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Thursday, 24 June 2004
Page: 31506

Mr WILKIE (1:10 PM) —The US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004 are extremely important pieces of legislation and their debate here today gives a further opportunity to discuss some of the issues raised in the agreement itself. As deputy chair of the Joint Standing Committee on Treaties and having had the committee table its report into the Australia-US free trade agreement yesterday, I welcome this opportunity to expand on a number of the recommendations made by the committee which received bipartisan support and also to comment further on the recommendation contained in the Labor members' dissenting report, particularly as these recommendations should have been considered in relation to both these pieces of legislation. As I stated yesterday, many witnesses at the public enquiries made the observation that this is not a free trade agreement because it never achieved free trade. They stated that it was merely another trade agreement, and I wholeheartedly agree with that sentiment.

In relation to the timing of the introduction of this legislation, I make the observation that the government has abused the committee process by not considering the contents of the report and by rushing this legislation into the chamber less than one hour after the Joint Standing Committee on Treaties tabled its report. I re-mind members opposite that the Joint Standing Committee on Treaties was established by the government to specifically give parliament an opportunity to scrutinise and examine all aspects of these sorts of agreements, to take evidence from relevant organisations and the public, to determine whether such agreements are in the national interest, to make recommendations as to appropriate matters concerning the national interest and to suggest ways in which an agreement may be implemented in a way that may provide further benefit to the country.

These considerations should have been taken into account by the government when introducing this legis-lation. Obviously when you are looking at a report of something like 300 pages and you introduce legislation that has already been drafted and written one hour after the tabling of that report, clearly the matters raised in the report could not have been considered before the introduction of the legislation. Clearly the government is in contravention of its own processes in relation to committees, and it should be condemned for that.

The Senate called for a Senate committee inquiry to also peruse this agreement and to complete the necessary parliamentary review process. But, instead of waiting for the committee's findings to be handed down in August, the government has juggernauted this legislation into this House for political reasons. Both the US Congress and the Australian Senate are still deliberating about the free trade agreement. But, in an attempt to capitalise on what the government has continually tried to push as an anti-American stance by the opposition, the government has tried to rush this legislation through. In doing so, the government is ignoring the outcomes of the committee reports and it is propelling the legislation into parliament without due analysis and consideration of the impact of the free trade agreement on Australia.

The Labor Party is an avid supporter of the US alliance. In the past, the United States and Australia have had an exceptionally good friendship, and that friendship will continue. That is not to say that, if you have a very good friendship with anyone or another country, there may not be an occasion when you can disagree. That has happened on occasions, and I think that is a healthy process. To say that Labor is opposed to an alliance with the United States is just ridiculous.

It was entirely fair and reasonable for the Leader of the Opposition to wait for the outcomes of both these inquiries before making any statements in relation to the Australia-United States free trade agreement and its benefits or otherwise for Australia. By waiting for both the JSCOT report and the Senate report, we could then get a true analysis of the impact of the Australia-US free trade agreement before committing ourselves to a position of support. In actual fact, this is something that the government should have done. Before making any other comments, the government should have said, `We will wait for the handing down of the joint standing committee's report and the Senate's report.' But, of course, they had already made a commitment to the agreement. It is the effect of the agreement on the Australian economy, Australian business and the Australian people that Labor have had at the forefront of their minds, not just jumping into bed with the United States and capitalising on a false and irresponsible belief that the Labor Party are anti-American—we all know that we are not. Obviously the government do not have the Australian public's best processes and best interests at heart.

In the dissenting report we raised four key areas. Firstly, we said that an extension of time had been needed by us to be able to report as a committee. Section 1 says:

Therefore, the dissenting Members:

1. Believe an extension of time should have been sought from the Minister for consideration of the Treaty to allow adequate time to review the evidence presented and to prepare the Report of the Committee.

As I observed yesterday, the committee was given less than three months—to look at all the evidence presented to it, to interview people from around the country, to prepare a 300-page report and consider all the information contained in it and to report back to the parliament. Clearly that was not enough time considering that some time ago, to look adequately at all the issues of and report responsibly to the parliament on the International Criminal Court—which was also quite a contentious issue—the committee was given an extension of time. Clearly, given this agreement's implications for Australia's future, the same sorts of concessions should have been granted to us in coming up with an appropriate report.

Also, given the interdependency of the consideration of the treaty and the legislative, regulatory and administrative measures which must be taken to implement its various terms, it is not possible to determine if it is in Australia's national interests for binding action to be taken without first considering the terms of certain measures—such as the appeal mechanism to be established with the Pharmaceutical Benefits Scheme and the implications for generic medicines; access by universities, educational institutions and libraries to copyright material under the proposed arrangements; and an environmental impact review of the treaty and legislative safeguards for local content rules subject to the treaty's ratchet provisions.

Firstly, with the Pharmaceutical Benefits Scheme, concerns relate to the operation of the Pharmaceutical Benefits Advisory Committee (PBAC) decisions. On the weekend the minister for health, when talking with Sunday's political editor, Laurie Oakes, referred to the appeal mechanism and said:

... this independent review process will be a purely administrative mechanism.

The independent review of processes of the Pharmaceutical Benefits Advisory Committee is not an administrative mechanism; it is a fundamental part of maintaining the integrity of the Pharmaceutical Benefits Scheme. If the minister cannot grasp this simple fact, as I said yesterday, he is in the wrong job—this is vitally important. The committee, in fact this parliament, needs to know how the review arrangement will operate. Will it be an open and transparent process or a closed process? If findings differ from the Pharmaceutical Benefits Advisory Committee's recommendations, will that be used against the government and the board's decision in a public campaign designed to have a favourable change to the ruling? The government know all about advertising campaigns and are running them now with the coming election; so what do you think a pharmaceutical company would do if it thought that by running a campaign it could get a different ruling?

Recommendation 5 of the committee's report outlines the need for a pragmatic review process to be undertaken by a specialised subcommittee of the Pharmaceutical Benefits Advisory Committee. It reads:

In establishing the independent review of PBAC processes (for PBS listing under Annex 2-C of the Agreement), the Committee recommends

that, in order to ensure that the fundamental integrity of the PBS is retained, the following principles be taken into account:

the review should focus on the issues of concern rather than reopening the whole application

the review should be undertaken by a specialised subcommittee comprising experts relevant to the subject of the requested review

the subcommittee should consider only that information provided to the PBAC, and relevant to the requested review

the subcommittee should report back to PBAC, and not directly to government

the review process should be pragmatic, and facilitate, not delay, the PBAC approval processes for PBS listing of pharmaceuticals

the review process be transparent and the findings and reasons for decisions made publicly available.

That recommendation was agreed to by both the government and opposition members. In other words, the government members also acknowledge that that is the sort of process that should take place when reviewing pharmaceutical benefits listing of drugs. The only person who seems to fail to get it is the minister. He just says, `It's an administrative measure and really, you know, it just happens administratively.'

It is a fundamental part of this agreement. If we do not get that right, the Pharmaceutical Benefits Scheme will be put at risk. The reason I say that is, based on the evidence the committee received, if you do not have that sort of process in place, the Pharmaceutical Benefits Advisory Committee may look at one set of criteria when assessing whether a particular drug should be listed and the new committee set up to do the review may look at a different set of criteria. If that criteria is not made public, if it is not open, accountable and transparent, you could have the position where you are comparing apples with oranges. You need to compare like with like so that, if the result handed down by the advisory committee or the review committee differs from that contained in the PBAC, you do not have a pharmaceutical company then running off and conducting a public media campaign designed to get that decision overturned.

This agreement was negotiated in good faith by bureaucrats, but it has not taken into consideration the political reality of life in the real world. I would not trust Humphrey Appleby to negotiate one of these sorts of agreements without political scrutiny. When politics comes into it and when public opinion can sway governments and ministers, you know that a big company will use its advertising might in order to try and get a different outcome. So, if we do not get this particular part of the agreement right—if we do not have a review process that is clear, transparent and works properly—then the Pharmaceutical Benefits Scheme will be put under threat. There is no doubt about that. It is vital that we get this particular mechanism right.

The committee heard a range of evidence about potential problems with copyright legislation. Recommendation 16 of the report seeks to preserve the rights of universities, libraries and educational and research institutions to readily and economically access material under copyright. Their concerns are totally understandable. They have not seen the legislation and neither has the committee. How can a free trade agreement be analysed if vital components are missing? Recommendation 16 says:

The Committee recommends that the Government enshrine in copyright legislation the rights of universities, libraries, educational and research institutions' to readily and cost effectively access material for academic and related purposes.

Recommendation 17 says:

The Committee recommends that the changes being made in respect of the Copyright Act 1968 replace the Australian doctrine of fair dealing for a doctrine that resembles the United States' open-ended defence of fair-use, to counter the effects of the extension of copyright protection and to correct the legal anomaly of time-shifting and space-shifting that is currently absent.

There are a number of other regulations in relation to copyright that I commend to the House. In relation to the environment, recommendation 22 of the committee's report states:

The Committee recommends that the Government undertake a review of the environmental impact of the Agreement ...

Page 117 of the guide to the agreement put out by the Department of Foreign Affairs and Trade states:

The Australian Government will be preparing an environmental assessment of the Agreement in the context of an overall analysis of the Agreement. The US Government has already prepared a draft review (December 2003) available on the USTR website ...

Despite the fact that the guide to the agreement said that there would be an environmental impact statement and analysis, we never received that, and it is ridiculous. That is also raised on page 271 of the report, where it is stated:

The Australian Government is remarkably under-prepared to ensure that trade agreements such as the AUSFTA do not have a negative impact on the Australian environment. For example, unlike under US law, there is no Australian legislation in place that requires the Australian Government to undertake a review of the environmental impacts of free trade agreements. Furthermore, unlike under US law, there is no Australian law that sets out Australian environmental objectives for free trade agreements.

Clearly, legislation needs to be introduced to ensure that all future agreements have had an environmental impact assessment, and the committee has recommended that. The government need to provide more data about these and many more detailed considerations, but until they do I believe the committee is unable to consider those sorts of issues—and they are vital issues.

Since the text of this agreement was first presented there have been concerns about the economic modelling designed to measure the outcomes of the agreement. The government commissioned analysis by the Centre for International Economics, and that modelling has been effectively discredited by a range of expert commentators, including Professor Ross Garnaut, who suggested the CIE's modelling would fail the laugh test. I quoted from Professor Garnaut yesterday. It is quite interesting that other noted economists made similar observations. The day after we talked to Professor Garnaut, another economist was giving us evidence. I asked if he would like to comment on the Garnaut assertions that the modelling had not passed the laugh test. He said: `No. Professor Garnaut is one of my competitors. I would not really want to quote him, but I would certainly say that when I looked at the modelling it raised a few eyebrows.' So I asked him if it passed the eyebrow raising test, and he felt it did not.

The government has failed to apply independent assessment of the impact of the Australia-US free trade agreement on Australia's economy. The modelling is seriously flawed. The only modelling that really has any credibility that was put to the committee was that undertaken by Professor Dee from the Australian National University, and the projected gains in Professor Dee's study are very limited. The government has consistently rejected the use of the Productivity Commission, which has professional expertise to analyse the free trade agreement and has done a substantial body of work on regional trade agreements in the past. The committee has made a recommendation that the Productivity Commission be used to look at the agreement in five years time to assess whether it is achieving what it set out to achieve. But, if the government can agree to let the Productivity Commission have a look at the agreement down the track, why did not it let the Productivity Commission have a look at this report in this instance? Why was it not used to put it forward then?

In terms of a whole range of other areas in relation to cross-border trade in services, I would like to look at recommendations 10 and 11. Australia did not get in the agreement the sort of access we wanted for our professionals. We were looking to have visas fast-tracked so that people who had qualifications could go and work in the United States and have easy access, similar to that established in many other agreements that the United States has negotiated. Unfortunately, we could not get this commitment. We had a commitment for the establishment of a working party to review this issue. Obviously, a working party is not necessarily going to lead to an agreement.

We had the same problem with qualifications. We had the committee recommending that issues of mutual recognition of qualifications and movement of business people should be made a priority within the professional services working group. Further, not-with-standing the operation of the professional services work-ing group, the committee recommended that the Australian government pursue, through all other available diplomatic channels, the issues of the mutual recognition of qualifications and the movement of business people between Australia and the United States.

Many people have dipped out in this agreement. We have had limited gains in agriculture but far less than what was expected by the industry, far less than what was promised by the minister and far less than we could have achieved. The Western Australian gov-ernment also made that observation. The government keeps saying that state governments like the agreement, but in fact the state governments have said that they really need it to achieve more. (Time expired)