David Fawcett (SA, Liberal Party) Share this | Hansard source

I present the 181st report of the Joint Standing Committee on Treaties, Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I move:

That the Senate take note of the report.

Today I rise to make a statement concerning that report, which deals with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or TPP-11.

The TPP-11 is the revived Trans-Pacific Partnership, and has been signed by all the original TPP parties except for the United States.

The active provisions of the TPP-11 are the same as those in the TPP, with the exception of a handful of suspensions.

Even without the United States, the TPP-11 is one of the most significant international trade agreements since the completion of the World Trade Organization Uruguay Round 20 years ago.

TPP-11 will provide considerable opportunities to Australian businesses, such as:

While the committee completed an extensive inquiry into the original TPP—and that was contained in report 165—a number of factors warranted an equally extensive inquiry into TPP-11, including:

One of the most interesting insights of the inquiry is that the withdrawal of the United States is actually likely to benefit the Australian economy. This is because US exports to Japan will still be subject to tariffs higher than those that will be applying to Australian exports.

The committee's inquiry benefited from extensive research into the TPP-11 conducted by the inquiry participants.

This has been particularly the case in relation to investor-state dispute settlement, commonly referred to as ISDS, and economic modelling.

The committee was presented with evidence drawn from over 500 examples of ISDS cases.

To date, Australia has been subject to only two ISDS cases.

The improved ISDS provisions in the TPP-11 should prevent foreign investors from bringing ISDS cases against Australia in relation to income, social security, social welfare, public education, public training, health, child care, public utilities, public transport, public housing and the environment.

TPP-11 also signals future improvements in ISDS processes, such as an appellant mechanism, a code of ethics for ISDS arbitrators and the introduction of precedent in ISDS cases.

The improved ISDS provisions in the TPP-11 mean that the Australian public should have confidence that the ISDS will not prevent the Australian government from regulating in the public interest when it is necessary.

The participants in the inquiry engaged in a lengthy debate about the outcomes of economic modelling performed on the TPP and TPP-11.

In summary, the debate about economic modelling was heated but not necessarily very illuminating.

Economic modelling takes a series of assumptions about an economy based on previous evidence and casts that forward to predict outcomes in a limited range of fields.

A consequence of this is that outcomes from different types of modelling cannot necessarily be usefully compared.

In addition, modelling a complex agreement like the TPP-11 environment in a real-world environment imposes necessary limitations on the accuracy of the predictions.

The committee considers that economic modelling is useful as a tool, amongst others, to inform decision-making.

However, the committee believes that there are significant benefits to be had, especially in the public perception of trade agreements, if the Australian government commissions modelling as part of the national interest analysis for future trade agreements.

Because of this, the committee has recommended that the government, as part of the preparation of the national interest analysis, commission economic modelling of future trade agreements.

In relation to TPP provisions suspended in the TPP-11, the committee found that suspensions relating to intellectual property and copyright were widely though not universally supported as beneficial to Australians.

The committee also took evidence that reimposing the suspended provisions would have a significant impact on some sectors of the Australian economy.

The committee therefore recommends that a proposal to reimpose any of the suspended provisions should be considered a treaty amendment, resulting in a further inquiry by the committee.

The tendency towards protectionism in international trade has grown since it was first identified as a threat in the committee's report on the TPP two years ago.

Trade protectionism will have a significant impact on Australia's exports and consequently on employment here in Australia, if it continues to develop.

Against this, the TPP-11 provides an important, positive example of international cooperation promoting rules based trade and investment liberalisation.

Ratification would be an important contribution towards stabilising the trade environment, reinjecting momentum into cooperative trade liberalisation and a rules based approach to global trade.

The committee recommends the ratification of the TPP-11.

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