George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

I merely indicate on behalf of the opposition that the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and the Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 have our support. This is part of a suite of free trade agreements which were initially developed under the previous government. I am pleased to say that the present government, or at least a majority of its members, have at long last accepted the wisdom of free trade agreements. The volume of trade between Australia and Chile is not inconsiderable, particularly in relation to commodities. Chile, as honourable senators will be aware, is the site of one of the world’s largest copper mines, for example, operated by an Australian company, and we look forward to the enhancement of that relationship as a result of these measures.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Although I have not circulated it, I seek leave to have my speech on the second reading incorporated.

Leave granted.

The speech read as follows—

The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and the Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 implement Australia’s obligations under the free trade agreement with Chile (‘the ACFTA’) by providing for preferential or free rates of customs duty for Chilean goods. According to the National Interest Analysis prepared by DFAT, ‘Chile will eliminate tariffs on 91.9 per cent of tariff lines covering 96.9 per cent of trade and Australia will eliminate tariffs on 90.8 per cent of lines covering 97.1 per cent of trade. All remaining tariffs on both sides will be eliminated by year six of the agreement (2015) except for one component of Chile’s sugar tariff’¹. Chile’s tariffs on Australian goods are presently set at a flat 6%. DFAT advises that the remaining tariff on sugar will not affect Australia, as the tariff only operates when the international price for sugar is low and Australia does not export sugar under these circumstances.

Other (non-tariff) obligations arising under the ACFTA do not require legislation, and consequently offer little opportunity for Parliamentary input. This includes the ACFTA’s dispute resolution mechanisms, which may lead to unanticipated interpretations of Australia’s obligations. Given the restrictions treaties place on the permissible range of Government action, the Greens would like to see far greater opportunity for Parliament to determine whom we negotiate treaties with, to what purpose, and whether we wish to ratify the product of those negotiations.

A key concern with this bill for the Greens relates to the export of coal. Coal is one of Australia’s primary exports to Chile, and reduced Chilean tariffs (from 6% to 0%) on Australian coal may mean that exports increase, resulting in more Australian coal contributing to climate change.

Several significant concerns raised in the evidence to JSCOT addressed general criticisms of aspects of the ACFTA and the process for negotiating trade treaties generally, including:

• The Australian Free Trade and Investment Network (AFTI) (and a number of contributors endorsed this view) would like to see ‘comprehensive studies…about the economic, regional, social, cultural, regulatory and environmental impacts that are expected to arise’ before treaty action is taken. JSCOT supported this view and recommended that this information be tabled in Parliament prior to any future trade negotiations. The Government has yet to respond to this report, although I am hopeful that it will agree to this recommendation given that it reflects ALP policy².
• AFTI would like the Parliament to have the power to decide whether trade treaty negotiations are to proceed, under what circumstances, and whether to ratify the treaties that result (in general, not only with respect to the Australia-Chile FTA).
• Both AFTI and the Queensland Premier raised concerns with different aspects of the ACFTA that they consider will limit Australia’s ability to conserve its natural resources.
• The Queensland Government considers that the ACFTA’s provisions regarding expropriation (nationalisation), and compensation for expropriation, ‘provide too much scope for Chilean companies to challenge the Queensland Government’s decisions relating to measures taken to ensure sustainable water and land use and environmental protection.’
• AFTI considers that the restrictions on Governments’ ability to regulate Chilean/Australian investment could prevent them from taking steps to ameliorate their environmental impact. While the ACFTA provides an exception for measures ‘related to the conservation of living or non-living exhaustible natural resources’, provided that they are not unjustifiable or arbitrary, AFTI argues:
• The term unjustifiable is yet to be defined and leaves itself open to broad interpretation. As has been mentioned above, there has also been a long history within the North American Free Trade Agreement (NAFTA) of exception clauses similar to the above being overruled by trade tribunals. Of the eleven times that the exception clause has been used within the NAFTA it has been upheld only twice.
• A number of submissions objected to the way FTAs limit the ability of governments to govern in the domestic public interest by, for example, imposing tariffs to protect domestic industries.
• A number of contributors would like to see public services clearly exempted from FTAs. AFTI argues that the wording of the public service exemption in the FTA does not adequately describe all public services (by, for example, describing them as services that are not in competition with other service providers – Medicare is one example that clearly falls outside this definition). However, DFAT advised that a general exemption from the agreement has been carved out in the Annexes for public services regardless of whether they are in competition with the private sector. This covers education, healthcare and other areas.
• Some submissions called for FTAs to include terms providing for regular reviews of their impact. JSCOT recommended that a review of the FTA be conducted by DFAT after two years to assess the accuracy of the various specific criticisms that were made of it. Given the complexity of FTAs and the level of public concern with FTAs, I hope that the Government agrees to this recommendation. More hard data on the concrete effects of such agreements can only be of benefit to the public debate.
• The capacity for investors to initiate dispute resolution processes where they feel that Australia or Chile are not complying with the terms of the agreement is seen to grant the private sector the capacity to overturn the decisions of our elected representatives.
• An academic made a lengthy submission highly critical of the FTA’s approach to intellectual property.

However, in considering all of the above, it must be borne in mind that the bills before the Senate only address Australian tariffs on Chilean goods. The broader issues just outlined remain to be resolved in future debate and discussion with the Government and my other Parliamentary colleagues.

1 Annex 1.

2 Chapter 3, paragraph 26.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I thank senators for their contributions to the debate on these bills and commend the bills to the chamber.

Question agreed to.

Bill read a second time.