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Thursday, 24 June 2004
Page: 31488


Mr RIPOLL (11:51 AM) —Today I rise to speak on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. These are very important bills for Australia to consider. Also, the Australia-United States free trade agreement is very important for Australia to consider, because it is probably the most significant trade deal that this country has ever embarked on. Therefore, I believe very strongly that we should be very considerate, we should examine the issues very closely and we should take all the time necessary that we have available to us to make the right decision in Australia's national interest.

Australia has always been a trading nation. Ever since our birth, as it were, we have been a country that has relied not so much on what we do, in terms of local jobs, but on what we manufacture and what we can export. Our real strength is in export markets in such things as the sheep trade, the beef and cattle trades, coal, mining, manufactured goods, our media, our intellectual property, our skills, our education—there is a whole range of industry areas where Australia is a world leader and a world trader. Whether or not we have this agreement does not necessarily impact on those industries as to whether we continue to trade. We are an export nation; we always have been and we always will be.

The concept of a free trade agreement is a good one—the concept that countries that sign up to a free trade agreement would be able, in a bilateral sense, to remove trade barriers between them and put in place incentives for that free trade to take place. On an initial reading of this free trade agreement, it is very complicated. There is an inordinate amount of material. If someone were to go to this and have look at it, they would just be stunned at the amount of pages that are contained in it. You get different numbers of pages depending on which version you look at, but it is either 600 or 900 pages—and some people tell me it is over 1,000. I have looked at cut-down versions of it, but it is certainly a lot. That in itself worries me, because it tells me that there is a lot of complexity within the agreement—a lot of complexity, a lot of bureaucracy and a lot of rules as to how it operates. We could imagine that a genuine free trade agreement would be slightly simpler. It would have rules that benefit both sides and it would have easily used and accessed dispute resolution mechanisms. So that, for me, is a point of concern.

A free trade agreement in itself—or a trade agreement, I believe, in this case—is neither revolutionary nor should it be nonbeneficial. There is no doubt that there can be some benefits to Australia's economy and possibly some downsides as well, and there should be the same consideration for American industry as well.

I want to highlight a number of issues about how we got to today and the rushed process that is being put forward by the government and by the Prime Minister. Currently, in the United States, their own processes for determining whether they will approve this agreement are continuing, but no decision has been made. Our processes here are continuing. The government have already made it clear that, regardless of the outcomes, regardless of what the Senate select committee says, regardless of anything, they had already decided from day one that, after they had finished negotiating, it was a done deal. It is only the US that really get to review this properly—only the United States that really get to examine it closely.

The government tells us here that, if we try to examine this closely or get some time to look at it in depth—and it is complicated, and we should be given the time—somehow, by us wanting to do that, just as the US Congress is doing, we are anti-American. And, by virtue of that, somehow we are anti-Australian. I find it a bizarre concept that somehow wanting the best deal that we could possibly get in the national interests of Australia would be either (a) anti-American or (b) anti-Australian. But this is the sort of pressure that we are getting from the government and from the Prime Minister about this legislation and this trade agreement.

In Australia, we have a Senate Select Committee on the Free Trade Agreement between Australia and the United States of America, where we have received over 500 submissions outlining different views for and against the free trade agreement. Those hearings continue. An interim report is to be delivered today, and there will be a final report delivered on 12 August. The Joint Standing Committee on Treaties also released its report last night. The Joint Standing Committee on Treaties report came back with a view that we should approve the free trade agreement between our two countries, but that we should do that in the light of some concerns and some amendments that would be put in place.

There have been a number of people—including academics and economic modellers—and different organisations that have done some studies as to the benefits of having a free trade agreement. At the end of the day, if it is just a bit of paper that does not deliver anything, there is not much point in having it. The idea is that it delivers a benefit for Australia and it also delivers a benefit for the United States. There were claims early on by the government—which they have quickly backed away from now—which alleged that there would be a $4 billion a year benefit derived from the agreement. That was work done by the Centre for International Economics. That made a whole heap of assumptions which now have been discredited, and of course it is no longer the case that there will be a $4 billion a year benefit. Those areas were of course sugar and agriculture. It did not take into account looking at the US investment in the film industry, which was lifted from $50 million to $800 million—sorry, foreign investment restrictions—and a whole range of other areas.

There have been other studies which have looked at the benefit and at how much that would actually be for Australia. Other studies have said that the benefit would be in the order of just over $1 billion per annum in 20 years time, which obviously would still be a benefit, albeit very small. There are other figures by Dr Philippa Dee, a consultant employed by the Senate committee, who has assessed the FTA on the basis of more reasonable assumptions and using a model which is better equipped to assess the full impact. When taking into account a whole range of factors, she assessed that there would be a net benefit to Australia of only $53 million per year after 10 years—again, a very small benefit, although nonetheless a benefit. If you use more generous assumptions, she raises that level to $359 million per year after 10 years, which of course is significantly less than another assessment made by the Centre for International Economics, which revised its model—using the G-cubed model—to $6.1 billion.

So there is a lot of conjecture as to how much net benefit there will be for Australia. The Australian Manufacturing Workers Union commissioned an assessment by the National Institute of Economic and Industry Research as well. They came up with a net loss. They expected a net loss of around $46.9 million in net present value terms to 2025, as well as a net loss of jobs—mostly in the manufacturing sector—of 57,700 per annum. So there are those who say there will be a minor net benefit, others who say there will be a larger net benefit and others who say that there will actually be no net benefit; in fact there will be losses in jobs and economic loss as well.

I am of the view that we should trade with the US, and we currently do. We do have a robust trade between our two countries. We should look at a free trade agreement that is beneficial to both countries and particularly beneficial to Australia's national interest. If there are parts in this free trade agreement which are unworkable or are of concern—and there are many and I will outline those in a minute—we should go and look at those and either renegotiate them or make amendments to the agreement and make the agreement conditional on those things being done. I think there is an imperative to do that. I do not accept what government members say—that this is a wondrous, magical deal that will reap great benefits for Australia. I am yet to see that evidence put forward. In principle I do support a trade agreement, as I think everybody in the end would. If you are offered a trade agreement or deal, as long as it is a good one, you would take it. But if we are giving away too many things in that deal that are not of benefit to us, we should have a closer look and make the appropriate amendments.

In doing a bit of research on this subject, I decided I would have a look not so much at what we are saying here in Australia but at what US congressmen and senators are saying about this agreement and what they feel it will do for their own country. While a number of people are in favour of the agreement in the United States, there are also a number of people in their legislature against it as well. I will mention a few of these people for the record. Congresswoman Jennifer Dunn, who is a Republican, advocated a US acceptance of the free trade agreement on the grounds that more than 99 per cent of US manufactured goods will become duty-free immediately, once the agreement is passed. That means that 99 per cent of US manufactured goods coming to Australia would be duty-free. She also stated that US manufactured goods account for 93 per cent of US exports to Australia. In effect, that manufacturing sector part of the Australia-US free trade agreement is the largest part in terms of jobs and the economy. It is obviously a very good deal for the United States because 93 per cent of their exports to Australia are actually manufacturing based, and hence it is where concerns lie for our own manufacturing industries here in Australia.

Congressman Adam Smith talked about the trade agreement certainly helping the US economy and benefiting Washington's manufacturing employees and ports—and, again, for the same reasons. Congressman Wally Herger, who is a Republican, supported it on the grounds that there would be a trade surplus of $6.6 billion to the United States. So they would have the surplus, not us. He also said that the agreement provided significant benefits for US businesses and employees, as well as US consumers. Again, he talked on the same issues that relate to manufacturing.

Congressman Howard Berman talked basically on the same grounds, except he touched on the entertainment industry, which is one that I have concerns about here. Currently in Australia about 72 per cent of all television is United States based or sourced. This agreement would open up that market to basically unlimited content on our own television here. And it is not just television; it is radio, print, digital media and new media, which we do not yet know what they are. That particularly concerns me. While Australia is very innovative and we have some wonderful programming here, the sheer ease of just using pre-plugged, pre-programmed shows from the United States makes it too easy for our networks, if they are not restricted, to use. I would hate to see us go from 70 per cent of content to 90 per cent or more of content. That concerns me, and it is something that we need to deal with. These congressmen are supporting the agreement because it will give them huge access to our markets and a huge increase in their own ability to get into our markets.

On the other side of the ledger, those who oppose the free trade agreement do so because it is not good enough and they do not get enough access to Australia's Pharmaceutical Benefits Scheme. That is a real problem for all of us in this place. We want to protect our Pharmaceutical Benefits Scheme. We want to make sure that it is a sound scheme that we control. We want to make sure that we determine what drugs go on the list and the prices of those drugs and that the parliament of Australia sets the bounds for, and the prices under, the Pharmaceutical Benefits Scheme. Those who oppose it say that it is not strong enough for the United States because they cannot get into our Pharmaceutical Benefits Scheme market.

There were complaints from other congressmen. Congressman Mike Simpson complained about the sugar industry. Initially, he would not support the agreement. After a huge lobbying effort in the United States, they would not accept under any circumstances any negotiation on sugar. They made it very clear to their negotiators not to come back to them with an agreement that had sugar in it from Australia. They got their wish 100 per cent. Unfortunately for Australia's sugar industry—and this is a major concern particularly in Queensland—we got zero access to sugar. There was no sugar in this deal at all, and that is extremely disappointing. In this agricultural area, Australia could have competed well with the US and could have had access to a good market. Our sugarcane farmers and all our agricultural farmers and industry in Australia worked very hard and were very competitive, but they came across very unfair tariffs and barriers to trade internationally. This would have been a major part of any free trade agreement. If it were a free trade agreement, you would have thought that was a key factor.

The other issue, of course, is beef. There were concerns in the United States about beef—that Australia was too good a beef producer and that this would affect their industries. So beef also had to be cut out. The best they got was that the beef lead-in was 18 years, so they have an 18-year window. So it is a really long time and many elections away before we see any benefit at all from beef. That is a view of what is happening in the United States. I read this morning that there has been a bit of a stumbling block in the negotiation in the US Congress. A very powerful US Senate committee has knocked it on the head. They disapproved it. They wanted even more control than the current 18-year lead-in time for beef import provisions. The senate finance committee voted 11 to 10 to recommend that the Bush administration change its implementing legislation for the US-Australia free trade agreement, to make it harder for US trade officials to waive a special beef import safeguard that would take effect in the ninth year of the pact.

So the US Senate committee want to make it even harder; I personally cannot accept that. I think it is already hard enough that we have to wait nine years before the provisions even kick in and 18 years before we see any benefit. Now they are saying that that is not even far enough out and it should be maybe 25 years. Again, I await the outcomes of this committee's negative response in the United States to the free trade agreement. If we cannot even get the beef lead-in times that are currently in the agreement, there is not much more left in that agreement.

In the short time that I have left I want to raise just a couple of other issues more broadly, such as television; television broadcast and media, which is of concern; the PBS and our own right to determine how the PBS works; and the delay and lead times that are afforded to generic drugs in this country. The cost of drugs in Australia is significantly lower than in the United States. What concerns me is that there would need to be a parity or harmonisation between the cost of drugs here and the cost in the United States. That would be a net disaster to this country and I would be very concerned about that.

The problem with this trade agreement is that some of the impacts and effects will not be seen for many years down the track. Basically, you sign it now and the lead times and other things that happen mean that those involved who negotiate the deal today may not be around or will not be in any position of influence to make any changes further down the track. There is certainly no room for renegotiation.

Television broadcasting is an area that really does concern me. An image that sticks in my mind is that of my two little girls, aged five and six. Whenever they are at home and they decide that they are going to pretend they are doing something and role-play, they do it with an American accent. I find that a bit funny. It is humorous and a lovely thing that they are play-acting and doing those things, but it also worries me. With the way that the current content of American television affects our culture and identity, it will not just be role-play. It will be a bit more significant than just role-play and more significant than just two little girls playing games in the backyard. That really does worry me.

I think what we need to do is look very carefully at this agreement. We need to go through the full process here in this House and not just have it rubber-stamped through this parliament, as is being done by the government. Why is the government so determined not to examine this? Why is the federal government so determined that it is okay for the United States Congress and Senate to examine it in-depth and reject certain parts that they do not like, but not for us? If it is anti-American for us to examine this, is it anti-Australian for Americans to also do the same thing? I do not think so.

I think this agreement and the rushed status that it has in this House today just highlights once more the politicking that goes on from the government and the rush to get this in and try to wedge the Labor Party on a critical issue for Australia's national interest, but only in the interest of their re-election. They are not so concerned about what is in this agreement. It is not about the agreement or what it delivers; it is about whether they can get through an election. That disturbs me even more than some of the parts that are contained in the Australia-US free trade agreement.