Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

On behalf of the Minister for Trade and Investment, I table a ministerial statement on the conclusion of free-trade-agreement negotiations with Korea.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the document.

We are here to discuss the ministerial statement on the conclusion of the free-trade negotiations with the Republic of Korea that the Minister for Trade and Investment made in the other place. Sixty-two days ago, that statement was made. And, 62 days ago, when the minister made the statement, Labor welcomed the progress in the negotiations for a free trade agreement with the Republic of Korea and urged the minister to release the text of the agreement. Well, 62 days later, we are still waiting. In fact, it is 69 days since the Prime Minister stood on the floor of the House of Representatives and told the Australian people that the agreement had been 'successfully concluded'. But, 69 days after the Prime Minister made that statement, we still have not seen the text.

Labor do recognise that reducing barriers to trade can boost economic growth and create Australian jobs, and negotiations on a bilateral agreement with the Republic of Korea were initiated by our government in 2009. In government we also focused on the opportunities and the challenges of this the Asian century and acted to deepen and enrich our relationships in the region, including through trade. The Republic of Korea is our third-largest export market, and a bilateral trade agreement presents significant opportunities for Australian exporters and Australian workers. We welcome the opportunities an agreement could present for our exporters in both goods and services, and note in particular the potential gains for beef producers.

The fact is an agreement will present challenges for a number of our industry sectors, including the textile, clothing and footwear sector, the steel sector and the automotive sector. As senators would know, sadly, prior to the minister's statement in the House, Holden announced it would cease its manufacturing operations in Australia; and, sadly, yesterday Toyota also announced its intention to cease manufacturing in Australia. Toyota's announcement made reference to the impact of free trade agreements. In Labor's view, the full impact of the agreement with Korea on our auto sector will need to be carefully assessed. Unfortunately, despite the passage of 62 days since this statement was first tabled in the other place, we cannot make that assessment, nor can the Australian people, because the government has still not released the text of the agreement.

Today, in question time, the Leader of the Government in the Senate made reference to the potential benefits for automotive component manufacturers, but no-one can make a judgement about the claims he made because the terms of the agreement remain secret. Australians do not know the detail of what has been agreed by its government, our government, in relation to the auto sector. What we do know is that this is the same government that has taken $500 million support from the auto industry between now and 2015, and that this is the same government whose ministers publicly goaded Holden to leave—the same ministers who have sat on their hands whilst Toyota reached the same decision. The tens of thousands of workers in the auto industry and its suppliers simply cannot trust this Prime Minister or this Liberal Party. They do not care about industry and they do not appear to care whatsoever about Australian jobs. The reality is that this Prime Minister has not lifted a finger to save Australian jobs or to find ways to create new opportunities. He has become part of the problem rather than part of the solution.

In the minister's statement, he noted the government's decision to agree to an investor-state dispute settlement, or ISDS, mechanism. Labor has grave reservations about the inclusion of ISDS mechanisms in this and other bilateral trade agreements. These mechanisms give foreign corporations the right to take action against our governments when they make public-interest decisions that adversely affect their commercial interests. Australian taxpayers, for example, are already footing the bill for such a challenge launched by Philip Morris Asia against our world-leading plain packaging laws. We are told by the minister that ISDS mechanisms in the Korean agreement and other agreements will include so-called safeguards—but without any public discussion or scrutiny of these safeguards. In fact, 62 days ago the minister did not outline the so-called safeguards in the proposed ISDS provisions in the Korean free trade agreement, and he has not subsequently done so.

In a newspaper piece published earlier this week, the minister attacked critics of the government's trade policy as 'peddlers of misinformation'. Instead of attacking those who question him, the minister should recognise legitimate concern in this parliament and in the community about the impact of ISDS mechanisms. Australians are entitled to ask what these provisions would mean for our environmental standards, labour laws, copyright and the Pharmaceutical Benefit Scheme, amongst others. It is time for the minister to start explaining his decisions.

Before anyone accepts the proposition that bilateral trade agreements without an ISDS cannot be negotiated, they should reflect on the Howard government's negotiation of an agreement with the United States and the more recent negotiation with Malaysia by the former Labor government, both of which did not include such provisions. Labor's position is that the outcome of any negotiation should be assessed against the national interest, and of course Australia's interest must never be traded way.

So I again renew Labor's call for the release of the full text of the negotiated agreement, including the ISDS mechanism, so that the parliament and the Australian community can assess its potential benefits and, if applicable, its detriments. If the government believes this is a good deal then the government would not be frightened of releasing it to the Australian people and to the parliament. Last year the Senate ordered the release of both bilateral and plurilateral trade agreements before signing. Not only has the government not tabled the text of the agreement with Korea; it has indicated it will not comply with the audit in relation to this agreement or any other agreement. I would urge the government and the minister to reconsider their position.

A week before, the minister delivered this statement to the House. As I said, the Prime Minister said that the minister had 'successfully concluded negotiations for a free trade agreement between Australia and the Republic of Korea'. The minister's statement indicates that he had 'substantially concluded negotiations'. Last December, the minister did not explain what, if any, stumbling blocks remained, and the somewhat stale statement before the chamber shines no additional light on this matter. The fact is that we have a shroud of secrecy in relation to these trade negotiations, and what that has done is emboldened opponents of trade liberalisation. Transparency should be one of the pillars of trade policy. It informs debate; it builds understanding; and, therefore, it leads to better outcomes. The minister should recognise this truth before he does further damage to community support for a more open and engaged economy. Labor look forward to examining the terms of the proposed agreement with Korea, and we will assess it carefully to ensure it is in the national interest.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We have heard significant debate and rhetoric today about the unfortunate decision taken by Toyota yesterday. Some economists are already talking about a recession in Victoria in 2017, following the simultaneous shutdown of both Ford and Toyota. I certainly hope it does not come to that—and we have all got a lot of work ahead of us to prevent it.

I want to focus on the free trade aspect of the decision announced by Toyota yesterday. I quote directly from their media release:

… with one of the most open and fragmented automotive markets in the world and increased competitiveness due to current and future free trade agreements, it is not viable to continue building cars in Australia.

The topic of free trade is very seldom debated; it is very seldom in the public realm. Certainly, it does not seem to be a popular topic for the media either. There is this implicit assumption that somehow free trade deals are always good for us, in whatever country we live. I would like to spend some time debunking that notion, but unfortunately I do not have enough time today. However, I want to talk specifically about why we can use this as an opportunity to have a bigger national discussion on free trade deals and how we need to prevent this sort of thing from occurring in the future.

In previous years, we have heard Mitsubishi, Holden and Ford talk about the impacts of free trade deals. They have been vocal, for example, on the unilateral deal that we did with Thailand, where we pushed agricultural product at the expense of their industries. Whether you believe it or not, that is the rhetoric that has been coming out of the car industry. Minister Robb had an op-ed in the Australian newspaper yesterday in which he exhorted the benefits of trade agreements. He said that free trade agreements 'can deliver truly enormous gains for Australia'. This is a similar to Labor's view. There is no doubt that trade agreements can deliver jobs, investment and wealth, but they can also have negative impacts on industries. There is actually a logic inherent in trade agreements that is often overlooked.

There are always trade-offs inherent in trade agreements. Negotiation, by definition, means trade-offs. Free trade has winners and losers. Who picks those winners and who picks those losers is the crucial question here: negotiators in secret deals behind closed doors? What is the logical extension of those negotiations? Who feeds the information to our very good DFAT negotiators who have been in secret trade talks on the TPP or on the Korean free trade deal for three or four years?

The way I see the world working, especially during my short period of time in the Senate, is that it tends to be those special interest groups who get into your office and push their agendas. This is how the world has always worked. Free trade agreements are the ultimate feast for friends with special interests. For example, I had some very fine gentlemen from the meat and livestock industry in my office recently. We were discussing free trade deals to enhance their export overseas. They said, 'Why have you got an issue with the TPP?' I listed whole areas of public interest which the Greens have particular issues with—for instance: health regulations; the PBS being under threat and how new patent provisions can cause the price of pharmaceuticals to rise; and freedoms being curbed by draconian copyright provisions et cetera. These are general matters of public interest. One of the gentlemen shrugged his shoulders a little bit nervously and said, 'Well, I don't know anything about that; I'm here to sell more beef.'

That is fin He is doing a good job representing the people that he has come to parliament on behalf of. But the point is that there are much broader areas of public interest that impact under free trade deals—and, once again, that is something we do not ever seem to have a discussion on. It is not just me and a few people out there in civil society who are saying this. Treasury and the Productivity Commission also agree with this proposition. Treasury, in their incoming government brief in 2010, stated:

Current approaches to preferential trade agreements, FTAs, are not meeting Australia's needs. The proliferation of FTAs has not built support for multilateral liberalisation and is delivering only modest preferential market access outcomes at the cost of reduced government policy reform flexibility.

In 2010 the Productivity Commission also released a report into bilateral and regional trade agreements. In that report they recommended that the Australian government should 'improve the scrutiny of the potential impacts of prospective trade agreements and opportunities to reduce barriers to trade and investment more generally. It should commission and publish an independent and transparent assessment of the final text of the agreement at the conclusion of negotiations but before an agreement is signed.' That is exactly in line with the order for the production of documents that the Greens and Labor pushed through the Senate earlier this year to compel the government to provide a draft text to the public for scrutiny prior to this going to parliament and prior to it being signed by cabinet—before the issue becomes political, before the government give it their stamp of approval.

I understand that a big, complex trade deal that covers 29 chapters and just about every aspect of economy, our community life and our environment is going to take a long time to negotiate. But if that is the logic for doing it in secret—and I do not believe it is justification—then at least release it and make it available for public scrutiny prior to it being signed by cabinet.

So, two premier economic advisory institutions have both expressed strong reservations about the trade path Australian governments are going down—and this includes Labor prior to the current Liberal government. Despite this advice, and concerns expressed by civil society, it is clear from the behaviour of successive governments that they are uncomfortable with the notion of transparency in trade agreements.

Without transparency the Australian people have no insights into the trade-offs inherent in these types of agreements. For example, lack of transparency allowed the Howard government, when negotiating the Australia-US free trade agreement, to extend drug patents, meaning 70 per cent of the drug patents expire later in Australia than in other countries. This means more expensive pharmaceuticals and the suppression of Australia's generic drug manufacturing industry. I have met these guys, and that is exactly what they are telling me. There may have been a legitimate reason for this trade-off. However, the government did not have to present its case. So who makes these trade-offs in our name? Who are the decision makers? We will never know the reason we agreed to that provision.

Minister Robb also wrote yesterday that he would not sign up to anything that does not materially advance the national interest. The national interest is a contested concept. That is why there are different political parties in this chamber today. The national interest is a very broad area, and politics and the role of parliament is an ongoing test of national interest. I would expect that Minister Robb's concept of national interest is very different from mine and that of many Australian voters. For example, Minister Robb has made it clear that he supports a free trade deal with Japan, and the necessity of that, over putting pressure on the Japanese government and causing a diplomatic incident in relation to whaling and preventing the slaughter of whales in the Southern Ocean. That is something most Australians feel very strongly about. More than nine in 10 Australians do not want to see Japanese whaling fleets in our Southern Ocean. The Liberal government had a very strong policy, going into the last election, to prevent that from happening by sending a Customs vessel.

It was only this week that Minister Robb went on record and admitted that our priority is a trade deal with Japan and not jeopardising that. That is a matter of public interest to this country that has not been incorporated into looking at the costs and benefits of these agreements. Who can put a value on the death of whales? For people like me, there is no economic value that can justify that. No doubt, people in the agricultural industry will feel differently.

Transparency is very, very important, particularly when free trade deals in their current form cover such a broad area of public interest. We are not just dealing with traditional exports and imports of goods and services like we used to, mostly around agriculture. We are now dealing with investment, the internet, access to generic medicines, and also the ability for a new world order to emerge from these types of deals where corporations have the ability to seize sovereign governments if they believe a decision is not in the spirit of a trade deal or will impact their future profits. To most Australians, that is totally unacceptable.

The Greens will continue to call for transparency. We call on the government to release not only the text of this agreement, as it has done for the Trans-Pacific Partnership Agreement, but also the modelling that outlines the costs and benefits of this trade deal. This is something we negotiated with Labor last year for any future free trade deals—that these costs and benefits had to be assessed upfront. We have been calling for this for months. It is time to release the modelling, as well as the draft text, so that this country can scrutinise it and we can put the public interest on a level with special interests in this country. While I agree that special interests are sometimes in line with public interest, they are not always.

Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I rise to make a few brief comments following the tabling of the statement from Minister Robb. In relation to trade—and I speak as a farmer as much as a minister in this building—there is absolutely no doubt that we have some of the most efficient farmers in the world. I know that Senator McKenzie would back me up on this. Farmers in her state of Victoria and, indeed, right around the country, are continually showing their efficiency, their resilience and their ability to innovate and move forward with the times. I say that notwithstanding the very, very difficult circumstances we are seeing now in terms of the drought that has taken such a significant hold over so many parts of our farming areas across the nation. But one of the things we realise as farmers in this country is that we are an exporting nation. Because, as farmers, we do not have the population they do in the United States, where they are very much a nation of consumption of their agricultural commodities, we have to export, and we recognise that. So we do understand that we need to put in place trading arrangements with other nations that are going to facilitate our agricultural communities and our agricultural businesses.

I certainly do take note of the previous speaker's contribution that the FTA is not in the national interest. I can tell you that the agricultural sector which stands to gain significantly from this free trade agreement does believe it is in the national interest. I will put on record some of those things. The 40 per cent tariff on beef will be eliminated over 15 years, not 18 years, because it was this country that pushed for the same deal as the United States. The 22½ per cent tariff on lamb and sheep meat will go. Tariffs on dairy products ranging from 36 to 176 per cent will be eliminated. And the three per cent tariff on sugar, in a market currently were worth nearly $500 million to Australia, will be eliminated as soon as the FTA comes into effect. The tariffs on wheat, seafood items, wine, chocolate, beer, a range of horticulture, pharmaceuticals, canned fruit—and the list goes on—will all go.

Now, I take it that there are some views around the FTA that may well be somewhat different in nature, as we have seen from the contributions in the chamber. But, if we are going to look to the future, and if we are going to look at where we want agriculture in this nation to be in 30 and 40 and 50 years' time, how do we put in place an environment that allows our farmers to prosper and to be sustainable? We have to look at our trading arrangements with other nations around the world, and that includes putting in place free trade agreements where they are appropriate and where they are of benefit to our agricultural producers. Somebody who does know this probably as well as anybody in the building is my colleague Senator Back, whom I have spent many an hour with on the Senate Standing Committees on Rural and Regional Affairs and Transport—which, sadly, I am no longer part of—looking at precisely these types of issues. If we are going to have sustainable farming into the future then we need to have a long-term vision. It is this side of the chamber, it is this coalition government, that has a long-term vision for agriculture in this nation.

Unfortunately, under the previous government we saw very much a disconnect between the government and the agricultural sector in what was needed in terms of that agricultural sector going forward. We need look no further than the live-export debacle, when we saw the knee-jerk reaction from the previous Labor government in banning live exports. That is a singular, most devastating decision for our agricultural farm-producing sector. It was just appalling. We have the opportunity now, with a coalition government, to finally have some long-term vision in where we want to place our agricultural sector in the world and in what decisions need to be made to make that agricultural sector sustainable. In light of that, we actually understand that that forward-thinking needs to contain agreements with other nations around the world that are going to provide that sustainability and that opportunity of access and that return to our farm sector that they so desperately need.

I commend the minister, Mr Robb, for the work that he has done and I also commend the supporting work from others in the coalition that I am sure was behind that to make sure that we have the best trading environment in place for our farmers, who deserve the recognition of this government for what they do for this economy and this nation. For too long our agricultural sector has been ignored. It is about time that they were given the recognition that they deserve for the contribution that they make not only to the social fabric of this nation but to the economy as a whole. It is generation of real wealth. So we, as a government, need to take all the decisions we can to provide them with some sustainability. The agreement around the Korean FTA is certainly an example of that.

Question agreed to.