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Thursday, 25 June 2009
Page: 4289


Senator BIRMINGHAM (11:29 AM) —On behalf of the Joint Standing Committee on Treaties, I present report No. 102 of the committee—Treaties tabled on 12 and 16 March 2009 and I move:

That the Senate take note of the report.

Report 102 of the Joint Standing Committee on Treaties reviews three treaty actions taken by the Australian government: the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area; and two taxation agreements with the Isle of Man. In each case the committee has supported the proposed treaties and recommended that binding treaty action be taken.

The Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area—or AANZFTA, as it has rather awkwardly become known—creates the largest free trade agreement Australia has entered into. Trade between Australia, New Zealand and the countries of the Association of South-East Asian Nations totalled $103 billion in 2007-08. This is indeed a very significant treaty and free trade agreement for Australia to enter into. AANZFTA represents a major development in Australia’s trade with our near neighbours. It provides certainty for Australian exporters by binding the parties to this treaty—the ASEAN nations, Australia and New Zealand—to defined tariff outcomes to 2020 and beyond. It also maintains Australia’s trade position in relation to ASEAN’s other major trading partners—important countries like China, South Korea and Japan—which have either negotiated free trade agreements with the ASEAN countries or are in the process of doing so.

While the JSCOT have supported binding treaty action in relation to this agreement, we do have a number of recommendations. The committee heard passionate representations from representatives of Australia’s horticultural industries. They were concerned at the outcomes of this treaty, in particular relating to exports of Australian fruits and vegetables into countries like Indonesia and the Philippines. They believe that the treaty locks in higher tariff rates than Indonesia applied in 2005 to Australian exports of mandarines and other key products that have damaged Australia’s position in those markets. The committee believe quite firmly that Australia’s horticultural industry did receive a poor outcome from this treaty and from the negotiations leading to this free trade agreement, and we have recommended that the government pursue all possible avenues to rectify and correct this and provide for a better outcome for our key horticultural industries in future. We know these are always negotiated outcomes and you cannot always win on every area of free trade. However, this was an industry that we felt was particularly disadvantaged as a result of the outcome. It locks in, yes, no higher tariffs for the future but it does leave quite significant tariffs going on.

The committee further recommended that, in the absence of other measures designed to improve free trade, a free trade agreement negotiated by Australia should not include a tariff outcome on a tariff line that is worse than the existing tariff on that tariff line. That may sound like an obvious statement, but again there were concerns about some of the tariff outcomes, particularly as they relate to bilateral arrangements that Australia may have with some of these other countries or most favoured nation arrangements in relation to treaties with these other countries. We further recommended that in future free trade agreements Australia should negotiate for the binding tariff rate to be the lower of either the rate at the time of binding or the most favoured nation tariff rate at the time the free trade agreement comes into force. The committee also recommended, following representations from the horticultural sector, that the Department of Foreign Affairs and Trade, who we recognise go through extensive and often painful negotiations in the preparation of these free trade agreements, prepare a report for the committee examining exactly how they can better allow negotiators to directly consult with industry representatives during the negotiation process so that groups such as the horticultural industry in this instance do not find themselves disadvantaged as a result of those negotiations and at least have some clear and significant input into those negotiations.

The committee also importantly considered the issue of including environmental protections, protection of human rights and labour standards in free trade agreements. We are mindful that they are negotiated outcomes and it will not always be possible to achieve a free trade outcome as well as outcomes on all of those other significant matters in these sorts of agreements. However, on balance the committee thought the government should, at least at the outset of its considerations, look at applying labour standards, environmental standards and human rights standards as a key factor in considering these negotiations. It is particularly important for this treaty because it is, as I said, with the ASEAN nations and this free trade agreement means that we have now a level of agreed tariff rates and trade arrangements with a country like Burma, a country whose human rights record is abominable, to say the least, a country where Australia needs to be taking strong stands, and in all of our diplomatic representations does take strong stands, against the poor treatment of prisoners of conscience and against the abolition of a democratic process. We believe that in future it is important that those concerns be at least considered and laid on the table at the commencement of the treaty processes.

In net terms, in total terms, this will be a very positive free trade agreement for Australia. We welcome the potential that it provides and the opportunities it will provide for Australian exporters, particularly in terms of maximising the opportunity for goods that are manufactured or produced using inputs from different countries across the free-trade bloc because it will provide significant advantages into those sorts of cooperative manufacturing and production processes.

In relation to the two taxation agreements with the Isle of Man, the committee recognises that these are important steps in the process of eliminating tax havens around the world and welcomes those tax agreements. It does note, however, that in relation to amendments that are required from those agreements the government has already introduced and proposed amendments to the International Tax Agreements Act 1953. The committee considers this to be pre-emptive of its consideration of these treaties and expresses its concern in the parliament and in the report at the government’s pre-emptive steps in that regard. Nonetheless, these are welcome treaties. They are steps forward for Australia. I endorse them to the house and I seek leave to continue my remarks later.

Leave granted; debate adjourned.