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Joint Standing Committee on Treaties
07/05/2018
Comprehensive and progressive agreement for trans-Pacific partnership, Peru-Australia free trade agreement, European Union framework agreement; Timor treaty on maritime boundaries

BURROWS, Ms Alison, Special Negotiator EU/FTA, Department of Foreign Affairs and Trade

DOWLING, Mr Brendan, Assistant Secretary, Americas, Europe, Middle East and Africa Branch, International Division, Department of Home Affairs

MANTON, Ms Lucienne, Assistant Secretary, EU and Western Europe Branch, Department of Foreign Affairs and Trade

McKINNON, Mr Robert, Assistant Secretary, National Security Strategy, Cyber and Intelligence Branch, Department of Foreign Affairs and Trade

Framework Agreement between the European Union and Australia

CHAIR: Welcome. The committee will now take evidence on the Framework Agreement between the European Union and its Member States, of the one part, and Australia, of the other part. Although the committee does not require you to give evidence under oath, I should advise you that the hearing is a legal proceeding of the parliament and, therefore, has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and will be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make a brief opening statement before we proceed to a wider committee discussion.

Ms Manton : Thank you for the opportunity today to appear regarding the Australia-European Union framework agreement. As the government's 2017 Foreign policy white paper highlights, cooperation with like-minded partners who support strong rules and institutions is becoming more important. In a complex and uncertain environment, we have to work harder to maximise our international influence and secure our interests. The white paper also states that 'a strong European Union remains vital to Australia's interests and will be an increasingly important partner in protecting and promoting a rules based international order' and the consensus and values that underpin it. The importance of engagement with the EU and its member states was demonstrated most recently by Prime Minister Turnbull's visit to Brussels and Berlin and to France and by French President Macron's visit to Australia.

Australia and the European Union are natural partners. Our constructive and substantial bilateral relationship is based on shared values, including common commitment to liberal democracy, the rule of law, global norms, and free and open markets. The EU will continue to be an important partner for Australia in global economic governance, with a shared commitment to the rules based global trading system. As a bloc, the EU is equivalent to Australia's second-largest two-way trading partner and the EU is our largest two-way trade-in-services partner. In 2017, Australia and the EU celebrated 55 years of formal diplomatic relations. We are now working to establish the foundation that will see relations flourish for another 50 years.

In the context of shifts in strategic power regionally and globally, the EU is a powerful actor, an important global force for peace and prosperity, and a strong proponent of the international rules based order. The EU will continue to enhance its global role, including engaging constructively in the Indo-Pacific. On strategic, trade and development issues, the EU has important contributions to make in our region. The Australian government is working to ensure our relationships with the EU institutions and member states are strong and enduring. This agreement is an important part of strengthening our relationship with the EU.

Turning to the framework agreement, the framework agreement marks the beginning of a new era of strategic cooperation between Australia and the EU. The framework agreement will build on our already close ties and aspirations for deeper cooperation. The proposed agreement will establish a legally binding institutional framework that will elevate and strengthen the bilateral relationship between Australia and the EU. As you will see, the agreement sets out a platform for cooperation on a broad range of issues of mutual interest with the EU and EU member states. This is not a full list, but it includes economic and trade cooperation, research and innovation, counterterrorism, development, nonproliferation, human rights, democracy, climate change, the environment, education, the information society, energy, the digital economy, culture and justice, just to name a few.

The proposed agreement will also formalise a number of bilateral cooperation and dialogue mechanisms and will provide for the establishment of a bilateral joint committee. These mechanisms take into account the existing structures for bilateral cooperation already in place between Australia, the EU and EU member states and recognise that Australia and the EU already work together to promote respect for shared values and common interests. These are set out in articles 2 and 4 of the agreement.

To sum up, the agreement will guide future engagement between Australia and the EU and complement the priority we place on launching negotiations for a comprehensive and ambitious free trade agreement.

CHAIR: Thank you. I would like to start with the basis for the framework agreement and why we actually need it. How did we get to this point where we have, ostensibly, an aspirational framework agreement? Why do we have it? Why do we need it? What's its origins? Where did it come from?

Ms Manton : As far back as 2008, Australia had a non-binding MOU status arrangement with the European Union which covered aspects of our bilateral cooperation. My understanding is that in 2010 it was agreed, between then Prime Minister Gillard and her counterpart on the EU side, that we might seek to elevate that to a treaty level or a legally binding agreement, and negotiations began soon after that and continued till 2017, when the agreement was signed. In terms of why we need it, it is something that the EU does with many of its core bilateral partners, and it has similar agreements with a number of those—

Senator IAN MACDONALD: Like?

Ms Manton : Japan, Korea, Indonesia—I could look up a full list.

Senator IAN MACDONALD: No, that'll do. That's fine.

CHAIR: Does this framework bind us to anything? Is there anything here that says, 'We must'?

Ms Manton : Canada.

CHAIR: Yes, we're happy that there are some others—good.

Ms Manton : There are quite a number of others. It binds us to an ongoing commitment to cooperate in the areas that I've outlined. It doesn't bind us to specific activities, necessarily, underneath that cooperation.

CHAIR: So it literally says, 'Please keep playing nicely in the sandpit'—to quote an oft-used analogy—because there is no reduction in tariffs at all; there are no market-access regimes; there's no commitment to, 'We're going to have a bilateral discussion out of it;' it's simply, 'Hey, we should play nicely in a whole bunch of areas'?

Ms Manton : Yes.

Mr JOSH WILSON: Thank you for being with us to discuss this today. Obviously this is a higher level framework agreement leading on to a possible, more specific, agreement in future. In section VIII of the agreement there is a reference to enhancing cooperation in the field of climate change, a term which, sadly, we don't see too often in international agreements these days. What does that mean, in your understanding—'enhanced cooperation in the field of climate change'?

Ms Manton : It means, precisely, enhanced cooperation in the field of climate change. Much of our engagement with the EU is in the context of the UNFCCC and also in the context of bilateral climate and environment projects that we might undertake together.

Mr JOSH WILSON: Can you give some examples?

Ms Manton : I could take that on notice and we could give you some examples.

Mr JOSH WILSON: Looking forward, I note some developments in relation to the way that the EU is considering ISDS. I understand that recently the European Court of Justice found that ISDS has an adverse effect on the autonomy of EU law and is therefore incompatible with EU law, and indeed that damages awarded in a case this year in an ISDS matter in the Court of Justice actually breached EU law. Is the department anticipating, on that basis, that there would be no ISDS provisions in a future agreement between ourselves and the EU?

CHAIR: Wait. We're talking about the framework, not any potential future agreement.

Mr JOSH WILSON: Well, the framework leads to that, Chair. That's what this is all about, right? This is a foundation framework agreement—

CHAIR: No. That was why my original question was: 'What's the purpose of this?' and there was nothing in the answer to say that this was a framework for a future FTA. Now, if I'm wrong, correct me, Ms Manton.

Mr JOSH WILSON: If I could just go to the briefing note that the JSCOT itself has—

CHAIR: Yes, that's JSCOT's briefing note to the committee; it doesn't represent evidence but a briefing note. We'll ask Ms Manton: is this framework meant as a basis for an FTA?

Ms Manton : No.

CHAIR: So, therefore, you keep your questions to the framework, Sir.

Mr JOSH WILSON: In here, as to the reasons to undertake the proposed treaty action, the third bullet point makes reference to the fact that Australia and the EU have begun work towards the goal of a bilateral free trade agreement—

CHAIR: As I said, any notes you have are for the committee from the secretariat. That's why I asked Ms Manton whether the framework is a prelude to an FTA, and she has answered no. Next question, Sir.

Mr JOSH WILSON: Well, I go back to the question I asked: in the department, in looking through this specific EU framework, has there been discussion of, or any work done in the background in relation to, ISDS, considering the emerging attitude to and judgement of the incompatibility of ISDS with EU law?

Ms Burrows : As the chair said, the framework agreement isn't linked to the free trade agreement, and there's a specific reference saying that we are preparing for the free trade agreement on a separate track. However, the EU does not yet have a mandate for the free trade agreement negotiations with us, so to a certain extent we are guessing what will be in their mandate. Although, yes, we are thinking about the developments related from that European Court of Justice ruling, that you referred to, at this stage we don't have a formal proposal from the EU on it, and I don't have the information I can share with the committee on it.

Mr JOSH WILSON: I'm happy with that. It does say explicitly here in relation to Title IV, Cooperation on Economic and Trade Matters, that these articles of this specific agreement include a commitment to promoting a positive environment for bilateral trade and investment, which seems to me to look squarely towards the agreement that we're told is, in fact, being prepared—

CHAIR: Putting aside the notes between the committee—

Mr JOSH WILSON: That is in this agreement. That is noted as being in this agreement. I'm a bit frustrated that we seem to be getting this sort of semantic. We're asking questions that are absolutely relevant to this area of policy and administration and we're kind of told that we can't ask questions about trade matters and ISDS, because they're not specifically in this agreement even though this agreement squarely looks to those kinds of arrangements.

CHAIR: Hang on, stop. I'll go back to Ms Manton again. On whether this framework has any connection to the FTA your answer was no. Was there a reference in this framework that specifically excludes connectivity with the FDA, is that what you said?

Ms Burrows : May I read aloud the article?

CHAIR: That'd be lovely. Thank you.

Ms Burrows : Article 15.5 of the agreement says:

The Parties shall exchange information on their policy approaches to free trade agreements (FTAs) and respective FTA agendas. This Agreement neither requires nor precludes the negotiation and conclusion of an FTA between the Parties in the future to complement and extend the economic provisions in this Agreement.

Mr JOSH WILSON: My question, based on that, is considering that it explicitly talks about a trade and investment agenda, can the department advise the committee on the analysis that it has made of the recent highly relevant developments through the European Court of Justice—

CHAIR: In short, no, because we're talking about this framework agreement not a proposed European FTA.

Mr JOSH WILSON: But this trade agreement goes to matters—

CHAIR: No, it doesn't. This is not a trade agreement.

Mr JOSH WILSON: We can have that read again. It talks about trade and investment.

CHAIR: This framework agreement between Australia is actually not a trade agreement.

Mr JOSH WILSON: I accept that, but it squarely looks at the agenda between Australia and the EU in relation to both trade and investment. That was just read out to us.

Ms TEMPLEMAN: Paragraph 15.4 before that says:

The Parties shall keep each other informed and exchange views concerning the development of bilateral and international trade, investment and trade- and investment-related aspects of other policies, including regulatory issues…

CHAIR: Correct. Whilst we wish to have a free trade agreement with Europe, which we think would be wonderful, and we have a mandate from the executive to do it, my understanding is that there's no mandate from Europe at present to have a free trade agreement with Australia.

Ms Burrows : That's correct.

CHAIR: Therefore, it doesn't exist.

Mr JOSH WILSON: I'm not asking about an agreement, I'm asking about trade and investment matters—matters that are under consideration and are relevant in the trade and investment space. I don't understand why that's being shut down or redacted in advance. What's the problem?

CHAIR: Ask you question again then, Mr Wilson.

Mr JOSH WILSON: On notice, can we have some information about how the department is taking stock of the recent developments and the recent decisions of the European Court of Justice, which have stated that ISDS is inconsistent with EU law?

CHAIR: Lovely. Take that on notice, thanks.

Senator IAN MACDONALD: Did anything change with Brexit in relation to this framework agreement?

Ms Manton : We began discussing a framework agreement before Brexit was an issue being discussed more widely, and since that time obviously the UK has had its referendum. We see that ultimately, post 2020, the UK will not be party to this agreement, but we have made no changes to the text as a result of the Brexit decision.

Senator IAN MACDONALD: The only other question I have refers to the climate change reference. Does that mean that Australia will now be demanding that the European Union reduce their carbon outputs to about 1.4 per cent of the world carbon outputs—as Australia has, of course? Are we going to be demanding that the European Union do something about alleged damage to the Great Barrier Reef because of carbon emissions? They emit 10 times more than Australia does, and yet they seem to be very prominent about lecturing Australia about different things, when Australia, as you know, emits a tiny fraction of the world's emissions of carbon. Will that reference to the climate change have any bearing on that? What does it actually mean in practical terms?

Ms Manton : In practical terms, this particular agreement commits us to having an ongoing consultation on climate, environment and other matters, but the negotiations about climate output would be in the UNFCCC and other fora.

Senator IAN MACDONALD: It wouldn't involve us criticising Germany for opening a new coal-fired power station or things like that? That wouldn't be part of what's expected by this framework agreement?

CHAIR: Remember, they can't give an opinion, Senator Macdonald.

Senator IAN MACDONALD: No, but I'm just saying: is that the sort of thing that would be spoken about, would you expect, or perhaps not?

Ms Manton : It would commit us to a dialogue, and I would leave the substance of the dialogue to those people having the dialogue.

CHAIR: A wise decision.

Senator KENEALLY: I just want to be clear. Going back to Mr Wilson's questions: are you saying that it would be incorrect to say that the framework agreement 'will guide future engagement between Australia and the EU' to 'work towards launching negotiations for a comprehensive, high-quality free trade agreement'?

Ms Burrows : There's clearly a reference in the framework agreement to the free trade agreement, but they're going down separate tracks with separate processes and with separate mandates.

Senator KENEALLY: Would the agreement guide that separate work? Will it complement it?

Ms Burrows : I think it would complement it.

Senator KENEALLY: So it will complement it. Will it guide it?

Ms Burrows : It's hard for me to see how it would guide it other than in the most general way, since it says that the agreement neither requires nor precludes the negotiation and conclusion of an FTA. But certainly it complements it in the sense that the references to open trade and investment throughout the framework agreement are ones that we would seek to pick up in the free trade agreement.

Senator KENEALLY: Mr Chair, with the greatest of respect, I think Mr Wilson's questions are quite relevant, because that sentence I just read is actually from a media release from the Minister for Foreign Affairs, Julie Bishop, on 7 August 2017, a joint statement she made with the European Union High Representative for Foreign Affairs and Security Policy. She's saying:

The Agreement will guide future engagement between Australia and the EU and complement work towards launching negotiations for a comprehensive, high quality free trade agreement.

So, if the minister is saying that, I think it's within the remit of this committee to ask questions about the ISDS provisions and specifically the Court of Justice of the European Union finding that ISDS has an adverse effect on the autonomy of the EU law. How is that being considered in the context of this framework agreement? And what work is the department doing on how we might marry up Australia's attitude towards ISDS and the EU's attitude towards ISDS?

CHAIR: That's why Mr Wilson's question was taken on notice.

Senator KENEALLY: Yes, but I think it's important that we're clear here, before we get back an answer on notice that simply says they're separate pieces of work, that it's quite clear that the minister has made clear that they are related.

Senator IAN MACDONALD: Has the minister given evidence to this committee yet?

Senator KENEALLY: Are you saying, Senator Macdonald, that the minister's published statements are not relevant?

CHAIR: Hang on; we're not having a debate amongst ourselves.

Senator IAN MACDONALD: No, I'm saying you've heard the evidence from the qualified witnesses before you—

CHAIR: That's enough.

Senator IAN MACDONALD: and you can't take the chairman's ruling. I don't know!

CHAIR: Mr Wilson's question was on notice.

Mr WALLACE: This behaviour is very unusual. We usually get on very well.

CHAIR: It's the Senate!

Senator KENEALLY: Forgive me for quoting the Minister for Foreign Affairs—

Senator IAN MACDONALD: Let's get on with it. We've got limited time.

Senator KENEALLY: on the subject we are discussing.

Senator IAN MACDONALD: We're not in the New South Wales parliament.

CHAIR: Move on.

Mr WALLACE: This agreement, as the chair has noted, is very aspirational. What are the greatest challenges that Australian industries and businesses face in entering the EU market now, and how does this agreement address those issues?

Ms Manton : The agreement addresses those issues by encouraging deeper, stronger, more frequent dialogue between our departments responsible for those issues and the European Union.

Ms TEMPLEMAN: Can I just pick up the establishment of a joint committee and how that will actually function. I look at article 56 and the things that the committee will do. It can request information from other bodies. It can 'monitor the development of the comprehensive bilateral relationship, including agreements'. Who's on it? How does it work? How often does it meet?

Ms Manton : You're correct that the agreement does establish a joint committee. Discussions are underway about the level at which that joint committee might meet. That hasn't been resolved at this point in time. Certainly we're looking to establish the joint committee once the agreement is ratified here and with the EU. It's one of the parts of the agreement that will be provisionally applied once that occurs. We are looking for the joint committee to monitor the development of the bilateral relationship comprehensively and to set priorities and to determine plans of action in relation to the purpose of the agreement. It will be an opportunity for all portfolios to bring together their current priorities and to have those considered at a high level.

Ms TEMPLEMAN: What sorts of options are you considering in terms of the make-up of that committee?

Ms Manton : We're looking at all options at this point in time, but the minimum, of course, would be that it would be at senior official level. We obviously have ministerial dialogues on a regular basis to take forward the priorities in the relationship, but the establishment and composition of the joint committee itself haven't yet been agreed.

Ms TEMPLEMAN: And the meeting schedule is only once a year?

Ms Manton : Currently it's anticipated that the joint committee would meet once a year.

Ms TEMPLEMAN: It's just a check-in each year. Is there a model that it is copying for what that will actually achieve?

Ms Manton : I mentioned before that there are a number of other agreements with other key partners of the European Union. Each of those countries has chosen to take an approach based on a formulation that complements their existing structures. Some have taken that at a more senior level than others. We'll look to find the right composition for the joint committee for us that complements our existing structures and makes sure that we find a way forward in terms of the key issues that might need to be discussed on the bilateral relationship.

Ms TEMPLEMAN: Can I just ask about article 38, around migration and asylum. I'm wondering what is different about what is listed in section 3:

The Parties agree to cooperate in order to prevent and control irregular immigration. To this end:

(a) Australia shall readmit any of its nationals irregularly present on the territory of a Member State, upon request by the latter without unnecessary formalities that cause undue delay …

Subsection (b) provides for the same thing for the EU member states. How is that different to the existing frameworks that we have in place, particularly that 'without unnecessary formalities that cause undue delay'?

Mr Dowling : We don't actually have any formal agreements around the readmission of nationals with the EU or its member countries. By and large that cooperation happens on a case-by-case basis when we or they have a person who no longer has a legal right to remain in the respective territory. Then the cooperation occurs with that country to organise their removal or return.

What this clause goes to is the processes and seeking some reassurance that those processes will happen rapidly and with administrative ease. The processes relating to the removal or a return are governed by each individual member state, so there is some variance in the individual processes that get applied by EU member states, in our operational experience. This really gives us a clause to say we expect cooperation to happen as rapidly and as easily as possible. It doesn't prescribe anything specific other than underlining that, in the event of a removal, we do expect that cooperation.

Ms TEMPLEMAN: Have we seen examples of what would be considered unnecessary formalities that cause undue delay?

Mr Dowling : I think that, while most removals and returns with EU countries happen in a relatively straightforward way—in many cases the Australian Border Force will need to request a travel document to enable someone to return—there are from time to time small numbers of cases where there's some complexity with establishing, say, someone's citizenship or right of residence in the country to which we're returning or in achieving, I guess, their consent, in some cases, to that return. So there are some more complicated cases which do take a little bit longer and where there is variance in the way that the EU country will treat it. So, for the most part, the answer is no, but there are some cases where we would expect or desire more rapid cooperation and less of an administrative overhead with those removals.

Ms TEMPLEMAN: So the fact that Australia and member states agree to provide their nationals with appropriate identity documents for such purposes—I suppose I'm trying to think of a case where that might come into play, where an Australian citizen in the EU does not have documents that are required. Can you think of a case? These things don't get written unless there are reasons to write them.

Mr Dowling : Yes. I'm less familiar with the experiences of an Australian in the EU and more familiar with the experiences of a European national in Australia.

Ms TEMPLEMAN: If you could give an example here, that would be—

Mr Dowling : Sure. If someone's been residing in one of the territories for an extended period of time—decades, for instance—there might be some trouble accessing records which prove the citizenship of that person to the threshold required to issue a travel document. It might simply come down to—to use an example of an EU territory—access to records from some decades ago that are not easily accessed in an electronic file, demonstrating in accordance with the law in place at the time that this person did hold citizenship of that country. There can even be some difficulties sometimes about establishing a person's identity, if they're found not to have a legal right of residence or otherwise. With no identity documents, even establishing a person's identity in some complicated cases can be quite tricky because you're working on the basis of no documentation, having to go back to records which might be older and therefore have no photos or biometrics associated with them. There can be some quite complicated cases in those instances.

Ms TEMPLEMAN: Does this make it easier, then, for Australia to return people to their country of origin in Europe if they have overstayed visas, perhaps by many decades?

Mr Dowling : This clause in itself would not make it easier, but it underscores the cooperation we expect and that the EU expects from us, in dealing with those cases, to have as efficient processing as possible. It doesn't prescribe enough to make a material difference to a specific case, but all European countries accept that obligation, as in Australia we accept that obligation, so it simply underscores that we expect efficient processing.

CHAIR: Thank you for your attendance here today. If you have been asked to provide any additional information, which you have, please forward it to the secretary within seven working days. As stated in my opening remarks, it is the witnesses' responsibility to meet the deadline. The secretariat will provide some assistance. You will be sent a copy of the transcript of evidence when it becomes available and will have an opportunity to request any corrections to transcription errors. Thank you for your time. It is most appreciated.