Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 12 August 2004
Page: 26298


Senator HILL (Minister for Defence) (11:17 AM) —Labor has always been deeply divided over this free trade agreement. In actual fact, it is deeply divided over the issue of bilateral agreements per se. I can remember, when Labor was last in government, there were suggestions that it might be possible to negotiate a trade agreement with the United States or it might be possible to, in some way, be part of what were then the NAFTA negotiations to put an Australian perspective and get opportunities for larger markets. The mere concept was condemned by Labor. I can remember Mr Keating in particular, as the Labor Prime Minister, condemning it and arguing for multilateral trade instead. Then, of course, we had trade minister Senator Cook, who maintained that position in subsequent years.

When Labor went into opposition, through the Senate committees and within this chamber its constant line was that bilateral agreements are evil and that the only way to seek broader trade opportunity is through the multilateral round. This government always had a different philosophical approach. It said that we have a responsibility to facilitate the growing of the Australian economy. Apart from getting the domestic fundamentals right—which was another area that Labor got so fundamentally wrong when it was in government; it made it impossible for Australia to export competitively because of domestic interest rates and inflation rates—this government also should take whatever opportunities present to broaden the market opportunity. It was legitimate to do that through bilateral and multilateral negotiations and it was not a matter of either/or.

Then, of course, as time went by Labor saw the Howard government successfully negotiate a bilateral agreement with significant benefits for Australia with Singapore and another with Thailand. It saw Australia exploring with other countries—China and a number of Middle Eastern countries—the potential for bilateral agreements and, to Labor's astonishment, it then saw ASEAN approach the Australian government to talk about the prospects of a trade agreement between ASEAN and Australia. Labor, in effect, got left totally behind and where it now stands philosophically on these issues is very difficult to read. Having lost the philosophical debate, Labor has sought to gain whatever short-term political benefit it could out of the detail of the bilateral agreements that have been negotiated by the Howard government.

This agreement, which has been negotiated with the United States of America, is, of course, the big one, because the US is by far the largest economy in the world and offers by far the largest market opportunity for a whole range of Australian products and services. Therefore, it becomes the primary focus of the Labor Party. It is also a primary focus under Mr Latham, I would suggest, because of the anti-American stance he has taken on other matters, particularly in relation to national security. If you bag the President of the United States on national security matters, it will be very difficult to endorse him on bilateral trade matters.

But anyway, for its own domestic political purposes, it always had a prejudice against a bilateral agreement with the United States no matter what benefit that agreement might provide for Australia—no matter that it might provide a benefit of an extra 30,000 Australian jobs. I guess that is not surprising, because Labor is the party that lifted unemployment in this country to one million. By contrast, the Howard government has reduced unemployment to the lowest levels in the last 20 or 30 years.


Senator Carr —This is humiliating.


Senator HILL —I am not surprised that Senator Carr is disturbed about our successes in reducing unemployment. We on this side of the chamber are proud of the fact that we have reduced unemployment by so much that we have been able to create another 1.3 million jobs, and we want to create more. We want all Australians to benefit. We want them to have the opportunity of employment. We want the Australian economy to grow. We will keep concentrating on the fundamentals that allow Australian exporters to be competitive and we will keep working on ways in which we can grow the Australian market opportunity. We do not mind whether it is with the United States or whether it is with some other party. We do not mind whether it is done multilaterally. Where we can get in and negotiate a benefit for Australia in terms of market access then we will do so. We have done so on this occasion in this agreement. That is why this agreement is so important for Australia and that is why it is so important for the Howard government. We are not going to easily forgo this unprecedented opportunity for market expansion. The opportunities offered to Australia—simply to get into the United States government procurement sector at both the federal and state level, for example—are enormous. We are not going to easily give away that opportunity.

Turning to the current debate, Labor have been prejudiced against a negotiation with the United States from the very first day and against this agreement in principle. What happened then? As time went by, more Australians started to realise that this agreement could, in fact, bring real benefits for our country. Yes, there is probably a certain amount of trust in Mr Howard on that. Why is there trust? Because his management of the Australian economy has been so successful. It is very difficult, even for Labor, to argue to the contrary when you look at the great economic successes of this country in the last 8½ years. Senator Carr might fold his arms, but that is the reality. If you read the international journals and look at what has been said by the IMF, the World Bank, the OECD and other authorities—and I invite Labor senators to go back and look at the OECD reports on Australia of recent years—you see that they all applaud the economic management of the Howard government and they all applaud the incredible economic successes of the last 8½ years.

Is it surprising that the Australian people have faith in Mr Howard and his leadership in taking them towards further economic benefits? No, it is not surprising at all, but it is embarrassing for the Labor Party. As the Australian people came to realise that this agreement with the United States could offer such tremendous opportunities for Australia, Labor domestically started again to be squeezed. The position became that perhaps they should not oppose the agreement in principle; perhaps they should search for a detail upon which they could distinguish their position—look for a fine detail or two on which they could go out and say, `Okay, we are no longer opposed to the agreement, but we are opposed to certain details.'

As I have said in the last three days in this place, the government were never prepared to negotiate an agreement with the US on any terms. There were always a number of no-go areas. We wanted the expanded trade opportunities, but there are aspects of our society and of our system that we are not prepared to sacrifice. Of course the US went into the negotiations on the same basis. There has to be give and take to get the extended trade benefits, but there were no-go areas. Those no-go areas for us included areas in the cultural sector and in the PBS. We are strong supporters of the PBS system. We have put an enormous amount of extra government money into the PBS system to ensure that it continues to work within contemporary Australia, particularly as new medicines and more expensive medicines become available. It is a critically important safeguard for the Australian community. We respect that and we support that. So this negotiation included a no-go area in relation to the PBS.

The Labor Party, however, whilst having to acknowledge that politically they had no choice but to support the agreement, decided that they would develop an argument that, in some way, the PBS was not adequately protected by this agreement. So we had Mr Latham and Senator Conroy coming out last week and focusing on the American system of patent registration and using the American experience to say that, in some way, there could be spurious patent claims within Australia that would threaten generics. Our position is that the Australian government supports the generic industry. Generic medicines play a significant part in keeping the prices of the whole system down in this country. We recognise that.

We also recognise, although the Labor Party are not prepared to acknowledge it, that the major pharmaceutical companies that invest enormous amounts in new medicines also have an important part to play. They have a right to reasonable protection. But a line has to be drawn that does not provide a disincentive for the generics. You have to get the best of both sides. The PBS system has given the best of both sides. Labor came in and, using the American patent experience rather than the Australian patent experience, argued that in some way there could be spurious—or, to use Mr Latham's language, bodgie—claims which would mean that generics would be threatened.

In the negotiation of this agreement, one of the principal concerns we had was to ensure that the generic industry and growth within the generic industry—because there has been significant growth in recent years and significant growth in the number of generic products that are on the PBS—did not suffer any disincentive as a result of this agreement. It was something about which we negotiated hard and which Mr Vaile negotiated successfully. Yet Mr Latham, rather than using the example of the Australian patent system, picked up deficiencies in the American patent system and said to the Australian people, `There is a flaw in what the government has negotiated.' Of course, what we have learnt in the last week is that he has had to come to realise that the Australian patent system actually works well; it protects against abuses. He has had to realise that spurious claims will not work, and that the application of the patent system in Australia is not a threat to generic medicines. So, having recognised that—and it took a week for him and Senator Conroy to recognise it—they were forced to move to another area of argument. The area they chose was injunctions, and they have brought forward amendments to put heavy penalties upon injunctions.

The position is, as I said, that generics are protected within the agreement; it was an important part of our negotiation. We argue that these amendments are unnecessary. We argue that they are also risky because it may be put—and there has been some suggestion of this—that they are inconsistent with the agreement. But the Labor Party does not care if that risk is taken because half the Labor Party wants the FTA to fail. We will agree to the amendments because of all the benefits—


Senator Carr —Finally, he announces it! After 14½ minutes he finally coughs.


Senator HILL —No, because of all the benefits that flow from the FTA. And if we do not agree to the amendments, we lose the opportunity for another 30,000 Australian jobs. But why, for a political stunt—which is what the Labor Party is up to in this exercise—would they even contemplate the chance of another 30,000 Australian jobs at risk? It is very difficult to comprehend. (Time expired)