members are forced to follow the dictate of their tactics committee in terms of upsetting the time of this House. But I will continue.

Opposition Members:

Opposition members interjecting—

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

No, you are right. I would never have done that in opposition. We had much more sense and a bit more free will. I would like to make a couple of comments in terms of the prudential purpose of this agreement. The application of the national interest analysis highlights two reasons for the undertaking of this particular treaty action. The first is to safeguard Australia’s position against the risk of tariff increases in ASEAN countries, as I mentioned before, where there was some uncertainty as to what would happen to a number of exporters in terms of the tariffs that were applied. What this agreement will do is provide that certainty, which is very important. What it does through this agreement is immediately bind the 2005 applied tariff rates for all but a few tariff lines—something I know will be welcome.

The second reason relates to countering economic agreements that are being reached by ASEAN member countries with regional trading powers such as China, Japan, Korea and India. There are a number of issues involved. We heard from the previous speaker in relation to some of the near-zero tariff regimes that are in place for certain other countries and the disadvantages this places on Australian exporters and the impact that that has. I am pretty conscious of that and what it means for Australian horticulture, for our farmers here in Australia. I think there has to be continuing development and negotiation in terms of levelling that playing field so that our good produce, our exporters and our great agricultural and horticultural industries can compete internationally, because we can, on the basis of quality and the products that we have. But obviously it is very difficult for us to compete against unfair free trade agreements. I think it is something that we must continue to work on and deal with.

I also want to mention that this agreement is comprehensive. It is wide ranging and it provides an excellent platform for the future. I also want to take the opportunity to commend the hard work of the Minister for Trade, the Hon. Simon Crean, and his commitment to working towards a positive outcome for Australia in this agreement. The amount of effort he has put in is very commendable. It is often the case that trade ministers are unseen in their work and play a background role but it is a very important role that should be acknowledged appropriately, as I want to do today.

It is essential that we pass the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and cognate bill through the chamber today. Both the Customs Act 1901 and the Customs Tariff Act 1995 require amendment to see the enactment of the amendments that we have put forward. What the amendments will do is give effect to Australia’s obligations under chapter 3 of the free trade agreement, which provides rules of origin of goods imported to a particular free trade agreement party from another party. The rules are essential for the purpose of determining whether imported goods are eligible for the preferential customs duty rates available under the free trade agreement. The customs amendment bill will provide the rules for determining whether goods originate in an ASEAN member state or in New Zealand. This will allow goods imported into Australia from those countries to claim preferential rates of duty.

It will come as no surprise that Australia stands to gain from this agreement across many sectors, including our exports of agricultural products and industrial goods and services. I want to note that the National Farmers Federation has already recognised what has been achieved in agriculture through this agreement. Australian farmers are now being guaranteed access to developing South-East Asian markets, many of which have a growing appetite for high-quality Australian produce.

I have made two contributions in this place about the global food shortage, or the global food crisis, and will be making further contributions in the future, including a private members’ motion. I acknowledge the member for Franklin, who is also in the chamber and will be supporting and seconding that motion. I think it is one of those little understood or acknowledged problems facing the world’s poorest people, some one billion people, for the first time in history, who have a really critical issue in terms of food shortage and are either malnourished or at the point of starvation. With the global population at six billion people and estimated to reach seven billion within the next 50 years, there is a real disconnect between the top one billion people in the world, who I can fairly say are overfed, with the bottom one billion people in the world, who are dramatically underfed.

There is a really good opportunity for Australia: we produce more food than we need for consumption, and hence we are an exporter of produce. With the right innovation, with the right agricultural policies and frameworks in this country, a combination of the things we are doing out of a number of departments, including foreign aid, trade and what we are doing in the Department of Agriculture, Fisheries and Forestry through Minister Tony Burke, we can make a significant improvement in and impact on the world’s poorest people in terms of their food security. This, in small part, will have some impact on that as well. Globally, this represents a massive opportunity for Australian farmers to contribute to a very, very good cause.

The Rudd government is committed to pursuing a range of most ambitious trade issues. We have a trade agenda which will drive world trade and also boost the Australian economy and create local jobs across sectors, whether they be industrial jobs, jobs in the commercial sector or jobs across the farming sector. That is why our negotiations on breaking down barriers for Australian exports into the region do not stop with this particular free trade agreement. We consider this to be part of a larger plan, a platform for progressively advancing Australia’s interests. I am exceptionally pleased about the intent, the process and what the amendments and this legislation will do, as I am of the agreement, the ASEAN-Australia-New Zealand Free Trade Agreement. I commend the bills to the House.

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

John Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Regional Development) Share this | Link to this | Hansard source

I am grateful for the opportunity to make a contribution on this important legislation, the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. The subjects have been widely covered by the members for Farrer and Wide Bay but, as the member for Mallee, I want to make a contribution from my allocated seat to speak on behalf of my constituents—particularly as the member for Wide Bay has made reference to mandarines, which are a large source of employment, production and economic activity in the federal divisions of Mallee and Farrer.

The matters relating to these bills have been investigated by the Joint Standing Committee on Treaties, a committee upon which I serve. It is a very hardworking committee. An enormous number of treaties and international agreements which are necessary come to its attention, but the ones that have caused us the most anxiety are the ones we have had on the free trade agreements, which the current Minister for Trade is hell-bent on settling with too much haste and without thinking of the detail and the repercussions—more particularly for agriculture and most particularly for horticulture, as the member for Wide Bay has made reference.

The matters of the investigation and inquiries were the subject of report No. 102 of the treaties committee, which was submitted in this chamber in June. There are six recommendations in that report, three of which one might consider to be extremely critical of the government. It is good to see standing committees doing their work, because when the committee heard the evidence from the commodity groups associated with horticulture, we were somewhat alarmed that too little attention had been paid to the needs of the commodities in the haste to get this agreement. It is a little bit disappointing because the Minister for Trade has got experience in government as a minister for agriculture and should have much more empathy and consideration for that very important sector of our economy. Horticulture has great expectations. We have known that for years and have instigated efforts to encourage it to grow as an industry. It is currently suffering because of the water crisis across the southern half of the continent. The commodity groups are extremely disappointed that their aspirations have not been achieved in the haste to get this agreement.

I will refer to three of the recommendations made in the report, and it is worthwhile reading them into the Hansard so that when the minister comes into the chamber to sum up on this legislation he might do what he ought to do and respond to them. They are very considered and important recommendations, particularly recommendation No. 2. It says:

The Committee recommends that, in the absence of other measures designed to improve free trade, a free trade agreement negotiated by Australia should not include a tariff outcome on a tariff line that is worse than the existing tariff on that tariff line.

That is what this agreement does, and the committee heard evidence to that effect. The committee’s report says:

… the Committee is at a loss to understand why a worse tariff outcome, that in any case will not apply, would be included in the AANZFTA. If, in such circumstances, Australian negotiators are not able to negotiate a better tariff outcome, then it would be prudent to ensure that any previously applying tariff outcome is carried over to the new free trade agreement.

At least! That has not occurred and other members have spoken on the detail. Recommendation No. 3 says:

The Committee recommends that in future free trade agreements, Australia should negotiate for the binding tariff rate to be the lower of either the rate at the time of binding, or the Most Favoured Nation tariff rate at the time the free trade agreement comes into force.

The member for Wide Bay made reference to inferior outcomes, particularly for horticulture. Indonesia, for example, has increased its tariff on six horticulture tariff items from five per cent to 25 per cent. They did that in 2004 and have not made any commitment to reduce that despite the sacrifices. And we saw examples in the mid- to late-eighties when the Hawke Labor government slashed and burned, and horticulture was the victim of that. I recall my 1993 election and the anxiety of my horticultural growers. I said to them: ‘Send me. I don’t believe in free trade; I believe in fair trade.’

Of course the nation needs access to markets and to do that we have to negotiate better outcomes for those countries that want to sell us something. That is true but the outcomes have to be fair. Horticulture have waited patiently. Horticulture have seen the enormous assistance that manufacturing have got. The member for Wide Bay already made reference to the motor vehicle industry outcome in this which the minister seems more focused on than the industries that come out of regional Australia, particularly horticulture. Horticulture have been waiting patiently. They have been told: ‘Yes, you have to accept a lower tariff regime here for people who want to sell us something. The proof of the pudding will be in the eating. Be patient.’ But they are running out of patience. To be somewhat fair to the minister, this is not something I would criticise him entirely for. Even during the years of the coalition government, I expressed these strong views about the impatience of horticulture to get the benefits of a fairer trade environment, not free trade, around the world.

Recommendation No. 4 is particularly critical, recognising the fact that many of the horticultural commodities feel left out of negotiations. We contract out the negotiations to commercial entities, to people who are quite skilled at what they do and are good at negotiating. But for agriculture they tend to negotiate the lot, and what we need is commodity related negotiation. They need to know the nuances about particular commodities. Take mandarines for example. The problem with mandarines is that they fall within the issue of regional localism. We all know what a mandarine is; it is a soft-peel citrus fruit. The fact that its original genetic origin is from China is not the issue. It is grown in Australia as a mandarine product. The same situation applies to valencia oranges. It is of Spanish genetic origin but the product is grown here. We have to go through this process to prove that it was actually a product produced in Australia. We have seen the same thing happen with the wine industry with labelling and products that are regionally located in Europe. We accepted their argument and we changed the names of some of the wine products produced in Australia.

Recommendation No. 4 actually supports the evidence that was put to the committee by the horticultural representatives. It says:

The Committee recommends that the Department of Foreign Affairs and Trade prepare a report for the Committee examining mechanisms to allow negotiators to directly consult with industry representatives during the negotiation process.

I do not want the minister to respond by saying, ‘That’s already done.’ The issue is that it must be negotiated on a commodity by commodity basis such as products like citrus, Leng oranges and table grapes. It must be a commodity consultation, not an across-the-board agricultural consultation.

The minister wants these bills dealt with expeditiously through this place today and through the other place by close of business tomorrow. He expects this to proceed as non-controversial legislation. I think he is being very unreasonable. He has had these recommendations since June this year and he has not responded to them. When he is summing up, I expect him to make a statement in this House about how he is going to respond to this. He has to do justice to the hard work of committees that beaver away, travel the whole nation, collect evidence and listen to Australians. We have been assured that this government wants to govern for all Australians. Yet this committee has put its findings into a report and they have been ignored by the minister. The minister should come into this place and make a statement that he is determined to get better outcomes for horticulture. To do that he has to accept in particular those three recommendations the committee has gone to the trouble to recommend, and maybe then he will have these bills dealt with as non-controversial legislation. There are some benefits in that legislation for the nation. But I cannot stand here as the member for Mallee and not stick up for my constituents, particularly my citrus growers and my table grape growers who have worked jolly hard to invest in their future on the expectation that they will gain greater international market access, and not have my say on their behalf. I will be waiting for the minister to come into the House to sum up and respond to my remarks.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. I have quite a bit of personal experience with New Zealand. For example, I can remember being there in about March 1978, when CER, Closer Economic Relations, was a big talking point in New Zealand. I have been to New Zealand seven times in my life. In fact, I was there as a member of the Joint Standing Committee on the National Capital and External Territories about three weeks ago, when we looked at their Antarctic division and had numerous discussions comparing their islands to islands of ours such as Cocos (Keeling), Christmas and Norfolk. I have also imported rams and semen from New Zealand, so I have quite a bit of experience when it comes to some of the protocols which, in some cases, we had to change because they restricted trade between our two countries. Frankly, I do not think there should be any restrictions between New Zealand and Australia. New Zealand is like a sister state; there is no other country more like Australia. We even have rugby competitions between just New Zealand and Australia. So it is important that in our laws we harmonise our trade as much as possible, and part of this legislation will do that.

As I represent nearly half of Australia’s wine industry I obviously take a lot of interest in this. About 12 per cent of wine consumed in Australia is imported, and most of that is New Zealand sauvignon blanc. Some people might say, ‘Why are we letting all this New Zealand wine into Australia?’ The fact is that we also send a lot of good red wine from my electorate and other electorates around this country to New Zealand. We can grow red wine grapes, such as cabernet, merlot and shiraz, better than most New Zealanders, and they are very good at sauvignon blanc, so there should be free trade between the countries—and I suspect that we actually do better out of it than New Zealand. That does not matter. It is important that we have free trade between the two countries.

These bills will implement the ASEAN-Australia-New Zealand Free Trade Agreement by amending the Customs Tariff Act 1995 to provide for the elimination or reduction of customs duties for many goods that qualify as originating in Australia, New Zealand or ASEAN countries. The free trade agreement provides tit for tat tariff reduction for motor vehicles, textiles, clothing and footwear and a range of other manufactured goods. All Australian tariff rates on agricultural imports will be reduced to zero on day 1. This is a culmination of 30 or 40 years of arguments about reductions in tariffs and how they benefit our country. It is very easy for people to say, ‘We should stop competition from other countries by putting on a tariff’, but that is a dead-end way to go. I am very thankful that governments in the last 30 years—dare I say neoliberal governments—have continued to implement free trade ideas. Reducing tariffs in the long term is always good for free trade around the world, and we should continue to fight for those sorts of things. Indeed, free trade is the one area that really got me interested in politics. As a politician, I have come up against people who say we should reduce competition from overseas countries because we can produce things here in Australia. I think you could grow bananas at the South Pole, but would it be a very sensible thing to do? No, it would not. We could grow anything here, but the importance of free trade is to ensure that we have efficiencies in our trade and production. Subsidies end up being a short-term and long-term disaster for our country. It is only by liberating our trade that we continue to increase it and increase the efficient production of anything that we might do better than other countries, so we should continue with that.

The present Minister for Trade is a bit like a fingerprint because no two of his policies have been the same over the years. In fact, I remember that before the 1998 election he tried to argue that we should put tariffs on pork because we were importing pork. But the problem with that was that we had eight times more other agricultural products, such as lamb, going the other way. It was a pretty stupid idea. At one stage he also used to argue that free trade agreements were useless. In actual fact, he started off doing free trade agreements and now he is finishing off with free trade agreements, but at many stages through that period he has had a different view. At least I can say I have had a very consistent view on the tariff regime in this country.

The ASEAN-Australia-New Zealand Free Trade Agreement is intended to liberalise and facilitate trade between the parties to the agreement. Countries are obliged to eliminate tariffs applied to goods and services imported from other countries that meet the agreed rules-of-origin criteria. More than 90 per cent of goods and services traded between the more developed countries are expected to be tariff free by 2013. That will be a very proud moment for me. It is a pity we cannot say that about the rest of the world. The fact that we will basically be tariff free by 2013 will be an enormous milestone in this country, and it is something that we should celebrate. The Treasury has estimated that Australia will lose $971 million in revenues from tariff reductions up to the 2012-13 financial year. That may be the case, but a tariff is no more than a tax on consumers, so consumers will benefit and our trade will benefit.

The horticulture industry holds the view that the horticultural tariff outcomes under the ASEAN-Australia-New Zealand Free Trade Agreement unfortunately are:

… in significant cases below optimal outcomes and lock Australian horticulture either temporarily or permanently into certain inferior trading positions against Australian horticulture’s competitors into the ASEAN markets.

I think the most quoted example is of mandarines, of which quite a few are grown in the Riverland in my electorate. We have very strong mandarine production and at times, though not always, it is reasonably profitable. It has quite good returns, so the more we can open that trade the better. Unfortunately, in the rush to get a deal, the minister has affected this market in a way contrary to that which we had all hoped for, which was to have free trade like other countries.

Horticulture is a very prominent industry in my electorate of Barker, with many established production areas such as the Riverland, the Barossa, the Murraylands and the south-east. The Riverland in particular has a crucial place in Australia’s food bowl. I note the member for Mallee and I both have situations where wine grapes coexist with citrus orchards and almond plantations. Between them, our electorates of Barker and Mallee account for something like 70 per cent of Australia’s wine grape production. It is certainly something we take a very keen interest in. This agreement would place added strain on many growers in my electorate already under increased pressure because of zero water allocations.

The specific concerns in relation to the outcome for horticulture are that the ASEAN-Australia-New Zealand Free Trade Agreement does not match the horticultural outcomes in the ASEAN-China Free Trade Agreement in the following ways: the tariff outcomes in the ASEAN-Australia-New Zealand Free Trade Agreement are worse than the tariff outcomes in previous bilateral free trade agreements with ASEAN members; the applied tariff outcomes in the ASEAN-Australia-New Zealand Free Trade Agreement are above the globally applied ‘most favoured nation’ rates; and the effectiveness of Australian negotiators in representing the interests of the horticulture industry is lower. So this is a sad occasion when—for the first time, to my knowledge—this country has gone backwards.

From the point of view of the Horticultural Market Access Committee, in a situation in which China enjoys zero tariffs on most horticulture lines into most ASEAN countries and Australia does not and will not for the term of the AANZFTA, Australia’s competitive position will suffer for many years. According to the Horticultural Market Access Committee:

It is a very sensitive issue for vegetable growers because basically we have lost a lot of our markets in South-East Asia to Chinese competition. When you are trying to talk to vegetable growers about becoming export orientated, they see China getting unfair advantages in, say, these free trade agreements vis-a-vis Australia.

Basically it will become almost a no-trade zone for us, which is not in our best interests.

The expectation out of all this was that Australian vegetable growers would at least be able to compete on an equal footing with Chinese vegetable growers in these markets.

The concept of an ASEAN-Australia-New Zealand free trade agreement was floated by the Hawke and Keating governments in the early 1990s. Formal discussion commenced under Minister Vaile in 1999—so we took up that cudgel fairly soon in government. Negotiations commenced in 2004 and continued under Minister Truss. And an agreement was signed by Minister Crean on 27 February 2009. I suppose he can claim the glory, but he still does not have it right.

The amendments proposed in the bill implement relevant parts of the ASEAN-Australia-New Zealand Free Trade Agreement. Whilst the coalition supports the bill, it is disappointing to note that the government is pushing this legislation through with very little notice. The ASEAN-Australia-New Zealand Free Trade Agreement was signed by the Minister for Trade and his counterpart ministers from ASEAN countries and New Zealand months ago, on 27 February. Here we are in September before we are finally getting some action on it. The agreement was tabled in parliament on 16 March this year, six months ago, and referred to the Joint Standing Committee on Treaties, which recommended that binding treaty action be taken in its report tabled on 24 June 2009—again, almost three months ago. Minister Crean proposes to introduce and pass the bills in the House today, 16 September, and wishes to pass the bills through the Senate on Thursday, 17 September 2009. This is highly disorganised and it is typical of this government.

I am sure this is only happening so that the Minister for Trade can attend the East Asia Summit on 25 October, where he anticipates that at least New Zealand and four of the ASEAN countries will also have completed their internal arrangements, thereby enabling the FTA to come into force on 1 January 2010. All the signatories are in any case required to advise of progress with their internal arrangements by 2 November 2009. So we have this rush basically because the minister dropped the ball. It would be embarrassing for the Minister for Trade if Australia’s arrangements were not finalised by that date, which is why the government has tacked this important piece of legislation onto the end of the sitting week before the break—in much the same way that the Prime Minister has been trying to ram through his flawed ETS legislation so he can show off at Copenhagen at the end of the year.

Given that the joint standing committee report was tabled on 24 June 2009, the government has had ample time to introduce and pass the legislation in an orderly fashion. Despite this, the coalition agrees that the free trade agreement will provide greater access to the Australian market for goods originating from ASEAN countries and New Zealand, and, importantly, provide greater access for Australian goods into the markets of the ASEAN countries and New Zealand—notwithstanding the points I raised earlier.

As was noted in the national interest analysis of the agreement, as a group ASEAN and New Zealand constitute a larger trading partner for Australia than any single country. ASEAN member countries and New Zealand together account for 21 per cent of Australia’s total trade in goods and services. It is also worth noting that total trade in goods and services between Australia and ASEAN and New Zealand combined was $103 billion in 2007-08.

The coalition believes that the ASEAN-Australia-New Zealand Free Trade Agreement will also support economic integration in the region and enhance Australia’s participation in the region’s evolving economic architecture though commitments in a range of areas. The coalition agrees that it is to Australia’s advantage to take the proposed treaty action. We support this bill.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 and the Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009. I note, as the previous member noted, that the rush with this bill is more to do with the minister and his appearance at the East Asia Summit than it is to do with dealing with legislation in an orderly fashion. I must say at the outset that I am aware that the purpose of this bill is to amend the Customs Act 1901 to define ASEAN-Australia-New Zealand free trade agreement originating goods and to amend the Customs Tariff Act 1995 to provide preferential tariffs for ASEAN-Australia-New Zealand free trade agreement originating goods.

We all know that the concept of an ASEAN-Australia-New Zealand free trade agreement was floated by the Hawke and Keating governments in the nineties. Discussions commenced under Minister Vaile in 1999, with negotiations starting in 2004 and continuing under Mr Truss, and the agreement was signed by Minister Crean in February this year. The proposed amendments in the bills are relevant to parts of the ASEAN-Australia-New Zealand Free Trade Agreement.

I am really disappointed that the government is pushing this legislation through with very little notice, particularly when it has such a negative impact on horticulture in this country. The ASEAN-Australian-New Zealand FTA was signed months ago, on 27 February, by the minister and his counterpart ministers from ASEAN countries and New Zealand and yet it has got to this point, on this day, when it has to be rushed through. The agreement was tabled in parliament in March and referred to the Joint Standing Committee on Treaties. That committee recommended that binding treaty action be taken in its report tabled on 22 June.

But horticulture groups noted, in relation to the Chinese free trade agreement, that Chinese horticulture exports to ASEAN are subject to near zero tariffs across the board. That has a major impact for growers right around Australia, and particularly the horticultural growers in my electorate of Forrest. Of course this zero tariff has resulted in exceptional growth, as noted in the committee’s report, in Chinese horticultural exports to places like Australia. Basically they have grown by 132 per cent in the four years to 2007-08. When I think about the growers in my electorate, this is having, and will continue to have, a major impact on them.

I note from the parliamentary committee report that, from the point of view of the Horticultural Market Access Committee, in a situation where China enjoys zero tariffs and Australia does not, and will not, Australia’s competitive position will suffer for many years. It certainly means that the growers in my electorate will suffer, and it is disappointing that in negotiating this outcome we have not got a better result. We should have had a better result for our horticultural producers, and you of all people would know that, Mr Deputy Speaker Washer.

I notice that according to the HMAC, and I quote:

It is a very sensitive issue for vegetable growers because basically we have lost a lot of our markets in South-East Asia to Chinese competition. When you are trying to talk to vegetable growers about becoming export orientated, they see China getting unfair advantages in, say, these free trade agreements vis-a-vis Australia. The expectation out of all this was that Australian vegetable growers would at least be able to compete on an equal footing with Chinese vegetable growers in these markets. That is where the disappointment comes.

No matter what form of agriculture, horticulture or viticulture we are engaged in, this is a common thread for all of us in those sectors. All we have ever asked for is a level playing field; and what we have never received is that level playing field. We have basically agreed to these types of free trade agreements and expected and hoped that the rest of the world would come along and deliver that free trade environment for our growers and create a level playing field. Well, the results—as we know from the dairy industry and from other agricultural industries—are entirely different. We compete on a significantly non-level playing field on a regular basis.

I note that Australia’s horticultural exports totalled $4.5 million while China’s horticultural exports totalled $403 million, so it is a David and Goliath situation for our growers in Western Australia and around Australia no matter what type of horticulture they are engaged in. I imagine that it has been insisted that these bills be passed not only by the House today but also by the Senate tomorrow just to enable the Minister for Trade to attend the East Asia Summit on 25 October, where he anticipates that New Zealand and four of the ASEAN countries will have completed their internal arrangements thus enabling the FTA to come into force on 1 January. The signatories are required to advise of progress within their internal arrangements and I imagine this is what is driving the minister. But we can certainly understand why those in the horticultural sector are very concerned about this issue.

I note that the committee recommended:

… that the Australian Government pursue all possible bilateral and multilateral avenues to secure improved tariff outcomes for the horticulture industry.

I would question what the minister has done and will do from here on this basis. The committee also recommended:

… that, in the absence of other measures designed to improve free trade, a free trade agreement negotiated by Australia should not include a tariff outcome on a tariff line that is worse than the existing tariff on that tariff line.

That is another issue in this particular agreement. The committee also recommended:

… that in future free trade agreements, Australia should negotiate for the binding tariff rate to be the lower of either the rate at the time of binding, or the Most Favoured Nation tariff rate at the time the free trade agreement comes into force.

One of the other recommendations is:

… that the Department of Foreign Affairs and Trade prepare a report for the Committee examining mechanisms to allow negotiators to directly consult with industry representatives during the negotiation process.

This would give groups like horticultural groups the opportunity to have input, to represent their views and to ensure that in developing a free trade agreement their issues are recognised and responded to, and that is a recommendation from the committee. Recommendation 5 is:

… that the Australian Government include consideration of environment protection, protection of human rights and labour standards in all future negotiation mandates for free trade agreements.

I note that the committee supported the establishment of this particular agreement.

As I said, there are a number of challenges, not only that of this free trade agreement, affecting horticultural growers. I speak about those in my electorate, and I have a number of them. These growers also have very serious concerns with the labour award modernisation process that has been advanced. This does and will have an impact on the horticultural industry. As I said earlier, Mr Deputy Speaker Washer, you of all people know that fruit and vegetables do not necessarily grow, ripen or need to be harvested during what we would consider normal working hours, and this is a real concern not only for those growing these products but for those who are packing them.

We know that the growth in Chinese horticultural exports has put even greater pressure on the Australian horticultural industry. The industry is very concerned about the introduction of additional biosecurity threats and burdens that our growers simply cannot compete with. We have seen what the government has done in removing $37 million from AQIS and the fact that 135 people have gone from AQIS as well. When we consider the biosecurity issues in relation to imported products, particularly vegetables and fruit, we understand the physical threats to the Australian industry.

I note that the joint standing committee report that I have referred to was tabled on 24 June and the government has not responded to it. It has had ample time to introduce and pass the legislation in an orderly fashion. In spite of this, I understand that this free trade agreement will provide greater access to the Australian market for goods originating from ASEAN countries and New Zealand and, most importantly, will provide greater access for Australian goods to the markets of the ASEAN countries and New Zealand. As was noted in the national interest analysis of the agreement, as a group ASEAN and New Zealand constitute a larger trading partner for Australia than any single country. The ASEAN member countries and New Zealand together account for 21 per cent of Australia’s total trade in goods and services. The total trade in goods and services between Australia and ASEAN and New Zealand combined was $103 billion in 2007-08.

The coalition believes that the ASEAN-Australia-New Zealand free trade agreement will also support economic integration in the region and enhance Australia’s participation in the region’s evolving economic architecture through commitments in a range of areas, including trade in goods and services, investment, intellectual property, temporary movement of persons, electronic commerce and economic cooperation. It really is to Australia’s advantage in these areas to take the proposed treaty action.

It will provide greater certainty for Australian exporters and investors, achieved through the country specific commitments on tariffs and market access for services as well as the ASEAN-Australian-New Zealand Free Trade Agreement’s provisions to enhance the transparency and predictability of regulatory regimes, including through consultation and cooperation mechanisms. Could I finish this speech by again reinforcing that the impacts of this agreement on those in the horticultural industry right around Australia will be significant, and they will be significant in my electorate. We certainly need the minister to be focused on those matters.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

in reply—I would like to firstly thank all of those members who have contributed to this important debate. The Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 amends the Customs Act 1901. The Customs Tariff Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2009 amends the Customs Tariff Act 1995. The amendments are the result of the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area that was signed on 27 February 2009. These amendments will commence on the day that the agreement enters into force for Australia, New Zealand and at least four ASEAN member states. At present, all parties are progressing domestic arrangements necessary for the agreement to enter into force. The date for the entry into force is expected to be 1 January next year. The amendments to the Customs Act 1901 provide the rules for determining whether goods originate in an ASEAN member state or in New Zealand. The amendments to the Customs Tariff Act 1995 will provide the rates of duty for ASEAN member states and New Zealand.

I note that some members have raised issues relating to the horticultural industry—for example, mandarines. The government agrees that it was disappointing that we could not achieve a better outcome with Indonesia in relation to mandarines. However, importantly, from 1 January 2010, 81 per cent of Indonesia’s horticultural tariff lines will have tariff-free treatment, compared to six per cent now.

The National Horticultural Market Access Coordinator, Stephen Winter, said to the Joint Standing Committee on Treaties in May this year:

It has been spoken about in glowing terms by various parties, including the government. We agree that it is vitally important because ASEAN as whole is a major trading partner and neighbour to us. A lot of effort has gone into the AANZFTA.

The agreement will reduce or eliminate tariffs across a region that is home to 600 million people and a region with a combined GDP of $3.2 trillion. This means greater job opportunities here in Australia. I commend these bills to House.

Question agreed to.

Bill read a second time.