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Foreign Affairs, Defence and Trade References Committee
05/05/2015
Commonwealth's treaty-making process

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DETTMER, Mr Andrew, National President, Australian Manufacturing Workers' Union, Australian Council of Trade Unions

KEARNEY, Ms Gerardine, President, Australian Council of Trade Unions

KWOK, Dr Jen Tsen, Policy and Research Officer, National Tertiary Education Union

REA, Ms Jeannie, National President, National Tertiary Education Union

Committee met at 09 : 00

CHAIR ( Senator Gallacher ): I declare open this public hearing of the Senate Foreign Affairs, Defence and Trade References Committee. This public hearing is in relation to the committee's inquiry into the Commonwealth's treaty-making process. Copies of the committee's terms of reference are available from the secretariat. A Hansard transcript of proceedings will be made. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. I emphasise that, while the committee prefers all evidence to be given in public, under the Senate's resolutions witnesses have the right to request to be heard in private session. If you would like any of your evidence to be heard in camera, please do not hesitate to let the committee know. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. As noted previously, such a request may be made at any other time.

I welcome representatives from the Australian Council of Trade Unions, the National Tertiary Education Union and the Australian Manufacturing Workers' Union. Would one of you like to make a brief opening statement before we go to questions?

Ms Kearney : I would like to make a brief opening statement and then my colleagues will as well. Thank you very much for the opportunity to address the committee. We believe this to be an issue of national political, economic and social significance. I am sure you know that the ACTU represents just under two million workers and our affiliates cover all sectors of the economy, across all states and territories. As you have heard, I have two of our wonderful affiliates with me today.

The ACTU, of course, supports international trade—but trade that is based on the principles of fair trade, which can be a tool for raising living standards through economic cooperation and growth, through improved social protections and core labour rights, through the implementation of sustainable environment standards and through adherence to human rights conventions and democratic values. The ACTU believes that trade agreements should retain or enhance the autonomy of government in Australia to design and implement policy in key areas. But we insist on a democratic and open process for trade agreements, and meaningful civil society engagement is also important.

Comprehensive impact assessments of existing trade agreements, including the impact on employment and wages, to inform future negotiations, should be part of the process, as should regular and substantive consultation during and between negotiating rounds, the public release of draft texts and proposals for review and comment and the release of the final text and full and meaningful parliamentary oversight and democratic approval before trade agreements are signed. With regard to impacts of existing free trade agreements, my colleagues will have specific examples but, generally, we know that the Productivity Commission has found that predicted economic benefits from bilateral and regional trade agreement were 'inflated' and the actual economic benefits often modest.

Balanced studies of the likely employment, social and environmental impacts of trade agreements before governments make the decision to enter into negotiations are necessary. We have seen over recent decades the significant expansion of trade agreements beyond reduction in tariffs or taxes on imports, and so the demand for a more open and democratic process for trade agreements has grown, because they are increasingly dealing with an expanding range of other regulatory issues which would normally be debated and legislated through the democratic parliamentary process and which have deep impacts on Australians' lives.

The inclusion of migration issues is a particular concern. The ACTU stresses that migration policy should be a matter determined by a democratic parliamentary process and should not be included in trade agreements. We have expressed deep concern with regard to this issue and the Korean free trade agreement and the memorandum of understanding that accompanies the China free trade agreement. We have seen agreements expand into the areas of health, social and environmental policy. The Australia-US Free Trade Agreement resulted in changes to patents on medicines, copyright, PBS and local content provisions in government procurement.

The current TPP negotiations have an even wider agenda, which includes food regulation, regulatory transparency and regulation of IT, including electronic data privacy and financial regulation. Proposals for changes in all of these areas would normally take place through democratic parliamentary processes. There is, of course, the extremely vexed issue of ISDS and the direct impact on the ability of our elected governments to actually govern. It squarely places the profits and interests of corporations above the interests and wishes of the people. It is scrutinised by a process that has no independent judiciary, no precedents or appeals and may well have impact on domestic court systems. The Howard coalition government did not agree to include ISDS in the 2004 Australia-US Free Trade Agreement. The Productivity Commission recommended against it in 2010 and we should not under any circumstances allow our democracy to be undermined in the name of trade.

Given these concerns and the broad scope of agreements, it is imperative that transparency and consultation are front and centre. Currently the consultation process is limited by secrecy. For some negotiations, DFAT hold briefing meetings where questions can be asked but officers are not permitted to reveal details of any text being negotiated, so answers to questions are limited. There is no way of knowing if concerns of stakeholders have been incorporated or even cared about by the negotiators. Indeed, leaked documents are the only way we get any knowledge of content.

The minister has repeatedly stated that the ACTU is being consulted. This simply is not the case. Whilst consultation with the previous government's minister and the department was welcome, the ACTU was not informed of any DFAT briefings when negotiations resumed on the Korea free trade agreement, the Japan free trade agreement and the China free trade agreement after September 2013. In the case of the TPP, DFAT general briefings for the Australian stakeholders were held twice a year, with briefings on particular topics held by request. Still no feedback on particulars of the text was allowed. However, after September 2014, there were no more arrangements for stakeholder presentations for the TPP, and the dates and locations of meetings have been kept secret. It is quite disingenuous of the minister to keep repeating his assertions that the ACTU is being extensively consulted.

As you know, the text of agreements does not become public until after cabinet has authorised the text to be signed. The national interest analysis is prepared by DFAT, who, quite frankly, are not likely to criticise their own document. There is no independent assessment of the economic, social and environmental costs and benefits of the agreement. JSCOT can hardly scrutinise massive and complex documents with the diligence necessary in the time it has, and the committee is hard pressed by its large workloads. At any rate, we know JSCOT cannot change the text of the agreement and can only make recommendations about legislative changes. Many items, like the important ISDS clause, of course, do not need any changes to domestic legislation. Both the EU and the USA have more transparent and consultative processes, so international precedents exist. Our submission contends that a greater parliamentary role is indeed compatible with the Constitution. Thank you.

Mr Dettmer : Thank you for the opportunity to be able to address you on these matters. As the committee would be aware, the AMWU made a brief submission, and, in part, we supported the submission of our colleagues in AFTINET, the Australian Fair Trade and Investment Network, of which the AMWU is one of a number of members. We would also seek to bring to the committee's attention a number of issues which we believe are of importance. We certainly endorse the submission by the ACTU and endorse the words just spoken by President Ged Kearney. But we would also bring to your attention what we believe are crucial matters which need to be addressed by this parliament if there is to be an appropriate response to what we now see as almost an avalanche of free trade agreements which seem to be being brought forward by this government.

Can I amplify the comments of Ged Kearney with respect to the consultation. Minister Rob seems to be at pains to point out that the ACTU seems to have some special relationship with this government with respect to the negotiations of free trade agreements, which I must say I find a little intriguing. The only discussions we have had with this government through the Department of Foreign Affairs and Trade are those meetings, which are stakeholder engagement supposedly. The last meeting took place on 5 March this year. At that there were more than 20 items for discussion with respect to the presentation to the stakeholders, and, for the Trans-Pacific Partnership report, that aspect took approximately 10 minutes of the entire two hours that were there. Questions were asked and we were told that they were prepared to have discussions, but at some indeterminate time in the future. Otherwise, the information that we sought was not available. That is the sum total of the discussion that has been had with representatives of the ACTU to my knowledge this calendar year, and that has been standard since September 2013.

We decry the absence of transparency with respect to trade agreements in general but especially with respect to the Trans-Pacific Partnership Agreement. We believe that that is a signal deficit on the part of this government but also the way in which the department now operates. The former Minister for Trade was at pains to consult with stakeholders including trade unions about matters pertinent to the Trans-Pacific Partnership Agreement. At that time and for that period, we certainly had many discussions with both representatives of the department and also Minister Emerson on trade. Unfortunately, we cannot say that that has taken place at all since September 2013. Despite my involvement in trade issues—I think Senator Ludwig could attest for perhaps the past 10 or so years—I am yet to meet Minister Rob nor has he made himself available to requests from my union or, to my knowledge, from other unions.

The other issues that we would like to address you on really deal with the process of approval and endorsement of this agreement and indeed other agreements. The problem that occurs is that in our view—we have submitted this on a number of occasions—is that treaties were formerly instruments by which nation-states avoided going to war with each other or resolved matters of conflict between them. What we now have, however, with the treaties that are being negotiated and endorsed is, of course, a process of any number of issues, which really are the sovereign responsibility of the parliament, being the subject of treaties with foreign governments, which then somehow preclude the democratic process from having any oversight or involvement. For the AMWU—and I think it would be the view of most if not all trade unions—this democratic deficit is something which we believe is a signal failure on the part of successive governments, we might add, in that matters which should be matters of legislation and also consultation can be, if you like, whisked away by virtue of the treaty being negotiated.

The fact that there is very little oversight and very little public consultation about these things indicates to us that there is an absence of real concern for the democratic process. And that democratic deficit is something that we find quite distasteful and something which should be rectified by way of this parliament having much stronger oversight and also other matters.

We also say that the national interest is not served by the matters such as the Trans-Pacific Partnership Agreement. We note the comments, for instance, of the Treasurer—and unfortunately I do not have a date for this quotation—where he said:

There would not have been any free trade agreements if we had not made the hard decisions about industry assistance …

So what the Treasurer is telling the public at large, but most especially those workers who have lost their jobs for instance in the automotive industry and the thousands of which are going to lose their jobs in the automotive industry, that it was it more important to reach an agreement with respect to trade with Japan and China than it was to actively support their jobs and the industries in which they work.

We also say that the impact of these so-called free-trade agreements are such that they are not dealt with in a way that we believe really bears scrutiny. We put in our submission that studies indicate to us that the impact of the Australia-US Free Trade Agreement, notwithstanding the large fanfare that accompanied its signature and ratification, in fact has resulted in very little advantage to Australia. In fact there are suggestions from some studies that that agreement, by way of its bilateral nature, has prevented trade opportunities opening up with other countries, and we say that that should also be investigated.

Likewise, we also say that the current scandal we believe—and the AMWU has been very strongly on the record talking about the scandal of the procurement of our new submarines—is something that appears to also be linked to the urgency of concluding a free-trade agreement with Japan. I think the senators would be aware of the media reports yesterday with respect to the procurement of those submarines as being somehow something which there was a desire to remove our capacity to make and maintain those submarines in Australia on the basis that it would be better in part for us to have a free-trade agreement. We say that those matters need to be dealt with. We also say that parliamentary scrutiny of that and also some very deep insights need to be derived from research before we go down this path.

Finally what we say is that investor-state dispute settlement, which my colleagues Ged Kearney has spoken about, is something that really obviates our capacity as a nation state to regulate our own entitlements. After all, as I think studies have shown—and we rely very much on the work of Laurie Wallach, who is an American lawyer and activist for the organisation called Public Citizen who has done studies of investor state dispute settlement—ISDS is effectively a world unto itself, where, in short, you have a number of law firms which specialise in ISDS. Those law firms can appear one day for a plaintiff, one day for a respondent and another day as an arbitrator/mediator. We say that that is an abrogation of our sovereign right as a country, but, worse, it appears it has become 'nice little earner' for those companies, which we say is not assimilable to what should be our democratic processes in Australia. We have important public goods which should not be the subject of being able to be written away or wished away by private arbitration which is set up at the behest of large corporations seeking to take advantage over the Australian government.

Senators, we believe that this committee has an important role to play. We are very happy to answer questions and we look forward to your report.

Ms Rea : Thank you for the invitation to present at these hearings. I wish to begin by acknowledging the Ngunnawal people, the traditional owners of this country on which we are meeting. I would like to use the opportunity of these opening remarks to note that the National Tertiary Education Union's interest in this topic is both general, as a union with a solid record of speaking out on matters of democratic governance, civil liberties and human rights, and specific, in that treaties can have intended and unintended impacts upon higher education and research and labour rights, and these are, of course, of direct interest to our members. The NTEU echoes the ACTU and other unions who have made submissions and those comments made by Andrew Dettmer of the AMWU here today, and we echo these in our concerns with the breakdown of the Doha WTO round with the growing proliferation and significant and local impacts of the bilateral and multilateral agreements such as the free trade agreements Australia has with United States and Korea and has completed with China and, of course, the plurilateral negotiations in the Trans-Pacific Partnership and the Trade in Services Agreement, which I will come back to later.

The lack of transparency and public and parliamentary scrutiny of the negotiations being done, apparently, on our behalf but by our elected government is unacceptable. Our public servants tell us that for, specifically, the TiSA agreement Australia has taken 'full reservations' on public education. But, because the text is secret, none of us know what this set of words actually means, and the only way we hear about what is going on is through leaks taken up through the media. So, at the moment, Australia is named amongst New Zealand, Norway, Colombia and a couple of other countries as proposing to include private educational services in the agreement. We do not know whether that is a fact or not. The NTEU supports a clearer definition of 'public services' in the TiSA, which would retain the right of governments to provide and fund public services without being obliged to provide subsidies to private providers, particularly big foreign and multinational higher education for-profit providers. This, of course, is a particularly pertinent issue for the NTEU, when twice the Australian Senate has rejected legislation to deregulate university fees, and importantly, though that legislation also contained clauses that sought to extend Commonwealth supported places to private higher education providers. We would argue that the government must be able to give the Australian parliament and public the assurance that it does not intend to let this slip through in the wording on public subsidies in the TiSA.

We congratulate the committee on picking up this topic of treaty making and are very hopeful of improvements, as we certainly do acknowledge that Australia has a very good record of reform on the treaty-making process over the last 20 years. But we believe it is time to put forward a decisive reform to improve transparency and accountability in the exercise of the executive's external affairs powers. We believe that this is only possible if the Commonwealth government recognises and legally entrenches the approval of both houses of parliament as a condition of the exercise of executive power. We note a growing consensus amongst our best constitutional law experts about the need to extend parliamentary oversight of treaty making effectively to make treaties, and, in particular, category 1 treaties, subject to the approval of both houses. The NTEU believes the best mechanism to lift transparency on a range of treaty process matters is through independent scrutiny, and we believe that this is best delivered through stronger and more robust parliamentary processes, evident, for example, in the work of this Senate committee and potentially through strengthening the role and responsibility of JSCOT. We believe that these improvements require legislative expression.

Expanding upon the recommendations made by the ACTU, we would like to very quickly outline a case study on the 2007 US-Australia treaty concerning Defence trade cooperation and the subsequent implementing legislation here in Australia, which we elaborate upon at length in our submission. Unlike the FTAs, where there are continuous and sometimes poorly evidenced disputes about the economic implications for Australia, the NTEU looks to this example because the treaty has been proven to put Australian scientists at a legal disadvantage compared to their US colleagues.

Furthermore, this case study demonstrates the basis for our recommendation 7, that parliamentary committees should be able to recommend a review of an international agreement on the basis of effective changes brought about by any subsequent negotiations or implementing arrangements prior to ratification. The treaty in question was signed on 5 September 2007, implementing arrangements were signed on 14 March 2008 and the treaty was only tabled with the national interest analysis on 14 May 2008. None of these documents made any statements or arrangements in relation to the university sector. There was no acknowledgement that there would be impacts upon universities and upon individual academic researchers. Ratification came on 16 May 2013, only after the implementing legislation was passed on 31 October 2012. However, the ramifications for academic research and researchers was widely criticised and led to a two-year steering group, led by the Chief Scientist, to be established to improve the most dangerous elements of this legislation.

In this case, the United States used the threat of non-ratification to compel domestic legislation that regulated dual use technologies, a condition that Australia was not actually bound to according to either in the terms of the 2007 treaty or the 1996 Wassenaar agreement on export controls. Thus the criminal liability that is now imposed on Australian scientists and other individuals involved in dual use research extends well beyond the terms of the treaty. Further, the passage of inferior legislation—following, we presume, strong lobbying by the United States—has now been proved to have legally disadvantaged Australian scientists in comparison to their US colleagues. This case demonstrates that an important reason to lift parliamentary oversight in the Commonwealth treaty making process, and in particular provision for JSCOT to trigger pre-ratification reviews, is to ensure that the standing of the Australian government and the Australian Parliament is not diminished by foreign influence.

The proposal really is quite modest. It is about ensuring that the national interest—economic, political, social and cultural—is in fact served. The defence and trade control case demonstrates the potential influence of a foreign power upon domestic legislation and how that foreign power makes them well after a treaty is signed. We note that another example of this dilemma did occur in relation to the 2004 Australia-US Free Trade Agreement, where the US demanded the introduction of the Copyright Legislation Amendment Bill 2004 to meet its interpretation of compliance, including commitments that were not in the actual FTA text—and I know that other submitters have made further points in relation to that.

Lastly, in our submission we have endorsed more robust processes for public consultation. We believe that the NIA should be constructed by an independent party. In some limited cases the Productivity Commission may be an appropriate body. We also believe that measures should be introduced to compel and strengthen public consultation by DFAT with stakeholders during negotiations. On the subject of what these processes might look like, we would like to express our overt concern about the potential for the Americanisation of the trade agreements process through the introduction of US-style industry trade advisory committees. The creation of approved industry groups is shorthand for undue corporate influence in trade agreement negotiations. Civil society groups and everyday Australians also deserve the right to access the same information and consultation processes that could be afforded businesses. Thank you for the opportunity to make these comments, and I look forward to questions.

CHAIR: Thank you for those submissions. The Australian government has been making trade agreements for more than 100 years, and you have given us a case study that is evidence of a new, evolving circumstance. Do I take it from that example that that was not happening in the sixties or seventies? This is a new event? Is this a new thing that has come into trade agreements, the case study you mentioned?

Dr Kwok : The process around which the United States has the opportunity to talk with Congress about the legislation that needs to be implemented in another country is generally called certification. I think it has only been around since the mid-eighties. Australia was largely isolated from the experience of this until the Australia-United States Free Trade Agreement, and we have here, as we have demonstrated, a very significant example of that. So we can anticipate that this will happen again, and probably more frequently.

CHAIR: The treaty-making process has been investigated and reported on quite a number of times. What we are really looking at is whether there is a new set of circumstances being dealt with in trade agreements where significant stakeholders are not consulted and have concerns with. You have put your case on the record. If the ACTU and the AMWU have a similar sort of example, then we build a case of evidence before the committee.

Ms Rea : So many of these treaties are now of course about trade; whereas, as Mr Dettmer observed, earlier treaties were about preventing war. So many of these are complicated and they are at the bilateral and plurilateral levels and they do cross over one another. I will turn to my colleagues if they wish to add anything.

Ms Kearney : There is no doubt that the content of agreements has expanded dramatically over the last decades. As we put in our submission, they now extend into far-reaching areas whereas before they certainly did not. As we say in our submission, those areas are areas that are legislated generally by the democratic process where the people have a say—areas like health, social policy, environment and even areas like intellectual property and privacy issues. I believe that in a good democracy they are issues that would be at least consulted around with the population.

Mr Dettmer : The Treaty of Versailles—which I think is probably the best known treaty that has ever existed—goes to about 100 pages. That settled war between many, many sovereign nations. The TPP, to my knowledge—and has been leaked by WikiLeaks —has over 1,000 pages, and that is not the entire document. Likewise, the Australia-US Free Trade Agreement has many chapters and codicils. There is so much content that seeks to regulate things which were not the subject of regulation between nation states previously. Yet this superstructure of approval has more or less remained unchanged since that time.

Obviously, Australia, as a sovereign nation, has developed since the Statute of Westminster and its ratification, but for the democratic process to be effective it would appear to me—and what we would submit—that there needs to be a new look at how broadly these treaties go. As it stands now, we have this superstructure which may well have been adequate something such as the Treaty of Versailles—if indeed the JSCOT existed at the time, which it did not. However, given that that was negotiated more or less in public with our Prime Minister at the time, Billy Hughes, being the lead negotiator for Australia, you would think that something as momentous as that was the subject of public view.

The International Covenant on Civil and Political Rights is subject to information being provided to contending parties and drafts are circulated. Even though it is a fundamental document of human rights, it is nevertheless a public document. We make that point in our submission and I think it is amplified very much in the AFTINET submission. We say that something as fundamental as trade must be and should be more open. There is no reason that these provisions should be done in secret.

Ms Kearney : Further to your question, an interesting issue is raised by the ISDS. Trade agreements were pretty much between sovereign state and sovereign state, and I think the advent of ISDS clearly places a third player in the whole factor—and that of course is the power of corporations to directly sue us as a government. I think that is definitely something that has developed since treaty making began. It is quite different.

CHAIR: With ISDS, I think the evidence says that Australia has used it more times than perhaps it has been used against us. But that was evidence at another earlier inquiry.

Ms Kearney : It does not make it right.

CHAIR: The Westminster system is very clear: it is the executive prerogative of government. Is there an example in the Westminster system where there is more consultation clarity that you can point us to?

Ms Kearney : Around trade?

CHAIR: Yes. Clearly the United States has a different system, and the European Union.

Ms Kearney : The European Union does, yes.

Mr Dettmer : The treaty making powers of the United Kingdom have been conditioned and limited by its membership of the EU. Even though, of course, it is a Westminster system—one that our own system is modelled on and follows very closely—nevertheless Westminster has effectively, if not abrogated, certainly conditioned and limited its response to treaty making by virtue of the fact that the UK, if you like, the owner of the Westminster system, has now subjected itself to that treaty making. I know from my own experience with respect to employment treaties, those EU treaties, for instance on labour rights, have been sometimes unwillingly imposed upon the UK parliament. It seems to me that the Westminster system has been made subservient to a process that is open and transparent. On that basis you would have to say that the Westminster system, as such, probably does not deal with treaties to this extent, or, at least from the home of the Westminster system in Westminster, it does not deal with treaties in the way that we are dealing with them.

Ms Kearney : I wonder, Jen, if you would like to add something.

Dr Kwok : Just a passing comment related to the TPP. It is clear that there are changes afoot in relation to the levels of transparency and the expectation by electorates and constituents—for example, the European parliament has access to the TPP wording now, and that has only been I think since March this year.

Senator WHISH-WILSON: The TPPA?

Dr Kwok : The TTIP, sorry. The US Congress obviously has only recently got access to both TPP and TTIP texts. That is still tightly controlled. Nonetheless, there is an absolutely different level of transparency that is occurring because there is an acknowledgement that those parliaments exercise sovereign authority and should have the right to have access to these important documents.

Senator FAWCETT: You said you had an example that demonstrated proof that Australian scientists were disadvantaged compared to their US colleagues. Could you just explain that a little further for us.

Dr Kwok : Our interest in this issue has been since 2012 when we realised that consultation around the Defence Trade Controls Bill was inadequate. It was a position put forward by a Senate committee preceding the passage of that legislation. There are two ways we can look at this. One is that, because of the arrangement with the United States, we have had to introduce a dual-use permit system. The cost of that system, based upon the legislation that was just passed, looks like around $50 million per year across the entire industry, including universities and higher education institutions—that is, about half a billion dollars over 10 years. With universities alone, I think it is about $106 million over that period. For the administration of this system, which we did not anticipate in 2007, we are talking about half a billion dollars over 10 years. It is a significant cost. The other cost that goes with that is—

Senator FAWCETT: Dr Kwok, this is the committee that oversaw that whole process, and most of us are quite familiar with it. You said that there was an example or proof that Australian scientists were disadvantaged compared to their US colleagues. That is what I am specifically looking for. We had lots of evidence put to us that that may be the case but, as consultations have worked through and the pilot programs have run, we have not actually seen to my knowledge an example So I am very interested to know if there is a specific example you can cite where an Australian scientist has been disadvantaged.

Dr Kwok : My understanding was that the passage of the legislation and with the establishment of the strengthened exports steering group one of the key things that they were meant to look at was the legal comparison between the United States system of defence controls versus the Australian. The outcomes of that assessment showed that Australia was in fact disadvantaged. There are notes about this in the steering group's minutes, and it was in fact the trigger with which the Chief Scientist decided to change entirely the way they would address the improvement of the legislation. So they decided to create a risk based permit system to reduce the amount of administrative burden upon universities, because they understood they needed to intervene to address the disadvantage that Australian scientists were facing.

Senator FAWCETT: Doesn't that actually show though that the existing committee system is working in that, when that legislation came forward and this committee looked at it and we got the feedback from in this case Universities Australia and many others about inadequate consultation and the potential impacts, that steering group was set up as a result of this committee's work, which has then led to a number of changes—and in fact the most recent number of amendments to the legislation has been a step change to the benefit of Australian universities and industry. We have put another 12-month period in to actually allow that to bed down and essentially looking to iteratively improve, if we need to. Doesn't that indicate that the current system actually works and that there is a check and balance here?

Ms Rea : If we went back to the time of when the Senate committee was meeting about it before the passage of the original legislation, it is probably where we would have most of the issues, as many of the others have done, about the process at that stage. In one sense the process once it went to the committee and the committee was looking at it, those issues were taken up, but I think the view at the time—and if I remember the report was one of that this legislation was being pushed through with undue haste, and there was much criticism in that regard. I would take the subsequent process of setting up the committee, the involvement of the Chief Scientist, the subsequent amendments—which, as you know, we were supportive of—has shown the process is working. But we need to go back to the earlier stage where the possible unintended consequences and the differentiation between the status of US and Australian scientists within these arrangements were exposed during that process. One could argue that that should really have occurred much earlier, if there had been a greater transparency and understanding of what was being looked at.

I think we keep coming up with—and every time I hear people talking about examples around the treaty-making issues about those sometimes unintended consequences or impact but sometimes, I suspect, intended by some parties and not others, and others are unaware of them. I think that is the point that we are trying to get to: that we could have dealt with those issues around that and indeed what the parties were trying to get out of it, what was necessary much earlier in the process instead of going through setting up the steering committee and so on and so forth to come to making some amendments to legislation, which was pretty well viewed—I know particularly by the coalition—as too rushed and inadequate in itself as well.

Senator WHISH-WILSON: It may be an example where the committee system has worked in terms of getting an outcome but, if this had been a small part of a very large trade deal like the TPP, for example, that went through the process of being signed by cabinet, JSCOT to parliament, we would not have been able to make those changes. That is the point I think we have to deal with on something specific like that or other treaties, we have heard that there is the ability, whether they are controversial or not, to make changes. But in part of a bigger holistic deal how can we make those changes?

Ms Rea : To be frank, if I may, our comment is that Universities Australia, and indeed our union, are much better positioned than many other civil society organisations to investigate and be able to articulate what some of the issues are, because of our particular constituency. I am well aware of that, looking at some of the other aspects of the TPP, which of course have been highly controversial and have been taken up by other civil society groups in trying to make a case about unintended consequences.

Senator WHISH-WILSON: Mr Dettmer, you mentioned the history of treaties preventing war, but I did notice a prominent US congressmen saying on the public record that the TPP was worth one aircraft carrier to the United States.

Mr Dettmer : Perhaps they are going to make it out of papier-mache. I do not know.

Senator WHISH-WILSON: It was an interesting comment. Obviously they see a strategic value in the TPP, from a US perspective, with China being, I suppose, the counterbalance. I just thought I would throw that in. You have explained to me why he might have said that.

Mr Dettmer : I suppose the thing is that, as is commonly known, President Obama has made it clear that he sees the TPP as a crucial part of his pivot into Asia, and in large part that can be seen as a counter to the tensions between the US and China. That being the case, I think that it is crucial that one of our major trading partners, China, not be the subject of great power game playing, with us as the unwitting or perhaps ignorant victims. I am not suggesting that the Australian government is ignorant, but I am suggesting that treaties that are as large as this have the capacity to be part of a broader narrative which I think needs to be also the subject of public consideration. There is nothing wrong with treaties being made between sovereign nations. We do not object to that. It is the manner in which they are made and the purpose for which they are made that we have our concerns with. We also say that there are a number of disadvantages, both potential and actual, which accrue from the making of a treaty such as the TPPA, especially with respect to ISDS. We say that our government should examine very carefully and closely the provisions with respect to ISDS because of the implications that they have for us as a sovereign nation making public policy but also activities such as, for instance, work on health and safety, on which I am privileged to represent the ACTU at Safe Work Australia. Those health and safety provisions, under the various health and safety acts which exist in Australia, must not be subject to change simply because they are objected to by another sovereign nation. Yet that is the capacity that exists.

Senator WHISH-WILSON: On that point, do you think philosophically the kinds of deals we are looking at now are probably deregulation agendas more than trade deals?

Mr Dettmer : Dr Kwok and my good friend Jeannie Rae possibly have a bit more technical know-how about these things, but, for mine, there are a whole range of issues where—as I think has been said—unintended consequences arise from these treaties. We think that that needs to be the subject of examination. If we are to go down these paths with respect to treaty making, then we must make them on the basis of what is in the interests of Australia and not what is in the interests of international companies and corporations which may believe that they are being somehow disadvantaged.

Ms Kearney : There is certainly an impact on a state's ability to regulate. I think there is no doubt about that, particularly through clauses like the ISDS, where regulations can be seen as an impediment to a company operating or making a profit. There is no doubt about that.

Senator WHISH-WILSON: Or in food labelling or a whole range of issues.

Ms Kearney : Through labour laws, through the ISDS cases in Canada et cetera, right around the world. To that extent, it certainly has an impact on regulation. There is no doubt about it.

Mr Dettmer : One thing that causes us grave concern is that free trade agreements now seem to provide immigration rights to nationals from countries within those treaties. For instance, we understand that within the China free trade agreement, should it be ratified, if there is a project worth $150 million or more—and that would be a fairly medium-level CBD building—the Chinese company that is the proponent or owner of that project can then bring its Chinese nationals here to work on it.

CHAIR: Are you saying that that is a recent addition to treaty making—

Mr Dettmer : Yes.

CHAIR: that it has not been about over the last century; that is only a very recent addition?

Mr Dettmer : That is absolutely the case, Chair, and we say that that is something which our country has not signed up to. We also say that if there are to be work rights attached to treaties made under the auspices of trade, that should be the subject of significant scrutiny. We have no objection to migration. In fact, I think pretty much everybody around this table can claim a migrant background somewhere in their history. The point for us is that that should be the subject of public policy and not something which is able to be simply snuck in by virtue of a treaty which is negotiated between Australia and another country, which then says, 'We're going to bring some money here so we should bring our foreign nationals in.' I find that objectionable as a citizen; let alone representing my organisation.

Senator McEWEN: Could I ask in relation to that, Mr Dettmer: do you know which was the first FTA to have those kinds of provisions in it?

Mr Dettmer : I am not aware of any until the China FTA.

Senator McEWEN: I think you say in your submission that you think KAFTA has got something like that in it.

Mr Dettmer : Yes.

Ms Kearney : It does.

Senator McEWEN: Is that the first agreement?

Ms Kearney : There have been, to my knowledge, agreements that deal with labour mobility insofar as things like educational standards that are necessary. I understand that there has been negotiation for English language levels and things like that. I come from the nurses union and we were always given plenty of time to explain the impact on quality of nursing care if we were to lower qualification standards. But to my knowledge, I do not think anything like the Korean mobility clauses or the China free trade agreements have been—

Senator WHISH-WILSON: I think the distinction between the Korean one and the Chinese one is that the Korean one still relates to skilled labour, whereas the Chinese one allows provisions for unskilled labour. It is the first time we have seen that.

Mr Dettmer : If you have $150 million for a project, you can bring in your Chinese workers to do it.

Senator WHISH-WILSON: In your submission you talk about incorporating fair trade principles into trade agreements. We have got a situation where we want to protect existing laws and regulations around, for example, labour standards. But what about across the region? What is the view of the trade union movement in terms of having binding agreements? This is why I asked the question about deregulation. There is a suggestion that groups such as yours want to see re-regulation in certain areas, such as binding agreements on labour in places like Vietnam or even on environmental issues. This is something Obama has talked up. What is your view on the need for trade agreements? It is part of the terms of reference for this inquiry, to look at these bigger issues being incorporated into trade agreements.

Ms Kearney : We think that trade agreements are very much an opportunity to raise living standards and they should be seen as that, and of course labour standards are an important part of that. There is dignity in work and we believe that labour standards are an important part of any agreement, and it is an opportunity to raise the living standards of people if we do indeed have decent principles around things like labour incorporated into trade agreements, definitely. We have said in our submission around labour in particular that we should adhere to ILO conventions, and if that cannot be the case then at least we have the principles of the ILO conventions incorporated into the free trade agreements, which I understand is where the labour chapter was heading with the TPP. We were doing a lot of work on that with the previous government. There was a lot of consultation around that. So, where possible, free trade agreements should be seen to actually improve the lives of those who are involved, and if that means we are working with countries that are emerging nations and their economies are not at the same level, then they should enhance those economies in some way.

Mr Dettmer : This might possibly go against my argument to an extent, but I am aware, because I represent our union internationally and I am just about to attend the Rotterdam convention meetings in Geneva, fundamentally about asbestos. Our union has a very strong relationship with the Vietnamese Union for Trade and Industry. They are effectively our sister union in that country. The Vietnam government want to show that they have a very strong belief in the importance of labour rights and labour standards, and there has been a change in Vietnamese labour rights and labour standards because of the desire of the Vietnamese government to adhere to the requirements under the labour chapter of the TPPA as they understand it will be implemented. We say that that is a good outcome for trade agreements. Would that it be so for all trade agreements to have at their heart the lifting of labour standards at an international level.

The Vietnamese government will shortly announce that they will outlaw the manufacturing use of asbestos products by 2020. That has arisen in part because they see that it is important that they have equitable standards and that industrial products as deadly as asbestos are not used in Vietnam. We say that that is a good outcome of trade agreements and that, where those labour rights are enhanced by them, they can and should be used in that way.

Ms Kearney : And the same for environmental.

Mr Dettmer : Indeed. But the problem we have of course is that the Vietnamese government is responding to those issues, but we know nothing about what is in the labour chapter beyond what we heard about up to the end of 2013.

Senator WHISH-WILSON: We heard scepticism from AFTINET yesterday that they will not be binding agreements or will not be enforceable. I have one last question. I have asked questions for years now around what discussions were had with this government around the removal of the tariffs in the Japanese and Korean free trade agreements. As a committee we are looking at how a cost-benefit analysis could be done upfront and these kinds of things can be captured to see what is in the national interest. DFAT have consistently refused to acknowledge that there were any risks to the car industry from the removal of those tariffs, as have the government.

Mr Dettmer : Once you have destroyed the car industry, you do not have to worry about protecting it, do you?

Senator WHISH-WILSON: You would obviously be on the inside on these things, Mr Dettmer. Would it have been an example where the removal of those last tariffs would have been a cost? Was it the straw that broke the camel's back?

Mr Dettmer : The Australian car industry, notwithstanding the poor press that it has got, actually has a very, very low level of tariff protection. Unlike most other countries which seek to support their own vehicles and vehicle assembly industries, the car industry in Australia has a very low level of tariff protection. Ultimately, for the car industry it was the failure by this government to make decisions with respect to support for that industry in line with international standards. In the absence of such support there was, I think, only one conclusion that those companies came to. There was no discussion with this union, nor am I aware of with any other union, about the removal of tariff protection. Nor was there any discussion about complementary changes, such as the removal of the restriction on the importation of second-hand vehicles before that treaty was finalised.

Senator WHISH-WILSON: I think two of the big four car manufacturers that have shut down have both fingered trade deals and the changes to trade as being one of the reasons that they have shut down. I wonder if it is an example of how, when we look at going into entering these deals, these risks are assessed or whether they are just traded off to sell more cows to a country?

Mr Dettmer : The glib amongst us suggested that the South Korea free trade agreement was a cars for cows deal, given that we could put a bit more Australian beef on South Korean barbeques. In Japan, the situation appears to be subs for sake. I am not an advertising copywriter, but—

Senator WHISH-WILSON: You are doing a pretty good job.

Mr Dettmer : The issue for us is that decisions with respect to Australian industry have been made almost by default, without there being an up-front process. Of course, this government has no concept of social partnership, as I know, having been removed from a couple of committees by this government when I was formally there as a social partner, as a representative of trade unions. So our involvement in these discussions has been negligible at best.

Senator WHISH-WILSON: Just for the record, Mr Dettmer, you may be aware that the Cattle Council, I think it was, one of the main beef industry proponents, did put on the record that they lobbied Minister Robb to include ISDS to get the Korean deal done, so that they could get access to that market. That is a clear example. That issue had prevented the deal potentially being signed in the past by the previous government—

Mr Dettmer : That is right.

Senator WHISH-WILSON: and that was a lobby group that wanted access to a market that got the very controversial inclusion of ISDS.

Mr Dettmer : Cows are worth more than workers, Senator!

Senator WHISH-WILSON: Yes. It is an ethical issue.

CHAIR: On that note, it being 10 o'clock, thank you very much for your contributions—your evidence and your submissions.

Senator BACK: At some time, Mr Dettmer, I will take up with you the comment you made about cows being more important than workers; I find that to be offensive. It is a shame there is not time to discuss it further, but this is not the forum for that. I think a cheap shot like that, with deep respect, is absolutely uncalled for in this committee hearing. I just place that on the record. Chair, I think it is a very disappointing statement to end up on. And shame on Senator Whish-Wilson.

Mr Dettmer : Unfortunately, Senator, we believe it to be true.

Senator BACK: You may believe it to be true, but this is not the place for us to have the discussion with no time left in this session. I look forward to having that discussion with you at any other time. Thank you.

Mr Dettmer : With pleasure.

Senator BACK: Excellent.