Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

What Andrew Robb has done with this free trade agreement with Japan is a fantastic thing. Just before the election in 2013 Andrew Robb addressed a capacity crowd at a lunch in Townsville. The words he said that day will stay with me always. He said that in the tropical world—that is, between the Tropic of Capricorn and the Tropic of Cancer—there are around 600 million people who would be considered to be in the middle class and by 2035 that number is expected to grow to 3.6 billion. Most of those people will be directly on top of North Queensland, so it is important to be able to get free trade agreement signed. We have signed free trade agreements with Korea and China and there are more to come.

My region, my state and our country are perfectly positioned in that space. What we must do, though, is remember that this is not just about food and fibre, it is not just about mining. This agreement and the agreement with China have also freed up the services economy. We have got a bunch of school kids up behind the glass and I say hello to them. You can only sell an asset once; you can sell something to an overseas country once and you can trade those sorts of things. But Australia is a service based economy. When you kids graduate from high school, go to university or get yourself a trade—if you go into the Army and become a logistician—the great things that you learn will put you in good stead to feed into this service based economy, to be the representatives of Australia and take our economy further. This is not just about food and fibre. This is one of the things that Andrew Robb has been saying all the way through. It is about our services—accountants, solicitors, town planners, architects, builders and our construction industry. All those people will feed into this. It is the people who run nursing homes, our nurses. All those trades that you kids will do when you leave school will feed into what this free trade agreement tries to do.

We have to understand where we are in the world and the opportunity that we have in this space. We have an opportunity to service 3.6 billion people, most of whom live directly above us in the Asian zone. That is the massive opportunity that we have. What we must also understand is that just signing a free trade agreement does not mean that the job is done. A free trade agreement is just an invitation to the table. All a free trade agreement does is give you an opportunity to impress. When you run a dairy farm and want to make sure that your top-quality cheese, yoghurt and milk gets into these markets, you get an opportunity through a free trade agreement to present to people in these markets. But you still have to close the deal. You still have to use your ability as a salesperson and the quality of your product to get that job done. A free trade agreement allows you deliver your product for the price they are prepared to pay and make a profit along the way. The Minister for Trade, Andrew Robb, the Minister for Foreign Affairs, the Treasurer, the Prime Minister and the Deputy Prime Minister are doing a great job into space. We are in this game and it has taken 10 long years of hard work across three or four parliaments to get this work done. We are doing it because, when I am older, I will need you guys to look after me. That is why we are doing it. It will make sure that you guys will have the opportunity to get in there and have a real go.

I am from Townsville. Townsville has two Japanese sister cities—Shunan, which is located in Yamaguchi Prefecture, and Iwaki. In that space, we are reaching out on a cultural basis. This is not just across coal, wheat, grapes or wine; it includes our arts, our culture. We have a massive ability to provide for people in this space. This free trade agreement is a great thing for Australia. The work that Andrew Robb has done in this space has been fantastic for our country. The work is still going on and it will be perfect for when you guys start to leave school. That is the message that I want to hear. My son is in grade 7. When he leaves school, when he gets in this space, I want to make sure that the has an opportunity to make a real name for himself when he goes overseas. I thank the House and I support this legislation wholeheartedly.

Russell Matheson (Macarthur, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Customs Tariff Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014. This bill represents a great opportunity for Australia. I take this time to pay tribute to our fantastic trade minister, the member for Goldstein, Mr Andrew Robb, for his proven leadership, his effortless negotiation and commitment to building positive relationships between Australia and Japan. Australia and Japan have enjoyed close ties over the years, but this economic partnership agreement is a historic agreement that will benefit Australians for decades to come.

Under the leadership of the trade minister, Australians have witnessed the largest Australian trade envoys reaching out to Japan, China and South Korea. Each of these trade delegations have resulted in positive outcomes for the Australian economy, Australian business and Australian consumers. The Abbott government's message to the world is crystal clear: Australia is now under new management and we are open for business. I am proud to say that throughout all these rigorous negotiations our government has kept the national interest at the forefront of their decision making. The coalition stated from the outset that these agreements must be in our national interest, and we have delivered.

The Japan-Australia Economic Partnership Agreement is a great win for the Australian economy and for the people of Macarthur. It represents the best quality trade deal that Japan has ever concluded. More than 97 per cent of Australia's current trade with Japan will receive preferential access or enter duty free when the agreement is fully implemented, giving Australian farmers, producers, manufacturers and exporters a significant competitive advantage. The agreement encompasses a wide range of goods and services. Most importantly, it represents a fantastic deal for Australian farmers. As one of our most valuable beef markets, this new agreement with Japan will see our beef exports, which are currently worth $1.4 billion, receive an immediate and significant competitive advantage through rapid tariff reductions. Fresh beef producers and live cattle exporters will also benefit from reductions in tariffs. Additionally, and very importantly, Japan has agreed that Australian beef will never again be subjected to the 50 per cent global snapback tariff, creating certainty for our beef and cattle exporters.

Another excellent feature of the Japan-Australia Economic Partnership Agreement is the agreement by Japan to review and negotiate these outcomes on beef, which will provide a positive framework towards further liberalisation. This framework includes a review triggered immediately if Japan provides another country with a better deal on beef, aimed at providing Australia equivalent treatment; an automatic review aimed at improving access five years after this current agreement comes into force; and a review of the safeguard mechanism after 10 years to consider abolishing the safeguard or increasing the safeguard trigger levels which are set above current trade levels. This feature is incredibly important in ensuring that Australia's interests, and our commitment to building and maintaining trade relationships with Japan, is not second bested by other global competitors. It represents a great deal for the Australian economy and for Australian farmers. I am pleased to see aspects of this framework featuring in many of the agricultural and horticultural tariff items.

Dairy farmers and producers are also beneficiaries of this historic agreement with Japan. Dairy products, predominately cheeses, are one of Australia's biggest agricultural exports to Japan. These exports were worth $452 million in 2013. Under the Japan-Australia Economic Partnership Agreement, Australian dairy producers will receive significant preferential access on key dairy exports, including cheese, ice-cream and yoghurt. Exports of milk based products will receive immediate duty free access, with products including lactose, casein, milk albumen and milk protein concentrates. The Macarthur electorate has one of Australia's largest dairies, the Leppington Pastoral Company. I look forward to seeing the many benefits of this agreement for our dairy farmers and producers within the Macarthur region.

At the last election the coalition made a commitment to the Australian people that we would build a strong and prosperous economy and a safe and secure Australia. With this agreement we are delivering on this promise. Australian importers of Japanese manufactured items will benefit from reductions in Australian tariffs and, in some cases, the elimination of Australian tariffs on some items. This is particularly important for the agricultural sector. The Japan-Australia Economic Partnership Agreement will be a great coup for my electorate of Macarthur, which has a growing agricultural sector. A local advocate for this agreement is Mr Eric Gilleland and his sons Rhys and Brett of Macarthur Mowers and Marine who are looking forward to seeing the benefits of reduced tariffs in agricultural machinery and council and golf course mowing equipment. Macarthur Mowers and Marine have just secured an exclusive agreement with the Japanese manufacturing giant, IHI Industries, to import the high-quality Shibaura golf course and council mowing equipment for New South Wales. As the largest dealer for Japanese manufactured Shindaiwa power equipment in Australia, Macarthur Mowers and Marine stand to gain a competitive edge with more affordable prices for Macarthur consumers.

I am excited about seeing the benefits of the Japan-Australia Economic Partnership Agreement in the Macarthur electorate. Local Macarthur families will benefit from greater competition within the consumer goods market, meaning a better deal on many electronic and household products. This will help to reduce some of the cost-of-living pressures faced by families across Macarthur. My electorate can only stand to win from this agreement, and I look forward to seeing the fruits of closer ties with one of Australia's closest trading partners.

I commend this bill to the House and I thank the Prime Minister, the foreign minister, the trade minister and the Minister for Immigration and Border Security, as well as all of the departments who have worked so hard to secure this great deal for Australia and the people of Macarthur.

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

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

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

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

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

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

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

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

The Japan-Australia Economic Partnership Agreement is an irrevocable return to high friendship in the economic relations of Japan and Australia. JAEPA is the most liberalising trade agreement Japan has ever concluded. More than 97 per cent of Australia's exports to Japan will receive preferential access or enter Japan duty free. At the end of 2013, Japanese investment in Australia was valued at $131 billion and Australian investment in Japan reached $50.2 billion. Let the naysayers know that this relationship benefits us nearly three times as much as Japan. Gone will be the high barriers for trade with Japan, including agricultural tariffs of up to 219 per cent. There will be immediate duty-free access for milk protein concentrates as well as new opportunities for ice-cream and frozen yoghurt exports. Tariffs on macadamia nuts, asparagus, lobsters, crustaceans and shellfish will be eliminated immediately, and there will be immediate duty-free and quota-free access for wheat for feed and barley for feed as well as streamlined export arrangements for some Australian wheat varieties. This is a good move for WA, and it is an especially positive move for all WA wheat growers.

JAEPA is a stepping stone, as it puts in place a framework to achieve an even better deal. Almost 30 years ago, in August 1986, US President Ronald Reagan signed an economic partnership agreement with Japan. In a radio address on 2 August 1986 he stated:

These agreements are examples of positive, result-oriented trade action. Instead of closing markets at home, we've opened markets to U.S. products abroad, thus helping to create more American jobs. … Because, believe me, when Americans are competing on a level playing field, they can outproduce and outsell anyone, anywhere in the world.

I trust and believe in Australia. I trust and believe in our Australian ingenuity and excellence. In trying to help workers in ailing industries, we must be careful that the cure is not worse than the disease, like the infamous Smoot-Hawley tariffs in the US that deepened and prolonged the Great Depression. Our plan is to create high-paying, sustainable jobs in the high-value-added goods and services sector. There is no other game in town. We either all get on board with the new rules of the game or we all lose out together.

I support the global growth targets of 2.1 per cent per annum agreed at the Brisbane G20. FTAs are our future. Tariff barriers are a redundant relic of history. Viewed in the context of our digital age, they are as outdated as other fashionable ideas from that period—and about as useful as an underwater hair dryer. Listen to some of the many pros of free trade: lower costs, increased purchasing power, comparative advantage improves economic growth. We compete in a globally connected, interdependent and competitive world.

In July the Business Council released a report that identified tourism, education, resources and energy, advanced manufacturing, agriculture and food manufacturing, professional and financial services as areas where Australia can be globally competitive. High-quality services are one of Australia's competitive strengths and largest areas of employment. The removal of trade restrictions in aged care, education, tourism, mining and construction, engineering and manufacturing services gives Australia an unprecedented opportunity to benefit from Japan's aged and ageing population.

The combined impact of the agreement with China, the FTAs signed this year with Japan and Korea, and a commitment to complete negotiations with India within 12 months puts Australia at the epicentre of Asian growth. We have achieved these agreements in the region that is set to account for half of the world's economic output. What the Howard government started, the Abbott government is finishing.

There are moral arguments to support free and freer trade among nations. Free trade respects the dignity and sovereignty of an individual. Free trade restrains the power of the state. Free trade brings people together across distance and cultures. Australia was built on foreign investment—first from Britain, then from America and, more recently, from Japan and China.

Japan and Australia are more alike than unalike. We have passed the days of horror. War is too short a syllable, too simple a word, to truly tell of the terrible, thundering terror of daily death, dismemberment and rape. To get to JAEPA has been a journey. Our achievement—our victory—is moving from questions and fears of attacks to questions and fear of a tax. This bill builds hope, reward, and opportunity.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014. It was good to hear the member for Hume refer to the work of Adam Smith, probably one of the greatest intellects in the economics sphere, ever. It was in his work The Wealth of Nations, back in 1776, that he wrote:

It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. … If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.

Two hundred and forty years of economic history have shown that Smith was right. Wherever countries have engaged in free trade, it has led to greater wealth, it has led to greater opportunity, it has led to more and high-paying jobs, and it has led to a higher standard of living. That is why we should give great praise to Minister Robb for the work that he has done, not just on this free trade agreement but also on the free trade agreements struck, within the first year of this coalition government, with China, Japan and Korea. It is an absolutely remarkable achievement that will have enormous benefits for our nation for decades to come.

In relation to our current trade with Japan, we imported from Japan over $21 billion in 2013. But we actually export to Japan, currently, more than double that. We currently sell to Japan almost $50 billion worth of goods and services. This is the base that we are working off. This free trade agreement gives us the opportunity to increase that base. It gives us opportunity across our agricultural sector and our manufacturing sector. It gives opportunity especially to our services sector. All those sectors have the opportunity to create more export sales, to create greater wealth for this nation and to create greater opportunity.

There are a few reasons that this is very important. Of course there is the wealth of the country, but it is also important, I would say, for many in our agricultural sector. Because having more companies, or more markets, to sell to helps break down the current economically damaging monopsony situation that many people in our food industry find themselves in with our overly concentrated supermarket sector. If those companies have export markets to sell to, they cannot be as easily held hostage by the demands of a powerful buyer.

It is also very important because of the situation that we find ourselves in as a nation. There are many things that both sides of the House want to do. We want to provide more money for the National Disability Insurance Scheme, for instance. But the only way we can do those things is to build the wealth, increase the wealth, of the country, and the best way to do that is through further free trade agreements.

We also have the job of fixing the current budget. We often talk about deficits and surpluses. I think, rather than saying the country is currently running a deficit, we should rephrase it and say we are running a loss. For the last six years, we as a nation have been running a loss. The Commonwealth government have been spending more money than we have been raising. That means we have to borrow money, which then creates an obligation not only to pay it back sometime in the future but also to pay the ongoing interest bill. That is what we face, with $1 billion in interest payable every single month, and we know that about 75 per cent of that flows out of the country. If we are going to turn that around, we need to increase our productivity, we need to increase the wealth of this nation, and free trade is one of the best ways we can do that.

The other benefit of this trade deal, of course, is the lower prices that it will lead to for Australian consumers. There are some doubting Thomases. But I will just leave you with one example. The EPA with Japan will reduce the duty on cars imported from Japan. It will reduce the price and make them duty-free. We have reduced the duties on cars over the last couple of years. If we look at a base-model Toyota Corolla, 20 years ago that was just under $20,000. Today, the very same starter-model Toyota Corolla has not increased 1c in price; it is still under $20,000. That is despite CPI increasing, over those 20 years, by something like 66 per cent. So you are getting a car for the same value as you were 20 years ago, but you are getting a better car, with improved features, greater fuel efficiency and more safety. That is because we have lowered tariffs; that is because we have lowered duties.

The Japan-Australia EPA is one of three remarkable free trade agreements that have been struck by our trade minister. He stands congratulated, and I commend this bill to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014, commonly called the Japanese free trade agreement. The Prime Minister said on election night back in September 2013 that Australia was 'open for business'—and, boy, we have to be. The challenges that are in front of this government grow daily as we discover the full inheritance left to us by the Labor Party, and one of the things we have to do is increase our trade. I think it was the New Zealand Prime Minister who said, and I paraphrase: 'No-one ever got rich exporting or selling to themselves.' We have to open up new markets.

Since that time, this government and in particular Andrew Robb, the Minister for Trade and Investment, have put in an exemplary performance and delivered on three free trade agreements. This is the detail, but the headline agreements are there. This deal with Japan is historical in that it breaks new ground. We have gone where no other similar country has gone before. Over many, many years, the thing that gridlocked the negotiations between Australia and Japan was access for our agricultural products to the Japanese markets. There are some that Japan chooses to still protect, but it has given no better access to anybody else in the world than it has to Australia in this instance. Written into these agreements is what we could call most favoured nation trading status, which means that, if somebody gets a better deal than us subsequently, we are in a position to claim the same. So full credit goes to Andrew Robb and his team for convincing Japan that trade liberalisation delivers a mutual benefit to both countries.

I want to concentrate on some of the industries within my electorate which stand to benefit greatly from this trade agreement and the other ones. Grey is a major supplier of beef to the world market, particularly from the northern pastoral regions of my electorate. This is what I sometimes call the romantic heart of Australia—up the Birdsville Track, the Oodnadatta Track, the Strzelecki Track or along the Ghan railway. This is where Sir Sidney Kidman pioneered his giant cattle properties. They exist in much the same manner as they did 100 years ago, except that are larger now because fewer people produce more of the same product, and they do it well. They have also now, largely, become registered as organic suppliers on the world market, which has increased their value. That makes theirs a premium product and they are looking for premium markets, and of course the Japanese market is one of them.

Tariffs have not been eliminated on beef, but over the next 15 years they will be halved on frozen beef and they will be down by 15 per cent on fresh beef. As I said, this is a better deal than anybody else has; and, should anybody else get a better deal, we will be getting it along with them, thank you very much. We are now also exempt from the national snap-back tariff that Japan can enforce with other nations. If the quota gets out of step and they are worried about the amount of beef coming into Japan, they can actually impose a 50 per cent tariff. We are exempt from that.

As for grain, my electorate and South Australia generally are exporters of grain. Japan is our fourth-largest market for wheat. We do operate under low tariffs into Japan currently, but there are some very highly regulated quotas, some of which at last will be going by the board. In particular, we will be the only country able to export feed wheat into Japan outside this very strict quota regulation. That gives us a great advantage in the world market. Barley will be duty free and have no quota. That is a great opportunity for us. The Japanese beef industry is always looking for good quality feed.

Seafood is very big business in my electorate right around the coastline, but particularly around Port Lincoln. Southern bluefin tuna tariffs are being phased out over 10 years. I know the industry would like to have seen them phased out quicker, but they are going, and that is a movement forward. We have seen quite a bit of confrontation, trying to get rock lobster into certain markets, particularly the Chinese market, in previous years. Rock lobster tariffs are being reduced immediately, from 9.6 per cent, as are those for prawns and abalone, of which the Grey electorate is a prominent supplier.

In the resources sector, coal, iron ore and LNG already have duty-free access to Japanese markets. They are the things that they have wanted from us for a very long time, but there have been products like titanium oxide, which in my electorate is mined at Iluka's Jacinth Ambrosia deposits just out of Ceduna, which will have tariffs reduced to nothing over the next few years.

All of those things are good for my electorate. I look forward to giving speeches that will highlight the benefits of both the Korean free trade agreement and, particularly, the Chinese free trade agreement, which has just been reached, at least in headline form, over the next few months. I look forward to Andrew Robb continuing his stellar performance and convincing the Indian nation that it is indeed in their great interest and ours to advance the cause of free trade.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

I rise to speak on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 and its cognate bill the Customs Tariff Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014. These two bills are being enacted to meet our obligations under the various chapters of the recent Japan-Australia Economic Partnership Agreement and to enable changes to the Customs Act 1901 to achieve that.

I commend these bills to the House because this agreement has massive positive implications for our economy and our nation and for Japan as well. This agreement builds on the original agreement on commerce that was signed in 1957 by the Prime Minister of Japan at the time, Mr Kishi, and the Australian minister for trade at the time, 'Black Jack' McEwen. Our current trade minister, Mr Robb, has done an excellent job in achieving this agreement, the second in the trifecta of international trade agreements.

What does this trade agreement mean for the Lyne electorate? In the Lyne electorate there are many agricultural exporters, manufacturers and service providers, but it is the agricultural exporters who employ the most people who will be affected by this agreement. They employed many, many people who put food on the table for their families, pay wages and pay taxes to the government. With more trade comes more job security, because the jobs of one in four people in regional Australia are underpinned by foreign trade. A stronger economy at home will be a result of increased agriculture exports. We export to Japan $66.5 billion in goods and $4.3 billion in services. Japan has $131 billion invested here and we have $50 billion invested within Japan.

Tariffs on goods going into Japan mean the landed price of Australian goods is higher and make our products less price competitive compared to our competition. Dropping and reducing tariffs makes our products much more competitive. As a result, producers in the Lyne electorate and in broader Australia will benefit. It is not just the producers at this end who will benefit, consumers will as well. We all buy a lot of electrical goods and cars that come out of Japan. Admittedly, the tariffs remaining on Japanese goods coming into the country are not great, but five per cent on the price of a modern car is a significant reduction, and we as consumers will all see the benefit of that.

The Lyne electorate produces some of the best grass-fed and grass- and grain-finished beef in Australia. Currently the tariff is 38.5 per cent. Eventually that will fall to 19.5 per cent. That makes the $1.4 billion trade of Australian beef even better value to Japan, particularly relative to our competitors from North and South America. That means that there will be better prices at the rails at the cattle sales in Wauchope or Taree or Gloucester, eventually, because there will be more competition for Australian beef from exporters. There will be better prices and volumes for the Wingham Abattoir, the biggest employer in the Manning Valley. There will be better prices for marbled Hokubee beef, which is produced in Wauchope, when it is exported into Asia, particularly into Japan. These better export prices will eventually mean greater competition, more volume of trade and better prices at the farm gate. In addition to beef, cow hides can now enter Japan duty free. Again, that means stronger demand for the product that comes out of Wingham beef, a stronger local economy and a much more secure position for its 380 employees.

Between the Hastings and Manning valleys, Hannam Vale and Johns River areas and the Comboyne Plateau there is almost 30 per cent of the milk supply of New South Wales being produced. Most of this enters the daily fresh milk market, but extra supply can go into the export market. As a result of this trade agreement, the market for milk protein concentrates casein and lactose, which currently amounts to $53 million annually, can grow. We have duty-free quotas for cheese which can also grow.

On the North Coast of the Lyne electorate, we have a lot of wood products from North Coast Timbers and the mills at Herons Creek or up at Telegraph Point or down at Pambula, such as fibre boards, particle boards and structured and laminated timber, that can all go into the Japanese market. As mentioned earlier, with this free trade agreement, Australian produce is much more price competitive. That means there will be greater demand for Australian product and better product prices at the farm gate.

Wine production in the Lyne electorate has been going into the Japanese market for many years. Just down the road from where I live, the very prestigious Cassegrain Wines have been producing quality wine that has been served on the Shinkansen for up to a decade. They are part of the $42 million trade of wine exports into Japan, particularly the premium end of the market, such as restaurants, as well. The 15 per cent tariff will drop immediately to zero for bulk wine being imported into Japan. Bottled product will have the tariff drop slower. This will allow this industry to be so much more competitive relative to wines from France and Chile.

Also we have macadamias and avocadoes on the Comboyne Plateau and at Redhill and Telegraph Point at the north end of the Lyne electorate that feed into both the domestic market and the Australian export market. This is $16½ million worth of macadamias that feed into the Japanese market, most of which come from 400 producers on the North Coast. That market will grow as well. It is quite a small tariff, but every bit of price reduction means our product is much more competitive.

We do not have a lot produced seafood in our area, but there is a significant crustacean and lobster market which feeds mainly into the local market. But if other big producers in the domestic market are now exporting to Japan, it means our product from the North Coast will be that much more competitive. Whole new opportunities will come into play with this free trade agreement, so I wholeheartedly support these two bills.

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

The Japan-Australia Economic Partnership Agreement will offer opportunities to Australian businesses, individuals and companies. I want to use my time to start with to congratulate the Minister for Trade and Investment, Andrew Robb. He has done a huge job that should not be underestimated—three major free trade agreements in a year. The weight of work that has gone on behind the scenes is huge. I know that the minister has applied himself and all of the resources at his disposal to get this done. These are truly landmark free trade agreements for Australia and they will see benefits almost ad infinitum in this country.

Australian companies and businesses have been given an opportunity. That is one of the best things we as a government can do—give them an opportunity. That is what these free trade agreements do. We know that Japan is a vital, longstanding and highly complementary economic partner for Australia. We will also see through this free trade agreement and partnership with Japan a strengthening of our bilateral relationship, something that we on this side of the House certainly do not underestimate.

In 2013 two-way goods and services trade with Japan reached $70.8 billion, making Japan Australia's second largest trading partner, with a surplus to Australia of $28.3 billion. The latest merchandise trade figures show Japan was Australia's second largest goods export destination and third largest source of imports in 2013. At the end of 2013, Japanese investment in Australia was valued at $131 billion and Australian investment in Japan was valued at $50.2 billion.

Despite the strong and mutually beneficial trade and investment relationship between Japan and Australia over a sustained period, we have seen the absence of a bilateral trade agreement. That has constrained Australian producers and exporters and their ability to further build trade in the context of high tariffs. It has maintained inefficient barriers to Australia's trade, which has also limited profitability. It certainly has not provided protection for Australia's exporters against preferential agreements that Japan has concluded or is negotiating with key competitors. It maintained higher costs for Australian consumers and businesses for key Japanese imports and maintained barriers to investment in trade and services. We heard that in Australia services are 70 per cent of our economy and only 17 per cent of our exports. So there is a great opportunity for growth in that sector in all of the free trade agreements.

The Japan-Australia Economic Partnership Agreement also provides an opportunity to take this bilateral relationship to the next level and further build the framework underpinning a key economic partnership for Australia. As we know, Australian exporters have faced very high tariffs into Japan, with customs duties levied on 6.5 per cent of Australian goods exported to that country. These are particularly high in agriculture, a vital area of trade for Australia, with an average tariff of 16.6 per cent. As Japan is Australia's second largest agricultural market, with an estimated total value of $4 billion in 2013, it is Australia's largest market for beef, cheese, animal feed and offal and an important destination for sugar, vegetable oil, seafood, fruit and nuts. Of course, Japan historically has imposed high tariffs on a range of agricultural goods, particularly on those key products of interest for Australia, including beef, dairy, wheat, sugar, barley, vegetable oils, tuna and rice.

Any agreement and any change in this certainly provides opportunities for businesses, for individuals and for companies—the opening of the door. Of course, many agricultural exports also confronted complex or opaque regulatory frameworks that included things from tariff rate quotas, state trading and special safeguard and emergency tariffs. So, in the absence of an EPA with Japan, Australian producers—agricultural producers—would continue to face these very high tariffs and complex barriers on major products. It is not just agricultural products; Japan is also Australia's second largest market for non-agricultural goods, with exports worth over $42 billion. It is Australia's largest destination for coal and liquefied natural gas, second-largest destination for iron ore and a major market for petroleum and aluminium.

In keeping my remarks similar to the ones that I have made, I really wanted to focus on the fact that the opening of the doors—the strengthening of the bilateral arrangement—is a key deliverable from this agreement. Once again, I will finish where I started. I know, as every member on our side does, the power of work that has been done by the minister to deliver these three critical free trade agreements. It has been an outstanding effort. In my speech today I want to recognise his efforts and all of those who have been working on this through the department—through DFAT. I think the job they have done has been absolutely outstanding. I have no doubt that the general economy as well as individual companies, individual businesses and individual industries are those that will benefit from the work that has been completed.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

I echo the words of the previous speaker. Australia's relationship with Japan has been of enormous weight and importance to us dating right back to obviously before World War II. But, most ominously, the foresight of Robert Menzies to initiate trade agreements as early as 12 years after the end of World War II certainly stood Australia apart from the rest of the developed world in developing that relationship early; it has proven to be an important one. Over the last few decades we have seen a rise in the optimism of Australia that Japan would be a reliable, solid trading partner—culturally important as well. Linguistically, it has become a major language taught in our schools. Through the seventies, we had a proliferation of Japanese becoming available to school students—I was one who studied Japanese for five years. We were always dealing with a degree of hysteria about Asia at the same time. I can remember, in the mid seventies, proposals for the Iwasaki resort in Yeppoon, Queensland, was met by ferocious opposition. The fact that there could possibly be Japanese investment on a small patch of Queensland land would bring an end to the Australia as we knew it. How wrong we were at the time, and how far we have moved on.

Japan, despite being in the economic doldrums for the last 15 years, remains a massive trading partner—the third largest economy in the world and second-largest export market and trading partner for Australia. We were right to jump in early and become not only a source of resources, energy and manufacturing but agriculture and food. Japan respects the relationship, no more strongly exemplified than by the visit of the Japanese Prime Minister earlier this year and the close relationship that he shared with our Prime Minister, Tony Abbott.

What, of course, we need with Japan is to recognise that it is the last great advanced economy for which we did not have a high-quality trade agreement, of those nations with which we had a highly developed trade arrangement. What we are now seeing in this shift, quite rapidly, with the work of the trade minister, will be a series of trade agreements with developing economies—some of the giant economies that are in the G20 and moving up to be the economies of the future. It is a very, very subtle but important shift, moving from advanced economy FTAs like that of Japan, the US, Singapore and New Zealand through to a focus on India, China and, potentially, Indonesia. These three massive economies with very, very high populations that are looking for significant capital investments and significant energy and food security place Australia in an incredibly important place.

We are a nation that, as I have said many times before, has a small population with a high capital base. With that low labour ratio, we need all hands on deck and every Australian trained as highly as possible to do the jobs of tomorrow. We do not yet have that. We still import around 175,000 overseas nationals to do the work that we need done in this country because we are unable to train Australians to do that work. That should be a challenge for us; that is a challenge because 175,000 salaries repatriated to overseas economies is simply a missed opportunity for Australian families. On the same token, we have 133,000 people leaving school every year going straight onto Newstart who are utterly unemployable. It is this skilling mismatch which has to be the policy challenge for Australia over the next decade.

Eliminations of tariffs, as I have said, are wonderful. It is extraordinary that it was almost grinding to a halt under the previous Labor government. How could they make such little progress over six years unless there was a subtle and deliberate intention to not engage in bilateral agreements? They were not moving forward any multiparty agreements either. There was just no real respect for the fact that reducing tariffs between economies is a win-win. Much of it is this focus on who is going to do better out of a free trade agreement; will it be the large economy or will it be the small one? Let us be honest, in any free trade agreement, the absolute benefit is probably going to swing slightly towards the larger economy. But in a relative sense the benefits accrue to the smaller economy and the benefits probably accrue to an export economy. If you are a major internal consumption economy, the benefits of trade liberalisation are slightly less. But for Australia what we dig up, what we grow and what we produce is, because of our small population, mostly exported. We benefit from freer trade. These have been listed by previous speakers, and I do not need to go through them again, but I want to highlight some of the large ones. Obviously these are around resources. If we can have a situation where 99.7 per cent of all of our export products in energy, agriculture and resources become tariff free to an economy like Japan, it just creates so many more jobs.

These percentages have been rolling off the tongues of analysts over the last few weeks, but let's remind ourselves what a one per cent reduction in a tariff means. In a highly competitive, liberalised economic market, reducing tariffs by one per cent simply makes your product one per cent cheaper in the destination economy. That is enough to swing sales and that is enough to change market share. That therefore has massive volume impacts for the producer. If we can export more, this is simply a multiplier—volume and profit.

It is a wonderful opportunity for Australia that we seem to have just forsaken for six years under a Labor government. I am yet to hear an adequate explanation for why all of these free-trade agreements, which mostly started in the Howard years, stalled for six years. It is economically damaging that they did so. The fact that they could only sign one—it was effectively one that we had almost completely negotiated for them, so all they had to do was submit the paperwork—is a real blight on the record of the Labor government. I hope that is highlighted in greater detail.

I say that to the miners out there and I say that to the agricultural providers, particularly beef providers. They stand to be $5.5 billion better off because of this beef agreement. That is just one sector. Compare that with the molestation of the live-trade agreement under the previous Labor government and the sorrow, the indebtedness and the destruction that they wrought on live export by hasty decision. That has killed of not just one year but many family dynasties who were involved in live export. It was a horrible price to pay by a short-sighted government that did not respect the importance of our trade relationship with our near Asian neighbours. I pleased to say today that that era is closed.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

It is very good to have an opportunity to speak on this most critical area of the free-trade agreement between Australia and Japan. I think there is no more important economic policy area than free trade. We talk a lot about removing red tape from the economy, removing impediments and so on. The reality is that the international system of trade barriers and protections represents probably the single most value-destructive act of global governance over the last century.

That is because what we are talking about in free trade liberalisation is effectively undoing the work that nations have done in previous era. When you impose a tariff on the product, you make it more expensive and you make it less attractive to buy. Consequently, less of it gets bought. You also make it more difficult on the other side for people in your own nation to manufacture goods, because it is harder to sell them overseas. It is just an economic philosophy that is entirely flawed and entirely wrong.

But, interestingly, it took this government to actually do something about it with our big trading partners—Korea, Japan and China. All within the space of 12 months, the Minister for Trade has managed to secure these blockbuster agreements. The Japanese agreement is the one we are talking about today. It is our second largest trading partner. There is more than $70 billion in trade relations and 97 per cent of our exports will now be free of tariffs or treated preferentially as a result of this deal. Earlier, we have the tremendous outcome on the Korean agreement as well. Just last week, there was the China agreement, which will benefit businesses like the owners of Lamb & Cumin, which is located in Hurstville in my electorate of Banks. We do not have a lot of lambs in the electorate of Banks, but we do have business people who export lamb product to China. They will benefit immensely from the liberalisation of free trade under this agreement.

The question is, as the member for Bowman alluded to, why this did not happen in the last six years. Why did it not happen? Why did we have this pause button on trade liberalisation during the entire period of the Rudd-Gillard-Rudd government? The reason is very clear. That is that they did not really believe in free trade. They did not really believe that these agreements were politically attractive for them and for their union base. As a consequence, they did not pursue them.

If you go back to 2008, the member for Lilley showed great foresight when he said in relation to the free-trade agreement with China:

We're negotiating with the Chinese but I don't anticipate any outcome of that process for some time…

He said that back in 2008 and he was absolutely right. That was because it took six years and a change of government for there to be some outcome. You do wonder why it took so long and it took a change of government.

Again, in 2011 the member for Lilley, who was the Treasurer of the whole country of Australia, was involved—according to The Australian Financial Reviewin arguments within cabinet to the effect that the politics of free trade were not very good and, as a consequence, the government should not pursue it. The AFR at the time, through Matthew Franklin, said:

…at least four sources have agreed that Mr Swan, with the backing of several other ministers, challenged the political saleability of trade reform.

There it is: politics before substance and media releases before the actual business of doing government. What we know about our Minister for Trade is that he is not focused on tomorrow's press releases. He is focused on the hard execution and the hard work that actually leads to real results. That is what we have seen over the last 12 months. It is not about putting out some fantasy press release; it is about actually closing deals. That is what he has done.

In a statement in 2012 that you could describe making a virtue of necessity, then Minister for Trade Craig Emerson—who I believe had quite a lengthy title in his previous role, but trade was among that—actually said:

Free trade agreements, I think frankly, are overrated in what they can achieve in terms of a relationship between Australia and China.

Overrated? Come to Hurstville and tell that to the many small business people in my electorate who are trading every day with China in relation to tourism, professional services and many other areas. The former minister for trade should come to Hurstville and say to them that free trade with China is overrated. It is not overrated; it is actually a blockbuster breakthrough that has been delivered by the minister for trade. It is a fantastic thing for my electorate of Banks. It is a fantastic thing for the entire nation. We see, in the Japanese agreement, the Korean agreement and of course now the Chinese agreement, what happens when you have clear convictions, a clear philosophy and the people, frankly, with the capacity and horsepower to get hard work done. That is what you see in this government, and that is why we have been successful in free trade. Certainly, the bill we discussed today is a great exemplification of that, and I commend it to the House.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

It is great to rise to speak on the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014 and related bill. It is very exciting to talk about the trifecta of success that the coalition government have delivered on free trade within our first year of coming to government. We have seen within, effectively, 12 months of the election the coalition government signing historic free trade agreements with Korea, with Japan and with China. This is good for the economy. This is good for consumers. It is good for exporters, but ultimately this is good news for job creation here in Australia.

These agreements will change the face of the Australian workforce for generations to come. In no short measure, these agreements provide new opportunities to the next generation of Australians to grow the products that go into the growing Asian market, and to deliver the services that the over a billion people that are coming into the middle class in Asia will require. If you were a young Australian today, these three agreements could ultimately change the jobs that you find across the working life that you might have. These are absolutely historic agreements. Here, in this Japanese agreement that we are discussing today, this is the first time that Japan has signed an agreement with a major exporter, particularly a major agriculture exporter. For beef, where we have got over a $5 billion advantage, for dairy, for horticulture and for nuts, the advantage that we have with Japan is an advantage that almost no other nation on earth has. If you are an Australian exporter going into the Japanese market, there is not another country that you are competing with that can compete in the same way that Australia can as a result of this historic agreement.

The minister for trade has just walked into the chamber and I congratulate him. He has become an absolute rock star of the coalition's first year in government, delivering things that many of our critics said could not be delivered. Here we stand, a very short period of time after the last federal election, with the delivery of three historic agreements.

Just recently, we saw the signing of the Chinese agreement and we got everything we wanted and more on agriculture, and that is great news for our country and great news for jobs. But the big thing in the Chinese agreement—and one that I think the public is just underestimating a little bit at the moment but in the decades to come will come to appreciate as transformative for our economy—is that we have access in the service side in health, in child care, in architecture and in law into the Chinese market. Again, no other country on earth has that level of access, where 100 per cent Australian owned companies can go into the Chinese marketplace and deliver these things. What this means is very simple: in a market of 1.3 billion people where literally millions of people are coming into the middle class, they are going to become consumers of our services, of our education services, of our childcare services, of our healthcare services and of architecture and of law. This is an enormous market, and the Chinese free trade agreement gives access into the Chinese market that effectively, in many cases, no other country on earth has in terms of advantage or that access. So I am very excited as part of the coalition government and as the chair of the Joint Standing Committee on Treaties to be talking today about delivering on these three historic free trade agreements, something that is great for the economy, great for exporters, great for consumers and, above all else, will create thousands of new jobs across the decades to come here in Australia.

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I thank the House for the opportunity to speak on today's combined bill, the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014, on the Australian-Japanese economic partnership that the coalition has concluded in recent months. This important partnership agreement was seven years in the making, and I am proud that this side of the House was able to successfully complete it within their first term of government. Today's customs amendment bill and customs tariff amendment bill will ensure that one of our most vital trading and investment partners will mutually thrive in a competitive global environment.

Whilst Australia and Japan have enjoyed a warm international relationship driven by mutual interests, there is no denying that Australia's largest trading partner and source of capital investment plays a significant role in further enhancing Australia's growth and prosperity in the Asia-Pacific region. I am excited by this economic partnership agreement and what the bills today will mean for Australian exporters, the agriculture sector and other Australian businesses. Increased bilateral trade, investment and closer economic integration benefit both countries and ensure that Australian businesses remain viable now and into the future.

The recent agreement is a comprehensive, wide ranging one that provides both countries with more liberal access to goods, services and investment markets. It will also ensure that Australian businesses have more accessibility and ease to do business in Japan, which was previously marred by opaque regulations, high tariffs and complex bureaucracy. Australian exporters of consumer goods, non-consumer goods and those in the tourism, education and healthcare sectors all stand to benefit from this economic partnership agreement. 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.

Today's bill will also amend the Customs Act to enable imported goods to enter Australia at a preferential rate of customs levy. In addition, goods imported to Australia that have originated from Japan will have preferential entry. Without the Economic Partnership Agreement with Japan, Australian agricultural and horticultural producers will continue to face high tariffs on commercial agreements, making Australian producers' market share in Japan increasingly difficult to sustain. Australia's ongoing competitive position in Japan is not guaranteed due to the myriad strong producers coming from other nations such as the USA; therefore, the EPA is the first step to ensure that our export businesses can be commercially viable in a saturated market.

It is important to point out that Japan has also been concurrently negotiating trade agreements with other key competitors, including the European Union, Canada, the United States and New Zealand, with trade agreements already in place with the Association of Southeast Asian Nations, Chile, India, Mexico and Peru. The coalition's signing of the EPA will not only deliver tariff elimination and reductions for Australian businesses; it will also position our country above our competitors, through strong renegotiation provisions should Japan provide better access for the above mentioned competitors. Not having signed and delivered the EPA would have been extremely regrettable for our producers. If we did nothing, Australian exporters would face steep tariffs, resulting in loss of market share and no competitive advantage over Japan's other trading partners. We would also be denying Australian consumers cheaper imports.

Japan is a vital and longstanding economic partner. In 2013 alone, our two-way goods and services reached $70.8 billion, of which $28.3 billion was surplus for Australia. For exports, Japan was our second-largest market, with 15.5 per cent of export goods leaving Australia. Yet, Australian exporters face a custom levy of 6.5 per cent of goods exported to Japan, whilst Australian agricultural businesses face an even higher tariff of 16.6 per cent. Japanese trade and investment in Australia in 2013 was valued at $131 billion, whilst Australia's trade and investment in Japan stood at $50.2 billion. Given that Japan is Australia's second-largest agricultural partner and that agriculture is also Australia's vital area of trade, the EPA will make an enormous positive impact on rural and regional communities. High quality Australian goods such as beef, cheese, animal feed, offal, sugar, vegetable oils, seafood, fruit and nuts are some of our most favoured products in Japan, and it would be a real shame for these exporters to lose market share simply due to tariffs. Similarly, Australian wine producers face stiff competition from countries such as Chile, who already have a tariff advantage through its existing trade agreement with Japan. In 2013, Chilean wine exports rose to $178 million, whilst imports from Australia actually decreased to $46 million. Again, given that Australia is world-renowned for its wine quality and its close proximity to Japan, it would be senseless not to be able to export a large quantity due to customs duties. The Japan-Australia Economic Partnership Agreement also guarantees access to the Japanese market for a range of lucrative Australian service providers due to Australia's high reputation in areas such as financial, legal, education and telecommunications services. I commend the bill to the House.

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

I rise to conclude the debate on the Customs Tariff Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014, and thank the House for the opportunity. The bill contains amendments to the Customs Tariff Act 1955 that will implement Australia's tariff commitments set out in the Japan-Australia Economic Partnership Agreement. These amendments are complementary to those contained in the Customs Amendment (Japan-Australia Economic Partnership Agreement Implementation) Bill 2014.

In summing up, I would firstly like to thank all those who have contributed to this debate. It is a most significant agreement that we have reached with the Japanese government and the Japanese people. It will lay the groundwork to take our relationship, which has been a very strong one, to another level altogether. You could see the sense of interest in Japan in the concluding weeks of this agreement and the enthusiasm with which Prime Minister Abe, his senior colleagues, the most senior business leaders within Japan and the many others throughout their community received this agreement. This does indicate that the relationship which has been forged since 1957, when the original commercial agreement was signed, is now going to be taken to a new level altogether.

Of course, Japan is Australia's second-most important trading partner, taking nearly $50 billion of Australian exports of goods and services in 2012-13. They supplied imports of goods and services worth $21 billion in the same year, and Australia has a trade surplus of $28 billion with Japan. They are also our third-largest source of foreign direct investment, with over $126 billion invested in Australia. So, as is often seen in history when there is a strong trading relationship, you end up with a strong and mutually beneficial investment relationship, and that has been the case with Japan. This agreement not only goes to trade but also to investment. There is a very strong investment chapter to try to ensure that the ease of doing business in Australia is maximised and that the encouragement for doing business in Australia is maximised. It is most appropriate that our two countries have reached this agreement.

Negotiations on JAEPA commenced in 2007, the year in which we celebrated the 50th anniversary of the signing of the first Japan-Australia commerce agreement. JAEPA takes our relationship, as I said, to a new level. It demonstrates that Australia can continue to forge deeper relations with our old friends, while accommodating the arrival of new friends. As other speakers have mentioned this afternoon, we have just concluded the free trade agreement with China, which is in a similar vein to Japan's. It is a very comprehensive and very protection-eliminating document. Again, it goes very strongly into service areas, as does the Japanese agreement.

The big growth for Australia in the future will be in the services area. In exports, of course, resources and energy will continue to be a feature for hundreds of years for Australia, and similarly agriculture and agribusiness will be a mainstay of our trade for centuries. We are the most knowledge based economy in the region, along with Japan, and our services are much in demand. Currently, 80 per cent of our GDP is services, yet the services sector contributes only 15 per cent of our exports. In many cases the failure of growth in the services sector has occurred because of the many barriers erected by many of the countries in the region, which prevent the ease of doing services business in those economies: services like legal work, engineering work, architectural work, project management services, auctioneering services, perhaps, anything to do with town planning services, education, health and ageing. In all of these areas we have world-class expertise, and our capacity to contribute so much in the region around us is starting to be realised by these countries.

Our long-term relationship with Japan and with Korea has led to two free trade agreements which were finalised earlier this year. Both of those countries have allowed a significant opening up of services arrangements between our two countries. The China agreement—the third in the trifecta—is a remarkable document for the opportunities Australian services have in that market, which no-one else has. It is the leading edge and there are literally dozens and dozens of opportunities that have been granted to us by the Chinese government that they have not given to anyone else at this stage.

After seven years of negotiations, JAEPA is the most liberalising agreement Japan has ever concluded. It goes a lot further towards freer trade, especially in agricultural products, than Japan would be prepared to give in the WTO. The big feature of the Japanese agreement is that not only it is strong on services, but that for the first time the five untouchable areas in trade agreements were confronted; and, outside of rice, we saw movement in all of them and some significant movement, especially in beef and sheep meats. It is really an agreement which will take our relationship and our opportunities in the agricultural space to a whole new level. In fact former US Assistant Secretary of State for East Asia, Kurt Campbell, described the agreement as 'a massive victory for Australia', and he observed that Europe and the United States had been trying to get this kind of agreement from Japan for 30 years.

Most speakers have detailed the huge benefits that we will have in things like frozen beef with a sliding scale of cuts in tariffs and with a very big up-front cut. If the agreement enters into force before April next year—as I am certain it will—we will get a cut and then we will get another one after 1 April. There will be a 10 per cent total reduction in tariff in the first four months of this agreement, and that will be an advantage over the US market of 10 per cent—and they are our biggest competitor in the Japanese market for beef. That 10 per cent advantage will increase up to 19 per cent in subsequent years. In a similar way we have seen opportunities with the guaranteed safety net that says any improvements bilaterally negotiated for access by the US with Japan will be automatically applied to Australia. So with the Trans-Pacific Partnership Agreement, if the United States finds itself with any advances on what we have achieved, then we will automatically receive those same advantages. We have also negotiated removal of the 50 per cent global snapback tariff being applied to Australia when volumes exceed a trigger level. In other words, if they feel the increase in imports is getting too high too fast, there will be a trigger which discourages other imports, and that trigger will not apply to Australian agricultural products. Dairy producers receive a tariff-free quota of 20,000 tonnes for cheese, which is in addition to the current 28,000 tonnes under the WTO.

There is a whole raft of other benefits—tariffs on most seafoods, fruit, vegetables, nuts, honey and wine will all be eliminated in between one and 10 years—most of them are front-end loaded. Australian wine was worth $42 million in exports to Japan last year, but it has been losing market share to Chile since Chile signed an FTA with Japan. JAEPA allows us to level the playing field with Chile and gain immediate advantage over key competitors, such as France, Italy, Spain and the US. Outside of agriculture the agreement provides an immediate elimination of all remaining tariffs on minerals and bulk resources. This includes immediate elimination of the 3.2 per cent tariff on our $89 million worth of coking coal exports and the 7.9 per cent tariff on our $74 million petroleum and oils exports to Japan.

In services JAEPA will also allow Australian financial services companies to provide investment and portfolio management services to Japanese customers. This is significant, as Japan has the second largest pool of pension funds globally after the US. Japan has also agreed to expedite registration procedures for Australian lawyers and has committed to allowing Australian lawyers to form professional legal corporations in Japan. A raft of different qualifications and professions where mutual recognition is either going to be allowed or considered after a review process.

We will form a committee to review this agreement on a continuing basis so that everyone can see that this is a dynamic document. This is a living document. This is a document that will move with the times. It is a 21st century trade and investment agreement and one that will make our relationship stronger than it has ever been before. So it is something to celebrate.

I notice that there is an amendment from those opposite. I make the comment that the three requirements that the opposition are looking for are unnecessary. They are looking for an inclusion to not agree to any investor state dispute settlement provisions in this agreement. But it is not in there. We are just about to have it enter into force. Secondly it says, 'to enact policies to ensure that Australian workers benefit from jobs growth'. That is the whole point of this agreement, to create more jobs. That is what we are doing in seeking to clean up the economic mess that we inherited; to make the best advantage of the three agreements. Much of our objective is to stop the recklessly high levels of spending built into previous governments' programs and replace that debt-fuelled government spending with private sector activity.

These three agreements—and this one in particular from Japan—will further increase the opportunities for investment from these countries, but also for trade, which will build growth here and will build profits. It will give confidence to more investors locally. It will slow the growth of government spending and replace it with private sector activity in our local economy, which is fundamental to our long-term sustainable growth objectives.

I do not see a need to support the amendments. The final element that the opposition wanted was to utilise the review mechanisms in the Japan-Australia Economic Partnership Agreement, to seek further market access gains, especially in agriculture. That is a sound sentiment, but we put that review in so that we could further achieve gains in agriculture. So I think it is unnecessary.

Mr Acting Deputy Speaker, thank you for this opportunity to summarise some significant contributions that we have had in this debate. It is a very important occasion for Australia to sign off and enter into force this landmark agreement which will help set up, along with the other two agreements, the foundations for strong trade and investment between Australia and our three big partners in the region. It will build jobs and prosperity for many decades to come.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Question negatived.

The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.