Stuart Robert (Fadden, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties, I present the committee's report, incorporating dissenting reports, entitled Report 165: Trans-Pacific Partnership Agreement.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Today I present the Joint Standing Committee on Treaties report 165 which contains the committee's review of the Trans-Pacific Partnership Agreement, commonly referred to as the TPP. While it is true that it is now somewhat less likely that the TPP will come into effect following the US election and President-elect Trump's outline of his first 100 days' priorities, the committee believes that reporting on this agreement is still important.

Some have argued that the committee should not report, citing that the US is highly likely not to ratify it. I argue, and the majority of the committee argues with me, that the role of the committee is to report on the benefits of any proposed treaty action, including the free trade agreement and whether it is or is not in the interests of Australia. The committee's role is not to determine whether foreign parties will ratify an agreement or what actions foreign parties will take in their respective parliaments. That is indeed the rightful role of the executive. Accordingly, the TPP report is tabled this morning.

It also provides an opportunity for the committee to make two clear statements about how we view the future of free trade in Australia. Firstly, in a world where protectionism and nationalism are on the rise, the committee wishes to reiterate the importance of free trade as a bulwark against international economic decline; and, secondly, the benefits accruing to Australia from the improved access to markets in the agreement and the plurilateral basis of the agreement in setting global trade rules should not be lost in future free trade negotiations.

I think it is fair to say that there are few people alive today who remember the privations of the Great Depression or the horror of the Second World    War. Few people remember that free trade in the modern world is one of the strategic tools developed at the end of the Second World War to prevent another Great Depression and another global conflict. Many people, however, realise that international trade is the cornerstone of Australian prosperity. We are an open market that needs open markets.

It is pretty clear we do not make iPhones and we no longer make sophisticated aircraft. If we want those things, we have to sell what we do make to other people around the globe. Regardless of whether it is cheese, iron ore, coal or apps, it is crucial that Australian products have access to other markets on terms that are as fair as can be negotiated. The TPP would have provided access on fairer terms to a significant part of the world's economy for so much of what Australia produces. In tabling this report, the committee means to emphasise how important it is to Australia that we are seen to remain committed to free trade and to oppose protectionism.

Many participants in the inquiry had genuine concerns about some aspects of the TPP. These are discussed in some detail in the report. However, the committee found that, taken as a whole, the TPP would have advanced free trade and provided opportunities for Australians and is therefore in Australia's best interests.

I would like to draw out some of the aspects of the TPP that allowed the committee to reach this conclusion. Probably the most significant benefit of the TPP was its plurilateral nature. This first plurilateral agreement to be successfully negotiated in 20 years provided an opportunity to overcome the increasing complexity of bilateral free trade agreements, evocatively called the 'noodle bowl' effect, and replace it with a standard set of free trade arrangements across many trading partners. We are talking about one set of strategic global free trade rules that cover something like 40 per cent of trade across the nation. It was an opportunity for the bulk of the world to finally set, pluriterally, a set of strategic trade rules.

The TPP would have reduced the administrative burden on Australian exporters by simplifying arrangements for exporting to all other TPP countries. Small and medium sized businesses would have found it much easier to access the benefits of international markets under this arrangement. In addition, the TPP would have given Australia the capacity to address arbitrary and discriminatory non-tariff barriers in a range of Australia's most significant trading partners. The issue of attacking, drawing down and reducing non-tariff barriers is and will increasingly become a major effort required by our nation as we seek to get further into other markets.

Finally, the TPP would have levelled the playing field for Australian companies competing with exporters from other countries across a range of product types, eliminating the advantage of lower tariffs those competitors have benefited from for many years.

In summary, the committee wants to ensure that the outcomes Australia obtained from the TPP negotiations are not lost if the agreement does not go ahead. The committee wants to affirm that it stands by the outcomes in the TPP, and that the Australian government should work to retain as many of the benefits the TPP offers as it can in any future negotiations with current TPP partners or with others. The committee has recommended that binding treaty action be taken on the TPP. On behalf of the committee, I commend the report to the House.

Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek leave to make a statement on this report.

Leave granted.

Unfortunately for this report, on 26 November, US President-elect Trump in his first announcement about what will happen when he takes over, again attacked the TPP and said that will be the first thing that his administration undoes. He described it as a potential disaster.

Last night at drinks for the Emperor of Japan, I was discussing at the Japanese embassy the important statement of the Japanese cabinet secretary that without the United States this treaty is in effect inoperative, and it seems therefore a shame that the Prime Minister and foreign minister are the only people who do not seem to understand that the TPP is unfortunately, or fortunately, not going to happen.

The Trans-Pacific Partnership Agreement requires ratification of the United States to be enacted. Of the 12 signatories, they are the most important, biggest economy. As I said, President-elect Trump has said he will withdraw the United States. Most significantly, and sadly for the member for Fadden, the Obama administration has announced it will not push the current Congress to consider it in the lame-duck session. Indeed, the Minister for Trade has conceded that the ratification is unlikely to happen.

If the other 11 TPP countries move to omit the United States from the agreement so that it can be enacted, this will be a new agreement that will have to come back to the committee for consideration. Labor would need to see new economic data on the benefits of the agreement with the omission of the United States. As the Minister for Trade said on 13 November when asked if the deal could go ahead without the US:

In theory, yes, … But really with the United States not being part of it, first of all, one officially the TPP would not get up but, secondly, if we looked at; ‘Is there enough merit to look at a trade deal among the 11 of us?’

Nevertheless, the government seems determined to go ahead with the ratification process.

As the agreement currently stands, there were some modest economic and strategic benefits the TPP would have for Australia but there are a number of areas where members of the opposition on the committee—including the member for Fremantle, who is here—made clear. They were the removal of labour market and skills testing, the potential rise in the cost of biologic medicine, the inclusion of investor-state dispute settlement provisions, intellectual property clauses, and the lack of independent assessment of the agreement.

I would like to take this opportunity to focus on two of these concerns; first of all, labour market testing and, second, investor-state dispute settlement provisions. The removal of labour market testing fundamentally undermines the 457 visa program and is at odds with community expectations. Australians expect that if there is a local who is able and willing to fill a job vacancy, they should have priority. This is not new and it is not protectionist. It is just common sense. The TPP may have had a poor effect on this by allowing six countries exempt from labour market test provisions, and there is widespread public concern that the skills testing would be taking place in those countries rather than to the standards we expect in Australia.

With all the denigration of unions and the ETU et cetera, Australians do like to have highly qualified electricians accredited in Australia, or at least the equivalent, putting in the electrics in their houses.

As the Leader of the Opposition has said, the 457 visa system needs to be tightened, not relaxed. It is there to complement the Australian workforce, not replace it. It is there to fill gaps in our experienced workforce so skill shortages do not slow down our economic growth. Labor would like to see the government take the opportunity, if the Trump administration does reopen negotiations on the TPP, to look at these provisions. No other country was as generous as Australia in this area, and Labor members are unable to understand why, when unemployment is rising in some parts of the country and we could and should have more apprentices who are capable of filling these positions.

The inclusion of investor-state dispute settlement provisions, commonly known as ISDS, was also concerning for Labor members of the committee. Throughout the hearing process, opposition members thought there was insufficient evidence that the ISDS would benefit Australia, in the face of evidence presented to the committee showing that it would in fact put our nation's sovereignty and reasonable policymaking at risk.

The member for Fadden and the committee entered the examination of this treaty with an honest purpose and have done a very good job, from all of the documents that I have read, although I came into this process late. It is very disappointing to see the United States withdrawing from international economic and strategic areas. I hope some of the people who constantly attack the United States think that this is going to be a benefit to the international system. It is not. We see that China is moving into the space that the United States is vacating. Politics abhors a vacuum. You will have a Chinese-led rival to this, perhaps not even as good, which will eventually take its place if the United States continues to vacate the field. Let us hope that this does not take place in the area of strategic concerns to Australia, because of course that would have a very bad effect on our ability to defend this great island nation.

Stuart Robert (Fadden, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Debate adjourned.