Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

by leave—It is with great pleasure that I speak about the Japan-Australia Economic Partnership Agreement and accompanying National Interest Analysis, which was tabled yesterday for parliament's consideration. Australia and Japan concluded negotiations in April during the Prime Minister's historic and very successful visit to North Asia. The Prime Minister signed the Agreement with Japanese Prime Minister Shinzo Abe in Canberra on 8 July.

As with all proposed treaties, the parliament's Joint Standing Committee on Treaties will now review the agreement and, in due course, provide its report. The tabling yesterday of the agreement will also give the public the opportunity to scrutinise the provisions of the treaty.

The signing of the agreement is a significant milestone for the government's economic diplomacy agenda. The Japan-Australia Economic Partnership Agreement is an important step forward in our trade and investment relationship with Japan.

Japan is an economic heavyweight. It is the third-largest economy in the world, worth almost US$5 trillion in 2013, and our second-largest export market, our second-largest trading partner, and a major player in regional and global supply chains. Two-way trade between Japan and Australia stood at $70.8 billion in 2013, more than 10 per cent of Australia's total trade. Japan is a vital, longstanding and highly complementary trading partner for Australia.

Greater integration with the Japanese economy will create jobs and build our economy. The agreement gives Australian exporters significantly improved market access across the spectrum of the Australian business community, reflecting the importance of Japan to the Australian economy. It eliminates high tariffs on a wide range of Australian exports. More than 97 per cent of Australia's exports to Japan will receive preferential access or enter duty-free when the agreement is fully implemented.

The agreement gives Australian agricultural producers and exporters a significant competitive advantage. It makes Australia the first major agricultural exporting economy to conclude such a liberalising agreement with Japan. Australian beef exports to Japan, worth $1.4 billion in 2013, will benefit from a halving of the tariff, with a deep cut immediately on entry into force.

Industry modelling shows that the agreement will benefit Australian beef export sales by around $5.5 billion over 20 years and deliver an increase in the annual gross value of Australian beef production by up to seven per cent. The beef outcome affords Australia a major advantage over our fiercest competitors, including the United States.

The former US Assistant Secretary of State for East Asia—and a man who is spoken of as a future Secretary of State, Kurt Campbell—described the agreement as a 'massive victory' for Australia. And I quote further from Kurt Campbell:

Europe and the United States … have been trying to get this kind of agreement from Japan for 30 years.

Exporters of horticulture, wine and seafood will also benefit from tariff-free access to the Japanese market.

The agreement is of course not just about agriculture. Japan will eliminate tariffs on all of Australia's manufacturing, energy and resources exports. This will particularly benefit our exporters of transformed resource products.

Services outcomes are equal to, or better than, the best commitments Japan has made in any of its other trade agreements and extend beyond Japan's existing commitments to Australia under the World Trade Organization. The agreement guarantees Australian services suppliers access to the significant and well-developed Japanese market in key areas of commercial interest, including financial, education, telecommunications and legal services and a range of other professional services. For example, Australian financial services providers will benefit from new commitments by Japan, beyond those in its existing trade agreements. Japan will allow cross-border access for Australian fund managers providing investment advice and portfolio management services in Japan. Japan has also guaranteed access for Australian financial services firms to conduct cross-border securities transactions with Japanese institutions. These commitments by Japan will help secure and protect Australia's access to one of the largest funds management markets in the world.

Both governments will support work towards enhanced mutual recognition of professional qualifications. Australian professionals will also benefit from guaranteed visa access arrangements, including for their spouse and dependents, to enter and stay in Japan.

In the education sector, Australia and Japan have further agreed to cooperate bilaterally to promote the recognition of each other's education qualifications, improve access to graduate studies in each other's country and strengthen student mobility between both countries.

In all key areas of commercial interest, Japan will extend commitments it makes in future trade agreements with other countries to Australian services exporters and investors, helping ensure that the agreement will remain relevant for Australian services exporters and investors in the years ahead. The agreement improves investment protections for both Australian and Japanese investors. With $130 billion invested in Australia in 2013, Japan is our third-largest investor and our most important Asian investor. By raising the foreign investment screening threshold for Japanese private investors, the agreement will encourage increased and more diverse investment from Japan and deliver the clear message that Australia is open for business.

I acknowledge that some sections of Australia's agricultural community had hoped for stronger outcomes on the products that they export. The government pushed on all products. However, the fact is that Japan is traditionally a very highly-protected agriculture market, and on some products it deems as particularly sensitive due to food security concerns, it moved in a tentative way, and on rice it would not move beyond our existing WTO access levels. The choice for Australia was continued stalemate and no agreement—or to secure a deal now that delivers considerable competitive advantage and keep pushing for further reform. So we fought for the best possible deal and made sure that the agreement also included mechanisms for future liberalisation. Scheduled renegotiation of outcomes for our key agriculture exports, and also a commitment to renegotiations should Japan give a better deal in the future to one of our competitors, means that the agreement has positioned Australia well for driving future gains. And, of course, the government will keep pushing for further liberalisation with Japan in other trade negotiations, including through the Trans-Pacific Partnership negotiations.

Let's be very clear—no other country has managed to negotiate such an ambitious agreement with Japan. No other country! For once Australia is ahead of the curve. We needed the Korea Free Trade Agreement to help level the playing field, given the advantage the United States and the European Community had because of their deals with Korea. We were playing catch-up. Under the agreement with Japan, Australian exporters will have the advantage. And I am confident Australian exporters will be able to make the most of this extraordinary opportunity.

As part of our commitments, Australia will remove its remaining tariffs on Japanese goods on entry into force or over several years. This will benefit Australian consumers and industries which rely on imported Japanese products. Tariffs on some products that compete with Australian-made goods, including some vehicles and automotive parts, steel, plastics, copper and textiles, clothing and footwear, will be phased out in staging periods to allow industry to adjust. The bottom line is with one in five Australian jobs linked to trade, this agreement will provide an important boost to Australia's economy. It is part of the government's broader push on trade. The agreement is the second of a series of bilateral trade agreements we are committed to concluding with major trading partners, following on the heels of the Korea-Australia Free Trade Agreement.

Now that the agreements with Korea and Japan are finished, we are intensifying our negotiations with China. This suite of agreements is significant for deepening these important bilateral relationships, as well as reinforcing our connection to North Asia, which is becoming integrated through increasing trade flows and supply chains. China, Japan and Korea together currently purchase 51 per cent of Australia's exports.

The economic benefits of Japan-Australia Economic Partnership Agreement to our businesses and consumers—and to the Australian economy more broadly—will start to flow once the agreement enters into force. We aim for entry into force in early 2015 to allow Australians to reap the benefits from this agreement as early as possible. Implementation of the agreement will require a number of legislative amendments, and I urge members and senators to give favourable consideration to these amendments when they are introduced.

This is an agreement that took a long time to negotiate, and I commend the achievement of officials from various agencies led by the Department of Foreign Affairs and Trade. There is bipartisan recognition of the crucial importance of Japan as a trading partner, and governments from both sides of the House worked on this agreement. In that light, I acknowledge the contribution of former trade ministers Craig Emerson and Simon Crean, as well as the Deputy Prime Minister, Warren Truss, who was Trade Minister when negotiations commenced in 2007. We should also recognise the vision of former Prime Minister John Howard. When he launched these negotiations with Prime Minister Abe in 2007, many said that a meaningful agreement with Japan was not possible. But Australia now stands as the first major agricultural producer to have secured such preferential access into the Japanese market. I would also like to acknowledge all of those officials and negotiators from my department who have worked so diligently over a very long period of time to help arrive at this outcome, including and especially Jan Adams, Frances Lisson, Peter Roberts, Simon Farbenbloom and many others.

I commend this agreement to the parliament, and hereby table the Japan-Australia Economic Partnership Agreement with its national interest analysis.

I ask leave of the House to move a motion to enable the Deputy Leader of the Opposition to speak for 11½ minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent the Deputy Leader of the Opposition speaking for a period not exceeding 11½ minutes.

Question agreed to.

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

On behalf of the opposition I welcome the tabling of the signed Japan-Australia Economic Partnership Agreement and the related national interest analysis. The opposition appreciates the acknowledgement by Trade Minister Robb of the efforts of former trade ministers Simon Crean and Craig Emerson in progressing this trade agreement with one of our largest trading partners. Those negotiations were part of Labor's embrace of our region.

In our Australia in the Asian century white paper we mapped out significant opportunities—and some challenges—for Australia in our region. Increased trade in goods and services is one of the key opportunities. Japan and Australia have a good, strong and stable relationship. We have been reliable trading partners for decades. In 2013, Japan was our second largest trading partner, with two-way trade valued at $70.8 billion. We are also reliable investors. Japan has been a long-term investor in Australia, with investment stock of $131 billion at the end of 2013. This investment has been critical to enable Australia to capitalise on the demand for our resources and to provide jobs and economic growth. Australia is also invested in Japan, with Australia's stock of investment in Japan at $50 billion at the end of 2013.

For four decades—since the Whitlam government lowered postwar tariff barriers—Australia has progressively opened its economy to the world. Whitlam, then Hawke and Keating set our nation on a course to greater productivity and competitiveness, delivering the high standard of living that we enjoy today. Japan has been much slower to embrace trade liberalisation. The concessions made during the course of negotiations on this agreement are welcome, as a first step on the path to more open trading arrangements.

Labor supports comprehensive trade agreements that are in our national interest. Preferential agreements should support a multilateral framework. In this agreement, Labor welcomes the proposed increase in the Foreign Investment Review Board threshold to over $1 billion for non-sensitive investment from Japan. This puts Japanese investment at the same standard as non-sensitive sector investment from the US, New Zealand and South Korea.

We note, however, the proposed carve-out of agricultural investments from the higher investment threshold—a shameless concession to the National Party and a shining example of why the government mantra of 'open for business' is little more than a brand on a banner. Many agricultural industries have not welcomed this agreement. Reactions have ranged from 'substandard' and 'not a major winner' to 'falls short of the mark' and 'another kick in the guts'.

Labor welcomes the fact that the Japan-Australia Economic Partnership Agreement does not include an investor-state dispute settlement provision. With investment between two countries with developed legal systems, there is no need for such a provision. However, we want to better understand the practical implication of the various ISDS review mechanisms embodied in the agreement. It is difficult to see why the signing of a future agreement by either country that includes an ISDS provision would trigger a review under the agreement.

We also want to explore some of the content behind the sales pitch. For example, the government has boasted that the agreement will deliver immediate tariff elimination and reduced levies for high-polarity—international standard—raw sugar. However, Australia's principal sugar export to Japan is a different kind. It is a special low-polarity grade sugar, worth over $235 million in 2013, which receives no benefit under this new agreement. Tariffs on this type of sugar remain at 70 per cent.

There is much more capacity to deepen our trading relationship with Japan. A key test of the agreement signed by the government is how much of that capacity will be realised. All Australians have a stake in our trading relationship with the world. In tabling the signed agreement and national interest analysis, the minister has finally given the parliament and the Australian community the opportunity to subject the agreement to scrutiny. Labor will embrace that opportunity, including through the Joint Standing Committee on Treaties. Labor notes with disappointment that the government published the text of the agreement just after signing, an act of defiance of the Senate order to table the text of the agreement 14 days before signing.

The minister made reference to the Korea-Australia Free Trade Agreement. I note that parliamentary consideration of the Korea-Australia Free Trade Agreement is underway, with over 60 submissions received by the Joint Standing Committee on Treaties and a further 56 submissions received to date by the inquiry being undertaken by the Senate Foreign Affairs, Defence and Trade References Committee.

The first public hearings on the Korea-Australia Free Trade Agreement were held by the Joint Standing Committee on Treaties early this week. It is clear that there is a great deal of community concern about the investor-state dispute settlement provisions included in the Korea agreement, with much scepticism about so-called ISDS 'carve-outs' negotiated by the minister. There is also concern from business about the commercial workability of the Korea agreement related to red tape and confusing use of nomenclature. Reducing red tape, improving harmonisation and implementing domestic measures to support the growth of our small, medium and large exporters is essential to secure Australia's growth.

Labor wants to hear from individuals, community groups and business in connection with the free trade agreements before the parliament. We urge the government to tone down its triumphalism and start listening to Australians with concerns about some of the decisions made by the government in concluding these deals. The government has a responsibility to convince Australians that trade deals are in the national interest. In this, as in other areas of public policy, three-word slogans are not good enough.

Labor will work with the government constructively, but not uncritically, in ensuring the proposed treaty before the House is in our national interest. Finally, I acknowledge the work of the minister and previous trade ministers and the contribution of the many officials who have played an important role in the negotiations on the Japan-Australia Economic Partnership Agreement.