Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Hansard source

I'm very pleased to speak in support of the Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018 and the Customs Tariff Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Bill 2018. The key theme of these bills is to promote an open Pacific economic integration and to advance development in the Pacific. PACER Plus is a unique framework and an important part of our trade agenda in the region. The Pacific Agreement on Closer Economic Relations, PACER Plus, is a unique framework because it is both a development centred agreement plus a regional free trade agreement. The agreement includes a substantial development assistance package of $7.7 million to help countries to prepare to ratify the agreement, and a further $25 million in the implementation assistance after entry into force.

But I cannot go beyond making some observations in relation to what Senator Hanson-Young just said. It demonstrates, yet again, the Greens total lack of understanding and a patronising attitude in relation to our neighbours. On the issue of women, clearly, Senator Hanson-Young, you are not aware that the negotiations for PACER Plus commenced in 2009 and they concluded in Brisbane in April 2017. They have been worked through assiduously with our Pacific island neighbours. PACER Plus opened for signature in June 2017, and, to date, has been signed by 11 countries: Australia, the Cook Islands, Kiribati, Nauru, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. I have to say that your patronising comments in relation to these countries demonstrate, yet again, your total lack of understanding of what is happening in our neighbourhood.

On the issue of women, we have had a very successful program of Pacific women shaping Pacific development. It's been a $320 million project over 10 years and has brought considerable benefits to our Pacific island sisters. On the issue of climate change, as part of the $1 billion commitment that Australia gave as part of its commitment to the Paris agreement, $300 million over four years is for building Pacific resilience and addressing climate issues in the Pacific. That's in addition to the $200 million that went to the Green Climate Fund. So, Senator Hanson-Young, before you come in here and pontificate on matters that you know absolutely nothing about, why don't you go and check your facts before you are critical about these issues?

Let me get back to PACER Plus. PACER Plus will help drive economic prosperity and raise living standards in our region. Our foreign policy white paper points out that being open to trade and investment creates wealth and supports higher living standards. A strong rules based liberalised international trading system is in the interests of all countries, including providing opportunities for developing countries to engage more in international trade. Perhaps those opposite haven't looked, but some Pacific island countries are in the process of moving towards graduation in relation to their economic status. It is important that Australia be amongst the first countries to ratify the agreement, as early ratification would signal our clear commitment not just to PACER Plus but to this important rules based trade in the Indo-Pacific region.

PACER Plus will deliver modest economic and commercial benefits to Australia, and I'm sure that the minister will elaborate on some of these benefits to Australia—modest though they are, commensurate with the size of participating Pacific island economies. In particular Australian producers of goods, suppliers of services and investors will benefit from more liberal and secure market access in the Pacific. By promoting growth and development, and strengthening reform processes in the Pacific, PACER Plus will expand commercial opportunities for Australian countries in the region to trade with their Pacific neighbours. Pacific island countries will have eliminated tariffs on the vast majority, 91.5 per cent, of their tariff lines, covering the bulk, 88.5 per cent, of Australia's exports. Based on 2016 data this represents a total value of $360 million when PACER Plus is fully implemented.

Australia's largest services exports to the Pacific are tourism and travel services, transport services and financial services, including insurance. Our Pacific island country signatories have made commitments in each of these sectors, many for the first time. Australian service suppliers will benefit for the first time from commitments from non-WTO members such as the Cook Islands, Kiribati, Nauru, Niue and Tuvalu. The 'most favoured nation' provisions in the agreement will help safeguard access for Australian producers of goods, suppliers of services and investors in the event that Pacific island countries apply more favourable treatment for the producers, suppliers and investors of nonparties, such as under free trade agreements.

Our foreign policy white paper identified the following:

Economic integration within the region and with Australia and New Zealand is vital to the economic prospects of the Pacific. Growth is constrained for most countries because of a combination of remoteness from markets, limited land and resource bases, the dispersal of people over many islands and environmental fragility.

The underlying impetus for negotiating PACER Plus and its goals of regional economic integration align with the narrative in our foreign policy white paper. The formation of an interconnected Pacific market which includes Australia and New Zealand will enable Pacific island countries to create a larger market not only for its consumers but also for its producers.

PACER Plus will not only cover trade in goods but also extend to trade in services, in investment, in labour mobility and in development assistance. For many countries in our region this will be the first WTO-compliant free trade agreement. When in force it will stand as a valuable example of the region's collective effort to work together towards greater economic integration. By establishing a common framework through which to transact each element of the participating country's economic relationships, PACER Plus supports the long-term economic development of Pacific island countries through closer integration with Australia and New Zealand, with each other and with the global economy. We recognise that it is important that, for trade to thrive, trade liberalisation has to be accompanied by a supportive policy environment, and that includes sound economic management, reforms and effective service delivery. We have committed to assist our Pacific island neighbours with transition, and we've taken careful consideration of issues like implementation time lines.

The region continues to experience significant economic, social and environmental challenges, and, having been minister from February 2016 until recently, I saw this firsthand. I had the opportunity to visit many parts of the Pacific. Indeed, I made over 35 trips to the Pacific during this time, and I saw for myself that distance and weak infrastructure make international trade expensive, but small domestic markets and narrow production bases mean that countries rely on it for income and consumption. And whilst the agreement provides a regional framework for trade and economic integration, dedicated assistance to each of these countries will be vital to address the barriers that those countries are facing and, of course, to unlock the potential of the Pacific and its ability to partake in the benefits.

An important component of this is the readiness package. We and New Zealand have provided assistance for readiness activities. To help signatories, we are supporting processes like legislative drafting to assist the signatories to review and update their relevant national laws and regulation as well as customs modernisation, harmonisation, implementation of up-to-date tariff codes and transposition of schedules so that each signatory will be able to implement the latest version of the internationally recognised system known as the Harmonized Commodity Description and Coding System. There will be training on notification requirements, including helping governments and private sectors in those Pacific island countries to meet the obligations around transparency. There will be funding for public outreach and stakeholder engagement, and there will also be revenue planning and mitigation to help signatories manage any impact on government revenues associated with tariff reductions. There's also a PACER Plus implementation package. Upon entry into force, Australia and New Zealand will provide a further funding package of $19 million and NZ$7 million respectively over five years, and this will focus on rules of origin and the implementation of those tariff commitments; customs; sanitary and phytosanitary measures; technical regulations, standards and conformity assessment; trade in services; and investment.

One of the key advantages of PACER Plus—and I have had many conversations with different Pacific island country stakeholders, ministers and the private sector—is that, in short, if Pacific island countries get their biosecurity systems up to a level at which they can export to Australia and New Zealand, then they can export to any other country around the world. Therefore, this is a very, very good thing for the Pacific. This is one of the key features that they have been asking us for, and that's why PACER Plus is so important.

One of the other components of development assistance, particularly in the Pacific, has been our Aid for Trade program. As part of PACER Plus, Australia remains committed to our Aid for Trade funding target of 20 per cent of our overseas development assistance budget in the Pacific. This target, of course, will complement the party's own trade related initiatives as Pacific island countries seek to increase growth, generate jobs and increase living standards for their people. Let me share some examples with the Senate of how this is being done. It's being done through agriculture export development. The Pacific Horticultural and Agricultural Market Access Program, PHAMA, helps Pacific exporters meet quarantine standards and other market access requirements of trading partners. It's being done through trade facilitation, export promotion and investment. We have increased funding to the Oceania Customs Organisation to help strengthen Pacific customs administrations, and we will continue our longstanding support for Pacific Trade Invest which provides high-quality export facilitation, investment and tourism promotion services across the region.

A separate non-binding arrangement on labour mobility has also been signed by Australia, New Zealand and Pacific island signatories to PACER Plus. Our new Pacific labour scheme will allow workers from the Pacific to take up non-seasonal low-skilled and semiskilled work in rural and regional Australia in growth sectors such as tourism and hospitality, disability and aged care, and non-seasonal agriculture. Why? Because it's about capacity building. It's about developing and affording opportunities to our Pacific island neighbours and people there to develop their skills, to come to Australia, to work in Australia and then to take those skills back into the Pacific, which is vitally important for their own economic development.

This, of course, is in parallel with our Seasonal Worker Program. Our Seasonal Worker Program will be streamlined to give more Australian employers access to a reliable, seasonal workforce drawn from the Pacific and Timor-Leste. We know how successful the Seasonal Worker Program has been for our Pacific island neighbours. Since its inception, about 12,000 or 13,000 Pacific island workers have come to Australia, and they often take back to their countries net gains of $5,000 or $6,000, which has enabled families to send their children to school, buy their own homes and do those things that are very important: to pay for their education, to set up businesses, and to build houses and community facilities. Of course, we will continue to work on all the outstanding partners to the agreement, because we consider that the benefits for Pacific economies outweigh any potential costs. I know that those discussions are ongoing, and I'm sure the minister will elaborate on how those are progressing.

Whilst PACER Plus will reduce government tariff revenue, it includes lengthy implementation schedules. The first tariff reductions are not required until 10 years after the agreement enters into force, and they are then phased in over the following 25 years. This means that all of the tariff reductions will not be fully implemented until 2053 at the earliest. That well and truly will enable Pacific island countries to take the implementation of this agreement at their own pace and implement it fully within their own economic systems.

The agreement underscores the role of open trade and investment in enabling economic development and rising living standards across our region. The agreement will cover an additional 1.5 million people who are not presently captured under Australia's existing FTAs. Whilst the commercial value of the trade with Pacific island countries is modest, this agreement will lay the foundations for its future growth. In 2015, Australia's goods and services two-way trade with participating Pacific countries totalled $1.2 billion of our total trade.

As I have said, PACER Plus is an unique agreement, because it is both a trade and a development agreement. It has the potential to shape and reshape the economic fundamentals of the Pacific region by creating new opportunities for trade and investment in our neighbourhood. Overall, we will see simplification and enhancing of regional trade, and also, of course, we will help Pacific island countries grow their economies by accessing international markets. It will facilitate greater integration of Pacific island economies into the global rules-based trading system and, of course, reshape the economic fundamentals of the Pacific region, creating new opportunities for trade and investment that will drive economic growth and, as I have said, raise living standards. It will also help Pacific island countries modernise their economies. For example, we will be able to assist Pacific island countries to modernise their customs and tax systems in preparation for implementation of PACER Plus. Our assistance will help build capacity in trade promotion, in investment facilitation, in biosecurity, and in micro, small and medium enterprises. The region has been slow to implement structural reform, and more needs to be done to integrate business environments and promote intraregional trade and investment. This is a great opportunity to promote reform, and it will provide an important impetus for change.

PACER Plus is also designed to remain open to the participation of nonparties, including Fiji and PNG. The agreement will be beneficial for all Pacific island countries, including Fiji and Papua New Guinea, if and when they decide to become parties. And I know that those discussions are ongoing. I, myself, was part of those discussions as minister. The Joint Standing Committee on Treaties noted that the absence of Fiji and PNG from PACER Plus may impact the scope of PACER Plus, but it also noted that, due to the long time frame over which PACER Plus will be implemented, there is sufficient opportunity for these countries to join the agreement if satisfactory conditions can be negotiated.

French Polynesia and New Caledonia, having now become full members of the Pacific Islands Forum, can apply to accede to PACER Plus, and perhaps the minister can also advise us as to how those negotiations are going. As with other parties, participation would require them to conclude negotiations on their market access schedules, and we know that those discussions have been had with countries around their potential involvement. As part of the readiness package, parties will be supported in their preparation to initially implement and ratify the agreement to respond to the needs assessment undertaken by the independent Office of the Chief Trade Adviser. Australia, as I have indicated, and New Zealand are assisting with those readiness activities. (Time expired)