Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Hansard source

I am very pleased to rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, which amend the Customs Act 1901 to implement elements of Australia's obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership 11, the CPTPP. I rise to speak noting that my colleague Senator Reynolds, who handles customs matters, will rightly conclude the debate. I also rise following the contribution by Senator Rice. Senator Rice could have done well to have (a) read the legislation before, (b) looked more closely at the terms of the TPP-11, (c) looked at the history of the benefits that have flowed from more open trade and access arrangements around the world or (d) listened to the opinions of Australia's farmers, businesses and others. But she, of course, is not alone in terms of the types of errant and incorrect contributions we've heard from the crossbench in the debate.

What I would like to do today is speak to the two bills in front of us but also, more broadly, the benefits of the TPP-11. The TPP-11 is one of the most comprehensive trade deals ever concluded, and, in doing so, it will eliminate more than 98 per cent of tariffs in a trade zone spanning parts of the Americas and Asia, with a combined GDP worth $13.8 trillion. Australians farmers, manufacturers and services exporters will benefit from new market access in terms of opportunities and economies with nearly 500 million consumers. It will provide better access for farm exporters, including beef and sheepmeat producers, dairy producers, cane growers and sugars millers as well as cereal and grains exporters. There will be new opportunities for our rice, cotton and wool growers, horticultural producers and wine exporters. That's why we have seen groups such as GrainGrowers, the Export Council of Australia, the Red Meat Advisory Council, the Winemakers' Federation of Australia and the National Farmers Federation all come out in support of the timely passage of these bills this week. They can see the benefits of Australia's involvement in this landmark agreement. They are the voices who, if those on the crossbench don't wish to listen to the government, the crossbench ought to be listening to.

The crossbench should also to be looking at modelling undertaken by economists from Brandeis International Business School and Johns Hopkins University, who quantified the benefits and showed that Australia is forecast to see some $15.6 billion in net annual benefit to our national income by 2030—annual benefits! This follows earlier modelling by the Peterson Institute for International Economics, which found the TPP-11 will boost Australia's national income by 0.5 and boost exports by four per cent. These gains are real gains; they are gains on top of what is already an incredibly strong economy. And they're boosts to our nation's economy and our income, which means there will be more jobs, higher wages and greater investment into further areas of business and jobs growth.

Let me give an example of how the TPP-11 will give our farm exporters an advantage over some of our toughest competitors. Within two years, Australian beef exporters under the TPP-11 will face tariffs 13 percentage points lower than the United States' competitors into the multibillion dollar Japanese market. That's a tariff advantage that will continue to widen over subsequent years. Our manufacturers also benefit from the elimination of tariffs on industrial goods. Our services exporters will have access to liberalise and improve regulatory regimes for investment, notably in mining and resources, telecommunications, and financial services.

TPP-11 is a comprehensive and truly next-generation trade agreement. For the first time in a trade agreement, TPP-11 countries will guarantee the free flow of data across borders, for service suppliers and investors, as part of their business activity. This movement of information or data flow is relevant to all kinds of Australian businesses—from hotels relying on an international airline reservation system to a telecommunications company providing data management services to businesses across a number of different TPP-11 markets. It's important to note in that context, though, that TPP-11 governments retain the ability to maintain and amend regulations related to data flows but have undertaken to do so in a way that does not create barriers to trade. This is the type of sensible balance that we seek to create in a world of free flowing of data to make sure that the protections that governments rightly put in place to protect the privacy of individuals or businesses are safe, strong and sound but that, equally, they don't inhibit the operation of businesses across borders or indeed the business opportunities created by such data flow.

TPP-11 also creates Australia's first free trade agreement with Canada and Mexico, giving Australian exporters preferential access to two of the world's top 20 economies for the first time. In 2016-17 nearly one-quarter of Australia's total exports, worth nearly $92 billion in 2017 terms, went to TPP-11 countries. The forthcoming entry into force of the TPP-11, we hope, will be a significant moment for open markets, free trade and the rules based international system. This is not just significant in terms of the opportunities that it provides in direct terms to Australia's farmers and businesses but also significant at this time, when the value of our longstanding international rules based approach to trade is being questioned. We see in the headlines, on a regular basis now, talk of trade wars and trade conflict. We see circumstances in which some countries appear to be rolling back the opportunities for goods to be sold to each other at lowest cost and the economic benefits that flow from that.

Our approach here in Australia has had—and in the passage of this legislation continues to have—bipartisan support. The TPP-11 is another demonstration of Australia supporting open, liberalised markets in the Asia-Pacific and around the world more generally. It's another example of Australia's support for rules based international trade that provides businesses and consumers with certainty and provides an environment in which we can see strong economic growth as we have seen to date.

It's important to note that the achievement of the final TPP-11 deal was far from guaranteed. When the United States withdrew from the original TPP in early 2017, the prospects of the groundbreaking deal being realised were far from certain. For Australia and its TPP partners, it was a test of resolve and judgement. There were those, including some here in Australia, who called loudly for everybody to give up. There was certainly no guarantee of success. Had we retreated, as some had called for, there would have been no new historic access to the Canadian market for our grain, refined sugar and beef exporters and no new access to the Mexican markers for our pork, wheat, sugar, barley and horticultural producers, or for our education service providers. There would have been no improved access to the Japanese market for our beef, wheat, barley and dairy exporters, and no improved access for our wine producers in the Vietnamese, Canadian, Mexican and Malaysian markets.

Thankfully, the Australian government—our Liberal-Nationals government—and our trading partners, led in particular by Japan, pressed ahead. I pay particular tribute to former Prime Minister Malcolm Turnbull and former trade minister Steven Ciobo for their work in ensuring that Australia remained resolute in working with those partners and in showing leadership, with Japan, to get to this outcome. As a consequence, our global trading system will be stronger with the coming into force of TPP-11 than would have been the case in the environment of uncertainty elsewhere in the world.

We are creating a beacon for nations who want to work within a rules based framework that is complementary to the global architecture provided by the World Trade Organization. We want the TPP-11 to grow in membership and we welcome other nations who wish to engage in discussions to join this trade agreement—nations who come to the table with the same principles of ambition and the same aspiration for a comprehensive agreement, which the TPP-11 is. We don't want the TPP-11 to be an exclusive, inward-looking bloc. We welcome the interest in TPP-11 shown by nations within and outside the Asia-Pacific. Given the significant contribution the TPP-11 will make to our trading future, it is important that Australia and its TPP partners reap the benefits of the deal as soon as possible.

The TPP-11 will enter into force 60 days after the first six member countries complete all necessary ratification procedures. To date, three nations—Mexico, Japan and Singapore—have ratified the agreement, and a number of other countries, including New Zealand, Peru and Canada, have indicated that they will ratify in coming months. The passage of this legislation positions us to be amongst the first to benefit from this trade agreement, and our government will be progressing this agreement through to ratification as quickly as possible. If Australia and five other countries can complete ratification before the end of October, then the TPP-11 will enter into force before 31 December this year. There's a particular benefit to that. It means that there will be two opportunities for tariff reduction in quick succession, the first occurring on entry into force and the second occurring, then, on 1 January 2019.

But, just as there are significant opportunities stemming from the ratification of this agreement, there are risks in the event the agreement cannot be ratified by Australia quickly enough. If TPP-11 were to enter into force this year without Australia, then our exporters would be at a significant competitive disadvantage. For example, New Zealand and Canada would gain superior access to the Japanese beef and dairy markets, better access to the Japanese cheese market and improved access to wine markets in Mexico. Now is not the time to stall or delay this landmark agreement. We would be doing Australian farmers and businesses a serious disservice if we did not lock in the benefits of this trade deal and did not ensure that they got the double benefit of ratification this year, and we would be denying the nation the estimated $15.6 billion in net annual benefits to national income by 2030.

While there are real upsides to ratifying the TPP-11, there are potentially even greater downsides to it not being ratified quickly enough, as competitors would get that advantage over our farmers and businesses in those key markets.

The TPP-11 offers significant advantage for our exporters, but these would become risks if our efforts were to be stalled in this place by naive amendments that would potentially block ratification. The risks are not limited just to agriculture. Australian businesses operating in a regional supply chain that includes TPP-11 countries will see their competitors gain a competitive advantage that comes with the early elimination of tariffs. Those who want to play an isolationist card by delaying, blocking or unpicking this agreement should listen to the farming and business representatives who are, instead, urging its swift ratification. Proposals for sunset clauses or delays would have placed the Australian government at a point of noncompliance with the TPP-11 and would unnecessarily delay the entry into force for Australia, with all of the detrimental consequences that I've just outlined. While some may put this forward as a favourable proposition, I doubt very much they would have the same attitude if another state tried to impose the same change of terms upon us. No state can faithfully claim to be in compliance with an international treaty if the implementing legislation requires further negotiations which seek to alter the terms of those agreements.

I want to quickly turn to a couple of the louder complaints made about the TPP-11—indeed, about trade agreements generally. Contrary to some claims here today, the investor-state dispute settlement mechanism in the TPP-11 will provide valuable protection to Australian investors overseas and will still safeguard our government or future governments' ability to regulate in the public interest and to pursue legitimate welfare objectives. Nothing in the TPP-11 prevents the government from regulating or reregulating services. There are provisions in the agreement that give the government flexibility in relation to the way in which it may regulate or reregulate public services, including exceptions for Australia to undertake the regulation of services in relation to health, education or environmental matters, in accordance with our own national interests. When you listen to the Greens speak, or to the Left speak generally, in relation to ISDS provisions, they are both misleading and inconsistent in their arguments. Misleading, because, as was exposed in relation to Senator Rice's contribution just before, these provisions have never been used successfully against Australia, not in the more than 30 years of history of operation across a range of different investment agreements that Australia has entered into. Their practical effect is far more to provide certainty for Australian investors operating in overseas markets than it necessarily is to provide certainty for investors in Australia, because we already have such a proven, robust and reliable legal system in place.

The Greens' arguments are inconsistent in the extreme. In every other sphere of public policy, it seems as if the Greens and the left argue for the internationalisation of courts and tribunals, for the adherence to international law and for the referral of powers to international treaties. The only entities, it seems, to whom the Greens wish to deny the right to test their case before any type of international fora are businesses, those evil businesses that the Greens demonise at every possible opportunity, notwithstanding that it is those businesses that create jobs for Australians and for others around the world. It is those businesses that create income, those businesses that generate the wealth that our taxes are collected from and our services are delivered through, and those businesses that provide the opportunities that have in many ways transformed our world, a point that I will return to shortly.

In terms of matters of the labour market, the government has been very clear that Australia did not make any commitments in the TPP-11 that would require any changes to the skills, assessment, licensing or registration processes for workers from overseas who are seeking to work in Australia. Many of the matters raised in this debate today are in domestic settings, separate to the pieces of legislation before us, which, as I said at the outset, are customs bills.

I do, however, want to acknowledge—across this legislation and all of the TPP negotiations—the constructive conversations that I have had with the shadow minister for trade and the shadow minister for foreign affairs respectively. I welcome the Labor Party's continuation of the long-held practice where we work constructively together, as parties of government, on foreign policy and trade policy. This constructive approach ensures that the risks of delay, which I spoke about before, should not be realised.

I recognise that for Labor this may not be the agreement that they ultimately would have signed. I recognise that if they were to be successful at the next election—and I certainly hope that is not the case—they may look to amending aspects of the agreement with TPP partners down the track. That would be a matter for a future government and those nations. Again, I do acknowledge that constructive approach that we have had to date. However, I would urge the Labor Party to maintain that approach on future trade discussions as well, to not pursue policies that would make it harder to enter into trade agreements and to disavow and step away from the extreme positions created by those of the left. I ask the Labor Party to think long and hard about that and to reconsider some of the positions they are increasingly taking.

Ultimately, open markets provide benefits. Trade is not just the shipping of widgets from one nation to another; trade opens up the flow of information, culture and knowledge. It provides benefits that are widely on display in our country and many others today. We ought to celebrate the fact that we live in a world with a vastly greater population than any could have conceived 100 years ago and yet the proportion of those in circumstances of extreme poverty or malnutrition is so much lower than it was 100-plus years ago. That is, of course, a testament to technology, health and a range of services, many of which are helped by growth in economies and by the exchange of knowledge and information that comes from open trading arrangements.

The deal that was signed on 8 March 2018 is one that fundamentally serves Australia's national interests, will create new opportunities and greater certainty for our businesses and will encourage job-creating foreign investment. It will make Australian exports more competitive so that our farmers can sell more produce, our professionals can provide more services and our manufacturers can make and sell more goods. Our involvement in the negotiation of this deal means that Australia played a key role in setting 21st century rules for commerce across the world's fastest growing region. This will help us and enable us to tackle new trade and investment barriers as they arise, helping our businesses to weather the increasingly challenging global trading environment.

These bills, as I said at the outset, will see the elimination of 98 per cent of tariffs from TPP-11 countries in a regional free trade zone that already accounts for over one-fifth of Australia's total two-way trade. They will effect a cost-saving impact on imported goods for Australian households and businesses and deliver material gains for our exporters. These bills and the TPP agreement have been through thorough parliamentary proceedings to date. I urge the Senate to support the passage of this legislation unamended. I want Australia to remain a leader among trading nations, one who is not afraid to show our trading partners through concrete actions that we support the principle that open and free trade creates circumstances for businesses, economies, national income and wealth to grow and, through that, for the prosperity of people to grow in respect of their incomes and the services their governments are able to provide them. I commend the bills to the Senate.