Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Innovation, Industry, Science and Research) Share this | Hansard source

For Australia, being a trade-dependent nation, it is very important that we understand just how significant the trading relationships that we have are to the prosperity of this nation. It's said that one in five Australian jobs are linked to trade and it's said that this is a method by which we can ensure we have better paid jobs. But trade, like any other aspect of the economy, is not about just letting the market rip, nor does it guarantee prosperity in itself. The truth is that there really is no such thing as free trade, because the market sets the rules. Therefore, it's important that this parliament has a view about what those rules are and how they apply. It is important, when we negotiate trade agreements, to ensure that the rules that are put in place do ensure fairness.

The A Fair Go for Australians in Trade Bill 2018 that the Labor Party has brought forward is aimed at ensuring that Australians are not disadvantaged by trade agreements with other nations, that we do ensure we are able to maintain access to engagement in the international trading system without losing sovereignty for this nation and undermining the living conditions of our own people. It is important that we are able to contrast the situation of what should be with what actually happens now, because trade agreements are negotiated in secret and have been done so for years. We know that they have been generally put in the context where economic modelling is presented prior to a trade agreement being entered into which is not delivered in practice.

There have been many occasions that modelling has been put to us. I'm going to quote from those who study these things a position put forward by Martin Feil, who studied the failure of free market economics, outlined in a book that is well worth reading. He highlights the point, which he has argued in various journals around the country, that we have known for some time that the agreements that have been modelled have always been modelled in such a way as to suggest the returns to Australia are very optimistic. He said:

In every agreement the results have been dismal. A background note by the Commonwealth Parliamentary Library (December 8, 2008) provides data for each agreement up until 2006/07 and states: ''Research suggests that FTAs offer little in the way of trade liberalisation and a shift to more liberal trade policies particularly in agricultural trade. Rather FTAs are used more often to promote other non-economic, diplomatic and regional interests.

It is a point I made when we were discussing other trade matters recently. When you look at the detail of what's actually being proposed, the benefits, one presumes, are in the strategic area rather than in the economic area, because the modelling, even in recent times, has been able to demonstrate that the case is not to be made in terms of direct benefit. Of course, we see this point in regard to the United States free trade agreement. At the time that the US free trade agreement was negotiated, which was established on 1 January 2005, it was promoted by the Deputy Prime Minister and trade minister, Mark Vaile. It was said to be the most significant free trade agreement in Australia's history. He said the FTAs were worth billions of dollars and would create thousands of jobs. On that occasion, a study was commissioned by the Centre for International Economics, a private economic consultancy. It was undertaken by way of commission for the Department of Foreign Affairs and Trade. The study that was promoted widely in Australia said:

… over the first 20 years … the present values of the benefits to the Australian economy exceeds $57 billion, over 30,000 jobs will be created and real wages will rise, and all states and territories will be better off.

Of course, when we look at the economic statistics, we find that that economic modelling was very optimistic.

Because I don't just read the critics of free market economics, I might also take this opportunity to quote the Productivity Commission. The Productivity Commission, in their recent review, which was published just this year with regard to the 2016-17 trade review, cited their earlier assessments. They've made this point on other occasions. They said:

… the economic benefits of bilateral trade agreements have generally been oversold and the risks have been understated. The Commission recommended that agreements should be reached only when they provide outcomes that are in Australia’s interest and they are the most cost-effective way of achieving those outcomes. The Commission further recommended that there should be more transparent and rigorous assessments of such agreements. This should encompass two elements. To ensure agreements are in the Australia’s interest, before negotiations commence, modelling should include realistic—

I underline that point, 'realistic'—

scenarios and be overseen by an independent body. After negotiations have concluded and prior to signing of the agreement, a full and public assessment should be undertaken covering all of the actual negotiated provisions. As with all areas of policy, trade agreements need to be considered on a case-by-case basis, and the balance of benefits and costs for future agreements may be different, for example because they cover a smaller share of Australian trade.

Most of these agreements, we concede, have been negotiated by conservative governments and have not been put in place to actually protect Australia's national interest, particularly when it comes to Australia's workers' interests, because they've undermined fairness in the Australian workplaces. They have used labour market arrangements in such a way as to undermine the capacity of Australian workers to actually defend their living conditions.

Labor acknowledges that, while foreign workers do play an important part in our economic development, there's the fundamental principle of fairness to ensure that Australian workers ought to be offered work first when it comes to ensuring the opportunities for prosperity in this nation. Foreign workers shouldn't be brought into Australia to undermine wages and conditions for Australian workers. The temporary migration system is intended to supplement skills and to make up for labour market shortages in the country, not to undermine the wages and conditions of Australian working people. They shouldn't be used to remove the ability of Australians to actually get jobs. That process couldn't be more simple. What we've seen, however, under these trade agreements is that capacity, that basic right, being undermined. Several of the agreements the current government has seen have been waved through. The exceptions in the trade agreements undermine the fundamental principles of social democracy in this country. I think this is why it's so important that we stand firm on those questions and why a Labor government will move to preserve that fundamental democratic right.

The provision of investor-state dispute settlements is another area. This bill seeks to prohibit future Australian governments from signing agreements that include these ISDS clauses, the provision to allow for foreign companies to sue national governments. The provisions undermine our national sovereignty by limiting the ability of Australian governments to act in the national interest. This argument is often heard from those who defend these arrangements embedded in a number of agreements. The TPP, for instance, is a case where the capacity to sue the Australian government—for protection of Australian health matters, for instance. It's claimed these agreements haven't worked, because the tobacco companies have not been successful to date. I don't hold to that view, because we just don't know what the circumstances will be in the future. We shouldn't provide opportunities for people to find other jurisdictions to undermine our sovereignty. Defending the interests of Australian people, for instance, on health matters has been an area of interest. I don't quote just critics of the free market. The Productivity Commission has made this point:

… seek to avoid accepting provisions in trade agreements that confer additional substantive or procedural rights on foreign investors over and above those already provided by the Australian legal system.

That's, clearly, what this bill seeks to do.

The bill also prohibits the signing of agreements that do not protect Australians' skills, in regard to future matters. It will also prohibit governments signing agreements that would undermine arrangements under the PBS. It will protect our universal health care. We could extend that to protecting such breakthrough provisions of social contract in this country as Medicare, which is a world-leading initiative. It is constantly under attack by international interests that are seeking to undermine the capacity for a universal healthcare program, such as Medicare has provided.

We also have measures such as the antidumping regime, which is consistent with our international trade obligations. But there are those who would seek to undermine this parliament's capacity to ensure Australian industry is not subject to unfair and unreasonable anticompetitive actions by foreign governments and foreign corporations and cartels seeking to attack Australian industry. We've seen so many circumstances where the Australian Anti-Dumping Commission has been obliged to act. We've seen it in steel and aluminium. We've seen it in glass. We've seen actions taken on tomatoes and a range of other products, where Australian economic interests have been directly under assault as a result of quite unfair and unreasonable actions taken in the international trading system. This should be prevented, and any government that was genuinely interested in preserving our domestic interest would ensure that it was. It is the entire global trading system. We see President Trump prosecuting his trade war with China. This has made circumstances even more volatile. The US has sought to protect its domestic interest at the expense of so many other countries, and even at the expense of Australia, with the question of trade diversion now becoming a real issue for the Anti-Dumping Commission, as we saw at the last Senate estimates.

There are issues around unsafe products. This bill prohibits governments from signing agreements which restrict the powers of the Australian government to regulate public safety with regard to the banning of importation of unsafe products, such as the flammable aluminium cladding which the Australian Labor Party has already indicated we will ban from being imported to the country following the Senate inquiry that we pursued through this parliament. It demonstrated examples of non-conforming building products. Senator Ketter chaired the inquiry, which made the point about widespread corruption in the international trading system—systematic fraud and cases where people were transferring documentation in such a way which left it wide open to abuse. And trade restrictions were not being enforced through the international trading system at the time. This left no choice for the Australian government to demonstrate—as it did with asbestos—its commitment to protect the Australian people. And, of course, the provisions contained in this bill would allow the Australian government to maintain those pressures.

I have already indicated that on labour rights we will emphasise how important it is that with all trade agreements—no matter what they're about or whether they're bilateral, regional or multilateral—the Australian Commonwealth government has an obligation to protect the human rights of Australians when it comes to the issue of defending their economic rights in terms of their rights at work.

There is the fundamental issue of ending the regime of secrecy, whereby governments negotiate these agreements in secret and without the effective engagement of the parliament in the process of agreement setting. Australian companies, the unions, NGOs, community organisations and the wider public are effectively kept in the dark. What we've seen is agreement after agreement being entered into in such a way as we're not given any real choice about ratification. Bills are put to the parliament and we really only have the choice of altering the tariff regime, not the substantive issues in the agreement itself. That's what we complained about in the previous legislation on this matter.

We make the point that it's critical in any government arrangements that we have a national interest assessment and that it be kept separate from proper and independent modelling so that the people who negotiate these agreements don't actually get to mark their own homework. We're getting the same people to assess what they've done; it's like having the auditors in your pocket when we put together any other arrangements in any other part of the economy. It's just a ludicrous proposition, what's actually going on at the moment.

With an election looming, what we do know is that these are issues we need to deal with. The Joint Standing Committee on Treaties needs to be given a proper engagement. We've made it very clear that we need to ensure that the parliament has a proper role to play in the setting of agreements of this type. This bill hasn't been conjured up out of thin air; the Labor Party and Jason Clare, the shadow minister for trade, have ensured that there has been widespread consultation on these matters. We've brought it to the parliament in response to real concerns in the community about the way these trade agreements are being conducted. The government benches understand how widespread the concerns are on these matters—that the existing trade agreement arrangements don't ensure fairness and don't ensure that we get a good deal for Australia. They're presented, effectively, as a fait accompli and they don't have proper accountability mechanisms built into them. So to ensure that we have a proposition where we can protect the public and the national interest, we have engaged widely with the unions—both at the ACTU level and individually—with the Australian Chamber of Commerce and Industry; with the National Farmers' Federation; with the Australian Fair Trade and Investment Network; and with the Export Council of Australia.

This bill, of course, is only the beginning of that work, and a lot more needs to be done to ensure transparency and fairness in the negotiation of trade agreements. Labor will make announcements on further issues that we will take forward. These measures are about protecting Australian jobs, genuinely protecting the national interest and making sure that unfair trade agreements that have been negotiated by the coalition are corrected. It will promote the defence of Australian industry and Australian workers, and we'll make sure that this is done in a way that is consistent with our international treaty obligations. We'll make sure fairness is put at the centre of these arrangements. We will not rely on the invisible hand, some magical force, to ensure that the national interest is protected. When it comes down to it, it is about what we do in this parliament. It is about what we, as the government of Australia, do to ensure the Australian people get a fair go in the international trading system. This bill will allow the beginning of that work to be undertaken. I trust that this chamber is able to give it the consideration it deserves and vote accordingly.