Dave Sharma (Wentworth, Liberal Party) 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 186: IA-CEPA and A-HKFTA.

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

by leave—Report 186 of the Joint Standing Committee on Treaties covers the committee's review of two separate trade agreements: the comprehensive economic partnership agreement between the government of Australia and the government of Indonesia, also known as IA-CEPA, and the free trade agreement between Australia and Hong Kong and the investment agreement between the government of Australia and the government of the Hong Kong special administrative region.

At this time of growing global economic uncertainty and mounting trade tensions, countries like Australia need to stand up for the principle of free trade and shore up the foundations of the global trading system. Australia has been a huge beneficiary from the liberalisation of the global economy. The ability to trade freely around the world on the basis of transparent and predictable rules has delivered us improved living standards, better jobs, higher wages and greater choice. This is why it is important for Australia to stand up for the global trading system and play our part to maintain and improve its liberal and open character. It's especially important given that one in five Australian jobs is linked to trade.

The agreement with Indonesia has the potential to transform our economic relationship and lift it to a level that better reflects the strategic importance of our two countries to one another. Australian grain and citrus growers, cattle producers, mining equipment providers and vocational education suppliers all stand to benefit from the improved access to the Indonesian market which the agreement provides.

But beyond this, and as the name implies, the Indonesia-Australia Comprehensive Economic Partnership Agreement goes on to lay the foundations for a comprehensive economic partnership with our largest northern neighbour. It will support Indonesia's own economic growth by supporting Indonesian capacity in key areas and position Australia as a partner of choice. It will improve the business and investment environment. It will provide a vehicle to tackle emerging issues in trade such as non-tariff barriers, the digital economy, connectivity, competition policy and regulatory transparency. Indonesia is one of Australia's highest priority relationships, and this agreement will help grow our ties in a part of the relationship that has been historically underdone. This is why the Joint Standing Committee on Treaties has recommended that we take action to implement the agreement as soon as possible.

Our economic and trading relationship with Hong Kong, one of Asia's largest and most open economies, is already well established. The Australia-Hong Kong Free Trade Agreement largely codifies existing trade and market access arrangements, providing certainty into the future. It also modernises the treatment regime for foreign investors, making investor-state dispute settlement mechanisms more transparent and more constrained and improving safeguards for governments wishing to adopt legitimate public policy measures in areas such as tobacco control.

It would not be realistic to consider the agreement in isolation from the political protests that have been underway in Hong Kong for several months. In considering this agreement, the committee heard from witnesses about the ongoing civil disturbances and political instability in Hong Kong. The committee supports a peaceful resolution of these issues within the 'one country, two systems' framework and Hong Kong's own institutions. We also recognise that the preservation of Hong Kong's unique status under the basic law, under which it enjoys a high measure of autonomy, is in Australia's national interests, and we view ratification of the agreement, negotiated as it was with Hong Kong's own government, as a means of supporting this unique status. Whilst the committee recommends that we take steps to implement the free trade agreement, the timing of the agreement's entry into force, once necessary legislative amendments and regulations are passed, will necessarily take into account the political situation in Hong Kong at that time, as it should.

On behalf of the committee, I commend the report to the House.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I too rise to speak on the presentation of report 186 of the Joint Standing Committee on Treaties. I just want to comment on the two free trade agreements: the Australia-Hong Kong Free Trade Agreement and the Indonesia-Australia Comprehensive Economic Partnership Agreement. As deputy chair of JSCOT—a new role for me post the election—I want to sincerely thank the JSCOT secretariat staff for all their hard work and the support that they provided to us through this process. I also acknowledge and thank the JSCOT chair, the member for Wentworth, for his work in leading the committee through this process, as much as can be done in this place, with less partisanship and more coordination and partnership in working towards the national interest. I thank the chair, the member for Wentworth, for all his work in preparing this report. I also thank all of the members of the JSCOT for their efforts, but particularly the Labor members for their invaluable contributions to the report.

I think the chair, the member for Wentworth, has covered many of the issues that I would have covered. I think it would probably be useful to just reflect on some of the Labor principles on free and fair trade that are highlighted in this particular report. First and foremost, in the additional comments of the report, the Labor members sought to include commitments to labour market testing. In them, we noted that Australia has not made any commitments in relation to labour market testing around contract service supplies, as we had not yet entered into negotiations on an agreement.

For this reason, during this JSCOT review process, the Labor members of the committee argued that any future agreement that Australia may negotiate with Indonesia for the entry of temporary foreign workers as contractual service suppliers should (1) be negotiated as a treaty-level agreement so it would come back to JSCOT for further consideration and (2) include a commitment to labour market testing to preference Australian jobs and also skill tests to ensure that any temporary foreign workers meet the same standards as Australian workers. The Labor members of the committee believe that report 186 should have included this as a recommendation, with the language that I've described. Unfortunately, the whole of the committee did not come to agreement on that. To have that in there did not receive support, but it has been included in the additional notes.

I also highlight two critical recommendations that from our perspective were very important to be included in this report. Recommendation 4 was in respect of the Australian government pursuing the termination of the old agreement between the government of Australia and the Republic of Indonesia concerning the promotion and protection of investments, and terminating the survival clause of that older agreement—the BIT, the bilateral investment treaty. There is acknowledgement there that provisions in the new agreement, which we have just reported on, replace the outdated previous bilateral agreements between the two nations. This measure reduces Australia's potential exposure to claims under the superseded agreement. This is a very important development.

It should also be further noted that the achievement of a comprehensive agreement with one of our largest and closest neighbours, as the member for Wentworth has outlined, is of utmost importance at a time of global trade uncertainty. We all know that in a decade Indonesia will be the world's fourth-largest economy. It is a market of 260 million people literally on our northern doorstep, yet—and some people might be surprised by this—it currently accounts for only two per cent of our exports. That is a remarkable statistic. The Labor Party has always been a party of trade on fair terms. We're hopeful that this agreement will lead to greater exports and a closer trading relationship with our most important northern neighbour.

I also want to draw attention to recommendation 5. The committee recommended that the Australian government give due consideration to implementing a process through which independent modelling and analysis of proposed trade agreements is undertaken in the future by the Productivity Commission or an equivalent organisation and provided to the committee, alongside the national interest analysis, which is part of the normal process, to improve the assessment of agreements. It's very important that we have this independent economic analysis to ensure that trade deals work for all Australians.

I am pleased we were able to include in the body of the report some language around the importance of consultation mechanisms and, going into the future, how they can be improved so that our agreements are better, particularly looking at them from the perspective of being a more inclusive civil society with the union movement as well as the business community. That has been achieved with some of the language in the report.

In conclusion, I echo what the member for Wentworth raised in respect of the Hong Kong free trade agreement. There is a valid argument that the ratification of this agreement with Hong Kong does in and of itself focus attention on the unique status of Hong Kong and its one-country two-systems framework. The characteristics that make Hong Kong unique under this system are recognised in a sense by the very act of engaging with them and signing a separate agreement with the autonomous territory. It emphasises the fact that they have a separate system to an extent with the rule of law, freedom of expression and the limited democratic rights that are afforded to the citizens of Hong Kong under the basic law and that are held dear by the people of Hong Kong and those outside of Hong Kong. They are in line with many democratic values of many other countries, such as our own.

Given the ongoing political instability and civil disturbance in Hong Kong, any risk to those unique elements of the Hong Kong system is very concerning to us. As long as the signing and ratification of the agreement with Hong Kong strengthens those unique elements it is obviously worthwhile that we support this. I do note for the record that any diminution of those unique elements in the Hong Kong system would be very concerning and probably lead us to have another look or reconsider the time line for ratification. It is important that that is noted. I have in public and in the media spoken up for the right to peacefully protest in Hong Kong. If we as democratic leaders and members of parliament in a democracy don't actually support them and their right to peacefully protest, who will?

It's important that the report also contained some language with respect to the ongoing civil disturbances and political instability, and urged for a peaceful resolution of these issues and for the preservation of that unique status that is enjoyed by the people of Hong Kong. I'm pleased to have worked with the chair to make sure that that kind of language was also included.

In conclusion, I wish to thank all of the groups, the associations, the organisations and the individuals that participated in the committee's inquiry by putting in written submissions, attending public hearings and answering our many, many questions. I thank them for all the hard work they put in and for their input. I also thank all the members of the committee. It is, as I mentioned, important that trade agreement processes should be more open and consultative, and we hope that will continue into the future. JSCOT is one of the few avenues for ordinary people—individuals, as well as other stakeholders—to provide input and feedback, so their input into the JSCOT report is of critical importance. I want to give my personal thanks to all of the different civil society groups, the union movement, business groups, researchers, academics and individual citizens who took the time and made the effort to speak to the committee during this process.

Dave Sharma (Wentworth, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for the next day of sitting.