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Monday, 16 June 2003
Page: 16407

Mr BAIRD (3:36 PM) —I move:

That this House:

(1) takes note of recent progress towards a Free Trade Agreement with the United States of America;

(2) welcomes the increased opportunities the agreement will bring to Australia and Australian producers;

(3) congratulates the Government on the significant achievement of bringing this initiative closer to reality; and

(4) continues to place priority on working to negotiate free trade agreements that compliment the work of the WTO and APEC.

The SPEAKER —Is the motion seconded?

Ms Julie Bishop —I second the motion.

Mr BAIRD —As part of a generation brought up in Australia that was taught the importance to Australia of the US, it would seem a natural progression that not only do we have a close relationship in terms of ANZUS and defence but also we negotiate a free trade agreement. Australia has established its reputation as a respected world leader in trade liberalisation, an important member of the WTO and a significant negotiator in the current Doha Round. As trade minister Mark Vaile said in his speech on 23 May, the free trade agreement with the United States:

... is—without question—the most significant bilateral trade negotiation in Australia's history, and a singular opportunity for Australia.

... ... ...

This negotiation is an extraordinary opportunity for improved market access for our farmers and manufacturers, stimulating exports and therefore economic growth ...

When Prime Minister Howard and President Bush met in Crawford, Texas, in May, they agreed on a framework which would see the negotiations conclude by the end of 2003. The second round of the Australia-United States FTA negotiations, held in May, maintained the constructive and productive atmosphere of the March meetings and outlined a positive agenda for the third round in July. The meeting provided certainty for the broad working framework for the agreement, setting out its possible chapters, and continued the detailed information exchange in relation to key areas of negotiation. Central to the May negotiations was the timetabling of the Howard-Bush communique from Crawford for the finalisation of negotiations and the conclusion of the FTA by the end of the year.

The outcomes of the July meeting will be critical to the future of the FTA. Market access discussions will focus on the scope and timing of the elimination of tariffs on goods, which is the core element of an FTA, and on requests to eliminate or address specific regulatory restrictions in services and investment. Another objective for the July round will be to make significant progress in building a draft framework text, narrowing as many areas of difference as possible and indicating the progress forged by the two administrations.

Today it is well recognised that free trade leads to stronger economic growth, greater standards of living and better employment opportunities. Therefore, the government's role in bringing to pass this free trade agreement with the US has to be noted and commended. The government's commitment to negotiating a free trade agreement with the United States is an expression of Australia's confidence in free trade and of our economy's structural resilience to integrate and compete with the world's strongest economy. Australia aims to ensure that the outcomes of the FTA negotiations complement and reinforce our objectives in the Doha Round of the World Trade Organisation negotiations and in the Asia Pacific Economic Cooperation—APEC—forums, and set a high standard for other FTAs in the region. It also follows the successful negotiation of the FTA with Singapore earlier this year. Australia's shared approach with the United States on many issues in both the WTO and APEC provides a strong foundation for the realisation of our mutual long-term goals.

The improved economic activity that free trade brings will enhance the ability of this country to achieve fundamental economic and social policy objectives. Nevertheless, the government will make certain that outcomes from the FTA negotiations do not weaken Australia's ability to meet fundamental policy objectives in health care, education, consumer protection, cultural policy, quarantine and environmental policy. There is no doubt that free trade agreements offer substantial benefits for Australia. This relationship with the USA does provide one of the best opportunities in terms of our economy that has been presented in recent times. The United States has the world's largest economy. It is Australia's second largest trading partner, the No. 1 source of foreign investment and now the largest destination for Australian direct investment overseas.

An FTA with the United States is not likely to do as some of our critics have claimed: shrink Australia's economy and divert our trade with East Asia. This government has set a whole-of-government target of doubling the number of Australian exporters by 2006. It is estimated that this would create additional export revenue growth of over five per cent a year and add $40 billion to national income and the EMDG initiative, which is vital to achieving those outcomes. In particular, the free trade agreement has the ability to lift barriers to investment, especially in financial services, and to ease residency requirements in the legal, accounting and architectural professions. It will also see the FTA leading much greater business integration as Australian and US companies realise opportunities in R&D, material sourcing, product development, marketing and of course information technology. It will also provide access to the huge US government procurement, through the FTA, which will be a major bonus for Australian companies wishing to work with US companies seeking access to US government contracts. To emphasise the importance of the FTA to the Australian economy, the Centre for International Economics estimates that the FTA with the US will offer the prospect of a boost to Australia's GDP of between 0.3 per cent and 0.4 per cent over the next 10 years, with annual benefits of some $4 billion.

The government's hard work and determination over almost three years has resulted in an opportunity to negotiate deeper integration with not only the world's largest economy but also the world's pre-eminent strategic power. Multilaterally, this FTA is a strategic opportunity to set benchmarks and elevate ambitions in the Doha Round of negotiations, while demonstrating how a comprehensive and genuinely liberalising bilateral agreement can support multilateral trade negotiations. This FTA is also a strategic opportunity to demonstrate the benefits of a genuinely liberalising agreement to other countries contemplating bilateral arrangements. In our own region, an FTA with the United States will send a powerful message—especially to China—about the type of liberalisation Australia want to see. Bilaterally, an FTA with the United States is an opportunity to create proper structures for handling policy misunderstandings and differences, and further developing the economic relationship.

This government has pursued a combined multilateral, regional and bilateral approach to trade policy, which is central to achieving its ambition of doubling the number of Australian exporters by 2006. As part of this policy Australia is open to completing regional and bilateral agreements that deliver substantial gains to Australia. Given the renewed interest in free trade agreements in our region, brought about by the success of the Singapore free trade agreement and the strong progress in terms of our free trade agreement with Thailand, the government believes that it is crucial that such agreements are integrated into the broader multilateral framework in which we operate.

Trade liberalisation in a regional context must remain central to forging a strong agenda in trade policy. However, we cannot afford to miss the opportunities presented by this FTA with the US. The continued expansion of the EU provides a strong incentive to Australia to look to a strong relationship with the world's most significant economy. I congratulate Minister Mark Vaile for his efforts in bringing the negotiations to this point and wish him well for the future in bringing the negotiations to a successful conclusion. There is no doubt the free trade agreement with the world's strongest economy presents many opportunities: opportunities in terms of service agreements with the US, opportunities for our manufacturers, opportunities for our mineral exporters, opportunities for joint agreements and for manufacture under licence agreements, and opportunities for a plethora of activities including taking part in bids for US government contracts. It provides a great opportunity for us and I commend these negotiations to the House. (Time expired)