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Monday, 10 September 2018
Page: 9


Dr LEIGH (Fenner) (10:20): Labor has a strong tradition of supporting sensible, broad based trade liberalisation. It was the Whitlam government that instituted a 25 per cent tariff cut in 1973 and the Hawke and Keating governments that reduced tariffs in 1988 and 1991. The net impact of that was to make the Australian economy more competitive and to put thousands of dollars back into the pockets of regular Australian households. Indeed, if you go to a department store now to buy a pair of kid's shoes, you'll see sticker prices that are similar to where they were 30 years ago. If you go to buy a bottom-of-the-range new car, you'll find sticker prices not that different from 30 years ago. Trade liberalisation has benefited households and has the potential to create jobs. But trade liberalisation has to be done right. Labor's commitment to trade liberalisation is a strong, multilateral one. As they say in trade, 'bigger is better', not only with respect to the number of countries engaged in agreement but also with respect to the breadth of the trade agreement. High-quality agreements generate greater benefits.

The Peterson Institute, in a paper by Peter Petri, Michael Plummer, Shujiro Urata and Fan Zhal, suggested that TPP-12 would deliver benefits of US$492 billion. Their modelling now suggests that TPP-11 would produce global benefits of US$147 billion. Alongside Australia, the TPP-11 includes Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It should be noted that it does not include the United States or China, the world's two largest economies. The Peterson Institute estimates that significantly larger gains would come if Indonesia, Korea, Taiwan, the Philippines and Thailand were to join the agreement—were it to be a 'bigger and better' agreement. When the institute turns to the individual countries, they note that no country benefits from going from TPP-12 to TPP-11. The Peterson Institute's modelling suggests an income benefit for Australia in 2030 of 0.5 per cent—a smaller impact than is found, for example, in Peru, in Brunei, in Malaysia, in Singapore or in Vietnam. These gains are smaller than they would have been under the original TPP and reflect the fact that this is an agreement that covers only a relatively small share of trade compared to the previous agreement.

Labor is committed to engaging with Asia. Our FutureAsia policy ensures that we establish an Australia week in China on an annual basis and that we establish a joint team made up of officers from DFAT, Austrade, the Department of Agriculture and the Department of Industry to tackle non-tariff barriers. We are also committed to ensuring that there is better Asia literacy among Australian corporate boards. As my colleagues, the shadow trade minister, the shadow Treasurer and the shadow assistant minister to the shadow Treasurer have noted, it is vital that we improve Asia literacy.

In terms of tackling trade agreements, we believe that the Productivity Commission should independently review trade agreements a decade after they're signed to see what the impact of them has been, and whether the results live up to the boasting. We need to increase the role of business in trade negotiations, and, importantly, we need to ask the Productivity Commission to conduct an independent economic analysis of every new trade agreement before it's signed. That approach of independent economic analysis has been supported by the Australian Chamber of Commerce and Industry, the Productivity Commission, the Harper review and, indeed, by Liberal MPs who examined the original Trans-Pacific Partnership. It was supported by the member for Warringah, who commissioned independent economic modelling on Australia's agreement with Korea.

We have reservations about the inclusion of ISDS clauses. We note that the New Zealand government, under Prime Minister Jacinda Ardern, has recently negotiated side letters with four countries, removing the application of ISDS clauses in the TPP-11.