Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak to the Fair Trade (Australian Standards) Bill 2013 as it has been proposed by our colleague Senator Madigan. I wish to put on record that I do not support the bill as it has been presented by Senator Madigan. But, at the same time, I do want to express my support for the sentiment that has been expressed by Senator Madigan and his deep interest in protecting Australian industry, protecting Australian jobs and protecting Australia's place in the world. The situation is that the bill, as it has been presented to the Senate, will do nothing to advance the interests of Australia or Australian consumers or, indeed, the Australian economy. But it would leave our exporters vulnerable to retaliatory action by other countries.

It is important that we are very clear on the circumstances of Australia—its economy and its place in the world—and why Australia enjoys such a high per capita income and why we are regarded as such a wealthy country. We are only 23 million people in the same land mass as the United States of America, which has some 350 million people, and we have the same population, indeed, as greater New York. When you have a look at China, with 1.2 billion people, or you look at India, which is rushing towards 1.2 billion people and which has the same land mass as Western Australia—only one third of our continent—it is interesting to reflect why it is that we actually do enjoy such a high per capita income.

There are a number of reasons. One has been, and hopefully will continue to be, cheap energy. But the other point that has got to be made very strongly, relevant to this debate, is that we are an exporting country. We cannot consume anywhere near what we produce. My own home state of Western Australia is an example when it comes to grain production, particularly wheat production. We export about 95 per cent of everything that we produce. The point is that Australia must observe its obligations under World Trade Organisation agreements, its commitments and its commitments to free trade. We must be able to regulate goods that are sold in Australia and prevent the import of goods that do not meet our mandatory standards.

Of course, it is necessary for people to understand that there are elements within Senator Madigan's bill, the Fair Trade (Australian Standards) Bill 2013, that will adversely impact on our capacity, impact on our reputation and impact on our compliance with world trade and other agreements, and I want to go through some of those. The point I want to leave the chamber with is that Australia is a major beneficiary of World Trade Organization agreements and, indeed, the other trading agreements to which we are a signatory.

There are times, I have to say, when these agreements are frustrating. I think back to the debate that we had over the importation of apples from New Zealand. An enormous amount of argument went on, and I led the arguments with the Department of Agriculture, Fisheries and Forestry. The sequence of events was that the then Prime Minister Gillard in Wellington, New Zealand said, 'We're going to allow the importation of your apples into Australia,' and all of a sudden the very DAFF officials who had argued so eloquently against apples from New Zealand coming into Australia had to change horse midstream, or 'change stream midhorse'—whichever you want to take on board. Then they had to argue to our Rural and Regional Affairs and Transport committee why, after all the reasons that they had previously given for why apples should not be able to be imported from New Zealand into Australia, they now could be. I am one who argued vehemently, but the point that I need to make is that it went to the independent international arbiter, the umpire, the World Trade Organization. We put our case, the New Zealanders put their case and it came down in favour of New Zealand. To this day, I still argue about the risk matrix that was adopted. Nevertheless, we are in a global trading environment. We must accept the rules of the umpire if we want to play on the oval, and that is exactly where we are. We cannot pick and choose. We cannot have a set of circumstances in which we place greater burdens on the importers of products coming into this country than we would expect to be placed upon us.

Once again, by way of practical illustration, I think of the move made in 2009 when the then Prime Minister Rudd and the then trade minister Crean put pressure on the then agriculture minister Burke to allow, in a cursory way, the importation of beef from the United States and Canada—Japan was also an applicant in the process—without going through an import risk analysis process. It was largely Senator Heffernan, supported at that time by Senator Nash and me, who led a very spirited campaign over an extended period of time in which we were able to prove to Minister Burke that he should indeed require a full import risk analysis.

Because it is absolutely relevant to this legislation, I want to share with the chamber some of the background. One of the precepts, one of the absolute rock hard conditions associated with world trade agreements, is that you cannot impose on another country that which you do not impose on your own producers. We had a circumstance where Japan, Canada and the United States of America all wanted a lifting of sanctions against the importation of beef. Those countries, especially Canada and the United States, had had BSE, bovine spongiform encephalopathy, better known as mad cow disease, a disease which we know had been transmissible to human beings. Of course, we all know about the BSE outbreak in the United Kingdom in the middle part of the last decade. Japan, unfortunately, had an outbreak of foot-and-mouth disease, so they ceased to be an applicant under this process.

What was interesting in that whole process is that it came down to a national livestock identification system. The United States of America claimed that we were imposing sanctions, hurdles or barriers on them which we did not impose on ourselves. We in this country do have an NLIS for our cattle herds. For a consumer purchasing a retail product today, should anything adverse occur we can go right back through the supply chain from that product in the retail store, back through the wholesaler, back to the facility at which it was processed and then through to the original property. So we were able to prove to the Americans that, since they did not have a national livestock identification scheme, we were not imposing on the Americans anything greater than we imposed on our own producers.

Acting Deputy President Sterle, you were of course part of that committee process. Basically, it was World Trade Organization agreements playing out in the correct space. So America was unable to continue that line of argument. To finish off the trifecta, right in the midst of it all a seven-year-old Angus cow from Manitoba in Canada was diagnosed with BSE. The end result was that Mr Burke, the then agriculture minister, did require that an import risk analysis process be undertaken.

I make that point to the chamber because it shows that we are part of international trade and how important international trade is. The two examples that I have given—one that went against us with the importation of apples from New Zealand and one which went in our favour in relation to the importation of beef from North America—are prime examples of the fact that, at the end of the day, the umpire must be allowed to regulate and to dictate. If you want to play on the field, you have to be subject to the rules of the umpire.

What the bill would do is actually skew those rules. It would impose on our importers a greater burden than we would be imposing on our own producers or that we would want imposed on ourselves as exporters. Unfortunately, you cannot have it both ways. We need to ensure that a country's mandatory import requirements do not create unnecessary barriers to trade, taking account of the risks that noncompliance with those requirements would create.

I will give you yet another example of how important it is that we retain and maintain the regulatory environment in which we now work. As a young veterinarian I recall that the importation into the United States of our manufacturing beef was a growing market. Today it is, of course, vitally important. Australia exports manufacturing meat equivalent to what the McDonald's chain in the United States itself actually sells on a daily basis. But back in the early 1970s, when these rules were not as strong as they now are, the United States beef lobby was strong enough to influence the US Department of Agriculture to place upon Australia a set of requirements—in this case, that we be free of tuberculosis and brucellosis, which indeed America was not and to this day is still not free of. You might ask: when it comes to brucellosis, where was the importance?

I am glad you asked that, Acting Deputy President, because brucellosis is actually a disease of the reproductive system and has got nothing to do with meat quality. In the case of tuberculosis, what were the Americans doing requiring Australia to be free of TB when they themselves were not? That was a trade barrier. Because the industry was so important to us in the early 1970s Australia in fact did eradicate it. We had the Brucellosis and Tuberculosis Eradication Scheme. We were the only country in the world to have eradicated both of those diseases, of which our profession today and the Department of Agriculture at the time are justifiably proud. But it makes the point that a barrier had been placed upon this country simply for trade imposition purposes. When we actually got rid of brucellosis and tuberculosis, they had another go. They said, 'Your export abattoirs have got to be lifted to a very high standard, indeed, a standard higher than those of the American abattoirs for their own domestic consumption.'

So we have moved on in the world and now both our sanitary and phytosanitary measures, some of which I have given examples of today—the SBS agreement—and the Technical Barriers to Trade Agreement are critically important pillars in the World Trade Organization framework. Those, in my very strong view, have to be protected and enhanced.

The difficulty that would confront us is that this bill, if passed, would actually make trade negotiations with other countries, those critical to Australia, our export wellbeing and the wealth of this economy, very much more difficult. It would have the effect of actually putting barriers in place, because if we impose any barrier on an importer then we can expect there will be an equivalent action against us as exporters. As I have just pointed out, we actually export about 65 per cent of everything that we produce.

The bill, if passed, would require Australia to give less favourable treatment to goods imported from free trade agreement partners than treatment given to goods from other countries. In other words, we would once again be skewing the market and removing what in fact is critical to international trade. We would be giving one group of importers an unfair advantage over others. They, in turn, would logically, necessarily and quickly impose exactly the same sorts of restrictions on Australia. The bill, if passed, would require that Australia not consider applications for Australia to accept conformity assessment procedures in other countries as being equivalent to those in Australia. I draw, again, on the analogies I have just given you with regard to BSE beef of that exact circumstance, that of conformity and assessment procedures in other countries being equivalent to those in Australia.

Mr Acting Deputy President Sterle, you will recall because you were part of that committee process, that at that time we said, 'We are not imposing on those other countries anything greater than we impose on our own producers. We have the national livestock identification system and therefore we would expect any importing country to meet those same levels of requirement.'

The bill, if passed, would require that Australia not consider applications for Australia to accept that another country's requirements are equivalent to Australia's in terms of policy objectives being pursued. There is an analogy here with New Zealand apples. We argued that case. We believe that a different set of requirements were being imposed. It involved, if you remember, the use of the antibiotic streptomycin, used at some stages in the production cycle of apples in New Zealand and not used here in Australia. And that was the argument which you and I and others presented at the time, but which the umpire determined otherwise. If we want to be part of international trade, as we do, we have simply got to say with respect to this particular case: the umpire's decision is final.

As an aside, I still regard that we probably did not do as good a job as we could have done in the appeals tribunal but you, Acting Deputy President Sterle, in football circles would probably have appeared before the tribunal more often than I did. So maybe we should have sent you to Geneva to argue the case.

Another point I need to make is that, if the Madigan bill is passed, it would require that Australia adopt import requirements that have the effect of creating unnecessary obstacles to trade. The example I give you, again, is that of the United States doing that to us in the 1970s, with diseases like brucellosis, tuberculosis et cetera. We cannot have that. We have moved on from that circumstance. Just look at what an advantage that has been to our country. Look at the current level of export of agricultural produce, in the case of manufacturing beef, to the United States of America. Of course, we all know of the possibility of retaliatory action. One of the great strengths of the WTO process is its binding dispute settlement system. We just cannot opt out if we do not like what the chairman of stewards tells us. We take it on the chin, we correct it and if we want to stay playing in the game and keep on the course we must then obviously comply. We cannot opt out, and it is tremendously to Australia's benefit that we continue to opt in.

It is the case that the dispute settlement rules do allow a complaining country—and we do plenty of that—to apply retaliatory action against a defending country's exports if the defending country has been found to be acting in breach of its rules and does not act to remedy those breaches. We are in an exciting phase now. We recently concluded the Korea-Australia Free Trade Agreement. We are hopefully in the final processes of concluding the Japan-Australia Free Trade Agreement. And we witnessed the signing the other day by trade minister Robb and the trade minister from China of the China-Australia Free Trade Agreement. These are all incredibly exciting opportunities.

I want to conclude by talking about Australia's role as a developed country in assisting least developed countries, underdeveloped countries and the small island development states. The best way we can help those countries is to encourage their development of trade, to encourage their domestic consumption so that they will get to the stage where they themselves will be net exporters and we have a set of rules and guidelines in place that will allow them to actually grow economically and to develop their people to move them towards middle-class aspirations, all within a World Trade Organisation framework. That is where I stand.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Labor understands, appreciates and values Senator Madigan's concerns in the area of fair trade. His activism has been well known, and we value it. As we know, this time of the debate is when I turn around and tell Senator Madigan that we are not supporting his bill; that seems to be the way it operates. But we want to go into the range of issues that are being brought forward and into why we are not supporting the bill at this time. I also want to put on record how much my dad would have enjoyed those comments made by Senator Back, about the beef industry. As a long-term member of the beef industry and a cattle buyer, he would have loved to hear those terms running off your tongue, Senator Back—the diseases of cattle; he loved them. We had books all over our library at home that talked about all those conditions. So, your speech brought back good memories.

I will now turn to Senator Madigan's bill, the Fair Trade (Australian Standards) Bill 2013. The stated purpose of the act as spelt out is to increase the standard of products sold on the Australian market in a fair and reasonable way. Its principal object, as contained in section 3, is to encourage Australia's trading partners to ensure that goods that are imported into Australia from a country that has a trade agreement with us are subject to minimum standards in relation to the quality of the goods. The bill will require Australia's trading partners to ensure that companies that export goods to Australia take responsibility for ensuring that their manufactured goods meet Australian standards prior to being sold on the Australian market. Australia's trade negotiators will be required to ensure that the appropriate requirements are included in any trade agreement that Australia enters into with any other country.

We believe that the Senate should not pass this bill, because the bill has not been drafted or explained in a way that would allow the Senate to have the confidence that, if enacted into law, it would achieve the objectives we have just spelt out, which sound fair and reasonable and would ensure that those objectives would be met. I know—and it is a very difficult issue—that resources at Senator Madigan's disposal to research and prepare a bill and an explanatory memorandum for presentation to the parliament are limited, and that is one of the issues in the way the process operates. Certainly they do not even come close to what we in the opposition have or to what the government has. However, when we are asked to consider passing a bill into law, the quality and the details of the legislation must be of paramount consideration. We are not convinced that the bill we are debating today achieves the very objectives that Senator Madigan intends. Nor are we convinced that it represents good legislation in its form.

It is of grave concern to us that this bill has the potential to actually damage Australia's trade relationships, which are essential to the growth of our economy—although we accept that this is not and never has been the intent of Senator Madigan's bringing forward the bill. The bill purports to protect Australian consumers from products that do not meet Australian standards and have been known to risk people's lives. We have seen media reports around that, and it has been extremely concerning. There are recent cases that have received considerable media attention about imports that have not met standards and have caused damage and in some cases death. So, there is a background there and a strong need to take action. However, while we share Senator Madigan's concerns about the reliability and safety of goods, we are not convinced that trade policy is the mechanism for enforcing appropriate standards. And that is what this bill is about.

Australia has domestic product standards and a very strong associated compliance framework that should not be tied to preferential trade agreements. This bill imposes high regulatory burdens and additional costs on Australian exporters and foreign firms for what could be of little or no foreseeable benefit. It also discriminates by only imposing restrictions on imports from countries with which Australia has a trade agreement. Although we recognise that Senator Madigan sees this as a legitimate avenue for addressing the problems, it goes without saying that goods imported into Australia do not come only from those countries with which we have a trade agreement. Senator Madigan has talked about double standards. The premise lying behind the bill is that Australian manufacturers are being undercut by cheap imports. Yet we believe that an unfortunate consequence of the bill is that it would impose restrictions on our trading partners—the very countries on whom our exporters rely for their income—yet not on imports from those countries with whom we do not have a relationship through trade agreements.

In the adjournment debate here in the Senate on Tuesday 23 September, Senator Madigan gave this explanation for why he has introduced the bill into the Senate:

In the media in recent months, we have been inundated with examples of products being imported from overseas that do not meet Australian standards, yet they are not covered under the ACCC’s area of authority or anyone else's area of authority.

This bill creates a holistic solution, which will ensure responsibility and accountability so that standards are enforced across borders, with the assistance of foreign diplomatic assistance at the highest level.

We say to Senator Madigan: if the problem is the standard of products on the Australian market, then we should be addressing that problem where it matters—right here in Australia. The problem does not stem from our trade agreements. Trade agreements did not create a gap in Australia's domestic policies for the regulation of product safety. Unfortunately, we believe this is an attempt to increase protection for one part of the economy, not for consumers, which will in fact come at much greater cost to Australian exporters and, in fact, Australian consumers. Senator Madigan makes no secret of this with his second reading speech outlining that this is not a bill about consumer protection but about levelling the playing field between importers and domestic producers.

Let me now go to the text of the bill and address Labor's concerns in specific terms. Section 4 requires a trade agreement to include certain provisions, creating a binding obligation between the countries party to the agreement to enforce each other's product standards. The substantive provision is subsection 2, which states that, prior to entering into the agreement, the Commonwealth must ensure that the trade agreement includes a binding requirement that goods sold to a purchaser located in one country by a company or entity located in the other country should comply with all applicable product standards that apply in the purchaser's country; or, if the goods do not comply with all applicable product standards that apply in the purchaser's country, the company or entity selling the products must ensure that the goods are improved to standards that comply with all applicable Australian product standards.

This is the crux of the bill, so let me break it down. The provision binds the Commonwealth to include this clause in every trade agreement it signs. It means that products must meet the higher of the Australian standard or the standard of the country they are being exported to, or that products being imported into Australia must meet the Australian standard regardless of any other standards that might apply in the exporting country. Section 4, subsection 1, states this applies to a new trade agreement and an agreement that amends an existing trade agreement. Imposing such conditions on new trade agreements will be difficult, but it also applies to existing agreements where they are amended, even if the amendment is made in an area totally unrelated to the import and export of goods.

Unfortunately, whilst Senator Madigan is seeking to close the gate on imports below a certain standard, we believe this provision would in fact leave that gate slightly open. Let us accept for the purposes of this argument that there is a problem with below-standard products being imported into Australia and that somehow it is possible to fix this problem through a trade agreement. If this is a problem, under the provisions of this bill, not only is this problem not actually resolved but Australians could face a situation where products imported under a new agreement are covered, products imported under an existing agreement are not covered, products imported under an existing agreement that has been amended are covered, but products imported from a country with which there is no agreement exists are not covered at all. This is not the best approach. Consumer safety must be of paramount importance and we all agree on that. We believe that the situation put forward in this bill will not make the Australian consumer feel any safer. I return to the point that trade agreements are not the place to enforce product standards. They are not the place to enforce product standards because, as the example I just gave demonstrates, there are in fact no standards at all.

Section 5 creates the prohibition on the Commonwealth entering into trade agreements that do not include the product standard requirements. Section 6 defines the meaning of a trade agreement as being an international agreement that the Commonwealth has entered or will enter into with the government of another country or with the governments of a group of countries that will abolish or decrease tariffs or other import charges that are levied or charged by Australia at the time goods are imported into Australia. I note that this includes agreements negotiated under a World Trade Organisation or United Nations framework.

It is unclear how the obligations imposed by the bill would be enforced. This is a flaw in this legislation that provides an obstacle to our support. The explanatory memorandum only says that this would be the responsibility of embassies, by stating 'standards are enforced across borders, with the assistance of foreign diplomatic assistance at the highest level'. I have a great deal of confidence in our diplomats and staff in agencies such as Austrade, but I am not sure how their expertise translates to being the gatekeepers for products being exported out of the countries in which they are based to ensure they meet technical standards. If product standards are a problem, and in particular the testing of products, then there is a much greater imperative to act. It would be more appropriate if Senator Madigan talked about how we could bring forward some proposals to arrest a gap in the regulation of product standards and compliance. We believe that should be done domestically.

Trade liberalisation is essential for Australia to secure markets for our exports, as long as Australia's national interest is not traded away. The opening of Australia's economy, including the dismantling of barriers to trade, has been one of the most important reforms of the modern era. It has built today's dynamic and competitive Australian economy. It has improved the living standards of millions of Australian working people, and it has stimulated the growth of innovative and entrepreneurial Australian businesses. Australia is no longer a closed economy. That is not something that has just happened this year, in the last five years or, indeed, in the last 10 years. No longer do we live in a country shielded by a wall of tariffs and protection, closed to the world. This is not where we have lived in for a very long time. There is a sense in some quarters of this debate that somehow competition from overseas is some sort of new innovation, but barriers to imports in this country have progressively been dismantled over more than four decades.

I am now going to be indulgent and talk about Labor's history in this area. It is a good time to talk about the good times. I think of the dramatic cuts to tariffs under Gough Whitlam, the first bold steps to create a new approach to trade policy after the protectionism that was one of the five pillars of the Australian settlement, enduring from Federation in 1901 until the 1970s. Then we move forward to the economic reforms of Bob Hawke. I remember Hawke's Treasurer, Paul Keating, working alongside him to achieve these objectives. And then Keating became Prime Minister. He led the nation with not just an economic vision but a social and cultural one that included opening our relationships with our neighbours in Asia and recognising that Australia's export future lay in our region. In that cabinet they had John Button, Labor's industry minister from 1983 to 1993, who worked to assist employees of industries that were no longer competitive to transition into new employment. Those transitions were hard—and people remember how difficult that time was and the debates that occurred across the community and, indeed, across our own party at the time—but it was agreed that the change was necessary. In the trade portfolio, John Dawkins founded the Cairns Group of agricultural exporting nations, an important bloc in the World Trade Organization which has advocated for freeing up trade in farm goods. Peter Cook, with whom I was privileged to serve for a period in this place when I was first elected, helped bring the World Trade Organization's Uruguay round to a successful conclusion.

The legacy continued with the Rudd and Gillard governments. Both of those prime ministers maintained a strong focus on Australia's international relationships whilst in office. They were supported in many portfolios by Simon Crean and Craig Emerson. As Minister for Trade, Crean negotiated free-trade agreements with Chile, the Association of South East Asian Nations and New Zealand, whilst Emerson negotiated a free-trade agreement with Malaysia, helped launch negotiations for a global trade-in-services agreement and opened new pathways for progressing the World Trade Organization's Doha round.

All these Labor governments have played important roles in dismantling protectionist barriers. Labor recognises that reducing barriers to trade can boost our economic growth, create more competitive industries and give consumers access to a wider range of goods and services at lower prices. However, the imposition of this sort of legislation without consultation with industry would lead to the loss of Australian jobs. So when we talk about protecting jobs—and I know that Senator Madigan is very strong in this area—we need to consider how we can really ensure a secure future for Australian workers. In the decisions that we make in this parliament we can seek to achieve this objective by either looking backwards or looking forwards.

We in Labor will continue to do what we have done for the last 40 years and look forward, recognising that our national prosperity will only increase if we are able to find new markets for new exports. In order to achieve these important goals we must also reciprocate and open our markets to other countries. This debate will continue; it must continue, because that is our future. When we are talking about interaction in this free-trade environment, there will be concerns raised, but they must be acknowledged and then we can work together to see how we can make sure we balance the protection we need for our jobs and industries and our important role in future trade agreements. That must continue.

With Senator Madigan proposing in this bill to set up a mechanism in a trade agreement in an attempt to solve a problem relating to consumer safety, it means that we are confusing the responsibilities we have. We acknowledge that we have deep concern about product quality and the protection of consumers, but we do not believe this debate should be had within the trade portfolio. Labor supports mechanisms that improve safety for Australian consumers, and that means deep scrutiny and exposing products that do not meet Australian standards when they are in our community. That surveillance must continue and it must be strengthened if there are weaknesses seen in that area. This bill does not achieve that objective. It attempts to create a legislative protection that only applies in a narrow and limited circumstance with countries with which we have trade agreements, and we believe it is not enforceable. What is more, it effectively winds back policies to open international markets to Australian exporters, which will damage Australian industry and the Australian economy.

We understand the intent of the bill. We want to work to ensure that we have protection for the standards in our community, and we acknowledge the people who work in that part of compliance across the nation. We also acknowledge the loss of life that has occurred—and it has been publicised—through bad products that should be excluded from our market. We should always remember that these debates are stimulated by real cases, and I do not think we should have the debate without acknowledging those people who have been injured or killed. Recently it was to do with connections to telephones. There were cases around telephones and a young woman who was killed overnight by that use. Naturally, we all share an abhorrence of that and it should not be allowed to continue. However, we do not believe that linking product safety and product standards in the Australian community with impositions on our trade and the trade portfolio is the best way of working forward to achieve the common goal of safety and security for Australian consumers and Australian industries.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

First of all, I congratulate Senator Madigan on raising this issue which deals with fair trade and Australian standards. It is an important discussion. It is particularly important to the part of the world that I come from. In fact, I have just had to leave a meeting in my office with my Queensland LNP Senate colleagues—Senator O'Sullivan unfortunately had to leave a little earlier—and the mayors of five of the shires in the Townsville region who are all very keen to promote their parts of North Queensland for trade and investment with the booming Asian economies. I thank Mr Ewen Jones, the hardworking and ever active member for Herbert, based in Townsville. I was pleased to welcome to my office Mayor Jenny Hill, from the Townsville City Council; Councillor Frank Beveridge, the mayor of the Charters Towers Regional Council; Mr Rodger Bow, the chair of the Hinchinbrook Shire Council; Mr Alf Lacey, from the Palm Island Council; and my own mayor, Councillor Bill Lowis, from the Burdekin Shire. Those five shires are banding together. They have come to the national capital this week at the invitation of Mr Jones to make sure that their message is heard in relation to trade considerations with Asia. They have been ably supported by both Townsville Enterprise Limited and the Townsville Chamber of Commerce who have a very clear focus on trade between this part of Northern Australia, Asia and the Pacific. Trade is always something that is very much front-of-mind for those of us who live in Northern Australia. For that reason I am delighted to participate in this debate that has been initiated, as I understand, by Senator Madigan.

I regret to say that, whilst I understand the sentiments of the bill that Senator Madigan has proposed, there are some issues with the bill that perhaps could be unintentionally counter-productive. Just by way of background, I indicate that Australia always retains the right, both under its World Trade Organization commitments and its free trade agreements, to regulate goods sold in Australia and to prevent the import of goods that do not meet Australia's mandatory standards, and that is very important. It is a principle that has been in Australia's trade relationships for a long time. Australia's import requirements for goods are established by taking into account the framework of rules established by the WTO. Australia benefits very substantially from those rules because, without them, Australian exports could be vulnerable to political and protectionist pressures in other countries. That is always a problem with trade negotiations, generally.

I suspect there would not be many senators in this place who have not, at some time in their lives, been approached by a constituent who said something like, 'Look, why don't we stop the Philippines importing bananas into Australia? Why don't we stop Asian countries importing motor vehicles into Australia so Australian industries can have a free go?' That is okay, and in the old days that was the way things were. What we have to understand is that, if we want the Philippines to buy our goods and services and if we want the Asian manufacturing countries to buy our technology, our services and our agricultural products, then we have to make sure that we have the freest possible trade between the countries. If we start putting up trade barriers, then you can be assured that other countries will retaliate, and you would not expect otherwise.

Particularly for our primary producers, it is essential that we have the freest possible trade. Australia produces much more in the way of food and general agricultural produce than we can possibly consume. So, Australian industries—two that I am very familiar with in the north are the sugar industry and the beef industry—can only exist because countries buy the products we sell that are surplus to our own needs. I might say that in both those instances the surplus is far more than what we consume nationally. So, the freest possible trade is essential. When you do things that interfere with that trade, like the absolutely, ludicrous, ridiculous and unintelligible ban on live cattle exports to Indonesia, you get retaliation, and that is what we do not want in our trading arrangements.

In looking at Senator Madigan's bill a couple of the things that spring to mind lead me, in this instance, not to support this bill. The bill, as I read it, would make free trade negotiations, which are crucial to Australia,—particularly to our agricultural and horticultural industries—much more difficult to negotiate. The bill suggests that Australia would be required to give a less favourable treatment to goods imported from free trade partners than treatment given to goods from other countries. Free trade agreements are, of course, all about making trade easier and more efficient.

This bill would require that Australia not consider applications for Australia to accept conformity assessment procedures in other countries as being equivalent to those in Australia. Similarly, as I understand this bill, it would require Australia not to consider applications for Australia to accept that another country's requirements are equivalent to Australia's in terms of policy objectives being pursued, even if the detail of those requirements is not the same. This bill would require Australia to adopt import requirements that have an effect of creating unnecessary and therefore unfortunate obstacles to trade. Also the bill, as it is drafted, would place a legal burden on a foreign exporter in their own jurisdiction, in contrast to the current process which places the onus on the importer operating with Australia.

If these measures were introduced, you could expect some retaliation. As I said, the most recent example that comes to mind is the Indonesian—understandable—reaction when, overnight, we cut off a food supply which provided about one-third of the protein supplements for that populous nation to our north.

We have to be very careful in all trading arrangements to make sure that we do not invite retaliatory measures, because Australia as a nation—no matter how good we are, how rich we are or how many natural resources we have—cannot exist as a nation without the freest possible free and open trade. I mention that in the North, and in the recent free trade agreements with Japan, Korea and China, the sugar industry do feel as if they have been singled out for bad treatment because unfortunately sugar has not done very well in any of them. But there is a reason for that. With the most recent agreement we understand that there is a significant sugar industry in China, and the Chinese were going to have a particular local political problem if cheaper better Australian sugar was going to enter the Chinese market. We had to recognise the Chinese difficulties in the negotiations, as they recognised some of the issues that we had with the state development regulations—which we would like to have seen more explicitly mentioned.

Sugar is a very important export commodity from Australia. Most of the Australian sugar crop is exported. I am hopeful that the fantastic negotiations by Mr Robb will mean that sugar will again be considered in the review in three or four years' time, which has been negotiated as part of the overall China free trade agreement, as I understand it. There I hope sugar may be a bit better dealt with. We do already export quite a lot of sugar to China, but there is room for improvement in that. But most essentially, in any negotiations on the Trans-Pacific Partnership agreement sugar must be included in a way that benefits Australia. The sugar industry—and, indeed, many of my colleagues and myself—will draw a line in the sand if sugar is ignored in any future Trans-Pacific Partnership arrangements. I digress slightly from the bill, but I wanted to indicate just how important it is, and how delicate negotiations are, for free trade agreements.

I mention again the high-powered delegation of mayors from five of the more prominent local authorities in Australia who are in Canberra making their views known and working very hard to advance the economic base of their own communities—which flows on to the economic base for Australia. They are determined to make sure that their shires and, indeed, to ensure that the whole of Northern Australia is seen as a liveable place and a good place to be with all the necessary social services. There are a number of ways that this can be done. The Australian government, of course, has to do its bit to help. I know our tourist traffic with Asia could increase substantially if we had a little bit more access from Northern Australia into the burgeoning Asian economies, those with increasingly large numbers of middle-class Asians who are looking for holiday experiences elsewhere. Already in the North we have good international airports in Darwin and in Cairns, and we continue to promote those places as destinations.

There is a group called AirAsia who would like to establish a new direct international link from Townsville—clearly numerically the biggest city in Northern Australia—direct to Denpasar in Bali and from Denpasar out of the AirAsia hub to the rest of the world. I understand that the fares that are being talked about are so attractive that even someone of my limited means would be able to fly from Townsville direct to Bali and then on to Asia if the air link were able to be established. I know that Townsville airport is limited but those who run the airport there are very keen. They have set everything up, they have made concessions and they are well advanced in opening this new international link. Unfortunately, the difficulty is the cost of getting Australian Custom' support for an airport that does not have a permanent Customs presence at the airport. Customs do have a permanent presence at the Port of Townsville, the seaport, and I hear—and I will explore this later in estimates this afternoon—that there is some diminution in the numbers of Customs staff at the Townsville port. I want to explore, as Mr Ewen Jones has suggested to me, why those Customs people could not be moved from the Townsville port to the Townsville airport to deal with this new proposed direct international flight from Townsville to Denpasar. Those are the things that have to be looked at and have to be considered as Australia pursues its trade and investment options.

I know there are other people who want to speak on this bill so I will not continue. Again, I thank Senator Madigan for raising the issue. I understand the sentiments behind the bill. There are some elements of the bill, some principles of the bill, that I do support, but I think because of the concerns that I understand might follow from the implementation of this bill, I would, at this stage, be against the adoption of this particular measure.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

I advise senators that the time for this debate will end at 11.53.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution in respect of the Fair-Trade (Australian Standards) Bill 2013. I regret to say that, despite the well-intentioned motives of Senator Madigan with this bill, I cannot support it. There probably would not be a parliamentarian in this place who would not want to see proper standards being imposed in respect of manufactured goods in Australia. When we look at the explanatory memorandum of this bill, we can see some quite laudable objectives. The memorandum says:

The Bill will require Australia's trading partners to ensure that companies that export goods to Australia take responsibility for ensuring that their manufactured goods meet Australian Standards prior to being sold on the Australian market. The requirement will require the Minister to ensure that appropriate requirements are included in any trade agreement that Australia enters into with another country.

That all sounds very good and there probably would not be too many people that would object to the intentions behind the bill. Unfortunately, there are a number of shortcomings with it.

One of the concerns that I have, as a senator for Queensland, is that I live in a state which is currently being mismanaged by the Newman government. The other factor that I think is relevant here is that Queensland is a state which depends upon trade. It is a very important part of the Queensland economy. Unfortunately, it would appear that Senator Madigan's bill has the potential for damaging Australia's trading arrangements with other countries. If that is in fact the case, then we certainly have some major concerns about it. If we look at the Queensland situation at the moment, we see that our state cannot make any further changes which would make it more difficult for our struggling Queensland government to meet its obligations to ensure that we have a thriving economy. Right now, we have got very big employment worries across regional Queensland. It has been revealed that we have seen unemployment at seven per cent, seasonally adjusted, in Queensland, with youth unemployment rates particularly high. This is a concern that I have: if we have a bill which, despite its good intentions, may lead to retaliation from our trading partners, then this could particularly adversely affect the good people of Queensland.

Apart from the intention behind the bill being quite laudable, we have some concerns about the way in which the bill has been drafted. We are concerned about the fact that it may not have the effect that Senator Madigan intends for it to have. The bill, unfortunately, has not been drafted or explained in a way that would allow the Senate to have confidence that, if it were enacted into law, it would achieve those laudable objectives.

As I have said, the bill would probably lead to some retaliation. I heard the contribution from Senator Macdonald, and it is probably one of the rare occasions that Senator Macdonald and I would agree on something. Unfortunately, if you leave things fairly loosely worded in the bill then it is likely that there are going to be some unintended consequences.

The bill, unfortunately, imposes higher regulatory burdens and additional costs on Australian exporters and foreign firms, for what would appear to be little benefit.

Trade liberalisation is essential for Australia, and particularly Queensland, to secure markets for our exports, so long as we do not sell out our national interest in meeting those liberalisation objectives. The opening-up of the Queensland economy and the Australian economy, including the dismantling of barriers to trade, has been one of the very important reforms that have occurred in recent times. I am very proud of the fact that Labor was at the forefront of that in the eighties, expanding the Australian economy and making the Australian economy much more outward looking. This, over time, has had the effect of improving the living standards of millions of Australian working people. And of course it has stimulated growth of innovative and entrepreneurial Australian businesses.

Whilst Senator Madigan might be seeking to protect Australian consumers, what he seems to be, in effect, doing is protecting Australian industry. I understand the intention behind that, and perhaps in other circumstances I might be more supportive of this type of approach, but the current bill does not advance the cause in a way that is helpful or constructive. We recognise that Australia is no longer a closed economy, and this is not something which just happened in the last five years or so; it has happened over the last couple of decades.

I would also like to point out that we understand that reducing barriers to trade can boost our economic growth but, unfortunately, this bill is not going to achieve this objective (Time expired)