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Thursday, 26 June 2014
Page: 4004


Senator MARSHALL (Victoria) (11:41): I would have liked longer, but I understand I might be in continuation at some point in the future. I welcome the introduction of this bill by Senator Xenophon and Senator Madigan. I welcome the fact that they immediately expanded the debate to one around trade in general. I think that is very important.

In particular, Senator Xenophon talked about the Thai free trade agreement. It is a matter that we have had some personal discussions about. It is also an agreement that I was involved in at the time, when I was fairly new in the Senate. The Australian Labor Party took a position to oppose that agreement. It went through parliament anyway. This was under the Howard government.

It was quite concerning to us that such an agreement would be entered into by a government. When you started to look at the detail of the Thai free trade agreement in particular, it effectively opened our markets completely, without restriction, to Thailand, yet most of the provisions of access to the Thai market would not kick in for 30 or so years. They still have not kicked in. It was only done a decade ago and most of the provisions for access for Australians into Thailand still are not there yet. Having an agreement where benefits to the Australian economy would not happen in any meaningful way for a 30-year period, giving Thailand a 30-year head start, to me was just inexcusable.

I think it is partly to do with this notion of free trade. Whoever thought of calling them 'free trade agreements' was very clever, because it is quite seductive in many ways. Who doesn't want something for nothing? That is what it gives the appearance of giving us when we talk about free trade. But of course free trade agreements are anything but free. There is a significant cost to our economy every time we enter into a free trade agreement.

I acknowledge Senator Macdonald did not refer to these free trade agreements as 'free trade'; he talked about the freest possible trade being achieved through these, because they are not free trade agreements at all. The closest thing to a free trade agreement anywhere in the world is in fact the Closer Economic Relations agreement that this country has with New Zealand. That would be the only agreement anywhere that would really come under the heading of anything close to being a free trade agreement. All the others are in fact discriminatory by nature, because, when we enter into a set of arrangements with a single country, by nature of that we discriminate against other countries that we do not have such agreements with.

I have long been of the view that, if we want to get free trade throughout the world, the best approach is to have multilateral agreements. That is where the significant economic benefits to this country will be gained. I am disappointed that we spend far too much time trying to negotiate what I think are discriminatory so-called free trade agreements bilaterally instead of putting much more effort into a multilateral round of discussions. Senator Macdonald also acknowledged that these are complex matters, and I accept that. They are very complex matters and they are very difficult. We are a trading nation and trading is incredibly important to us.

Let us come back to the free trade agreement with Thailand. After that agreement was reached, as of about now as I understand it, there has been a 287 per cent increase in Thai exports into Australia. Over that same period of time Australian exports to Thailand have fallen by 25 per cent. Who could argue to me that that agreement was in the best interests of Australia? I find that incredibly disappointing. Roughly around the same time we also negotiated a free trade agreement with the United States of America. Senator Macdonald has acknowledged that we did not get all that we wanted in that agreement either. After a lot of consideration the Australian Labor Party opposed that agreement too. We opposed it because we thought it was not in our best interests. It was not in our economic interests as a nation. Strangely enough the argument used by the then government, who are now back in government, was that we were anti-American. They actually wrapped themselves in the Australian flag, which is the subject of this particular bill, to say that we were anti-American in opposing that agreement. Of course, they were potentially wrapping themselves in an Australian flag that was not made in Australia, unlike in the US where, if they were wrapping themselves in a US flag, it would be made in the US. The US have exemptions from the same free trade agreement that we entered into with them where they mandate that they can make their flags in the US, but the same agreement, for whatever reason and interpretation, means that we cannot do the same. I think that that is particularly disappointing.

We know that in the US agreement, which is supposedly a free trade agreement, there are several conditions put on it by the American congress. They have amendments, and Senator Xenophon referred to the Berry Amendment and to the Buy American Act. These, as we understand, are allowed under the free trade agreement. We slavishly apply the black-letter law to our interpretation of the same agreement whereas the Americans interpret it quite differently. The Americans also have the Jones Act where shipbuilding is absolutely protected in the United States. We are unable to do that it seems, yet it is the same free trade agreement, and one would assume that it is the same set of rules that apply to everybody. We as a nation, as Senator Xenophon said, seem to slavishly apply the black-letter law of free trade at any cost without actually understanding the concept of best price or best value. Best price and best value are often two very different things. When we talk about best value we must talk about the value-adding and the best value for our economy, which does not always necessarily translate to the best price.

According to research published by the Industry Capability Network in 2008, every $1 million of new or retained manufacturing business in Australia contributes $339,900 in tax revenue. It generates domestic value addition of $985,000, saves $95,000 in welfare payments and creates 10 full-time jobs. If you add all that up, that $1 million retained manufacturing investment in this country adds up to much more than $1 million in value to the Australian economy. That is value. If we buy Australian products we get better value even if the price is higher. I do not think you have to be a Rhodes scholar to understand what is best for the Australian economy in these terms.

I understand the need for trade in general, but there are provisions in all of these agreements to protect small- and medium-sized enterprises. We simply do not seem to apply those rules or use those rules to this country's advantage. I do not know why. I do not know why we have to pretend, alone in the whole of the world, to be so purist about these issues. Why do we have to be the only ones who have to be so pure about these issues when many other countries put up non-tariff barriers as obstacles to our trade? Thailand is a classic example. We do not do it to them, but they do it to us, and we simply say, 'That's okay.' Well, I do not think it is okay; I think it is incredibly disappointing. I think we should do much more work and make much more effort. As I said earlier, I do not support entering into bilateral agreements, as I would much rather have multilateral agreements, but we have entered into them and then we do not use those agreements to our advantage. The misunderstanding of price versus value is a fundamental flaw in the way we approach trade in this country.

I personally try, whenever I can, to buy Australian. I personally look for the Australian Made label. I do it with my suits and other clothing, and sometimes with clothing it is incredibly difficult to find anything made in Australia, but I do so because it is great quality and it is still at a competitive price. It is, maybe, not the cheapest you could purchase, but it is still a competitive price. If everyone simply did that they would give an enormous boost to the textile and clothing industry in this country, which still employs many, many people. The more trade agreements we enter into where our nation's economic interest is not put first, the more pressure there is on all of those industries, particularly manufacturing.

We saw a massive influx of vehicles coming into our country with the Thai free trade agreement, but there were non-trade barriers, as Senator Xenophon took us through, on our vehicles going to Thailand. Then we saw a government particularly disinterested in the manufacturing industry in this country, daring Toyota to leave. Of course, given that dare, they actually accepted that challenge by the government and walked away, as have Holden. I find it incredibly disappointing. I think there is much merit in what Senator Xenophon and Senator Madigan have said. I look forward at some point in this debate—

The PRESIDENT: Order! The time allotted for this debate has expired.