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Thursday, 27 November 2014
Page: 9483


Senator MOORE (Queensland) (11:09): Labor understands, appreciates and values Senator Madigan's concerns in the area of fair trade. His activism has been well known, and we value it. As we know, this time of the debate is when I turn around and tell Senator Madigan that we are not supporting his bill; that seems to be the way it operates. But we want to go into the range of issues that are being brought forward and into why we are not supporting the bill at this time. I also want to put on record how much my dad would have enjoyed those comments made by Senator Back, about the beef industry. As a long-term member of the beef industry and a cattle buyer, he would have loved to hear those terms running off your tongue, Senator Back—the diseases of cattle; he loved them. We had books all over our library at home that talked about all those conditions. So, your speech brought back good memories.

I will now turn to Senator Madigan's bill, the Fair Trade (Australian Standards) Bill 2013. The stated purpose of the act as spelt out is to increase the standard of products sold on the Australian market in a fair and reasonable way. Its principal object, as contained in section 3, is to encourage Australia's trading partners to ensure that goods that are imported into Australia from a country that has a trade agreement with us are subject to minimum standards in relation to the quality of the goods. The bill will require Australia's trading partners to ensure that companies that export goods to Australia take responsibility for ensuring that their manufactured goods meet Australian standards prior to being sold on the Australian market. Australia's trade negotiators will be required to ensure that the appropriate requirements are included in any trade agreement that Australia enters into with any other country.

We believe that the Senate should not pass this bill, because the bill has not been drafted or explained in a way that would allow the Senate to have the confidence that, if enacted into law, it would achieve the objectives we have just spelt out, which sound fair and reasonable and would ensure that those objectives would be met. I know—and it is a very difficult issue—that resources at Senator Madigan's disposal to research and prepare a bill and an explanatory memorandum for presentation to the parliament are limited, and that is one of the issues in the way the process operates. Certainly they do not even come close to what we in the opposition have or to what the government has. However, when we are asked to consider passing a bill into law, the quality and the details of the legislation must be of paramount consideration. We are not convinced that the bill we are debating today achieves the very objectives that Senator Madigan intends. Nor are we convinced that it represents good legislation in its form.

It is of grave concern to us that this bill has the potential to actually damage Australia's trade relationships, which are essential to the growth of our economy—although we accept that this is not and never has been the intent of Senator Madigan's bringing forward the bill. The bill purports to protect Australian consumers from products that do not meet Australian standards and have been known to risk people's lives. We have seen media reports around that, and it has been extremely concerning. There are recent cases that have received considerable media attention about imports that have not met standards and have caused damage and in some cases death. So, there is a background there and a strong need to take action. However, while we share Senator Madigan's concerns about the reliability and safety of goods, we are not convinced that trade policy is the mechanism for enforcing appropriate standards. And that is what this bill is about.

Australia has domestic product standards and a very strong associated compliance framework that should not be tied to preferential trade agreements. This bill imposes high regulatory burdens and additional costs on Australian exporters and foreign firms for what could be of little or no foreseeable benefit. It also discriminates by only imposing restrictions on imports from countries with which Australia has a trade agreement. Although we recognise that Senator Madigan sees this as a legitimate avenue for addressing the problems, it goes without saying that goods imported into Australia do not come only from those countries with which we have a trade agreement. Senator Madigan has talked about double standards. The premise lying behind the bill is that Australian manufacturers are being undercut by cheap imports. Yet we believe that an unfortunate consequence of the bill is that it would impose restrictions on our trading partners—the very countries on whom our exporters rely for their income—yet not on imports from those countries with whom we do not have a relationship through trade agreements.

In the adjournment debate here in the Senate on Tuesday 23 September, Senator Madigan gave this explanation for why he has introduced the bill into the Senate:

In the media in recent months, we have been inundated with examples of products being imported from overseas that do not meet Australian standards, yet they are not covered under the ACCC’s area of authority or anyone else's area of authority.

This bill creates a holistic solution, which will ensure responsibility and accountability so that standards are enforced across borders, with the assistance of foreign diplomatic assistance at the highest level.

We say to Senator Madigan: if the problem is the standard of products on the Australian market, then we should be addressing that problem where it matters—right here in Australia. The problem does not stem from our trade agreements. Trade agreements did not create a gap in Australia's domestic policies for the regulation of product safety. Unfortunately, we believe this is an attempt to increase protection for one part of the economy, not for consumers, which will in fact come at much greater cost to Australian exporters and, in fact, Australian consumers. Senator Madigan makes no secret of this with his second reading speech outlining that this is not a bill about consumer protection but about levelling the playing field between importers and domestic producers.

Let me now go to the text of the bill and address Labor's concerns in specific terms. Section 4 requires a trade agreement to include certain provisions, creating a binding obligation between the countries party to the agreement to enforce each other's product standards. The substantive provision is subsection 2, which states that, prior to entering into the agreement, the Commonwealth must ensure that the trade agreement includes a binding requirement that goods sold to a purchaser located in one country by a company or entity located in the other country should comply with all applicable product standards that apply in the purchaser's country; or, if the goods do not comply with all applicable product standards that apply in the purchaser's country, the company or entity selling the products must ensure that the goods are improved to standards that comply with all applicable Australian product standards.

This is the crux of the bill, so let me break it down. The provision binds the Commonwealth to include this clause in every trade agreement it signs. It means that products must meet the higher of the Australian standard or the standard of the country they are being exported to, or that products being imported into Australia must meet the Australian standard regardless of any other standards that might apply in the exporting country. Section 4, subsection 1, states this applies to a new trade agreement and an agreement that amends an existing trade agreement. Imposing such conditions on new trade agreements will be difficult, but it also applies to existing agreements where they are amended, even if the amendment is made in an area totally unrelated to the import and export of goods.

Unfortunately, whilst Senator Madigan is seeking to close the gate on imports below a certain standard, we believe this provision would in fact leave that gate slightly open. Let us accept for the purposes of this argument that there is a problem with below-standard products being imported into Australia and that somehow it is possible to fix this problem through a trade agreement. If this is a problem, under the provisions of this bill, not only is this problem not actually resolved but Australians could face a situation where products imported under a new agreement are covered, products imported under an existing agreement are not covered, products imported under an existing agreement that has been amended are covered, but products imported from a country with which there is no agreement exists are not covered at all. This is not the best approach. Consumer safety must be of paramount importance and we all agree on that. We believe that the situation put forward in this bill will not make the Australian consumer feel any safer. I return to the point that trade agreements are not the place to enforce product standards. They are not the place to enforce product standards because, as the example I just gave demonstrates, there are in fact no standards at all.

Section 5 creates the prohibition on the Commonwealth entering into trade agreements that do not include the product standard requirements. Section 6 defines the meaning of a trade agreement as being an international agreement that the Commonwealth has entered or will enter into with the government of another country or with the governments of a group of countries that will abolish or decrease tariffs or other import charges that are levied or charged by Australia at the time goods are imported into Australia. I note that this includes agreements negotiated under a World Trade Organisation or United Nations framework.

It is unclear how the obligations imposed by the bill would be enforced. This is a flaw in this legislation that provides an obstacle to our support. The explanatory memorandum only says that this would be the responsibility of embassies, by stating 'standards are enforced across borders, with the assistance of foreign diplomatic assistance at the highest level'. I have a great deal of confidence in our diplomats and staff in agencies such as Austrade, but I am not sure how their expertise translates to being the gatekeepers for products being exported out of the countries in which they are based to ensure they meet technical standards. If product standards are a problem, and in particular the testing of products, then there is a much greater imperative to act. It would be more appropriate if Senator Madigan talked about how we could bring forward some proposals to arrest a gap in the regulation of product standards and compliance. We believe that should be done domestically.

Trade liberalisation is essential for Australia to secure markets for our exports, as long as Australia's national interest is not traded away. The opening of Australia's economy, including the dismantling of barriers to trade, has been one of the most important reforms of the modern era. It has built today's dynamic and competitive Australian economy. It has improved the living standards of millions of Australian working people, and it has stimulated the growth of innovative and entrepreneurial Australian businesses. Australia is no longer a closed economy. That is not something that has just happened this year, in the last five years or, indeed, in the last 10 years. No longer do we live in a country shielded by a wall of tariffs and protection, closed to the world. This is not where we have lived in for a very long time. There is a sense in some quarters of this debate that somehow competition from overseas is some sort of new innovation, but barriers to imports in this country have progressively been dismantled over more than four decades.

I am now going to be indulgent and talk about Labor's history in this area. It is a good time to talk about the good times. I think of the dramatic cuts to tariffs under Gough Whitlam, the first bold steps to create a new approach to trade policy after the protectionism that was one of the five pillars of the Australian settlement, enduring from Federation in 1901 until the 1970s. Then we move forward to the economic reforms of Bob Hawke. I remember Hawke's Treasurer, Paul Keating, working alongside him to achieve these objectives. And then Keating became Prime Minister. He led the nation with not just an economic vision but a social and cultural one that included opening our relationships with our neighbours in Asia and recognising that Australia's export future lay in our region. In that cabinet they had John Button, Labor's industry minister from 1983 to 1993, who worked to assist employees of industries that were no longer competitive to transition into new employment. Those transitions were hard—and people remember how difficult that time was and the debates that occurred across the community and, indeed, across our own party at the time—but it was agreed that the change was necessary. In the trade portfolio, John Dawkins founded the Cairns Group of agricultural exporting nations, an important bloc in the World Trade Organization which has advocated for freeing up trade in farm goods. Peter Cook, with whom I was privileged to serve for a period in this place when I was first elected, helped bring the World Trade Organization's Uruguay round to a successful conclusion.

The legacy continued with the Rudd and Gillard governments. Both of those prime ministers maintained a strong focus on Australia's international relationships whilst in office. They were supported in many portfolios by Simon Crean and Craig Emerson. As Minister for Trade, Crean negotiated free-trade agreements with Chile, the Association of South East Asian Nations and New Zealand, whilst Emerson negotiated a free-trade agreement with Malaysia, helped launch negotiations for a global trade-in-services agreement and opened new pathways for progressing the World Trade Organization's Doha round.

All these Labor governments have played important roles in dismantling protectionist barriers. Labor recognises that reducing barriers to trade can boost our economic growth, create more competitive industries and give consumers access to a wider range of goods and services at lower prices. However, the imposition of this sort of legislation without consultation with industry would lead to the loss of Australian jobs. So when we talk about protecting jobs—and I know that Senator Madigan is very strong in this area—we need to consider how we can really ensure a secure future for Australian workers. In the decisions that we make in this parliament we can seek to achieve this objective by either looking backwards or looking forwards.

We in Labor will continue to do what we have done for the last 40 years and look forward, recognising that our national prosperity will only increase if we are able to find new markets for new exports. In order to achieve these important goals we must also reciprocate and open our markets to other countries. This debate will continue; it must continue, because that is our future. When we are talking about interaction in this free-trade environment, there will be concerns raised, but they must be acknowledged and then we can work together to see how we can make sure we balance the protection we need for our jobs and industries and our important role in future trade agreements. That must continue.

With Senator Madigan proposing in this bill to set up a mechanism in a trade agreement in an attempt to solve a problem relating to consumer safety, it means that we are confusing the responsibilities we have. We acknowledge that we have deep concern about product quality and the protection of consumers, but we do not believe this debate should be had within the trade portfolio. Labor supports mechanisms that improve safety for Australian consumers, and that means deep scrutiny and exposing products that do not meet Australian standards when they are in our community. That surveillance must continue and it must be strengthened if there are weaknesses seen in that area. This bill does not achieve that objective. It attempts to create a legislative protection that only applies in a narrow and limited circumstance with countries with which we have trade agreements, and we believe it is not enforceable. What is more, it effectively winds back policies to open international markets to Australian exporters, which will damage Australian industry and the Australian economy.

We understand the intent of the bill. We want to work to ensure that we have protection for the standards in our community, and we acknowledge the people who work in that part of compliance across the nation. We also acknowledge the loss of life that has occurred—and it has been publicised—through bad products that should be excluded from our market. We should always remember that these debates are stimulated by real cases, and I do not think we should have the debate without acknowledging those people who have been injured or killed. Recently it was to do with connections to telephones. There were cases around telephones and a young woman who was killed overnight by that use. Naturally, we all share an abhorrence of that and it should not be allowed to continue. However, we do not believe that linking product safety and product standards in the Australian community with impositions on our trade and the trade portfolio is the best way of working forward to achieve the common goal of safety and security for Australian consumers and Australian industries.