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Wednesday, 4 August 2004
Page: 25592

Senator LEES (11:57 AM) —The Australia-US free trade agreement—the so-called free trade agreement—is an agreement that we cannot walk away from if we find that there are major problems a year or two down the track. It is something that we will have to live with on a daily basis. Therefore, it is something that I stress should have been looked at in much greater detail, and we certainly have time to do that. Almost 90 per cent of submissions to the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America oppose the free trade agreement in its current form.

Labor made some very worthwhile recommendations—some 43 of them—but are only going to stick with two of them. Those 41 recommendations would have made a difference and would have brought this agreement towards a more balanced position than it is in now. We have to ask: why the rush? Why are both the ALP and the government very keen to get through this legislation—the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004—and to see it pass through parliament when we have another five months before it is due to be implemented? The answer is obviously a political one: with the election looming, the government wants to use this as a political football. It wants to put the ALP in a position where it can label them as anti-American. I stress here again that, by being pro-Australian, you are not being anti-American. Rather than having this rush now, the parliament should be taking some time to debate the legislation. We should have, for example, invited input from the Productivity Commission. We should have accepted the ALP senators' recommendation of the establishment of a select committee on intellectual property.

Many submissions to the free trade agreement select committee detailed widespread implications for our intellectual property law and they should have been carefully gone through issue by issue. Let me briefly illustrate the problems with intellectual property rights, which cover copyrights, trademarks, patents and industrial design. Australia is a net importer of intellectual property, and the strengthening of these rights will have a negative economic effect on Australia. The FTA implementation bill obliges us to harmonise our patent, copyright and trademark protection with that of America. It affects pharmaceutical patents; the audio, video, DVD and software industries; and the education sector. I note that the Australian Vice-Chancellors Committee's submission to the select committee was scathing in its criticism of the intellectual property changes in the agreement. It argued strongly that the proposed modifications of Australia's copyright law to conform with the US law will significantly diminish our access to information in the public domain and that this in turn will diminish our academic innovation and increase costs of education.

There are strengthened protections against the circumvention of the technological measures used by authors to restrict access to their work. An example is the coding of CDs to restrict how and where these might be used, and this is biased in favour of producer interest in the US to the detriment of Australian consumers. For instance, the technological protection measures that are embedded in the agreement will put thousands of existing DVD and digital music player holders in contravention of the law if they own a multizone DVD or if they legally download compressed music from a different region. The implementation bill also narrows some exemptions which used to allow consumers to make copies of performances at home, solely for their own use. That will not be allowed anymore; it cannot be done. It makes it a copyright infringement to play an unauthorised copy of a DVD or even to unknowingly view it online. This shifts the onus onto the consumer, not the person making the unauthorised copy.

The increase in the duration of copyright protection would significantly diminish our access to information in the public domain. The extension of patents in the software inventions for established companies is bad news for Australian users. We will be paying monopoly prices for software, and that is bad news for Australian software innovators working with open source software. The restriction on parallel imports of copyright goods by Australia means that only the copyright holder can import or authorise the importation of copyright material. I think we will see far-reaching effects in this right across a whole raft of sectors, including our health sector. It is reasonable to ask why the government's implementation legislation ensures trade restrictions in the name of free trade. Why should we embrace the US model of intellectual property rights when we have a perfectly good model ourselves? Why should we not have insisted that they embrace ours?

I will move on to another of my key concerns, and that is the whole issue of quarantine. The free trade agreement will allow the US to pursue the reduction of our quarantine regulations as they impinge on exports of US product to Australia. This poses a very real and significant threat to our clean green agriculture, not just to our image. We have a very good image based on our quarantine restrictions that are based on good, scientific evidence. But if you read the material from the US you will see that US agricultural exporters in their huge pig industry are expecting and planning to export fresh pig meat into Australia, despite the fact that they have the devastating disease PMWS and we do not. The US farm lobbies have huge expectations that this agreement will break down our quarantine barriers. They see them simply as an impediment to trade.

Some additional material was presented to the Senate committee in response to some questions from Senator Boswell. After reading this material, I cannot understand why Senator Boswell remains so committed to this agreement. This material was prepared by Professor Linda Weiss of the University of Sydney and Dr Elizabeth Thurbon of the University of New South Wales. I do not have much time to go into it in great detail. One section reads:

Most significant change under the deal:

The inclusion of US Trade Representatives in Australia's quarantine decision-making processes will now give foreign trade officials the power to intervene in policies of utmost national importance for economic security.

They go on to detail some of these changes:

A stated objective of Chapter 7 is to `provide a forum for addressing bilateral Sanitary and Phytosanitary (SPS) matters, resolve trade issues, and thereby expand trade opportunities (Article 7.1). As such, two quarantine-related discussion bodies will be established under the agreement:

(i) Australia-US Committee on Sanitary and Phytosanitary Matters (hereafter the SPS Committee),


(ii) Australia-US Standing Technical Working Group on Animal and Plant Health Measures (hereafter known as the SPS Working Group).

Both of these bodies are intended to `facilitate trade between the parties'.

The SPS committee will compromise very much what Australia has been able to do in the past—that is, restrict access on the basis of the potential of diseases coming in when we do not have those diseases here. This will damage our status for export to other countries who will not want this disease and will not want our products in the future. Also, there will be benefits for big US chemical companies because we will have to have large volumes of chemicals and health companies will be able to sell more antibiotics to our farmers. That will mean more chemicals and more antibiotics coming into our food chain, and that in itself is a worry for the health of our community. We do not give large subsidies to our farmers, and I wonder about their ability to fight these diseases in their animals and plants. I suspect that we will not be able to compete in many industries, given the additional costs they will be facing. There is also the additional concern for our native flora and fauna. How will they be protected from exotic diseases?

I hope the ALP maintains its commitment to the two issues it has highlighted, particularly the issue that is still in contention. Most of the threats to Australia will remain even if these issues are fully supported by the government. Other issues that I believe we will still have to deal with are our ability to maintain our public services, our industrial relations conditions and—as I have just mentioned—our quarantine standards.

The FTA contains grievance procedures which could seriously undermine Australia's ability to protect social standards and environmental health. These grievance procedures open the door for US companies to receive compensation if future legislation limits their profit margins. This will mean that, for example, if Australia tries to protect environmentally sensitive areas from industries such as those that produce dioxins or other toxic material, to introduce restrictions on work force casualisation, to fund Australian film productions which are not commercially viable but culturally essential, to refuse to privatise national parks or to refuse to export dolphins and dugongs to the US for marine exhibits and shows, it may have to compensate US companies for unrealised profits. The agreement sets out that compensation is payable at 50 per cent of those unrealised or anticipated profits. This would be a huge deterrent to any government to stand up and protect us, the environment or cultural investment.

I know this may sound extreme, so I want to draw on a couple of examples to highlight it. The first one relates to the export of dolphins and dugongs. The Whale and Dolphin Conservation Society alerted us a couple of weeks ago to the inclusion of whales, dolphins, porpoises and dugongs in the tariff schedule under the FTA—they are actually there. They say in their press release:

The US not only allows some trade in whales and dolphins at present, it also allows whales and dolphins to be imported for its commercial marine theme parks which hold marine mammals in captivity for entertainment. With 46—

of these species—

in Australian waters, and a trade agreement in place—

that names them—

Australia may become a logical source for such trade in the future.

At present we prohibit such trade, but there is a loophole. The minister has the discretion. The minister has the ability under the federal environment act to allow trade. I will conclude by quoting again from their press release:

If trade in—

these animals—

between the US and Australia is not intended, there should be no problem in taking whales, dolphins, porpoises and dugongs off the Tariff Schedule, in order to comprehensively rule out this risk.

I ask the government—and we can do this as we get into committee—why they are not making what are quite commonsense changes to this agreement before we see it passed.

Let us look at other examples of what has happened with the North American Free Trade Agreement, NAFTA, and the experiences of the US, Canada and Mexico. I quote again from a document that is looking at some of the problems with NAFTA. The first example says:

The U.S. Metalclad Corporation sued a local municipality in Mexico for US16.7 million, because it was refused permission to build a 650,000-ton/annum hazardous waste facility on land already so contaminated by toxic wastes that local groundwater was compromised ...

I quote further:

The U.S.-based Sun Belt Water Inc. is suing Canada for US$10 billion because a Canadian province interfered with its plans to export water to California. Even though Sun Belt had never actually exported water, it claims that the ban reduced its future profits.

The model we are looking at here is the same model as we see in NAFTA. If that does not ring alarm bells for some members of the government and opposition, I am not sure what will.

There is a whole list of other issues. There is the exemption from the Foreign Investment Review Board review of takeovers of Australian companies by American companies—now up to 800 million. Then there is culture—our culture. Surely it is a public benefit that certain activities or industries are subsidised by government. For example, where would our film and TV industries be without government arts funding and content quotas? Where would films like Gallipoli; The Adventures ofPriscilla, Queen of the Desert; Lantana;and Shine be? There is a long list of films that on the drawing board could not be argued were going to be economically viable. These films would not have passed a strictly commercial test but they have contributed, I would argue, immeasurably to our cultural heritage.

Already 85 per cent of box office takings in Australia are for US films, 70 per cent of our television dramas are from the US and 95 per cent of music played on Australian radio stations is from the US, but they still want more. The Australian Film Finance Corporation in 2002-03 financed 11 feature films, six adult television drama projects, five children's TV drama projects and 31 documentaries. Then there is, of course, the ABC and SBS, about which questions have been raised in this place already this morning. There is a long list of issues that I believe we need to deal with before we pass this agreement.

Labor's amendment insisting on Australian content being actually locked into legislation—that is, 55 per cent on TV actually locked in—will certainly help. And it does seem that this amendment has been agreed to by the government. I am very pleased to see that change; however, this agreement still does not allow for us to insist in the future on quotas—for example, for pay TV, radio and new media like datacasting. So I argue that the Labor Party should go a lot further with their protection of our culture.

This trade agreement includes our health system. When I first heard that I thought they were joking, but no. In the submissions—and we certainly had a lot of publicity about the impact on the PBS—the health industry were consistent in their condemnation of the treatment or indeed the inclusion of our health system as a trading commodity. Those who manufacture generic drugs call the intellectual property provisions in the FTA `unfair obstacles to generic manufacture in Australia'. Even with some changes, I still believe we will face substantial problems that will cost us billions of dollars for our PBS in the future. American pharmaceutical companies have very deep pockets, and I do not believe that they will walk way from the possibility of increasing those profits.

Our PBS is not popular, and that has been highlighted time and time again on programs on the ABC—I think there was a program on Monday night. Hopefully, while the Labor amendment will reduce some bogus claims, I do not believe that we have tackled this adequately and I think it is still far too great a risk to take. Generic production in Canada has almost halted under a similar regime, and it is not in Australian consumers' interests to introduce barriers to generic manufacture. We should have a process to review and audit all of this as part of the agreement on our health system—a periodic examination at least, and I think a full analysis by the Productivity Commission—but we have got a very enthusiastic government determined to get this through parliament. I suggest we have a government that really does not want any more scrutiny.

Going further down the list, we see that our blood plasma regime will also be compromised by this agreement. The Red Cross warned in its submission to the Senate committee that pressure within the agreement to source blood from overseas where there are fewer controls is a major problem that puts at risk the integrity of our blood products and the Australian blood system. While Labor senators expressed concerns, they are not pursuing this issue. It seems to have slipped off the agenda, and I would argue it is far too important an issue for that to happen.

I want to stress that I am not simply opposed to any or all trade agreements with the USA. That is not the case. I am opposed to this agreement because it is far from a free trade agreement and it is heavily biased against us. The economic gains are minimal at best and, as you go through the agreement, I believe that the costs will far outweigh any short-term economic gains. It is a threat to our clean and green image and negates our long history of careful quarantine rules. It is a threat to our health system.

There are so many problems with this agreement, it simply should be sent back to the drawing board. I hope the ALP insists on both of its amendments, but even with them we are still a long way from an agreement that would be of benefit to this country. At risk is not only our agriculture, particularly our animal based industries, but also our wildlife and native species—our birds, our unique flora and fauna. Let me summarise by simply saying that the risks in this US-biased trade agreement are enormous. Put simply: we should not be prepared to take even half of them.