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Tuesday, 3 August 2004
Page: 25426

Senator WONG (5:58 PM) —I rise to speak on the US Free Trade Agreement Implementation Bill 2004 and the related bill. It seems clear, from the analysis of the Senate committee and much of the analysis that has been done over the last months, that this government has not negotiated the best deal possible for Australia in this free trade agreement. Many have said this government has been outnegotiated, and I concur with that view. Perhaps that is because the government's primary focus through these negotiations has been not so much on the national interest as on ensuring its own electoral advantage as a result of the free trade agreement. Its focus has been on its political life and on getting re-elected, and insufficiently on Australia's national interest. In that process some key deficiencies in the agreement exist for Australia, which I will return to later.

The political gamesmanship of this government over the last few weeks and months has been demonstrable and patent. There have been many occasions in the past where Australia's trade position has had bipartisan support. In a recognition that our interests are often best served by speaking with one voice there has been bipartisan support for liberalisation, for example, of trade in agriculture. As US trade representative Robert Zoellick told Congress, he wanted to make sure that the free trade agreement with Australia had bipartisan support. That was certainly his intention. That was certainly not the intention of this government. This government has played this debate in an attempt to gain electoral advantage. It has not sought genuinely to achieve bipartisan support and has resorted to quite a lot of cheap political point scoring in recent weeks. It has taken a partisan approach. It has held back key aspects of the detail of the agreement from the Senate committee and from the public—in particular the details of the review under the PBS, which is part of the free trade agreement. That was an essential part of the information needed for both Labor and the public to inform their positions.

The government has regularly been critical of Labor for requiring the scrutiny of this agreement by the Senate Select Committee on the Free Trade Agreement and has attacked us over the delay, it says, that that scrutiny has occasioned. These are actions of a government that is not interested in obtaining bipartisan support for an agreement; these are actions of a government interested in making a political point. The government has regularly berated the Labor Party and sought to use our consideration of this agreement as an element in its strategy to paint the Labor Party as being anti-American. As our leader, Mark Latham, said quite succinctly: Labor is not anti-American; we are pro-Australian. We opposed the war in Iraq—and in hindsight we were right to do so because it was clearly a decision based on a lie. In relation to the free trade agreement Labor has sought to discern the national interest and to make an assessment as to whether this agreement is of net benefit to Australia and whether the concerns raised by some groups about the agreement could be allayed or not.

It is important to note that, unlike some of the minor parties in this chamber, Labor has not taken a position of absolute and jingoistic protectionism over the last 30 years. This is the hallmark of some parties—and that is their right—but we say that they are wrong. It is undeniable that the liberalisation of trade has assisted some developing economies to dramatically improve the incomes of their peoples. It is also undeniable that many Australians in export focused industries have benefited from trade liberalisation. China and India, where there are substantial numbers of the world's poor, have been able to lift many of the poor out of poverty—in large part due to their capacity to sell their products on world markets. As Oxfam say—and they are not noted for their extreme right wing views:

Trade can be a powerful engine for poverty reduction.

It is also the case that many of the world's trade rules have largely benefited certain developed economies which spend far more on protecting themselves from poorer countries than they give in aid.

Labor's view is that there are benefits to be gained for Australians from trade liberalisation. I am also of the view that we can make trade work to benefit the poorer countries as well as Australia. Happily, our interests coincide in many areas, particularly in the area of the liberalisation of trade in agricultural products. Labor has consistently, over the last decades, pushed for gains through multilateral processes, not simply through bilateral processes. However, it is also the case that trade liberalisation is not some sort of magic bullet. It must always be accompanied by a transformation of the economy. There are Australian workers who are patently and potentially vulnerable to the vagaries of world markets. We cannot compete in low-skill, low-wage jobs. We must always have active industry development policies—policies that seek to create jobs for the future, that seek to enable diversification of our export base and that seek to assist people in reskilling and developing skills which will enable them to perform the jobs of the future.

Unlike the Howard government, which seems to have a hands-off industry policy, Labor governments have always sought to implement industry development policies with the recognition that trade liberalisation must be accompanied by economic transformation. And in some areas we were very successful. Look at elaborately transformed manufactures over the period of the Labor governments, let us say between 1988 and 1996. ETMs, as a share of our total merchandise exports in 1988, were 13.6 per cent. After eight years of Labor government that share had climbed to 23.7 per cent. That is a significant achievement because it demonstrates an ability to produce products which are valued added, which require a reasonable amount of labour input and which can command reasonable prices on the world markets. Unfortunately, the substantial increase in that measure of improvement under Labor governments has not been shared by the Howard government. We have seen the share of ETMs as a proportion of total merchandise exports fall under the Howard government. In fact, if the share of ETMs was now the same as in 1996 when Labor lost government, there would be almost $2 billion more in ETM exports. That is a substantial criticism of the Howard government.

Labor has also announced, consistent with this view, a new agenda for Australian manufacturing. I am sure Senator George Campbell, who is in the chamber, can tell the Senate more about this than I. We have announced a centre of excellence for advanced manufacturing, an Australian manufacturing council and a 10-year national manufacturing strategy to revitalise manufacturing. These are aspects of a view about trade that recognises that trade liberalisation can have negative consequences for certain workers and that governments have to intervene and develop industries to ensure that impact is minimised and that the benefits of liberalisation can be shared—that we can have productivity with a purpose and not simply leave people by the wayside.

In contrast, what we see from this government is a hands-off industry policy—except, of course, when it comes to certain agricultural sectors where some National Party constituencies need to be bought off. This is a government that makes it harder rather than easier for people to reskill and upgrade their skills and that makes it more expensive for people to take on higher education. It is a government that has failed to engage in any real industry development across a range of manufacturing areas.

I return now to the free trade agreement. It is disappointing, particularly in the area of agricultural products, that there are some clear areas where Australia did not receive benefits. There are extended phasing-out periods for tariffs, the continuation of quotas in some areas and some let-out clauses which may in fact allow for the reimposition of tariffs in some areas. Notoriously, sugar has not been included in this agreement despite its non-inclusion being described as un-Australian by the Deputy Prime Minister—perhaps more evidence of the demise of the political power of the National Party.

However, there are some net benefits to the agreement. They have been wildly overstated by this government. As Ross Garnaut said, the economic modelling on which this government relied for its overblown claims regarding the benefits of the agreement failed the laugh test. Perhaps a far more accurate analysis is that done for the Senate committee by Dr Philippa Dee, which concluded that the agreement would be of some net benefit to Australia—but a substantially lower benefit than that trumpeted by the Howard government.

Labor's position, which we announced today, is that there are net economic benefits to Australia and on balance this agreement should be supported. But there are reasonable concerns which have been raised by the community, particularly before the Senate select committee, over some of the social impacts of the agreement, and we share many of these concerns. If you look closely at the announcement that Mark Latham and Senator Conroy made earlier today, you will see that Labor have taken an approach which seeks to safeguard against many of the concerns which have been raised by community groups regarding the social impacts of the agreement.

There are two primary ways in which we are seeking to do that. The first is by moving specific amendments in the Senate on two issues. The first amendment relates to the PBS and ensuring that there is protection against bodgie patent claims by drug companies—patents lodged in order to try to prevent cheaper generic drugs coming onto the market. The second amendment we will be moving will ensure that current local content standards are legislated into an act of parliament, which they are currently not. In addition to these legislative safeguards, we have announced a range of measures that, if elected, a Labor government would put in place to ensure that the implementation of this agreement did not have any unintended social consequences.

This is a test for the government in relation to our amendments. If, as the government says, the Pharmaceutical Benefits Scheme is not undermined by this agreement then the government has nothing to lose by supporting Labor's amendments. Similarly, if local content rules are not under threat then the government ought to support Labor's amendments. If it is the case, as Senator Boswell said when he preceded me, that there is no threat of evergreening of patent claims, which would of course have cost consequences for the PBS, then surely the government would support our amendments that ensure that evergreening—in terms of baseless patent claims being used to prevent generic drugs coming onto the market—does not occur. If the government opposes the amendment then I say the Australian public should be rightly suspicious of the position taken by the government and rightly suspicious of the government's claims that the PBS and local content are not under threat.

Finally, I want to speak briefly to the minor parties—who, I understand, have a different view on the agreement from that taken by the Labor Party today. You have trumpeted your concerns regarding a number of issues, particularly the integrity of the PBS and the maintenance of local content. Given that, Labor look forward to your support for our amendments—because we are seeking to protect precisely those things about which you have stated concerns.