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Thursday, 12 August 2004
Page: 26438


Senator HARRIS (11:23 PM) —I move One Nation amendment (1) on revised sheet 4367:

(1) Page 3 (after line 11), after clause 3, insert:

4 Exclusion of services provided by governmental authorities

(1) For the purposes of the Australia-United States Free Trade Agreement, all services the subject of a customs tariff which are supplied by a governmental authority in the exercise of its responsibilities are excluded from the provisions of the Agreement.

(2) For the purposes of subsection (1), a governmental authority includes:

(a) a central, regional or local government and any authority of any of the governments listed in this paragraph; and

(b) a non-governmental body when exercising of powers delegated by a central, a regional or a local government or an authority of any of the governments listed in this paragraph.

The reason for moving this amendment to the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004 relates to the difficulties in being able to move amendments to various bills because of the way the bill is structured. I spoke earlier about the implementation bill changing 10 bills, and now we have moved to the next implementation bill, relating specifically to Customs. One Nation's concern about this particular bill relates to a side letter dated 18 May between Ambassador Zoellick and the Hon. Mark Vaile. Both parties make a commitment in this letter, which says:

During the course of their negotiations concerning Chapter Thirteen, the Parties discussed Article 13.15 (Recognition). Based on these discussions, I have the honour to confirm the Parties' shared understanding that the scope of measures covered by Article 13.15 is no less extensive than the scope of measures covered by Article VII of the General Agreement on Trade in Services (GATS) and paragraph 3 of the GATS Annex on Financial Services.

I know that the side letter is speaking primarily about financial services. The real concern that One Nation has with that commitment the way it stands is that it brings into the American free trade agreement the sections of GATS that also refer to services provided by government authorities. For the benefit of the chamber I will read the One Nation amendment:

(1) For the purposes of the Australia-United States Free Trade Agreement, all services the subject of a customs tariff which are supplied by a governmental authority in the exercise of its responsibilities are excluded from the provisions of the Agreement.

(2) For the purposes of subsection (1), a governmental authority includes:

(a) a central, regional or local government and any authority of any of the governments listed in this paragraph; and

(b) a non-governmental body when exercising of powers delegated by a central, a regional or a local government or an authority of any of the governments listed in this paragraph.

By introducing this amendment, One Nation is taking the reference to government services as it stands in GATS and excluding it from the free trade agreement. One Nation believes this is imperative because the majority of our local governments—I will work on the local government level—currently have the ability to award a contract for services in their particular area and an increased grant of up to 10 per cent to a company that has local status. In excluding government services as currently defined in GATS, we are preserving the ability of, as the amendment says, a central, regional or local government or an authority of any of the governments listed in this paragraph. So we are excluding them from the implications in relation to the General Agreement on Trade in Services.

The second thing this would achieve, and probably the more important, would be to clarify the definition of a government service. As it currently stands in GATS, a government service is a service that is not supplied commercially or by one or more service providers. The concern that One Nation has with that definition in GATS is that, historically, government services have had an equivalent service in private enterprise. For example, there are state funded hospitals and there are private hospitals. Under the definition in GATS, hospital services provided by a state government are not excluded. If they are not excluded from GATS, they are not excluded by the definition of these side letters and they are not excluded from the free trade agreement.

Private enterprise has capacity on our railways. Schools are a more frightening aspect of GATS. For the benefit of the chamber, it encompasses not only our lower level state schools but also high schools and universities. By agreeing to write these into the free trade agreement, the Australian government is writing in the ability for any American provider of a service to, in a legal sense, raise an argument that they should have access to government services that they would normally have been excluded from. When I introduced this amendment, I did raise the difficulty of addressing these structural issues in light of the way the agreement has been written. The only way we could partially exclude them would be through the customs tariff bill. I know it would be an unusual way to achieve it, but the difficulty is how to address the issues of concern through the structure of the free trade agreement. It is very difficult to find any government service that is not provided by a service provider, with the possible exception of reticulated water. Our electricity is well and truly catered for by private enterprise; therefore there could be no claim that the provision of electricity should be excluded from GATS.

One Nation put forward a number of recommendations to the Senate inquiry into the free trade agreement. Item 10 of article 1.2, `General definitions', of the free trade agreement says:

GATS means the General Agreement on Trade in Services,contained in Annex 1B to the WTO Agreement;

Item 22 sets out very clearly that a service supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers. One Nation recommends that all services that are supplied in the exercise of a government authority be excluded from the Australia-US free trade agreement. That is the reason that One Nation has moved this first amendment to the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004.

Question negatived.