Senator KEMP (Assistant Treasurer) (3:02 PM) —In accordance with the order of the Senate of 9 March 1998, I table today two documents relating to the proposed Multilateral Agreement on Investment. The first is a draft Multilateral Agreement on Investment (MAI) as at 13 February 1998. The second is Australia's latest revised schedule of preliminary reservations dated October 1997. I also seek leave to incorporate a short statement in Hansard .

Leave granted.

The document read as follows—

MULTILATERAL AGREEMENT ON INVESTMENT

I table today two documents relating to the proposed Multilateral Agreement on Investment (MAI). The first is the draft Multilateral Agreement on Investment (MAI), as at 13 February 1998. The second is Australia's latest Revised Schedule of Preliminary Reservations, dated October 1997.

It should be emphasised that the two documents are very much in draft form. The negotiations on the MAI are far from complete as is evidenced by the significant number of square bracketed provisions and alternative formulations in the draft. Many significant issues are yet to be settled, including the nature of the dispute resolution mechanism, the extent of any so-called "carve outs", the treatment of regional economic integration organisations and the nature of and processes for exceptions. Accordingly, negotiations are not likely to conclude for some time. The OECD Ministerial Council Meeting (MCM) in late April 1998 will need to decide the future of the negotiations on the MAI, including whether to extend the deadline for negotiations, for example to next year's MCM.

Given the nature of the MAI negotiations, countries' lists of exceptions, or reservations, will form an integral part of the agreement. Australia's draft reservations should therefore be included in any assessment of the draft agreement. I stress that Australia's draft reservations are likely to be significantly revised and refined as the negotiations proceed, reflecting:

. further development of the provisions of the MAI, possibly involving significant changes;

. the outcome of ongoing consultations with Commonwealth and State agencies as regards the application of MAI provisions and policies that may impose more stringent requirements on foreign investors than on domestic investors, for which we will need to take reservations; and

. the outcome of negotiations on the form that country specific reservations should take and the types of reservations that will apply, including with respect to the question of applying standstill to particular reservations.

The Government believes that an appropriately worded MAI could provide benefits to Australia. For example, Australians who invest overseas would benefit from a more transparent and certain global investment framework and Australian offshore investments will be more secure because of the protection offered by the MAI. Australia would also benefit from the higher global investment promoted by an MAI. Strong global investment is critical to generating high levels of economic growth over the longer-term, and brings benefits from the creation of jobs, from higher income and from new technology.

The Government will not sign the agreement unless it is satisfied that it is in Australia's national interest to do so. In protecting Australia's national interest, the Government has stated that it will ensure that any agreement on the MAI will not override, or weaken, Australia's existing policies on foreign investment. Australia will lodge all exceptions required to protect current policies. For example, exceptions would be taken out in the areas of foreign investment, immigration and indigenous people. Australia is negotiating on the basis that general exceptions would apply to such things as tax measures, national security, public order and health and quarantine measures. Foreign investors operating in Australia would continue to be required to adhere to Australia's domestic laws and regulations, including our environmental and labour standards.

In conducting the negotiations, the Government is actively consulting with interested parties, including the States and Territories, business groups, the union movement and other non-government organisations.

The draft MAI has been referred to the Joint Standing Committee on Treaties for examination. The Committee has called for submissions and will undertake public hearings in most capital cities. For those who have expressed concerns regarding the MAI, the Committee process provides an opportunity to comment on the draft agreement and Australia's draft exceptions. The Government will carefully consider all issues raised by interested parties and the general public in participating in the ongoing negotiation of the MAI. The Joint Standing Committee on Treaties aims to produce an interim report on the draft agreement by 25 May 1998.

The Government will not take binding action on the MAI until it has been subjected to the new treaty-making processes established by this Government in 1996. These processes require treaties to be tabled in Parliament along with a National Interest Analysis (and thus subject to public and parliamentary scrutiny) before the Government takes binding action. This process also requires that the views of the States and Territories be taken into account before Australia agrees to become a party to, or indicate its acceptance of, the treaty.