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Tuesday, 3 August 2004
Page: 25412

Senator KIRK (5:01 PM) —I rise to speak this evening on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. Free trade is one means of generating the growth necessary for enhancing the living standards of all Australians. In the past, Australia has directly benefited from trade liberalisation. Reducing trade barriers boosts our economic growth, creates a more competitive industry environment, provides benefits to consumers and builds stronger relationships with our trading partners. Labor has always fought strongly to ensure that the benefits of such economic growth are equally shared. The US-Australia free trade agreement promises all of this for Australia.

The free trade agreement is designed to more closely integrate Australia with the United States, the world's most dynamic and largest economy, by reducing tariffs and improving market access. But it has also raised a number of concerns. Throughout this year, the position of the Australian Labor Party has been that we would judge the government's trade agreement with the United States on the evidence and ask whether it is a net plus or net minus for Australia. Labor members and senators have participated in a number of inquiries into the US-Australia free trade agreement. The Joint Standing Committee on Treaties, of which I am a member, conducted an inquiry into the agreement. Our report was tabled during the last session. The report released yesterday contains the recommendations of Labor senators on the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America. Rather than stalling implementation of the agreement, the committee process has enabled the Senate to thoroughly examine all the facts, hear the arguments from those who stand to lose or stand to gain from the agreement and reach a conclusion as to whether the free trade agreement is in Australia's national interest.

The Australia-US free trade agreement has generated considerable debate in our community, which is evident both in the number of submissions to the inquiries and in the number of emails, letters and faxes that have been received by members of parliament. It is strongly supported by business and by state and territory governments. But there is also strong opposition to parts of the free trade agreement, and this has been voiced by some unions, community organisations and other interested parties. In particular, the sugar industry was bitterly disappointed at being left out of the deal. Concern has been expressed about the impact on the Pharmaceutical Benefits Scheme, local content in future audiovisual mechanisms, intellectual property and possible job losses. These are some of the matters I will be addressing in my remarks today.

Labor has listened to all the concerns of all those persons who have raised issues with the free trade agreement. From the very beginning, Labor's position has been that it will only support this agreement if the agreement can be shown to be in the national interest. This is not a decision it has taken lightly. The two committee inquiries into this free trade agreement have allowed for all the parties—both those for and those against the agreement—to submit their views. On consideration, both inquiries—the Senate select committee and the Joint Standing Committee on Treaties—found that, on balance, it is in the national interest to support this deal. Labor will support the government's free trade agreement legislation through the parliament but only if the government addresses key concerns in some very important areas, including protecting the Pharmaceutical Benefits Scheme and maintaining Australian content in the media.

Labor does not want Australia to pass up the chance to achieve freer trade arrangements with the world's largest and most dynamic economy. But the facts of the matter are that this government has failed to negotiate the best deal possible for Australia and in a couple of areas there are serious flaws. The government no doubt could have achieved a better deal for Australia if it had pushed harder at the negotiating table, especially on behalf of our farmers. The government sold out many important Australian industries that were counting on the Prime Minister and his government to look after their interests. This free trade agreement has been incompetently negotiated. In particular, the government's uneven-handed pursuit of bilateral trade deals has meant a lack of focus on where Australia stands to gain the most. The biggest gains for Australia are in expanding opportunities for our agricultural sector, and the biggest hurdles to this require participation in the World Trade Organisation to negotiate down the levels of export subsidies and other types of agricultural support in parallel with all major subsidisers. The WTO is the only place where this can happen. Labor's policy preference is for multilateral trade liberalisation via the World Trade Organisation.

This bilateral agreement before us today will increase access to US manufacturing, agricultural, services and government procurement markets, although the gains will be far smaller than the figures that have been bandied around by the government. Bilateral agreements should not be at the cost of Australia's position at the World Trade Organisation. A consultant to the Senate select committee, the expert economist Dr Philippa Dee of the Australian National University, has estimated the benefits to Australia at $53 million a year. Over time, the free trade agreement will allow Australia to establish closer economic relations and integration with the world's largest economy, with increased two-way investment flow. Undoubtedly, this will be of long-term benefit to Australia.

Throughout the examination and debate surrounding the free trade agreement, Labor has raised a number of concerns about its social impact. Some of these matters have been addressed as more information has become available. The free trade agreement is a living agreement and it will continue to develop over time. Labor senators on the Senate free trade agreement inquiry made a number of recommendations to improve the implementation of this agreement. Drawing on these recommendations, Labor will put forward safeguard amendments to the enabling legislation, here in the Senate, to ensure that the free trade agreement does not undermine the PBS and the existing local content rules. The Senate inquiry into the FTA has put together a package of more than 40 recommendations that should be considered as complementary to the free trade agreement to ensure that Australia's national interest is maximised through this agreement.

The Joint Standing Committee on Treaties, of which I am a member, made 23 recommendations in its report. Most of them related to action that could be taken at Australia's initiative or within Australia to ensure that the free trade agreement is a better deal. Labor members of that committee supported the recommendations of chapters 1 to 17, but we opposed taking binding treaty action at the time of the report's writing. In our dissenting report, Labor members stated they:

1. Believe an extension of time should have been sought from the Minister for consideration of the Treaty to allow adequate time to review the evidence presented and to prepare the Report of the Committee.

2. Consider that given the interdependency of the consideration of the Treaty and the legislative, regulatory and administrative measures which must be taken to implement the various terms of the Treaty, it is not possible to determine if it is in the national interest for binding treaty action to be taken, without first considering the terms of such measures as

the appeal mechanism to be established with respect to the PBS and the implications for generic medications

access by universities, educational institutions and libraries to copyright material under the proposed arrangements

an environmental impact review of the Treaty

legislative safeguards for local content rules subject to ratchet provisions of the Treaty.

These were the concerns that were outlined by dissenting members of the treaties committee. Following this, of course, we now have the report of the Senate select committee into the free trade agreement. A number of the concerns that we, as dissenting members on the treaties committee, had in relation to the free trade agreement have now been allayed by the Senate select committee's report. It has made more than 40 recommendations to ensure that Australia's national interest is maximised through this treaty. The Senate select committee inquiry found that the overall package is marginally in Australia's national interest. But, as it stands now, the deal puts at risk the PBS and also existing levels of Australian content on Australian media. We believe that, instead of rushing this ahead of an election for political gain, this government should have taken the time to negotiate a better deal for Australia and for Australians. Consequently, as has been foreshadowed here today, Labor will be proposing amendments which we consider are key and must be passed to safeguard Australia's interests.

Firstly, we consider that it is necessary to protect the PBS by preventing and penalising drug companies that try to stop cheaper generic drugs from coming onto the market by lodging spurious patent claims. Labor has said that it will require all documentation submitted to the independent review mechanism, which will be established to examine unsuccessful drug listing applications on the PBS, to be published on the Internet within 48 hours. The Productivity Commission will be required to monitor and report annually on the impact of the free trade agreement on the PBS, including the impact of the independent review mechanism. If the differential between US and Australian drug prices is seen to be narrowing, then a Labor government will change the independent review mechanism. If the independent review mechanism is used, each acceptance by PBAC and the Minister for Health and Ageing of the recommendations of the independent review will be reported to parliament in a ministerial statement.

The terms of reference of the medicines working group will include a commitment to the principle of universal access to affordable medicines, which currently underpins the PBS. This working group will not consider any policy issues that could be seen to undermine the principle of universal access to affordable medicine. This working group will operate with appropriate transparency in regard to its agenda items, minutes and recommendations.

Secondly, Labor has said that it will allay concerns about any future reductions in local content for free-to-air television, pay television and radio, through an amendment which will legislate the current local content standards. Of course, currently those content standards are determined by the ABA. Labor has said that it will ensure that Australians continue to see and hear Australian faces and voices through their popular media by ensuring that the free trade agreement provides flexibility to regulate local content on future media. Labor has said it will legislate to ensure the free trade agreement definition of `interactive audio and/or video services' includes, but is not limited to, future media already identified and it will announce a policy package to encourage further investment in Australia's film and television industry before the upcoming election.

Labor will not pass this free trade agreement enabling legislation without the two amendments I have just referred to, namely, the amendments that will protect the PBS and, secondly, those that will protect local content. Labor has also indicated that when it wins government at the next election it will put in place a package of additional measures to address a range of other community concerns that have been raised in relation to the free trade agreement. These include a commitment that prior to entering into any future free trade agreement negotiations a Labor government will table in both houses of parliament a document setting out its priorities and objectives in the negotiation of a free trade agreement. This document will include an assessment of the costs and benefits of any proposals that may be negotiated. The assessment will also consider the economic, regional, social, cultural, regulatory and environmental aspects which are expected to arise under the agreement. Once the negotiation is completed, a Labor government will then table in the parliament the proposed treaty together with any implementing legislation. These two stages that Labor will be putting in place preceding the formal consideration of a treaty will improve the process considerably and make the process more transparent. The process Labor is proposing is in stark contrast to the way that this free trade agreement was negotiated by the government. This free trade agreement was negotiated behind closed doors, with only minimal consultation with stakeholders and the Australian public.

Thirdly, in relation to copyright and intellectual property laws, a number of concerns have been raised about those aspects of the agreement. Labor has said that it will continue to provide a fair balance between the interests of creators, owners and users under copyright and intellectual property laws. Currently, in the United States there is a much more generous definition of fair use than in Australia, affecting access by libraries and researchers. Under the agreement, Australia has not been required to adopt the United States definition. The United States has a much higher standard of originality for copyright protection than Australia, requiring `creative spark', not just `skill and labour'. The changes made by the free trade agreement therefore are far more restrictive in the Australian legislative context, including a more prescriptive regime in creating limited liability for Internet service providers, allowing the transfer of copyright by contract, and an extension of copyright protection by an additional 20 years.

In Australia, the existing legislation provides for four categories for fair dealing purposes: research or study, criticism or review, reporting of news, and professional advice given by a legal practitioner or patent attorney. The United States legislation provides also for four, but four different, fair use aspects: the purpose of the use, the type of the work, the amount of the work used, and the impact on the market. It is clear that the United States legislation allows for a much broader application than the limited Australian legislation, where it is restricted to specific activities. Labor would address this by establishing a Senate select committee on intellectual property. The role of this committee would be to comprehensively investigate and make recommendations for an appropriate intellectual property regime for Australia in light of the significant changes required to Australian intellectual property law by the agreement.

Implementing the Australia-US free trade agreement without paying attention to how Australian legislation can be altered to maintain a balance between users and owners of copyright would result in significant costs, in particular for educational institutions. Labor would require that the Attorney-General report annually to parliament on changes to the Copyright Act affecting universities, libraries, educational and public research institutions, particularly with regard to any increased costs they may bear.

The Joint Standing Committee on Treaties, of which I am a member, in recommendations 17 and 18 provides for the government to replace the Australian doctrine of fair dealing with one that resembles the US open-ended defence of fair use, and also that the Attorney-General's Department and the Department of Communications, Information Technology and the Arts review the standard of originality applied to copyrighted material with a view to adopting a higher standard such as that in the United States.

In conclusion, Labor have looked at the facts. We have waited until we have all the information at hand to enable us to make a decision in relation to the free trade agreement. The fact is that the government failed to negotiate the best deal possible for Australia, and in a couple of areas there are serious flaws. However, we do not want Australia to pass up the chance to deal with the world's largest and most dynamic economy, the United States of America. Labor will therefore support this legislation, subject to the passage of our amendments in the Senate.