Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Congratulations, Mr Speaker, on your appointment as Speaker of this House.

Whilst the Abbott government rushes to sign free trade agreements and the TPP, it unwisely dismisses the groundswell of critics who constructively argue that such agreements do not deliver the exaggerated benefits claimed and, even worse, can be detrimental to many sectors of the Australian economy. Those critics are not radical minorities but include conservative politicians, respected economic analysts and even the Productivity Commission.

I accept that free-flowing trade between nations has meant that more people have easier access to more products and that removing trade barriers has very likely delivered considerable benefits to people around the world. It also means that inefficient businesses will not survive unless they change. However, attributing trade benefits solely to free trade agreements in an ever-changing world can also lead to flawed conclusions. The world is much different today to what it was a decade ago and different again to each decade before that. The internet, rapid communication and faster transport means that consumers know what is happening and what is available around the world. Governments that continue to put up barriers to consumers buying what they want from where they want will quickly find themselves on the wrong side of their voters.

I note that the USA, China and Japan were all major Australian trading partners well before the signing of FTAs. I also note that the lower Australian dollar has overshadowed tariff reductions committed to in FTAs, and, as we are seeing with China right now, some countries continue to manipulate their currencies in order to influence trade. A rising middle class has most likely done more to lift Australia's trade with Asia than FTAs. Interestingly, beef sales to Vietnam and China rose sharply without FTAs. Furthermore, there is little evidence that FTAs signed in recent years have been of significant benefit to Australia. What they have done, however, is to add more obstructions and compliance obligations on traders and limitations on Australian autonomy.

Not surprisingly, the evidence is mounting that the major beneficiaries of FTAs are global transnationals and economic superpowers, who seem determined to control world markets. The use of investor state dispute settlement clauses—ISDS clauses, as they are otherwise known—in agreements is an example of the growing power of multinationals. These clauses enable foreign companies to sue governments if a change of law affects the investment of a company. It is a right that is not available to domestic entities. That, in itself, is an absurd, discriminative proposition.

Just as foolish, national sovereignty is lost and democratically elected governments lose the right to make laws and decisions that the people may want. This is not exaggerated scaremongering. It is happening right now, with Phillip Morris using a 1993 agreement between Australia and Hong Kong to sue Australia for profits lost because of Australia's plain-packaging cigarette laws. That case has already been running for four years. To date, it has cost a reported $50 million—and it is still far from over. There are also claims the Victorian government's attempts to support local industries and use Australian steel in government projects breaches FTAs with Japan, Korea and the USA.

Australia is not alone with these dilemmas. Over 608 ISDS cases have been taken out in recent years, and the numbers are rapidly escalating—driven, in part, by law firms that do very well out of them. Of those cases, around a third fail and the rest are either settled out of court or won by the companies. Even worse, the cases are generally secretive, not subject to the normal judicial rules of law and are heard by a panel of three selected arbiters. How any government could trade away its sovereignty by entering into such agreements bewilders me and the people I speak with.

Not surprisingly, several governments are now wanting to review the ISDS process. Former Prime Minister Howard, to his credit, would not allow an ISDS clause in the Australia-United States FTA. With every agreement there are winners and losers. Governments trade off the future of one industry sector and the jobs of thousands of Australians against that of another. It is a trade-off that simply does not sit comfortably with me.

There are two other serious concerns that I want to refer to. Firstly, FTAs may extend patent periods, thereby preventing lower-cost generic products from entering the Australian market. Secondly, under the ChAFTA, foreign labour may be brought into Australia to fill jobs that could otherwise be done by Australians.

On 28 July I hosted a very well-attended public forum on trade agreements in my electorate. The views and concerns I have outlined reflect the overwhelming views of those people who attended on the night. The government should not be so dismissive of public sentiment on these matters and should take note of the serious concerns that have been raised throughout the community with respect to free trade agreements and the Trans-Pacific Partnership Agreement.