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Monday, 9 November 2015
Page: 7888

Senator WHISH-WILSON (Tasmania) (10:21): The Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 enable the so-called Chinese free trade deal. The heart of the matter for the Australian Greens is that we have a fundamentally flawed and broken treaty-making process in this country and that therefore the legislation we see before us today also reflects a fundamentally flawed and broken trade deal with China.

The Chinese free trade deal was negotiated in secret. At no stage were the Australian parliament or the people it represents asked why we were seeking to negotiate this agreement or what we wanted from it. At no stage were the expertise or insights of businesses, unions, academics or a host of other interested parties called upon to help inform the government about the implications of this deal, whether the provisions in the deal were in the national interest, or whether the whole deal was in the national interest. There was no transparency around the negotiations. ChAFTA was initiated and agreed to by the executive government and presented to parliament as a take-it-or-leave-it prospect. Once these secret trade deals are signed by the executive, there is no way of changing the detail in the deal. The melee that follows is familiar: there is an overhyping of benefits, the government literally exponentially inflates the number of jobs—and I am glad they did clear that up in the Senate recently—and there is a confected sense of urgency. The chant is: 'We must sign this now; it is absolutely critical'.

Free trade is being presented as being inherently good, and those who speak out against it are accused of being xenophobic and antitrade. I refer to the comments made by the Minister for Trade and Investment over the weekend to the ABC. After five years of secret negotiations the Trans-Pacific Partnership Agreement was released. Those who have been following this very closely, who have significant expertise in this area and who have raised concerns were immediately called 'hysterical' and attacked by the government. After releasing a secret deal and finally providing the details—although I have to say it did not include all the details, because the details in the hundreds of side letters were not released to the public—Minister Robb had the gall, the nerve, to attack people who are questioning a fundamentally undemocratic process and the outcomes which have been given to us. They were being attacked by the trade minister for raising concerns.

Against this backdrop, the JSCOT is meant to provide a calm and reasoned assessment to inform the government of the day. To a large extent, the committee report provides this. However, as is the pattern, the subsequent recommendations are either inadequate or nonexistent and do not reflect the content of the committee report. On free trade, the committee has unfortunately become a rubber stamp for the executive.

There are serious problems with the agreement we are debating today. It is lopsided. The projected economic benefits are based on faulty modelling. On labour mobility, ChAFTA reads like the Korean free trade deal and appears to be creating a parallel industrial relations system. Let us make this very clear: this deal, like KAFTA and like the Trans-Pacific Partnership, is a deregulation agenda for the labour market. It is designed to set up a parallel industrial relations system in this country.

Let us look at this a little bit more closely. Senator Wong mentioned that the China free trade deal has taken 10 years to get to parliament and that Labor had a say in the various stages of this deal. The Korean free trade deal also took years to get to parliament—Labor did not complete that deal while they were in government. You should ask yourself what the reason for that might be. Why did Labor not complete the Korean free trade deal or the Chinese free trade deal? The labour market issues—whether it be labour market testing or labour mobility—were fundamental issues for the Labor Party while they were in government and they were fundamentally concerning issues for the union movement. We know there is a lot of concern in the union movement about 457 visas as they stand now: the rorting of the system, the lack of regulation and the lack of auditing of standards and licences. These issues are being talked about by the union movement in church halls around the country as we speak. The unions are talking to their members about their concerns about the deregulation of the labour market through these trade deals. Labor did not sign these deals while they were in government. They did not complete them.

The Korean free trade deal was the straw that broke the camel's back for the car industry. Car industry CEOs themselves said it would be the straw that broke the camel's back—hundreds and thousands of workers out of work because of these free trade deals. The question then is: why are Labor supporting these deals now if they had concerns while they were in government? I will get back to that before I finish.

I turn now to the issue of investor-state dispute settlement clauses where we give corporations special rights to sue sovereign governments if they feel that legislation or policies impact on their profits, their future profits or the value of their investment. On this issue, in the China free trade deal—whether Chinese corporations should be able to sue our government for public policy changes—Australia, our government, appears content for the EU and the US to sort that out for us at a later date. We have an open-ended ISDS clause in this Chinese free trade deal. We are told by DFAT that in a few years time they will fully finish the ISDS clause and negotiate it then—that China is not ready to finish the detail on this yet because they are in their infancy in moving into the trade deal space. So we in this parliament are being asked to sign up to an ISDS clause that is open-ended.

The Greens fundamentally oppose giving corporations special rights to sue our sovereign government. We fundamentally oppose that. I have put up a bill in this parliament to have ISDS provisions banned. The comprehensive evidence from around the world, from a number of experts, is that we do not need them. They do not add anything to labour mobility between countries. There is no evidence at all that they support so-called free trade, but we know they add risk and directly challenge the sovereignty of our governments. We do not need them. Senator Wong's language was interesting. She said that, while Labor had not traditionally supported ISDS clauses, they would 'seek to amend these clauses when they get to government'.

Our view, as Greens, is that they cannot be amended—they cannot be fixed. They fundamentally should not be in secret trade deals. This is not the road we want to go down, giving corporations more power to influence our parliament. Anyone who has been a senator or a member of parliament, not just in federal parliament but in state parliament, knows how much power corporations already have over the functioning of our democracy. We all know about the special interest effect and the power that corporations wield on the legislation and the outcomes that we, as representatives of the Australian people, produce in parliament. But to give them special rights, to go a step further, in shading parallel legal systems with no right of appeal and no transparency, is fundamentally unacceptable.

I have not time to debate the TPP today, but there have been some attempts to try and provide some disincentives for corporations to bring these cases. But let me tell you—once again, this is evidence based—that the wording of every previous ISDS clause has failed to stop corporations from bringing strategic litigation. They are set up to give corporations the right to challenge regulations in the public interest, be it around public health, be it around environment, be it around labour laws in our country. I will be moving a second reading amendment, when I finish this speech, on that particular issue—that we remove ISDS clauses from the Chinese free trade deal. I just want to emphasise before I move on that in this case it is exceptional that we are being asked to support an open-ended ISDS clause that has not even been finished in its detail yet.

I would also disagree with Senator Wong's point that this deal brings significant benefits to this country. There is no doubt that in some sectors of our economy this deal will bring benefits to producer groups and to some industries. I want to make it very clear that the Australian Greens believe we should be seeking to consolidate economic relations with China, our largest trading partner and the second largest economy in the world. Further open and transparent trade relations help breed trust between nations which can in turn help bring a more peaceful and prosperous world. However, in its current form ChAFTA is not a good deal. It is not in our national interest, and we do not feel it should be supported.

So let us get back to these significant economic benefits. We have had a couple of interesting questions without notice here in the Senate on this exact issue. I think we all know now that the government, as is always the case with these secret trade deals, hold the cards. They have the detail. We do not see it until it is signed. By that stage they have given drops to newspapers, and stories are on the front page of the news and in the bulletins on TV about the billions of dollars of wealth that it is going to create for our country, about all the agricultural producers it is going to benefit, and about the hundreds of thousands of jobs it is going to create. Mr Robb's direct quotes in relation to the free trade deals we signed with China, Japan and South Korea were that these were a:

… landmark set of agreements and it will see literally billions of dollars, thousands, many hundreds of thousands of jobs and will underpin a lot of our prosperity in the years ahead.

The evidence does not suggest that. In fact, it is quite the opposite. For all of these three deals—not just one, not just the Chinese deal which we are debating today—the Department of Foreign Affairs and Trade's independent modelling contradict these claims by Minister Robb. Their analysis estimates these agreements will increase GDP by 0.05 per cent in 20 years time, or an additional $780 million per year in today's terms, and would increase employment in 2035 in total by 5,434 jobs. That is very different to the hundreds and thousands of jobs that we have heard about in this place and elsewhere from the trade minister.

My point is these deals are highly politicised. When we get to the detail, governments always over-promise and under-deliver. The evidence is there from the US free trade deal, which was going to pave the roads with gold 10 years ago and has recently been modelled has having had almost no effect on our economy. We all know the technical, theoretical jargon around trade diversion with bilateral trade deals and that they never deliver what they promise. Yet we still go through this rigmarole in our national debate and in the Senate about how great they are going to be for our economy. We always ignore the risks.

There are always winners and losers in trade deals. Any first year economics student will tell you that. In theory, the winners compensate the losers, and that is how we are all better off. We do not even do an analysis of who the losers are going to be. But at least the labour movement in this country is standing up on this issue of the deregulation of the labour market, because they know they will be losers under these deals if there is not adequate regulation around labour market testing, skills assessments and other important issues. I look forward to moving amendments when we go in committee on this particular issue. So I will not go into the detail now; I can deal with that a little bit later.

Free trade deals are about spin—a lot of spin. There is very little evidence that they live up to the hype. Yet our governments are happy to shove this down our throats and attack anyone who dares criticise the minister on issues around trade or raise perfectly valid questions. I would say this view that the treaty process is broken and fundamentally flawed is not just the view of the Greens. Numerous Senate committees have made recommendations on exactly this issue. In fact, recently the Senate Foreign Affairs, Defence and Trade References Committee looked at the ChAFTA, which we are debating here today, and highlighted in chapter 5, in the conclusions and recommendations, that the Senate had completed a previous significant inquiry into the treaty-making process and made four key findings that essentially we need to incorporate into any future trade deal. The recommendations include that an independent analysis be undertaken prior to the commencement of negotiations, as well as an evaluation of likely costs and benefits after negotiations have concluded, through some body such as the Productivity Commission; that we grant access to the draft treaty text so people can see the detail; and that we create a model trade agreement that covers controversial topics. This is the conclusion that the Senate drew:

5.3 The committee's inquiry into ChAFTA illustrates that these findings and recommendations have continuing relevance. It is worth considering whether the issues with the labour mobility components of ChAFTA would have surfaced if improvements to the treaty-making processes had been made. In the view of the committee, it is possible these issues could have been appropriately resolved before the final treaty text was agreed. In this context, the committee reiterates its recommended reforms to the treaty-making process.

If we do not fix that going forward, we are always going to be having the same politicised debates about something as important as trade, where there are always winners and there are always losers.

That is why the Greens are fundamentally a party of fair trade, where the opportunities through the treaty process are not just open to a few and where the opportunities are at least there to be scrutinised by everyone—opportunity for all. At the moment, I have no doubt that those groups that have the minister's ear will be winners. We have seen with the trans-Pacific partnership agreement that 500 corporations had access during the draft treaty making process, whereas civil society and others were invited along to the odd 'show and tell' but were shown no detail at all. These corporatised trade agreements do not provide opportunity for all. That is our view as the Greens. We fundamentally question the logic behind trickle-down economics that is attached to these trade deals and what it has delivered for the community. We do support trade, but we want to see that it is fair and that externalities, such as environmental externalities and social externalities, are incorporated into these deals so that we do have a balance and that we do have fair trade—and that is going to be a big issue with the Trans-Pacific Partnership Agreement in coming months, no doubt. It is interesting to note that the Chinese free trade deal does not even have a labour chapter and it does not have an environment chapter—unlike the Korean deal, which did. It does not even include those issues.

This is the first time we have seen an investment facilitation agreement, an IFA, included in a trade deal as a side letter, as an annex. At estimates recently I asked DFAT who had proposed the IFA—knowing it must be Australia, because that is a process that we use—and they admitted that they had proposed the addition of an IFA to the Chinese to help facilitate the trade deal. That is more evidence, if you need it, that the Chinese were playing hardball on labour access arrangements and on labour mobility.

There is no doubt, there is no secret, that wherever the Chinese have invested around the world they have liked to vertically integrate. They have liked to bring in their own labour, their own expertise and their own skills, particularly around significant direct foreign investment. I do not think it is any secret that that was a barrier that had to be overcome to get the Chinese to sign this deal. I intend to go into more detail on labour mobility issues when I move amendments in committee.

This enabling legislation supports a fundamentally flawed deal, and that is because our treaty and trade negotiation process in this country is fundamentally flawed. If we do not make a stand on that, it will never be fixed. When I look at the so-called benefits of these deals, I do not believe that they are going to bring significant economic benefits and jobs to this country, but they do introduce significant risk to labour markets and to our sovereignty by allowing ISDS. The Greens fundamentally oppose corporatised, secret, trade details.

I move:

At the end of the motion, add:

", but the Senate calls on the Government to negotiate any future articles relating Minimum Standard Treatment and Expropriation in the China-Australia Free Trade Agreement:

   (a) within the terms of current international law;

   (b) to exclude investor losses due to changes in government policy or regulation; and

   (c) to ensure that governments can change policy and regulate in Australia's public interest, without legal resource from another party."