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Thursday, 24 June 2004
Page: 31593


Mr KATTER (8:48 PM) —We have already signed an agreement, called the WTO agreement—it was signed about 15 years ago, if my memory serves me correctly. I am not familiar with the industrial side of the WTO agreement—with manufacturing—but I am familiar with the agricultural side of the agreement. Every country that was a signatory to the WTO agreement agreed that their average support levels would be reduced by 30 per cent. So the first question is: did the OECD countries reduce their support levels? In 1987, at the commencement of the WTO agreement, the average support level was 55 per cent. The average in 1999 was 59 per cent. It is now 49 per cent. Do not get excited, because they are actually reducing. They have guaranteed prices, so when the world price for commodities comes down then the support levels go up. In any event, the OECD countries most certainly did not reduce their support levels for agriculture. The European Union went from 55 per cent to 66 per cent and, because of high commodity prices in 2003, they are on 50 per cent at the present moment. The US was on 48 per cent and went to 51 per cent. Their level has not reduced—it has actually gone up.

So ask yourself the question: is the US going to honour this trade agreement? The answer is there for you. They have already committed themselves to a 30 per cent reduction in their support levels with the OECD. This is not some idea that I have pulled out of the sky; it is from the agricultural policies report from the OECD—a very heavy document, as you can see, Mr Deputy Speaker Hawker—and they upgrade it every year. Anyone can pick up this report and verify for themselves just how much this trade agreement was honoured.

A very popular and wide-selling book at the moment, on the shelves in just about every newsagency in Australia, is Paul Krugman's book The Great Unravelling. There are many things that I disagree with, but let me quote from the book:

When the Bush administration imposed steep tariffs on imported steel—

and this comes from a rabid free marketeer. Krugman is one of the leading commentators. He is the New York Times op-ed columnist. He continued:

... it demonstrated an unprecedented contempt for international rules. When the Bush administration decided to give the steel industry the protection it required it was in effect saying ... that the rules don't apply to yours truly ... What good are new agreements if we won't honor the old ones?

Those are not my words. This person was appointed to one of the leading economic tribunals in the United States by Ronald Reagan and was subsequently appointed by Bill Clinton, and he is one of the leading columnists in the United States. He is, as I said, a very unapologetic free marketeer.

Let me turn to the figures. Mr Keating had generously given it all away, even before Australia went into the WTO. We were down to 11 per cent, but we have reduced that to six per cent. So we have cut our support levels clean in half. But the average agricultural tariff in the United States is 1.8 per cent. The 49 per cent support level is not coming from tariff protection; it is coming from subsidies—this is the World Bank World Development Indicators for 2003. If you take out the 1.8 per cent, that leaves the American farmer with a 47 per cent subsidy. If you take out the Australian tariff protection—which ironically is a bit higher than that of the United States: 3.9 per cent—then the support for Australian farmers by their government is two per cent. So the American farmer has a 45 per cent advantage in the marketplace over the Australian farmer. If you think that our farmers can beat the Americans over a 100-metre race when we are giving them a 45-metre start, I am afraid you have a different attitude from mine. That is the agricultural position. It has to be a colossal and monumental stupidity to provide your opponents, your competitors, with a 45 per cent advantage in the marketplace over yourself. I emphasise that these are not my figures but those of the World Bank and the OECD.

Moving on to Broken Hill, BHP are the big Australian, as you have seen on television in the advertisements. But BHP have gone. BHP Steel are now BlueScope Steel. BHP have got out of steel. After manufacturing steel in this country for probably a century, they are no longer there. The reason—they have made no secret of it—is that when the free trade deal goes through they will not be able to compete in the long run against the United States. I have to be honest and say that they also do not think they will be able to compete against China, either. Without any help from government, they have no hope of surviving. So the steel industry has gone.

Statements that we now have the American market available to us intrigue me greatly. I am quite fascinated by how our motor vehicle manufacturers are going to compete against the United States motor vehicle manufacturers. They have the massive backup from the R&D that is put in—and I have seen this on many occasions in my lifetime: the magnificent R&D that the United States has through the military industrial complex. In solar energy they were so far ahead of the rest of the world that there really was no comparison, when I was a minister in the Queensland government and we were pricing out solar energy in the rest of the world.

Their motor vehicle plants are set up for economies of scale that will service 431 million people. Under NAFTA they have the Mexicans at 100 million, Canada at 35 million and the United States at 295 million people. They are servicing a market of 430 million people, and their plants are set up for economies of scale to serve that market. Our plants are set up for a tiny little economy of 20 million people. And yet, are people seriously saying that we are going to be able to compete against the Americans in motor vehicle manufacture? I do not represent motor vehicle areas. In fact, there may even be some advantages in the motor vehicle industry closing down as far as I am concerned. But as a patriotic Australian I wonder about a country—and I will come back to that subject in a moment.

This country has had a wonderful record in building ships, particularly medium-sized ships, patrol boat sized ships, fast cats—that sort of area—and there is no doubt, as anyone who knows anything about the military knows, that this country needs 100 patrol boats with guided missile capacity, interception capability and helicopter facilitation. That will happen. There will be a government in Australia that will do that. And the fast cat service, just from Darwin to Jakarta and Singapore alone, with a seamless railway system, will happen again in Australia.

In days past, that small- to medium-sized boat manufacture in this country saw Evans Deakin with 16,000 employees and NQEA in North Queensland with some 3,000 to 5,000 employees. It will see shipping virtually vanish in this country because, once again, the Americans have their own rules. The Jones Act guarantees that all of their coastal shipping of this variety will be built by Americans. The Jones Act will stand, notwithstanding this so-called trade deal, which really is an American free trade act, if you like—and that is the way that it should be described.

We saw the great tragedy in Queensland of Austoft, the last of our cane harvester manufacturers. All the world's cane harvesters were built in Australia once upon a time; now none of them are built in Australia. If there are any tractors being manufactured in Australia, I am not aware of it. No-one that I know has Australian tractors anymore.

So whether it is steel, motor vehicles, shipping, tractors or cane harvesters, none of these things will be available in this country when this legislation goes through. That should be glaringly obvious to everybody. Are the government—and arguably the opposition—seriously putting the proposition to the Australian people that our car manufacturers are going to compete in the United States market against people who are servicing a market of 430 million people? Is that seriously a proposition they are putting before the people of Australia? And is it any wonder that the people of Australia are rejecting that proposition?

This document was conceived, as far as Queenslanders—particularly North Queenslanders—are concerned, in deceit. I do not like to say that, because I have many friends—I would like to think of them as friends—in the government. I hope I have some on the other side of the House too. But we went to the polls in Queensland, and I worked very hard to get some Independents up in that election. Those people went to the polls believing, because they were told four times—I think maybe five times—by Minister Vaile and twice by The Nationals leader, Mr Anderson, that there would be no free trade deal without sugar. They did that all the way up to the day of the election. And on the Monday after the election they announced that sugar would not be in the free trade deal. Those members of parliament who were elected for The Nationals in Queensland must feel absolutely abominable if they have a conscience, because they know they were elected upon a lie.

On bananas, we had a decision made by AQIS that bananas from the Philippines would not be allowed into this country. Again, I make reference to The Great Unravelling, because we have got some insights into how the American economy works. I again quote Paul Krugman, who said:

Cronyism is hardly novel in America; the Clinton administration took us to the edge of a trade war on behalf of Chiquita bananas, a major campaign contributor.

Chiquita, Dole and Del Monte are the three groups that sell fruit and vegetables in the United States. They massively dominate the American market. One of those companies, Dole, is in the Philippines. They are the Philippine banana producers. They will not be Filipino bananas that will be coming in here; they will be American bananas, produced by workers in the Philippines working for about $800 a year versus $12,000 a year for Australian workers, at the time at which the World Bank produced those figures.

If you carefully read what the Americans are saying to their people, phytosanitary arrangements are very much part of the banana decision. Similarly, with the drug issue and the pharmaceutical benefits arrangements, exactly the same is happening. There will be another body set up that is acceptable to the Americans and it will make the decision on what will come into this country and what will not. That is what the Americans have told their people; but it is not what the Australian government has told our people. If you close down the sugar and banana industries, you take about $2½ thousand million a year out of the Australian economy—and that is what is happening at this very moment on the policies that are being pushed forward. I simply cannot believe that the Dole company, and its influence with the Republican administration that are in there at the moment—not that I am sure they would not have similar influence with a Democratic administration as well—do not have exactly the same influence as the sugar lobby. Listening to the banana growers at their big meetings in North Queensland, there is no doubt left in my mind that it was part of a dirty deal that was done with the Bush administration in the United States. The fact that the announcement on the bananas was made an indecent nine or 10 days after the Queensland elections again means that this document was born in deceit.

Let me just go back: I sit in my office under a picture of the great John McEwen. He was the man who presided over the most successful economy in Australian history—and I have not got time to reel out the figures here tonight, but if you look at some my past speeches you will see them and they speak for themselves. As a very young man I was mentioning that I did not think that tariffs were such a good idea, and I had afternoon tea with the Deputy Prime Minister of Australia. This is what he told me, a very young man at the time: `Firstly, there is no such thing as a tariff, there is only a nursery tariff. Secondly, if our agricultural industries are to survive and prosper then they need the security of a relatively large home market—' something that this government clearly does not understand, `to allow them to ride the roller coaster of the international trade cycle. To achieve this we need population—'and this is another concept that both sides of this house do not agree with, `and this population must have jobs, so we need a protected home market for the industries that will provide them jobs. Thirdly, though you are too young to appreciate this, I will never see my country plunged into another war without the ability to build a main battle tank.' I doubt whether we can build a rifle now, let alone a main battle tank. Most certainly, without a steel industry and a motor vehicle industry, there would be absolutely no hope.

The two most prominent figures in trade negotiations in this country's recent history have been Colin Teese and Professor Garnaut. These two men have condemned, in the strongest possible language, this deal. I am not an expert in international trade relations, but both of these men are. Professor Garnaut said it does not pass the laugh factor, but Mr Teese was not quite so humorous in his remarks about it. They were both the Australian negotiators in past trade negotiations.

Other concerns that I have include the fact that there have only been two other reports done on this—one by ACIL, one by CIE. ACIL has said it is bad for Australia; CIE has said it is good for Australia; and the government will not go to the Productivity Commission. One must really ask the question as to why they will not go to the Productivity Commission. Why is this thing being rushed through this place with indecent haste and not being put before the Productivity Commission? We have continuously seen statements in the national media that the trade negotiators advised the government not to proceed with this deal. Clearly, the fact that the Productivity Commission has not been introduced is because there is a large body of opinion in the public service in Australia that simply will not buy this deal.

I do not know, nor has the government claimed, that a single, individual commodity will be improved. It is presented to us on a general basis that we will have access to America. My family have sold clothing in this country for about 150 years. Groceries were not our core business, we should never have gone into them and when we did we got a big black eye because we could not compete. If you have somebody you cannot compete against the last thing you want to do is get into a competition with them but, by abolishing our tariffs, by abolishing a huge part of Australia's sovereignty, we have done just that. There is no doubt in my mind that we are going to get the same black eye as my family did in our own minor way.

Let me finish on this note: one of the great families of agriculture in Australia is the Mackay's, who, to some degree, dominate the banana industry of Australia. Robert Mackay was talking with a very important person in this country and the person said, `There is a trade-off in Philippine bananas. We've got to worry about milk here; we've got to worry about cattle.' Mr Mackay replied, `Well, we are very big cattle producers so we have a foot in both camps.' This person said, `I will answer you this way: the reason the Philippines buy our cattle is because they are cheaper, they are better quality, they are handy, and we are reliable suppliers. Those are the same reasons, regardless of what anyone says, why that country will buy those cattle tomorrow.' Trade is about making a quid and that is the way it is going to operate whether it is the steel industry that the United States has completely ignored in the WTO, or whether it is agriculture, which the American media claim they have doubled the support for when they were supposed to reduce it by 30 per cent. Let me say this: people like Mr Mackay have their brains in gear and their feet are solidly planted in Australian soil. That is more than I can say for the Australian government in this dreadful deal which will take away from our country so much of its sovereignty.