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Tuesday, 11 November 2008
Page: 10611


Mr MARLES (6:21 PM) —I rise to speak in support of the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and the related bill, which amend the Customs Act 1901 and the Customs Tariff Act 1995 for the purpose of implementing the Australia-Chile Free Trade Agreement. This free trade agreement represents the most significant partnership between Australia and Chile since the member for Isaac’s marriage. It was, until now, clearly the most significant partnership between Australia and Chile, as I think he indicated in his own speech!

The Australia-Chile Free Trade Agreement was signed on 30 July 2008 by our foreign minister, the member for Perth, and the Chilean Minister of Foreign Affairs, Mr Alejandro Foxley, during Mr Foxley’s visit to Australia. This followed a process of negotiation, undertaken by the Minister for Trade, the member for Hotham, on Australia’s part, which commenced in February of last year under the former government and concluded in May of this year. This bill will allow both nations increased access to goods and services by breaking down the trade-inhibiting conditions which currently exist between the two countries. In doing so, it will further strengthen the ties between our two nations, enhance the growth and prosperity of both Chile and Australia and enhance security in our region.

The Rudd government sees this legislation as providing increased opportunity for Australian business particularly on the South American continent, which is one of the fastest growing regions in the world. This policy is indicative of the Rudd government’s trade policy of open engagement. It is a policy which is consistent with the government’s commitment to the Doha Round of trade talks and the APEC Bogor goals to foster ‘further global trade and investment liberalisation’.

In recent times, Australia has engaged in an increasing number of free trade negotiations. We have signed agreements with Singapore, Thailand and the United States of America. We have the longstanding Closer Economic Relations Trade Agreement with New Zealand, and negotiations are underway to transform that into a fully-fledged free trade agreement. There are free trade agreement negotiations currently underway with Japan, China, Malaysia, the ASEAN group of countries and the Gulf Cooperation Council, and there are also free trade agreement feasibility studies examining the possibility of agreements with India, Indonesia and the Republic of Korea. So there is a great deal of activity on the free trade negotiation front, on both a multilateral and a bilateral basis, between us and other countries and also between us and regional groups of countries.

The government has also undertaken the Mortimer review, which was commissioned by the Minister for Trade in February of this year. It is a review into Australia’s export policies and programs. Among its 70 recommendations are:

  • Market access: opening up export and investment opportunities by removing impediments and distortions imposed in other markets.

…            …            …

Accord a high priority to the Council of Australian Governments’ efforts to construct a seamless national economy for goods and services that delivers a truly consistent regulatory environment.

…            …            …

Adopt a future approach to the negotiation of double taxation agreements that supports the internationalisation of Australian business.

In addition to that, the trade minister will also give the government’s response to the Mortimer review shortly. Indeed, he is speaking to the Press Club on 26 November.

These recommendations, or at least some of them, are already embodied in legislation which has recently passed through this parliament or which is in fact being debated in this parliament, not only in the context of this bill but in other bills, as we speak. For example, the National Measurement Amendment Bill 2008, which is to come up in the House of Representatives later today, is a bill introduced at the request of COAG and which decreases unnecessary regulatory burdens in the form of inconsistencies around our weights and measures system. We have the International Tax Agreements Amendment Bill (No. 2) 2008 going through the parliament, which removes the system of double taxation that currently exists between Australia and South Africa. And, of course, we have the present bill.

Taken in their totality, these facts indicate that this government is absolutely committed to removing the restrictions on Australia’s export growth. This is a government which is all about trying to assist Australian businesses to grow their exports while at the same time growing our national economy. That is being done with considerable success. In September of this year, for example, Australia recorded its second largest trade surplus on record, $1.5 billion, and that was up 18 per cent on the revised August forecast.

That stands in stark contrast to the efforts and achievements of the former Howard government, which had a legacy of ineptitude and laziness when it came to Australia’s trade performance. We saw under the Howard government 72 consecutive trade deficits, which culminated in the worst three-month trade figures in Australia’s recorded history, being the last three months of the Howard government. In only two of the 12 years of the Howard government did we see net exports grow. By contrast, we saw net exports grow in 10 of the 13 years of the Hawke-Keating government.

The Rudd government is working to support Australian trade. It is building upon a very strong Labor history when it comes to promoting Australia’s trade with other countries. We intend to reverse the neglect of the Howard years. We absolutely understand the critical importance of international trade to a country which has a relatively small domestic market like ours. We also understand how important international trade is to our national interest and indeed how important this free trade agreement will be to the national interest of the people of Chile. But, even though we and indeed the people of Chile can see that, unfortunately those opposite failed to see that in the 12 years of the Howard government, and they fail to see it now they are in opposition.

Like Australia, Chile is pursuing free trade agreements. It currently has 54 preferential trade agreements, including benchmarks for any future negotiations. But our ties with Chile do not simply end with free trade. Nor do they simply end with the marriage of the member for Isaacs. There have been multiple official visits between Australia and Chile, particularly around the 2002 APEC meeting which was held in Chile and the 2007 APEC meeting which was held in Sydney. In 2005, the Chilean President, Ricardo Lagos Escobar, made an official visit to Australia. This was the first by a sitting president of Chile in over a decade and only the third in our history. Both countries are also members of the Cairns Group.

There are approximately 40,000 Chileans currently residing in Australia, contributing in a great way to Australia’s multicultural society through organisations and events such as the Chilean film festival in Melbourne, the Chilean Australian Club here in Canberra, the New Chile Social Club in Western Australia and many other folk dance and sporting clubs scattered across our nation. In the business context we also see this occurring through the professional network of Chileans in Australia.

The business and economic ties between Australia and Chile are strong and we hope to build upon them through this free trade agreement. In 2007-08 Australia imported $563 million worth of goods from Chile, and that meant that Chile ranked 37th in terms of bilateral merchandise trade with Australia. It accounted for 0.3 per cent of Australia’s total imports. The principal items that we imported from Chile included copper, pulp and wastepaper, pig iron and wood. At the same time, Australia exported to Chile $210 million worth of goods, which meant that Chile ranked 44th in terms of our export markets and accounted for about 0.1 per cent of our total exports. Our principal exports to Chile include coal, civil engineering equipment, measuring and analysing instruments and rubber tyres, treads and tubes.

In addition to goods, in 2007 Australia exported $120 million worth of services to Chile and at the same time imported $195 million worth of services from Chile. In recent times the Chilean economy has grown exponentially—in 2003 the Chilean GDP was $74 billion and the forecast for the Chilean GDP in 2008 is $181.5 billion. For Australian businesses in the context of the Australia-Chile Free Trade Agreement it means that, as the Chilean economy continues to grow, they will have increased opportunities and links in a very significantly growing market. This is one of the reasons why the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill is so important.

This bill and the complementary Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 amend the Customs Act 1901 and the Customs Tariff Act 1995 to give effect to Australia’s obligations under chapter 4 of the Australia-Chile Free Trade Agreement. This chapter provides for the rules in relation to identifying goods of Chilean origin and whether those goods are then eligible for preferential custom duty rates in accordance with the free trade agreement. To meet this eligibility requirement, the goods must be wholly obtained or produced in Chile. That obviously makes sense, but it does not stop there in terms of those goods which will meet the eligibility requirements. If they meet the specific requirements of annex 4-C of the agreement, then they also qualify. Consistent with other Australian free trade agreements, that provides for goods which satisfy the grounds of demonstrating Chilean origin—which essentially is the case where there is a significant alteration of non-Chilean materials, with that alteration occurring in Chile. The legislation also allows Customs to obtain manufacturing records from Australian producers and exporters. In a sense, that provides for the reciprocity of the agreement to verify that goods exported to Chile were, indeed, produced in Australia.

It is important that these bills are passed in this current sitting because that will enable the free trade agreement to take effect on 1 January 2009, which is the current scheduled date. The Australian government values its relationship with Chile and values very much the significant two-way trade which currently exists between Chile and Australia. The agreement and these bills are aimed at trying to boost that trade. The government sees that the Australia-Chile Free Trade Agreement is an opportunity for Australian businesses to expand into one of the growing markets in the world and also to advance overall the principles of trade liberalisation, which are key to allowing greater markets for Australian goods.

In doing that, the government are absolutely committed to rectifying the appalling legacy of the Howard government in relation to trade. We are dedicated to improving Australia’s international trade position, which is already occurring within the first year of the Rudd government. We are dedicated to providing a greater opportunity for Australian businesses to find markets around the world in what is now, of course, a global economy. We are committed to engaging in dialogue with other nations to advance this cause of trade liberalisation not only on a bilateral basis—which, of course, is the subject of this legislation—but also on a multilateral basis. With those comments, I would certainly say that these bills support all those objectives and I commend the bills to the House.