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Wednesday, 11 August 2004
Page: 26090


Senator HARRIS (9:41 AM) —I wish to concur very much with what Senator Ridgeway has been discussing. When considering the Australia-US free trade agreement, we need to look at it in reflection and look at its similarities to NAFTA. If we look at chapter 11 of NAFTA, we see that its subchapter A has exactly the same heading—`Investment'—as the free trade agreement, so there is a parallel even in the actual setting out of the two documents. If we look at sections of the agreement, we see these terms or headings: `Investors of another party', `National treatment', `Most-favoured-nation treatment, `Minimum standard of treatment' and `Performance requirements'. These are all in sections that have parts of NAFTA lifted out verbatim, and I emphasise the word `verbatim'. It is not that they are similar or that the chapters just by chance happen to be talking about the same issue; the wording contained within sections of the agreement is absolutely verbatim. One of the ones that Senator Ridgeway has picked up very aptly—subsection (2) of NAFTA's article 1103, `Most-favoured-nation treatment'—says:

Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of investors of another Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.

The words that I want to highlight in that are `or of a non-party with respect to the establishment'. What is the reference to `a non-party'? We know who the two parties are in the Australia-US free trade agreement. They are obviously Australia and the United States of America.

When the document clearly articulates the rights of a non-party entity, who is it speaking about? As a result of NAFTA, we now know what the reference to a non-party in NAFTA refers to. Senator Ridgeway raised two or three of the issues in the US. There are 19 actions that have either been heard and completed or are in the process of being completed. The issues are varied. For example, in the case of Ethyl Corp. v. Government of Canada, from 14 April 1997, a US chemical company challenged Canadian environmental regulations on gasoline. In the case of S.D. Myers Inc. v. Government of Canada a US waste treatment company challenged the Canadian ban on the export of PCBs, compliant with the multilateral environmental agreement.

The United States themselves are not insulated against this process opened up in NAFTA. The concern of One Nation is that Australia is going to be exposed to the same situation that the US government find themselves in in the case of The Loewen Group Inc. and Raymond L. Loewen v. United States of America. In that case a Canadian funeral conglomeration is challenging a Mississippi jury's award of damages. So we have a situation where a Canadian company, through NAFTA, is challenging the decision of a jury in a court case in the United States of America. In the case of Pope & Talbot Inc. v. Government of Canada a US timber company is challenging Canada's implementation of the 1996 US-Canadian softwood lumber agreement. So a Canadian government agreement is under challenge from Pope & Talbot.

In the case of the Methanex Corp. v. United States of America a Canadian corporation is challenging California's phase-out of MTBE, which is contaminating drinking water around the state. In the case of United Parcel Service of America v. Government of Canada UPS claims that the Canadian post office delivery service enjoys an unfair subsidy because it is a public service. That is an absolutely classic example. We have written into the US-Australia free trade agreement clauses whereby non-party entities can access this facility. I remind the chamber of the current request from the EU under the General Agreement on Trade in Services. GATS, to which Australia is a signatory, allows the European Union to challenge the status of Australia Post. So here we have another door opening. Senator Ridgeway made the comment that the door has been nudged open. It has not been nudged open—this allows somebody to sail a battleship through Australia's rights.

I will keep going with my list of cases under NAFTA. In Mondev International Ltd. v. United States of America a Canadian real estate developer challenged a Massachusetts supreme court ruling on local government sovereign immunity. We are not talking here about a corporation having a disagreement with the American government; we are talking about the facility where a Canadian real estate developer challenged a Massachusetts supreme court ruling on local government sovereign immunity. We face the possibility that a non-party entity could sue the Australian government in relation to a Supreme Court ruling. What on earth are we getting into?

The government cannot say that this is rhetoric or that we are filibustering. We are providing, for this chamber and for the Australian people, documented proof of the type of loophole that Senator Brown's amendment is attempting to close. These are the equivalent examples—real examples—of where NAFTA has allowed non-party entities to access a similar clause. In the case of the ADF Group Inc. v. United States of America a Canadian steel contractor challenged a US `buy American' law. The equivalent section of the Australia-US trade agreement could actually result in a non-party entity—that is, any corporation, whether it be American or Australian—challenging Australia's ability to have any laws that support the `buy Australian' campaign. For goodness sake! Surely the government can see the dangers in this road that they are going down.

Then we have Waste Management against Mexico, which is again out of the NAFTA examples. In that case a US waste disposal giant challenged the city of Acapulco on the revocation of a waste disposal concession. So you have Acapulco declining to have a waste disposal facility in their area with NAFTA being the vehicle under which that non-party entity accesses the rights under that agreement. Then we have Adams et al. against Mexico, where US landowners challenged a Mexican court ruling that the developer who sold them the property did not own land. Here we are now actually moving into property rights. If ever there is an area in Australia that is absolutely in disarray, it is the area concerning the right of a property owner within Australia to be able to enjoy their parcel of land in peace and harmony. These are just a few of the examples.

We have the situation in the Australia-US free trade agreement where similar, if not absolutely identical words, have been lifted out of NAFTA and placed in this agreement. We have a complete raft of actual examples of where this type of wording referring to non-party entities does not just nudge the door open; it blows it wide open and allows non-party entities to access the agreement. I foreshadow that I will have copies of this document made and shown to the whips in the chamber and I will seek leave to table that document.