Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to Senator Cormann as Minister for Finance and representing the Minister for Trade. Yesterday, Mr Jim Griffin, the President of the Federation of Automotive Product Manufacturers, which employs close to 40,000 people and depends on a viable automotive manufacturing sector, said that free trade agreements had failed to deliver any benefit to his industry because of non-tariff barriers. I note that the Federal Chamber of Automotive Industries, the FCAI, advises that Ford Australia, in seeking to export the Ford Territory to Thailand, is faced with non-tariff barriers that push the price of the vehicle from about $40,000 here to over $100,000 there. Does the government acknowledge that a number of free trade agreements, including that with Thailand, have been biased against Australian manufacturing because of a failure to negotiate effectively on non-tariff barriers?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Xenophon for that question and for some notice of it.

We do not accept the notion of a bias against Australian manufacturing in our free trade negotiations. Our exporters—manufacturing, services and agricultural exporters—would be subject to the same non-tariff barriers the senator refers to without a free trade agreement. It should also be remembered that the future of car exports is subject to the exchange rate, production costs—including of course Labor's carbon tax impost on the cost of production—and strategic decisions made in foreign capitals more than Australia's residual five per cent tariff.

The government works with trade partners to reduce, if not eliminate, tariff and non-tariff barriers facing Australian exporters from all sectors: manufacturing, services, agriculture and resources. The government is committed to achieving high-quality comprehensive free trade agreements that produce tangible benefits for all sectors of the Australian economy. Australia's free trade agreements improve and lock in access for Australian exporters far more than would be the case without an FTA.

Non-tariff barriers are always difficult to negotiate in free trade agreement negotiations, because they generally cannot be applied to imports from free trade agreement partners only. That is why Australia is active in the World Trade Organization and multilateral trade negotiations. These negotiations provide great opportunities to address non-tariff barriers so solutions can be applied in a non-discriminatory way.

I am pleased to be able to report to the Senate that recent progress has been made in World Trade Organization negotiations: 159 WTO member economies agreed on a package of trade outcomes, including on trade facilitation, that will make it easier and cheaper for goods to flow through the ports and customs processes of 159 countries. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Will the minister at least answer on notice how much non-tariff barriers in Thailand add to the cost of a Ford Territory? And can the government assure the Senate that the free trade agreement recently entered into with South Korea will not have similar adverse outcomes for Australian manufacturers because of non-tariff barriers, as has occurred with Thailand?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

What I can assure Senator Xenophon of is that we will progress every single one of the free trade agreement negotiations that this government is involved in in the national interest. We will be focused on strengthening our economy and creating jobs. We will not be able to solve every trade barrier faced by our exporters, but this government, with the conclusion of KAFTA, progress in the TPP negotiations and a successful conclusion to the WTO negotiations, is making far more progress than the Labor Party in government ever did.

Under this FTA with South Korea, all Australia's tariffs will be removed, including on cars, consistent with all our previous FTAs. We recognise the Australian car industry is facing many challenges, and that is of course why we negotiated staging periods for the reduction of tariffs on some vehicles and parts. Of course, both Australia and South Korea have had to make concessions in areas of interest to the other— (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. The FCAI has, through the Allen Consulting Group, using the same modelling parameters as Treasury, estimated a $21.5 billion hit to the economy if the automotive industry fails. What modelling and what contingency plans have the federal government undertaken to assess the damage to Australia's economy and to jobs in the automotive supply chain, given the General Motors decision to exit car manufacturing in Australia? Does the government acknowledge the size and the utmost urgency of the problem?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Clearly we are facing a challenge as a result of the decision that was announced by Holden yesterday. The important thing is that we pull together in an effective policy response to deal with the impact of the decision. The Prime Minister has said that the government will be announcing measures in coming days which will build on the strengths that we have and that will offer hope for the people of the regions impacted. That is what this government is working on. It will be part of a considered package of measures designed to rebuild confidence in the long-term economic future of those regions, in the long-term future of manufacturing in this country. If the Labor Party were truly interested in the future competitiveness of manufacturing in Australia, what they would be doing here today is voting with us to scrap their job-destroying carbon tax. Their carbon tax has caused absolute wreckage across manufacturing in Australia, and every day that they stop us from scrapping the carbon tax they are putting more jobs at risk. (Time expired)