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Wednesday, 4 August 2004
Page: 25562


Senator NETTLE (9:47 AM) —I rise to speak on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. Young artists who are looking to a career in new media have had opportunities taken away from them by the government and the opposition in this deal. The livelihood of farmers, particularly citrus, pork and stone fruit producers, who rely on our strong quarantine laws to protect their product from diseases, will have their livelihoods threatened by this deal. Cancer patients, kids with asthma and Australians with diabetes, who rely on access to affordable medicines, will have to look closely at their future financial prospects, thanks to this trade deal.

Australians who are from a non-English-speaking background, who live in regional communities and who work in industries such as the manufacturing industry or in textile factories will worry about their jobs because of this agreement. Suburban and school libraries will have to decide whether they can pay more money to Walt Disney for the increased copyright charges, thanks to this agreement. Sugar farmers have been completely left out. These Australians lose out because the government and the opposition think that Australia's trade polices should be dictated from Washington rather than coming from the Australian parliament. Despite two Senate reports and countless academic studies and concerns from community and industry groups, the Labor and Liberal parties have decided to go ahead with a bad trade deal. The PBS patents amendment that is being debated by the government and the opposition does not change the fact that this entire trade deal is a bad one. Government senators this morning have pointed out the flaws in the trade agreement, but they and the opposition are prepared to blindly forge ahead with this agreement whilst admitting that they do not know all the consequences.

One amendment about a new offence for patenting drugs does not constitute a safeguard for our Pharmaceutical Benefits Scheme. The safeguard that our Pharmaceutical Benefits Scheme needed was to be exempted from the US-Australia free trade agreement. I was part of a Senate committee that proposed this at the end of last year. At that time the Labor Party agreed with it, but now they seem to have changed their minds. The ultimate safeguard not just for our PBS but for the government's right to make laws that are in our public interest in the future is to oppose this US-Australia free trade agreement and to ensure that trade agreements are negotiated in multilateral fora and are based on the principles of ecological sustainability, international labour standards and human rights standards.

There are three substantial measures in this free trade agreement that will lead to increased medicine prices for Australians: the appeal mechanism for companies whose application for a drug to be listed on the PBS has been rejected; allowing drug companies to delay the release of low-cost generic medicines; and establishing a committee to look at making Australians pay more to US drug companies, supposedly for their research and development. A submission by academic and former PBAC members predicted that these measures would increase the price of the pharmaceuticals bill by at least $1.5 billion.

Australia's Pharmaceutical Benefits Scheme is promoted by the World Health Organisation as a model for ensuring that affordable medicines are available. Several state governments in the United States are trying to create their own pharmaceutical benefits scheme, but US pharmaceutical companies keep taking them to court to prevent them from being able to create a pharmaceutical benefits scheme like the one that we have in this country. The US drug companies are keen to destroy our Pharmaceutical Benefits Scheme not only because it will get them more profits but, more importantly, because they do not want such a model scheme being out there in the international arena so that other countries can point to our Pharmaceutical Benefits Scheme and say, `We want that.' Professor Kevin Outterson, from West Virginia University, told the Four Corners program on Monday:

Look at who you are dealing with: a multibillion-dollar, very sophisticated international industry with specific experience in the US beating us over the issue. Will they prevail over Australia and effectively raise prices over the next five years? Absolutely.

The review process that is proposed in this legislation gives US drug companies the right to a review if their drug is rejected for listing on our Pharmaceutical Benefits Scheme. New patented drugs are often rejected because they do not offer value for money compared with equally effective and cheaper generic drugs. The review process will create measures for listing the higher priced drugs by the PBAC. A side letter to the free trade agreement stated that Australia will provide opportunities for an adjustment to prices—that is, increased profits going to US pharmaceutical companies. These companies have made it clear that they expect such changes from a review process, and they have a history of the aggressive use of trade law to achieve their objectives. If they do not get results from the review process, they can ask the US government to use the FTA disputes process to challenge the adequacy of the review process.

The dispute is then heard by trade lawyers who can recommend changes to law or policy, allowing the United States to impose trade sanctions if such changes are not made. These trade lawyers can make these changes and decisions without considering the impacts on health, culture or the environment and whether it is in the public interest. This is the danger of including any aspect of the Pharmaceutical Benefits Scheme in a trade agreement. The Greens will not support any trade agreement that undermines our Pharmaceutical Benefits Scheme, so we will be voting against this trade agreement.

Generic drugs are an important component of controlling the cost of the Pharmaceutical Benefits Scheme. But, under this agreement, the Australian government has agreed to measures that will allow US drug companies to delay the introduction of generic drugs to Australia. Patents on five groups of current PBS drugs are due to expire next year, allowing cheaper generic versions to become available. The Australia Institute has estimated that, by delaying these five generic drugs by 24 months, it would cost an extra $1.1 billion to the PBS. That is the same amount of money that the government and the opposition thought they were saving by increasing the price of pharmaceutical benefits by the recent backflip on the copayment rise to the PBS. Australian National University academics found that state public hospital drug costs will rise by 12 per cent by 2008, or around $134 million by 2008, as a result of the patent changes proposed in this free trade agreement. Dr Tom Faunce from ANU stated:

The word `pharmaceuticals' appears in the text of the FTA 58 times, mainly in relation to commitments made by Australia ... for the Howard government to say that the FTA will not increase drug prices is a complete lie.

The Greens will defend our Pharmaceutical Benefits Scheme. That means protecting our public health sector and voting against this trade agreement. The agreement binds or freezes federal, state and local government regulation of essential services at their existing levels, unless they are listed as exemptions. This means that it will prevent increased protection by governments in the future of important services like water, energy and public transport that are not listed as exemptions. We face the prospect of one of our most precious community resources—water—being controlled by US multinationals. The last time this happened in Australia, when an Adelaide company ran a sewerage system in Adelaide, it was an absolute disaster.

The agreement commits Australia to aligning our copyright laws with those of the United States. One of the worst aspects of this deal is that the government has agreed to extend copyright protection from 50 years to 70 years after an author's death. This is the Disney clause, where local libraries in places such as Broken Hill, Redfern and Fitzroy will have to pay the Walt Disney corporation more money over the next 20 years for copyright on books, tapes and videos that exist in their libraries. How is that in Australia's national interest?

This deal gives the United States greater access to Australian manufacturing markets than Australian access to US markets and prevents government purchasing policies from giving preference to Australian local firms, and that is at local council level as well. That will mean a significant loss of jobs in regional areas of high unemployment. Last month I was in Albury-Wodonga, talking with locals about their fears for an autoparts manufacturer that exists in their community, how it will suffer as a result of this trade agreement and whether local jobs will be lost. Stories from Canadian autoworkers about their experience with their free trade agreement with the United States provide no comfort to these autoworkers in Albury. Buzz Hargrove, President of Canadian Automatic Workers, was recently in Australia. He had this to say:

In Canada, prior to the free trade agreement being signed with the US in 1989, on a per capita basis, we were the best industry in the world for producing vehicles. We were fourth placed in the world overall. We were behind the United States, Germany and Japan. We've now slipped to eighth place. We're way out of the ballpark from where we were. We've lost 9,000 jobs, but remember, it's not just those 9,000 jobs we lost, we lost those in a growing market. The market has been incredibly strong. Had we not had the free trade agreement, instead of losing those amount of jobs, we believe we've added up to 20,000, 30,000 new jobs in Canada.

That was the experience of the Canadian autoworkers and their experience with the free trade agreement with the United States. The Labor Party has proposed no amendment to this free trade agreement to protect the 50,000 jobs that the AMWU predict will be lost as a result of this agreement. Mr Latham has said that the agreement is not a trade agreement but an investment agreement. Not all investment is good for Australia. Investment can often mean takeovers of Australian companies by American corporations. Therefore, decisions will be made on jobs and profits in places such as New York and Los Angeles.

The agreement, and the changes in this legislation, will mean that the government gives up the important watchdog powers of the Foreign Investment Review Board to scrutinise and advise on foreign investment. The FIRB will now only review foreign investment in industries that total $800 million, rather than the $50 million threshold that existed before this trade agreement. Large Australian companies could now be bought up by the US and the government will not even know about it. It would not have had to look at these issues through the Foreign Investment Review Board.

On the issue of procurement, the government claims we will have access to the US procurement market but in fact access will be severely limited. One major barrier is that the US government has retained the right to give preference to its small firms—that is, firms which employ up to 1,500 people. They are hardly small firms by Australian standards. Australia has no such right, no such exemption for so-called `small' firms of 1,500 workers. Certainly, Australian IT companies with fewer than 1,500 people—I would suggest that is a significant number of Australian IT companies—will be competing with hundreds of other much larger US firms in the American marketplace, firms that the US government supports with what it calls `aggressive advocacy'. We should read this for what it is—subsidies.

I turn now to the textiles industry. US trade barriers in the textiles industry that are untouched by this deal, such as the `yarn forward' rule, allow for the make-up of garments in overseas countries as long as the home country made the fabric or yarn that is used. Australian textile manufacturers make extensive use of imported fabric or yarn, making it difficult for Australian textile businesses to meet the US trade barriers that will remain in place after the trade agreement. Singapore thought it was getting a bargain under its free trade deal with the US, but it found that the US textile trade barriers were so hard to meet that now it does not even bother applying for tariff reductions; it just pays the tariff. It cannot meet the tariff-free status with the `yarn forward' rule that exists in the US. The powers that are given to the US in this legislation are incredible. In the textiles industry, US customs officers are allowed to accompany Australia-US free trade agreement verification officers while they search textile factories in Australia to ensure that the free trade agreement is being abided by.

This deal has not come close to delivering the promised wins for agriculture. Sugar is completely outside this agreement. The government promised it would not sign a deal that locked sugar out, and Mark Latham's `no sugar, no deal' promise will fade into insignificance now. Tariffs remain in place for wool, for 10 years; for wine, for 11 years; for steel; and for beef, dairy, horticulture and cotton, for 18 years. Beef and dairy producers have to wait almost a generation—18 years—for the elimination of US quotas and tariffs. Also, if our exports to the US rise too quickly or our prices are too competitive against the exchange rate, the US can slap its tariffs back on—no questions asked.

The government claims that this deal is a win for avocado farmers. But Australians who are growing avocadoes—for example, in northern New South Wales—are not allowed to sell to the United States during our peak production time. It is the same story for citrus. So much for the benefits to agriculture that the government promised under this deal. The Nationals' representative negotiating this deal for the government has let down producers of Australian pork, avocados, stone fruit and citrus, to name a few.

This trade agreement is not in Australia's interest. It will undermine other international trade agreements. The Greens do not support bilateral trade agreements. How can Australia expect to get a fair deal when negotiating with the US, the world's largest economy? How can we expect to get a fairer deal in a bilateral agreement with the United States than we can when we are negotiating with every country around the world? The Greens support trade agreements in which all countries are involved. The charter of Greens parties from over 80 countries outlines how Greens parties around the world are working to support trade agreements that involve representatives from affected communities in transparent processes. Fair trade can only develop through cooperation amongst the developed world and countries like Australia to ensure that labour rights, essential services and environmental regulation do not get pushed aside by powerful countries like the United States. We can and should have trade agreements that ensure that generic medicines are available, not just to Australians but to all people, particularly African and Asian women who are suffering as a result of the growing epidemic of HIV. We should have trade agreements that ensure Australian farmers are not blocked from selling their produce in the US because of trade subsidies.

This trade agreement damages Australia's chances of getting such a global, international agreement in place. It should be rejected now. The Greens wish that more political parties in our parliament were prepared to stand up to the bullyboy tactics of the United States in negotiating this trade agreement as well as in areas like defence. We will stand here and speak out about these agreements. They are not in our national interest and we cannot support them. I move:

Omit all words after “that”, insert “further consideration of the bills be deferred until after the Australia-United States free trade agreement has been subject to a review, with public input, of its environmental impacts, and a report on that review has been tabled in the Senate”.

This is a very similar recommendation to the one that was made by the first Senate committee that looked at this legislation—a Senate committee that I was part of. In that committee report, the Labor Party agreed to this amendment and they agreed to exempt from this agreement the PBS, our cultural industries, our Foreign Investment Review Board, our single-desk export manufacturing boards like the Australian Wheat Board. But today we see the government and the opposition both prepared to support a trade deal that undermines our national interest in all of these areas. It is not good enough. The Greens are going to stand up for our national interest. So we will oppose this trade agreement and continue to campaign for fair trade agreements which provide us with the opportunity to regulate in our national interest and with human rights and labour standards across the globe that we can be proud of.