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Monday, 9 August 2004
Page: 25856

Senator BOLKUS (12:46 PM) —I rise to speak in the debate on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. On a number of occasions in recent weeks—commencing on about 28 or 29 July—I was cited in the Adelaide Advertiser as being a person who supported the free trade agreement and its implementation. I probably was the only member of the parliamentary Left to adopt this position but I did so after great deliberation and with no confidence in the prospects of the El Dorado that the government has tried to con the Australian public to believe would flow from the treaty into the Australian economy.

I supported the FTA with absolutely no trust in the white shoe brigade of the government—from the Prime Minister down—whose rhetoric knows no bounds on this issue, as with many others, and whose credibility is inversely related to their outlandish rhetoric. I supported the agreement in the belief and expectation that the implementation and ratification were inevitable and in the belief that ratification would present a real opportunity for a parallel agenda to be pursued by those who had concerns about the downsides of this treaty. I believed that that agenda would be critical to any balanced outcome for the Australian people.

We are led to believe that there is only an upside but I would like to put on the record an early part of the report of the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America because I think it reflects some of the diversity of outcomes arising from this treaty. The report says:

For many people, however, the Agreement represents nothing but economic, cultural and employment risks from exposure to powerful United States interests. Some economists have argued that the trade diversion effects of the AUSFTA could work to the overall detriment of the Australian economy. Many have argued strongly that the Agreement will undermine Australia's sovereignty and erode social policy, and that many of the AUSFTA's provisions will severely restrict Australia's future capacity to direct and manage its own affairs.

That paragraph sums up the diversity of concerns in the community, ranging from economic to cultural concerns and concerns about sovereignty. They were concerns that I addressed in coming up with my position on this matter.

For me the ratification process presents an opportunity to address some of these fundamental concerns in a long-term way; to focus in a meaningful way on some issues such as the PBS, cultural content and so on; to develop forward agendas and secure long-term structures and outcomes; to address some of the issues that arise from the FTA; and to address some issues which have their genesis before the FTA but also run parallel to it. By expanding and changing the market, pressures are going to be put on existing systems and existing legislation, and those sorts of issues have to be addressed in a timely way. At the same time the politics were, and continue to be, extremely important for me. The government's lie machine has been in overdrive. Expectations across industry sectors have been raised. If the critical and central issues could be addressed then the politics also demanded a balanced outcome.

The outlook I adopted was not a new one. It has been successfully used by progressive people in mainstream politics in the ALP quite often in the past. It is one that, as a member of the Hawke-Keating cabinets, I participated in quite often. In fact, if one goes back even as far as post-war reconstruction under the Marshall Plan, one can see the obvious elements of a strategy that should have been used from the start but which has been forced on the government by the opposition leader, Mark Latham. That is, you cannot have economic reform without a contemporaneous social policy underpinning such reform. Under the last Labor government we had unquestionably an enormous trade liberalisation, regulatory reform and global agenda. We opened up Australia to the world but we recognised—and we paid ongoing policy respect to—the fact that some of our citizens would miss out on the benefits and some would lose because of the opening up of the Australian economy to global pressures, expectations and demands.

Recognising that, we acted to either insure them from the effect or, importantly, provide them with new opportunities arising from new markets and new agendas. So we had a steel plan. Particularly for my state of South Australia, we had a car industry plan. When it came to the banking sector we had consumer protection and regulatory measures. We had a raft of social and community adjustment programs. We had those measures with regard to our trade and economic liberalisation agendas, and we had them when our environmental or Indigenous agendas were going to impact on smaller outlying and regional communities.

These opportunities have been tried and proven in the past. These opportunities should have been seized by this government when developing the Australian position on the AUSFTA. But the government did not. Not only did it not take a broad approach to policy, one driven by the concern of Australians, but it did not even go through the formal processes of, for instance, raising this treaty with the Treaties Council of ministers before it agreed to the AUSFTA. In fact, probably the first real opportunity the public has had to have input in the parliamentary process and in the development of this treaty came through the Senate committee in particular, a committee that the government has bagged consistently from day one, rather than through the processes of the House of Representatives and the Senate. But it has been a committee process that has raised for the consideration of the parliament some critical issues that quite obviously needed to be addressed right from the start.

I need to make one other point at this stage, one that I think is fundamental and that exposes the hypocrisy of some of the proponents of the AUSFTA in the current debate. I have always proceeded in politics on the premise that the Australia-US alliance was a critical fundamental piece in our policy settings—the alliance with the US, that is, not with the neoconservatives who have momentarily hijacked that country and its policy directions. The alliance is an important security link that permeates many other areas of policy. It has never worked and would never work if Australia were to be a client state, in servitude to US interests, or a deputy sheriff. It only works and it only resonates if it is respected by a broad cross-section of Australian people and a broad cross-section of the Australian politic. It is not an alliance of conservatives of both countries; it is an alliance between countries. And it is only an alliance that works for us, proud Australians that we are, if it is an alliance with dignity. We can have our disagreements, we can disagree on major issues—as we have in the past—but we should always have that right to disagree and take a different position to that of the US. This right is fundamental to a meaningful alliance.

Within these parameters two things are important. General support for the alliance across the broad section of the body politic is critical to its continuation as an important factor in political life in this country, as with the USA. It is not good enough to have an in-house club between neoconservatives on both sides. It is not good enough to marginalise and politicise the alliance in that respect, which has happened quite consistently over recent months. It is an agenda that has been consistently pursued by the conservatives in this country in particular. If you do not have broad support for the alliance, if it is only left to the Right on both sides in both countries, then you do not have a healthy, ongoing alliance. You need to have, as much as possible, people from across the spectrum—the Right, the centre and some on the Left as well—to ensure that you have a healthy, dynamic relationship. But it has been marginalised, and I think that has been unfortunate for those who claim to pursue the interests of the alliance but who, in the process, are undermining it. On the other side of the debate, in the US, the way that President Bush has played politics with this has not been helpful. In earlier days the US ambassador fell into that trap, but it is good to see that in more recent days he is taking a more diplomatic approach to the issue.

It is important not to politicise the alliance; it is also important not to threaten the underpinnings of our trade and security policies. Year after year in this place, the conservatives in particular have said to us: `You have got to keep the US alliance immunised from day-to-day political issues. You cannot use it as a political bargaining chip.' But what have we had in recent months? We have had this Prime Minister, desperate to do anything to retain government, using this alliance for that specific purpose. For him, it does not matter if he trashes it, it does not matter if he marginalises it, so long as he gets the political outcome he wants. Those on the conservative side of politics have particularly been the ones who for decades have been using the mantra: `We can't use the alliance as a bargaining chip'—whether it comes to agriculture, whether it comes to issues such as MX missiles, whether it comes to Star Wars and so on. Unfortunately, those on the conservative side have dragged the alliance into day-to-day politics here. People like the Prime Minister you would expect; but it is a pity that the likes of Paul Kelly and Greg Sheridan—people I know and respect—and others like them who know better, and I know they know better, are not writing better. It is a pity they are falling for the government's strategy. It is a pity they have become so institutionalised that they have lost their balance and their long-term perspective on issues such as this.

We have before us legislation in respect of that treaty, but it is legislation and a treaty which would have not received adequate scrutiny—responsible scrutiny—had it not been for the Senate committee process. As I said, it was a committee that was criticised for its institution, criticised for its deliberations and criticised for its outcomes, but it is a committee that has come up with quite a number of areas of concern. The Australian people need to understand what is in the nuts and bolts of this treaty. They need to go into it with eyes wide open. Except for this Senate committee, they would have been going into it with eyes wide shut. It is not the El Dorado that the Howard government claimed it was: a $6 billion assertion that we heard on day one has conveniently disappeared into the ether. The committee says there are benefits and there are negatives, but the benefits are probably marginal at best.

There will be winners. For instance, with respect to some of those winners in my state, South Australia, the manufacturing industry came solidly behind this agreement in the first instance, but people in the vehicle industry realised that where there might be some manufacturing industry adjustments, particularly in the component parts industry, they are not going to be to the benefit of the South Australian community. Similarly, the fishing industry is cited as an industry that expects major opportunities out of this treaty. That has been the view expressed by some of their leaders. But with the rules of origin that apply, and with time, a lot of those people in that industry have started to realise that, once again, their expectations should be nowhere near as high as they have been led to believe by the government. Wouldn't it be really great if we had a government that focused on a huge market for them, a market that does have trade barriers—the European market. There is a 15 per cent barrier there. Were we to get rid of that as a priority that would be of major benefit, particularly to the fishermen in Port Lincoln and other parts of South Australia, if not to the whole country.

One of my primary concerns was the cultural community. `Let's protect it' was the mantra coming through on the emails; but protect what and protect for how long? This industry came up as a candidate for the typical Labor solution in this area—that is, to ensure that if you are going to be affecting the rules that govern the industry then you have to make sure that the industry gets not just protection but a springboard into future generations of that industry. You need to do so not just with an industry plan but by looking at the future generation of technologies, the future delivery platforms and the real protection that is going to be needed. You do not have real protection now and you have not had real protection in recent years under the ABA chaired by David Flint. What the industry needed, what it needs and what Mark Latham has proposed it will now get is a new platform of protection and support. That is going to be critical for its future.

There were many concerns with the agreement, as I said, one of which was the PBS—and that has had a solid work-out. The dishonesty of the government knows absolutely no bounds. Minister after minister over the weekend appeared on radio and TV telling us that this agreement will not change the Pharmaceutical Benefits Scheme. What this agreement does do is change the market. It changes the players in the market, it changes their share of the market, it changes the pressure in the market and, consequently, it changes the regulatory mechanisms that are in play. If you have an evolving market, yesterday's regulatory mechanisms will never be good enough for the future. The government knows that but dishonestly tries to skirt the issue of what this trade agreement does for the pharmaceutical market. The market will not be the same. That is a fundamental outcome of this agreement. If the market will not be the same then you have to focus on how to best protect our patent laws in the context of a new market and in the context of new pressures on the PBS.

Once again, the federal opposition leader's initiative in this area is one that any responsible government should have come up with. But what have we had from the government? We have had dishonesty, disingenuity, a belittling of concerns and a belittling of the ideas of the other side. On the one hand the government say, `Well, we will listen to a good idea,' but do you reckon they have the capacity to come up with one themselves? This has been quite stark in recent discussions on this issue. If you look at the Senate committee report, whether on health services, patent law, the service industry or, particularly, intellectual property—an issue that has not been adequately addressed either by the government—you will see that it was the Senate process, rather than the government, that came up with the concerns with the agreement and with the way to address them. The government have just blindly signed to a treaty without even scant respect for the concerns of the people it might affect.

For a treaty that was inevitably going to be passed into law, it was important to me that a parallel agenda be developed. As I say, the usefulness of the Senate committee process was shown again in the weight of the report. For that I have to congratulate you, Mr Acting Deputy President Marshall, and other members of the committee, particularly Senator Peter Cook, who obviously deliberated on this issue under enormous personal duress. I think he and you have done a great job in a very comprehensive report. I must say, after debate on this report by almost all the Senate, hardly anyone has been able to find fault with it—with its fundamentals, with its premises or with its deliberations. There might be some political argument as to outcomes and as to some value judgments at the end, but I do not think anyone has managed to strike a blow at the heart of the validity of this report. Senators need to be commended for that.

The development of that parallel agenda was something that was always going to come out of this, and the opposition leader has done that. Some people might say, `You can have that agenda but it doesn't have to be within the legislation.' That is almost like the Prime Minister saying to us in the parliament: `Trust me. I'll look at it into the future.' The Prime Minister's store of trust with us and with the Australian public has worn out. The strategy of ensuring that legislation is amended as we go towards a treaty is obviously a much more productive one than taking this Prime Minister and this government on trust. Some issues raised need to be taken much more seriously than they have been. I have quoted one paragraph from the Senate committee report. It is also important in closing to acknowledge that, as the report says:

Any trade agreement, especially one as unprecedentedly complex as the AUSFTA, necessarily entails both costs and benefits ... Assumptions are invariably contestable ...

Econometric reports, as the committee found, led in different directions. Agriculture, investment and service industries were important. The power imbalance in the marketplace was something that the committee seized upon but that the government has never acknowledged. The report continues:

While the removal of tariff and other barriers enhances Australia' access to the American markets, the opening of Australia's markets to highly competitive and export-oriented US firms will obviously have ramifications for Australian companies and their employees.

We are dealing with a huge market and, as the report says, with firms geared up to greater consumption levels and greater opportunities to offset costs, and that is something that needs to be factored in. At the end of this process, we are in a position where amendments have been put up by the opposition. Those amendments go very much to the heart of protecting the Australian public from the excesses of this treaty, excesses which we always knew were going to be there. It is a pity the government did not put them up, but I am pleased to say that the leader of the Labor Party had the courage to do so and has the courage to pursue them to their conclusion.