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Wednesday, 26 November 2008
Page: 11538


Mr TRUSS (Leader of the Nationals) (4:27 PM) —The opposition supports Australia’s participation in discussions to establish the so-called trans-Pacific partnership. This proposal builds on a trade arrangement already put in place known as the P4, which was put together by Chile, New Zealand, Singapore and Brunei. In a sense, the P4 would not have been one of the most difficult agreements to put together, because most of the countries have limited trade with one another and, in addition to that, the range of issues would have been small. It was perhaps something of a surprising agreement because, again, the countries concerned do not especially have a degree of geographic affinity or, for that matter, a lot of commonality. Nonetheless, I think that emphasises the point that the Minister for Trade made in his statement that there has been a rapid growth in FTAs, and some of them have been quite curious partnerships.

I think that the fact that the P4 has put together countries from a range of different geographical areas and with different interests provides an interesting foundation for a potentially wider arrangement. The proposal now to extend the P4 to P7, P8 or maybe even a wider agreement is potentially quite exciting. Of course, it would be a gigantic step to bring into an arrangement like that a country like the United States, because it would be a much, much bigger partner in that kind of arrangement than any of the other current participants, or, for that matter, a country like Australia, which has considerable ambitions in relation to our export opportunities in many of these countries.

I am somewhat concerned that there has been an emphasis, perhaps, on quantity rather than quality in free trade agreements around the world. Some of the things that are labelled free trade agreements are clearly not consistent with the WTO’s rules in relation to what can be called a free trade agreement; in fact, they are probably a direct breach of the members’ commitments to the WTO, but this seems to have been overlooked for a period of quite some years now. Everyone takes some degree of pleasure out of incremental advances in free trade around the world, but some of these agreements are really just that—at best an incremental advance. They do not provide the comprehensive breakdown of trade barriers that is expected from a WTO-consistent free trade agreement. In fact, what is obligatory for a WTO-consistent free trade agreement is that it be WTO-plus. Many of these are WTO-even or sometimes even WTO-minus. There are a lot of agreements around, and some countries are able to boast that they have a very large number of agreements, but they do not necessarily have a particularly free-trading regime. So I think it is important that we also emphasise the importance of quality—that there be real advances. Let us not do deals for the sake of clocking up additional numbers of agreements and getting certificates on the wall. What we actually have to do is to deliver fairer and freer trade around the world. Let us not sign up to an agreement just for the sake of improving relations with the country if there are not any real advances in the opportunities for Australian industry and new initiatives which lead to genuinely freer and fairer trade.

A bad deal is worse than no deal. A bad deal is one which enables high levels of industry protection and barriers to trade to be entrenched. In fact, when we agree to a free trade agreement that leaves in place significant levels of protection, we provide a comfort zone for the country that signed the agreement. They can stand behind, sit behind or, even worse, relax behind or lie down behind the legitimacy of a free trade deal and feel as though they do not have to take any further steps. So we should not be prepared to accept deals that are bad deals and that do not in fact make significant advances.

The minister said in his speech:

Our announcement to join negotiations on the Trans Pacific Partnership is perhaps the most important initiative the Rudd Government has taken to fulfil that aim.

That may well be the case, although it might be said that there have not been many other initiatives so there was not much competition. The statement then goes on to say that the reason for that somewhat flamboyant statement is about the hope for the future—that this agreement might lead to a more significant Asia-Pacific free trade agreement. You see, the most significant countries in this latest round of discussions—countries like New Zealand, Singapore, the United States and Australia—all already have free trade agreements generally with one another, so one would expect that this agreement will need to go beyond those arrangements so that there is some additional benefit. Our trade with Brunei, for instance, is about $1.1 billion, but all of that except $32 million is oil imports from Brunei, so the trade is quite small. When it comes to Peru, our total trade is $152 million. When you talk about Vietnam the trade is much larger, but again two-thirds of that trade is oil imports from Vietnam. I think that, of the countries involved in this initial round of discussion, the potential for us to have a stronger trading relationship with Vietnam is perhaps the most important, although I welcome any breakdowns in barriers and any new trading opportunities, whatever country they might be with. The clear hope is that the P4 might expand to a P7 or P8 and then perhaps something broader covering a significant breakdown in tariff barriers. If we can in fact achieve the 90 per cent elimination in tariff barriers across all of the countries that are involved on entry into an arrangement, that is certainly a worthwhile advance.

I know that there have been discussions over recent months—in fact quite a few years, but the new government has taken up the mantle—in relation to the ASEAN-Australia-New Zealand free trade agreement. Having been a trade minister for a while, I appreciate some of the difficulties that there have been in those negotiations. Good progress was made and we thought we were close, but when most of the Asian countries went home they found a whole range of new difficulties that had to be addressed. I am aware of statements that have been made that some kind of agreement has now been reached, although the text of that is not available; we have been told that the agreement has been made even though certain issues are not resolved. I do not even know what those issues are, although my guess is that one of them might happen to be the car industry, which would be a bit of a sensitivity for the minister himself and obviously is of some interest to all Australians. I think that, if there is to be an ASEAN free trade agreement with Australia and New Zealand, it needs to set the example. It must be a good deal and not a poor deal. For it to be a good deal, the countries of the ASEAN group will have to be prepared to open up their markets for Australian goods. It cannot be a one-way deal where Australia and New Zealand provide opportunities to the countries of ASEAN without getting anything in return. There must be genuine progress towards reducing industry barriers and protectionism in the countries of Asia so that the merits of a free trade agreement can actually flow through to the economies of Asia as well as to our own.

This does create some sensitivities, I appreciate, in the countries of Asia, who are keen to protect their own industries and have been very, very slow to wind back protection measures. In addition to that, there has been a desire for Australia to break down quarantine barriers, for instance, which is simply unacceptable. We cannot put issues like biosecurity on the table when it comes to discussion about trade, and that has been an issue that many of the countries in the ASEAN group have had difficulty accepting. I am looking forward to hearing and learning a bit more about what has allegedly been agreed in relation to the ASEAN-Australia-New Zealand FTA. I think it is an important grouping which can also play a key role as a building block to a wider Asia-Pacific free trade area. So all of those sorts of things are important developments and need to be pursued.

While I am talking about the importance of having good deals rather than bad deals, let me make a couple of comments about the Doha Round, which the minister also referred to in his statement. I note with interest that the APEC leaders made a statement calling for the Doha Round to be advanced; it sounded very much like the same leaders saying the same thing as they said in Sydney. Some little progress was made, and it is good to have the commitment of international leaders but it is not necessarily the key to turning out a successful outcome.

The G20 also made similar comments about wanting the Doha Round to come to finality. I notice that the British government is part of the G20 and two days ago they announced a new duty on international travellers, which suggests that protectionism is alive and well in the UK and that there is no new-found enthusiasm from the leaders of the G20 to break down barriers. They are in fact putting a new tax on people who travel to and from the UK and that tax will fall most heavily on countries like Australia that are further away. So I do not think that there has been, in spite of the joint statements that might be made at G20 and APEC, any fundamental turnaround in the desire of not only the Europeans but also the Americans to actually embrace a significant level of trade reform.

We should not be desperate in relation to the Doha arrangements to get a certificate on the wall or to get to a stage where we have traded everything off and ended up with signatures but no actual gains. I repeat again what I said earlier: the real problem with having an agreement that everyone is prepared to sign up to but does not actually make any progress is that countries slip back into a comfort zone. They have nothing more to do until there is another round of trade talks. This was the problem with the Uruguay Round because it allowed farm subsidies, export subsidies and the like to fester because they were put off to another time.

I appreciate there are a few things potentially to be gained from the Doha Round. I understand there is a high level of agreement on issues such as an end to export subsidies, although that is some way off. There is some commitment to tariff cuts, although that is mainly in the water with very little pain associated with it. There is some commitment to reduce industry subsidies, although in the case of the United States it will pretty much be an academic cut because, with prices the way they are at the present time, it is highly unlikely that there would be a call for anything like the amount of money that will still be available to the US under these kinds of subsidy programs.

We know, of course, from past experience that the US frequently has found tricks and ways to get around the rules of the WTO to in fact deliver more protection to their farmers than would otherwise be allowed. There is an important case currently before the WTO in relation to US farm subsidies and I hope that the Australian government is giving urgent consideration to participating in that case. It is a very important case because it seems to have identified a whole range of new issues in relation to industry support in the United States which will have ramifications across the world. It is an important test case and Australia should be there and be a part of it.

What we really do want out of Doha, if it is worth doing, are actual real reductions in protection, real reductions in subsidies that actually happen and cause some pain and deliver real results. Then we want practical market access, not theoretical market access but real market access that does not have a whole stack of conditions attached to it which make it very difficult to be taken up.

From an Australian perspective, it is also important that the developing countries are prepared to pay their way. I acknowledge that many of the most difficult issues have been unwillingness by the developing countries to provide access to their markets in return for the demands they are making on the developed countries. I accept that developed countries can do more than developing countries, but developing countries have got to show good faith and goodwill as well. I am particularly perturbed about some of the non-government organisations that advise the least developed countries that they should hide behind protection or that they can expect everything to be done for them rather than acknowledge that their economies will benefit most by being more open and that their consumers will have access to leading technology and the best things in the world which will then drive competitive industries in their country as well.

So a successful outcome to the Doha Round would be an important boost to world trade, but only if the deal is a good one. So I appeal to the minister, who I do not very often have the opportunity to be able to speak to directly on these issues, that if he comes back with his signature on the dotted line, to make sure that it is something he will be proud of in two or three years time; that there will be Australians actually exporting and getting advantage from the Doha deal rather than just have his name in history as the person who signed the deal and perhaps achieved little for our country.

The final point that I would like to make is that these discussions in relation to a trans-Pacific partnership are welcome but let us not lose sight of the two most important bilateral free trade agreements that we should be concentrating on at the present time—that is, China and Japan. Japan is still our most important trading partner; China our most important export market. Any agreement that we can make with China and Japan has the potential to provide enormous benefits to Australia. I know they are hard but they are well worth doing. I was disappointed when the government cut funding to negotiations for the free trade agreements with Japan and China because they ought to be priorities. They ought to be the areas that we are concentrating on. I know the department is stressed with resources, but please do not take any resources away from the Chinese and Japanese negotiations in order to do the new Pacific partnership deals or for that matter any of the other FTAs. Our relationship with Japan is long-standing and needs to be refreshed. Our relationship with China is growing and strong but needs to be underpinned by a quality free trade agreement. (Time expired)