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Treaties tabled on 15, 21 and 24 June 2010

CHAIR —Welcome. Do you have any comment to make on the capacity in which you appear?

Ms Ward —I am the Assistant Secretary of the Trade Policy Issues and Industrials Branch in the Office of Trade Negotiations, DFAT, responsible for oversighting this issue.

CHAIR —Thank you. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and warrants the same respect as proceedings of the House and the Senate. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of the parliament. If you nominate to take any questions on notice, could you please ensure that your written response to questions reaches the committee secretariat within seven working days of your receipt of the transcript of the day’s proceedings. I invite you to make any introductory remarks that you wish to make before we proceed to questions.

Ms Ward —Australia is strongly committed to supporting developing countries’ participation in the multilateral trade system. Trade is a powerful engine for economic growth, poverty reduction and achieving the Millennium Development Goals. However, global trade rules are complex, and resource-poor developing countries often require assistance to take full advantage of the benefits of trade liberalisation.

Last year the government announced its support for the Advisory Centre on WTO Law, ACWL, through a $3 million one-off contribution. ACWL is an effective organisation, and the government strongly supports its work in helping developing countries build trade policy expertise and capacity to take advantage of the WTO system, to realise their WTO rights, to respect their WTO obligations and to participate fully in trade negotiations. ACWL is the first true centre for legal aid in the international legal system. Since its establishment in 2001, ACWL has delivered over 700 legal opinions, assisted members and least-developed countries in 32 WTO dispute settlement proceedings and offered annual courses in WTO law in which 275 delegates have participated.

ACWL is led by well-respected Executive Director Frieder Roessler, who visited Australia earlier this year, and is staffed by lawyers with substantial experience in WTO law. ACWL has a broad reach, with its services available to 74 developing and least-developed countries, half the WTO membership. In response to public consultations on joining ACWL, stakeholders indicated their support for Australia joining the ACWL as a developed country member.

By joining the ACWL, Australia will be able to complement its financial contribution by having a voice in the deliberations of the ACWL, particularly in the direction-setting of its work. As a member we will be able to promote Australia’s trade and foreign policy interests while contributing to the operations of the ACWL. For example, we could encourage the ACWL to increase its support for the Pacific. ACWL has provided advice in the past to Pacific island countries in relation to WTO accession processes.

The benefits for Australia of supporting ACWL are set out in the NIA. In particular, I would like to highlight that our commitment to ACWL complements existing trade development activities. ACWL’s work promotes more equitable access to the WTO system, reflecting the strength of Australia’s commitment to the WTO and to an open and transparent multilateral system as a foundation for future prosperity. Improving developing countries’ capacity to trade internationally, especially in our region, has the potential to directly benefit Australia by leading to larger and more reliable export markets for our goods and more sources of imports for Australian consumers and manufacturers. More generally, supporting ACWL will raise our trade and development assistance profile and demonstrate our commitment to developing countries.

I would like to take this opportunity to bring to the committee’s attention the fact that ACWL is presently considering future funding options. We have made it clear to ACWL that Australia’s $3 million contribution was a one-off payment and that Australia has no ongoing obligation to contribute to the ACWL. Over recent weeks, we have been participating as an observer in deliberations at the ACWL in Geneva regarding future funding arrangements for its members. We will keep the committee informed of any decisions that the ACWL makes in relation to funding arrangements, including any that may impact on the parliamentary process underway for Australia to accede to the ACWL. Thank you very much, Chair.

CHAIR —Thank you. The Dean of Law at the University of Sydney, Professor Gillian Triggs, has argued that a small claims procedure would be better suited to the challenges facing developing nations and that it would reduce the financial costs of the dispute resolution process and the time taken to resolve claims of this kind. If the idea is to overcome the challenges faced by developing countries, would these challenges be better overcome by developing a small claims procedure in the WTO dispute resolution framework?

Ms Ward —I think that is a question that goes to the content of WTO law rather than what the ACWL’s mandate is. I believe that, while the ACWL’s mandate is really to provide assistance for developing countries to prosecute their interests and to learn to work within the WTO’s current rules, the question of exactly what happens with the dispute settlement understanding of the WTO is currently subject to discussion in the Doha Round of negotiations. So that is more a question for the Australian government as a member of the WTO to think through and whether that is a priority for us to take to that negotiation.

CHAIR —Do you know if the small claims idea has any traction amongst the WTO members?

Ms Ward —I am afraid I will have to take that on notice.

CHAIR —And perhaps the same, but also about Australia’s position: would Australia support the inclusion of a small claims process in the WTO’s dispute resolution or dispute settlement body?

Ms Ward —Again, I am going to have to take that on notice.

CHAIR —Sure. You have mentioned the Doha round; both the dispute settlement procedures and the WTO’s development objectives are being debated in the current Doha round of negotiations. Are you able to provide the committee with an update on the progress of those proceedings?

Ms Ward —Sure, to the extent that I can. The WTO Doha round has actually been at an impasse since 2008. Meetings held in Seoul in the last couple of weeks by leaders of the G20 and by APEC leaders in Yokohama have resulted in very clear instructions for negotiators to proceed in 2011 to try to iron out outstanding difficulties to conclude the round.

As you say, the Doha round does have a mandate as a development round. That means various things to various people. Part of the Doha development agenda, of course, is to tackle the issue of agricultural subsidies by developed countries. The negotiations have made considerable inroads into formulating a framework where we would see very significant reductions in those subsidies. There is also a range of cuts to tariffs that are being envisaged in both developed and developing countries. Of course, developing countries do export significantly into other developing countries; so actually reforming developing country markets is a very important outcome.

CHAIR —This question may reflect adversely on lawyers, but could the existence of accessible and reliable legal advice make WTO members more litigious? Or do you think there has been any trend in that direction, for WTO members to be more litigious, or less litigious or about the same?

Ms Ward —I am not exactly sure of the trends in disputes. I can provide you with further detail on that if you would be interested.

CHAIR —That might be something we can take on notice.

Ms Ward —I can say that where many of the disputes have been between developed countries, the body of law and the membership by developing countries should allow equitable access for developing countries in prosecuting disputes should they so wish.

CHAIR —Right. It has been suggested that due to its size and funding the Advisory Centre on WTO Law can only provide minimal legal assistance. Does the department view that as a legitimate concern?

Ms Ward —I do not think so. In my statement I read for you the numbers of legal opinions and disputes in which the ACWL has been involved. We believe that it plays a very important role. Not only is there funding provided by the 10 developed country members but there is also a sliding scale of contributions made by developing countries according to their economic heft. Legal opinions, for many of those who seek them, are actually subsidised rather than just completely free opinions.

Senator McGAURAN —Prior to Australia’s $3 million, who has contributed to it? Or who is the main contributor? While I understand what it means for Australia to join, I am just wondering what the membership requires—a one-off $3 million? For an organisation that is ongoing like it is, I am almost certain we will have to contribute again.

Ms Ward —At the moment the developed country contributors—Canada, Denmark, Finland, Ireland, Italy, the Netherlands, Norway, Sweden, Switzerland and the UK.

Senator McGAURAN —They are not one-offs, though?

Ms Ward —To accede to the ACWL requires a one-off contribution, and these countries have provided a one-off contribution. Whether that was amortised across numbers of years or whether that was just one block was really up to the country itself. As I stated, a conversation has recently started about future funding arrangements.

Senator McGAURAN —I am sure.

Ms Ward —That is the developed country component of the contribution. As I mentioned, developing countries also pay contributions according to their size.

Senator McGAURAN —What does that allow us to do to supply a group of lawyers to attend a couple of conventions a year?

Ms Ward —Accession to the ACWL would provide us with a seat at the General Assembly of the ACWL. That meets at least twice a year. That basically makes decisions about what programs to support, the general direction of the ACWL, future funding arrangements and the like.

Senator McGAURAN —What do you mean by ‘what programs to support’?

Ms Ward —This is a demand-driven organisation. Where you have a huge range of requests for ACWL funding, the general assembly has some role in making decisions about the programs in which the ACWL becomes involved.

Senator McGAURAN —I am not clear. Do you mean the cases?

Ms Ward —The cases, but also I mentioned in my opening statement that there have been trade policy courses run by the ACWL. Discussions would take place about how often you run those courses, which countries you would invite to those and what sorts of contributions would be required.

Senator McGAURAN —Who would be our representative? Would someone from DFAT here fly over there, or would it be our ambassador in Geneva?

Ms Ward —We would probably be represented out of our mission to the WTO in Geneva, either the ambassador or a representative of his choosing.

Mr FORREST —Could I ask about the $3 million. Has it already been paid? The government have made an announcement twice now with the suggestion that it has been advanced. But it cannot be advanced until at least this committee signs off on the agreement, surely.

Ms Ward —As I understand it, there are two steps. The first was a decision which emanated from a recommendation in a review into our multilateral trade funding by Andrew Stoler in 2008 to provide some support for the ACWL. The government’s contribution of $3 million was done on the back of the outcome of that independent review but not with a view at that stage to acceding as a member. That point has come after we have provided that one-off donation. If we are to provide a contribution of this size then it would be in Australia’s interest also to be involved in the running of the WTO centre.

Mr FORREST —So it has not been paid?

Ms Ward —The money has been paid, yes, but it was independent of the question of accession as a member.

Mr FORREST —Can I express a view. This agreement has been around for a decade and nobody has ever been convinced that it will deliver anything. Would I be right in making a statement that Australia has got to the point in order to facilitate underdeveloped countries’ greater access to better advice? Is that a reasonable statement? Otherwise, if Australia so enthusiastically supported it, why didn’t we come to this point much earlier?

Ms Ward —I take your point. I think the outcome of the recommendation of this independent review provided for us some clarity of vision around what we wanted to do in our trade development programs. I think that this is an area of the work that we do in conjunction with AusAID, and for the most part we provide funding to train trainers. But that has been very much a bilateral focus. I think that this particular review, which threw up this recommendation to pursue this funding to an independent body, provided a different perspective and I think that it is the space which Australia has become increasingly aware of and interested in participating in.

Mr FORREST —Chair, I am a bit disturbed that the commitment has been made without proper process through our very hardworking committee.

Senator McGAURAN —Are there any Australians—trained lawyers—who through their own resources are part of the team?

Ms Ward —I do not know the answer to that. I can take that notice, if you wish.

Senator McGAURAN —It is just out of interest.

Ms Ward —I do not have the answer to that.

Senator McGAURAN —They may, through their own resources, have applied for a job there and become advisers. I am just wondering whether there are any Australians employed by the legal aid wing of the WTO. It is just out of interest. Is it an avenue for any Australian lawyers?

Ms Ward —It is an independent body; this is not part of the WTO secretariat. It is not actually part of the WTO at all. It is an independent body. The answer to your question is: I am not sure whether there are Australians associated with—

Senator McGAURAN —That is interesting. I can imagine that it acts independently, but it has been established by and it is totally independent of the WTO?

Ms Ward —Yes, it provides advice on WTO law but it is independent of the WTO.

Senator McGAURAN —But established by the WTO—

Ms Ward —No, it has not.

Senator McGAURAN —Who established it?

Ms Ward —It was established by some Europeans.

Senator McGAURAN —Who are those ‘some Europeans’? What are its actual origins? I then wonder what the status of our agreement is. I thought we were dealing with the WTO—I know, an independent body—but what is the status of our agreement? Who are we really dealing with here? It is just a European body, is it? Is the United States part of it?

Ms Ward —No, they are not. It is a group of countries that have provided funding for this centre which provides WTO advice to developing countries so they can prosecute their interests inside the WTO.

Senator McGAURAN —Is France a member?

Ms Ward —I will read the countries to you again.

Senator McGAURAN —So it has been done at government level though, has it? It has been formed at government-to-government level?

Ms Ward —I am not sure that I understand your question.

Senator McGAURAN —When they came to form this—

CHAIR —Who set it up? Was it a group of governments that set it up or some NGOs that set it up?

Ms Ward —I see, sorry. It was set up—

Mr FORREST —Take it on notice, if you want.

Ms Ward —I am advised that has been set up as an intergovernmental organisation. However it is independent of the WTO secretariat.

CHAIR —When we are saying that originally it was independent of the WTO, if you look at paragraph 2 of the National Interest Analysis, it was open for signature during the Third Ministerial Conference of the World Trade Organisation, so does seem to have some WTO auspices rather than something that has appeared out of a clear blue sky.

Ms Ward —The linkage with the WTO is extremely clear, because legal advice is provided to developing countries to prosecute their interests inside the WTO. However, that does not mean that the WTO funds the body.

CHAIR —Or runs it.

Ms Ward —Or runs it. What we are saying is that this is separate to the WTO secretariat. Basically WTO members put in subscriptions on an annual basis, and part of those subscriptions run what is called the WTO secretariat, which supports and provides research for WTO members en bloc. What we are talking about here is an organisation which sits to the side of that which provides assistance to specific members, in this case developing and least-developed country members, so that they can better promote their interests inside the WTO.

Mr FORREST —When was the $3 million advanced? You can take this on notice. When was the $3 million paid? What date was the referral made to this committee? I think what happened was that parliament was prorogued, but I want to know the sequence of those dates.

CHAIR —It says that we made a commitment on 12 November 2009.

Mr FORREST —A commitment is one thing; payment is different. I do not mind the commitment; I just want to know when the payment was made and how it fits with the referral to the work of our committee.

Ms Ward —I will have to take that on notice, but I would stress that, at the time when the contribution was announced, it was not announced with a view at that point to accession. It was announced as a contribution. Subsequent to the contribution being made, thought was then given to the idea that maybe there would be value in acceding, so that we could actually assist in directing the work of the organisation.

Mr FORREST —It is just the principle. What would happen if this committee got good evidence to suggest that it is not a good thing to agree to this proposal? That is all I am saying. I just want to work through the process.

CHAIR —As there are no further questions, we thank you for attending to give evidence today. If the committee has any further questions, the committee secretariat may seek further comment from you at a later date. I thank everybody for their attendance and contributions.

Resolved (on motion by Ms Livermore):

That this committee authorises publication of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 11.58 am