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Thursday, 26 June 2014
Page: 3997


Senator CAMERON (New South Wales) (11:02): Acting Deputy President Stephens, can I just indicate publicly that I want to thank you for all your time in the chair that you have had over the years. You have conducted yourself extremely well as a senator over many years. This may be one of the last times that you are in the chair. On behalf of myself, could I add to the very good views that were taken of your contribution to this place over many years. Thank you very much for the work that you have done.

If I could come to the bill: I thought Senator Ruston started off pretty well in her contribution, but it rapidly deteriorated towards the end of her contribution. Twenty minutes is a long contribution, Senator Ruston. You valiantly battled your way through the 20 minutes, but I think some of your conclusions at the end of the 20 minutes go to the issues I think that Senator Madigan, Senator Xenophon and many on this side would absolutely oppose in terms of the advocacy that you are putting up.

Let me say that I understand the symbolism of having an Australian-made flag and I understand the symbolism of having crockery in the dining room that is Australian made, but these are symbols. What I had been doing personally—as the national secretary and also the assistant national secretary of the AMWU over many years—was to try and ensure that we were not about symbolism; we were about creating jobs in the manufacturing industry of this country. I think when I look back at my career I will say that is one of the big failures of my career. That is because jobs in the manufacturing industry—in the textile, clothing and footwear industry and in the car industry—are all now disappearing. I think we will be a poorer country for it. Not being able to make an Australian-made car in this country and not being able to have the goods to produce the crockery or the flag will always be an issue.

One thing I do not agree with, Senator Ruston, is this apocalyptic view that if we actually say that we are going to make our flag in Australia and it is going to be an Australian-made flag then there is going to be a catastrophic response from our trading partners and the issue of trade will become a huge international problem for Australia. That is patent nonsense. Let me tell you, the big issues for the agricultural sector are not with what this bill would do; the big problem is the statements made by the Attorney-General in relation to the occupied territories in East Jerusalem. They are the big issues for us in trade at the moment, not what is happening if we make a flag in Australia. It is the ill-thought-through and ignorant approach of the coalition in trying to deal with the huge issue of Palestine and the effects that would have on our agriculture and farming community being able to continue exporting to many countries in the Middle East and elsewhere. That is the big problem, not whether this bill would have a cataclysmic response from the United States or anyone else in terms of our trade position.

Senator Xenophon describes our approach as being the free-trade Taliban. We are not quite the Taliban, but we are free-traders of some ideological purity. We do seem to say in this country that we must set an example on trade, so we will unilaterally disarm our industries' capacity to procure within Australia, to service Australian industry. This is because of an ideological purity, more so on the coalition side. We heard it from Senator Ruston, who was lauding the so-called free trade agreements that the government has just signed. We have not got one free trade agreement in this country—and this is the issue. We talk about free trade but what we are negotiating are bilateral preferential trade agreements. This means it is an agreement between us, as a country, and another country, and we preference our goods between each other. They are not free trade agreements, and I have argued this within the Labor Party.

I have argued on the conference floor of the Labor Party that bilateral agreements will not work in the long term. If you want the benefits of so-called free trade, they have to be multilateral trade agreements and everyone has to be playing by the same rules. We are not playing by the same rules. I agree with Senator Madigan: there is no fairness in this free trade approach. These bilateral preferential trade agreements simply mean that you are dismantling some impediments to trade with an individual country. And there is another theory out there that I think is being seen in practice called displacement. When you do that, you simply displace another country from activating their trade with that country and, at best, you simply increase the trade between the two countries that sign the agreement, but trade diminishes in a third country. There are all of these arguments going on about trade.

I think it is proper that Senator Xenophon and Senator Madigan raise these issues. I have been raising these issues in the public arena in this country since, I think, 1998. I have been raising concerns about manufacturing jobs and the problems with the so-called free trade agenda in this country. In 1999, I was the only representative of a non-government organisation to attend the WTO in Seattle. I was the national secretary of the AMWU at the time, and I argued to my council that this was a big issue and that we had to understand what was happening in the rest of the world with WTO agreements and the implications they would have for manufacturing jobs. The Seattle WTO is renowned for the violence that took place in the streets there and the focus it placed on some of the smaller countries who felt that their individual economies were being opened up to big multinational, mainly agribusiness, companies coming in and demolishing some of the smaller agrarian economies that had been built within developing countries. They were not agreeing to just opening themselves up to the free trade approach that was being promoted. Ever since then, it has been almost impossible to get a proper approach on a multilateral trade agreement anywhere in the world, and that is because small countries are disadvantaged.

When I was in Seattle, the complaint being made by some of the small country representatives there was that they were coming to these multilateral agreements in Seattle, which were being held at the peak level of diplomatic and economic negotiations, and they did not have an economist, an adviser or anyone who could help them get a decent deal. One of the issues that has been made clear from trade negotiations is that the big country always has the power. The big country has the negotiating tools, the negotiating muscle, the negotiating competence to do over the smaller countries. In Seattle, the small countries said: 'We are not going to be in this anymore. We do not want agribusiness coming in here and demolishing our capacity to feed the country, to build our agricultural industries within our country, to the best that we possibly can.' It is 2014 and we are still running around signing crook so-called free trade deals with other countries and coming in here and lauding those agreements as being so fantastic that you just cannot walk away from them.

I know that Senator Xenophon wants to focus on the bill, but I think this bill is about symbolism. I think the bill is about opening up the broader debate on these issues, and I congratulate Senator Xenophon and Senator Madigan for doing that. As I said, I have been doing it since 1998 and maybe a bit before then, because we were concerned about it. I went back to a 2004 document that epitomises the issues that we are trying to deal with here. This 2004 document is from the Centre for International Economics, the CIE, who did the econometric modelling and the analysis for the AUSFTA—the Australia-US Free Trade Agreement. When you look at what is in this document, you think: what happened? This analysis was done just after the agreement was negotiated. They said, 'Here's our analysis on the basis of what this agreement says and what it is going to mean for Australia.' They stated:

A decade from now the most probable effect of the Agreement on Australia's real gross domestic product is an increase of $6.1 billion per year, or nearly 0.7 per cent above what it might otherwise be

Absolute rubbish—never happened, never likely to happen. Yet that is what the public was sold in 2003 and 2004 when the former Howard government was negotiating a US bilateral agreement. We could not even get sugar in at that time. We could not even get an agreement. We were the minnows up against the sharks and we were gobbled up in that agreement. The US manufacturing industry were calling it the manufacturing trade agreement, because they knew that the US manufacturing industry would make significant gains out of that US free trade agreement.

We were being told at the time, 'Look, you might lose a little bit here, but you will gain much elsewhere. One of the big issues that you will gain from is your capacity to access the US procurement program, one of the biggest procurement programs in the world. Once you get access to that procurement program, you watch your manufacturing industry take off. You watch all the benefits that you are going to get.' These were all modelled, with different types of models, and the modellers that were being paid by the department, by the government, were all saying, 'This is what's going to happen.' Well, it was all rubbish. All these years down the track, nearly 10 years down the track, it has not happened.

The CIE report said that this was 'the most probable effect'. 'The most probable effect' means that they did not really know. They thought it was a probability that this would happen. They talked about the usual caveats being put into the model. Those usual caveats are that if you put rubbish into the model, you will get rubbish out of the model. They went on to say in their report that we would be so well off under this agreement that there would be immediate benefits, but there would be immediate costs. Well, there were the immediate adjustment costs, as they are described, and jobs were lost. The US manufacturing industry actually gained jobs. We got negligible access to the US procurement program. I had been warned that this would happen. The Canadian Auto Workers union, who had a close relationship with the AMWU at the time, and still has—

Senator Ian Macdonald: Of course!

Senator CAMERON: Of course we have a good relationship with workers around the world, Senator Macdonald—that is a good thing. Some of their experts had a look at the NAFTA agreement in the US. Their economists had analysed all the arguments that had been put forward for NAFTA to see the benefits that would apply in Canada. They concluded that it was just a con job; it was not going to happen. They told us that the Canadian manufacturing industry—which was on the doorstep of the United States—could not access the US procurement program. At the national secretary of the union, when I raised this with departmental officers in Australia and with the minister, I was told: 'You're wrong. It's all going to happen. It's going to be so good. It's going to be great agreement. It's going to lift everything in terms of economic activity in Australia.' Nine years down the track, we know that that is a crock. We know it has never ever happened.

The CIE analysis went on to say that there would be large gains in New South Wales and Victoria. The report stated:

The only significant limitation on the benefits of the Agreement flowing from the rules of origin—

I will not go into rules of origin here, because it is so complex that you would need 20 minutes to even touch the base—

is that it may preclude over 90 per cent of textile and wearing apparel products from Australia receiving preferential tariff treatment on entry into the US.

What we are trying to protect now is the textile and clothing industry. Back at the time of this 2004 agreement, even the government's analysis said that the textile and clothing area would not get any preferential treatment through this agreement with the US.

The CIE also went on to talk about the dollar and what the dollar would do. They were arguing that there would be benefits for Australia because of our relative lack of strength against the US dollar. It would help us export. But what happened in reality? Our dollar went through the roof. Every analysis that was made by CIE has been clearly proved to be wrong. It is not only me and other people saying that. Back in 2004, the New York Timesstated:

The deal with Australia is a huge setback in the process of liberalising global agricultural trade.

…   …   …

The agreement sends a chilling message to the rest of the world.

Even then New York Times thought it was a crock at the time.

A study undertaken by the IMF:

… found that a free-trade agreement with the United States would shrink the Australian economy by 0.03 per cent per year and increase the bilateral trade deficit.

So when I hear people like Senator Ruston come in here with all her good intent, it is quite clear that the arguments that are being put up a false; the arguments are wrong. I have argued this for many years. We have got a very comprehensive trade policy in the Labor Party. We take the view that there should be checks and balances, that you should not simply run in and do these deals that do not deliver for the Australian public, that do not deliver for agriculture, that do not deliver for manufacturing and that cost jobs. That is ideology, not the reality.