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Thursday, 18 November 2004
Page: 21

Senator NETTLE (10:47 AM) —The Greens support multilateral trade agreements with rules that seek to address global inequity and which contain robust safeguards for labour standards, human rights and environmental protection. We support fair trade agreements; we do not support free trade agreements. The US FTA, which we have heard today the government intends to come into force on 1 January, is not a fair trade agreement. It is unbalanced and it is bad for Australia's national interest. Similarly, the Thai-Australia free trade agreement that we are debating today is unbalanced and it will hurt some Australian industries. But it will also be bad for the Thai people, Thai society and the Thai economy. As the only international political party represented here, it is important for the Greens to speak out about the way in which we can use such agreements, when we enter into them, to address global inequity. It is something that this free trade agreement specifically does not do.

The Thai free trade agreement was negotiated during eight negotiating sessions conducted in Australia and Thailand from August 2002 to October 2003. It was signed by Minister Vaile and his Thai counterpart in Canberra on 5 July this year during a visit to Australia by the Prime Minister of Thailand and nine of his cabinet ministers. The trade agreement will be Thailand's first comprehensive free trade agreement with a developed economy, and it is Australia's fourth free trade agreement. It is also the first free trade agreement between a developed and a developing country in South-East Asia. According to the Australian government it will set a benchmark for future trade liberalisation in the region.

The agreement covers trade in goods, services and investment, as well as promoting cooperation and benchmarks in a range of areas, including competition policy, e-commerce, industrial standards, quarantine procedures, intellectual property, government procurement and dispute settlement. The Thai free trade agreement will result in Thai tariffs on virtually all goods imported from Australia being eliminated by 1 January 2010. Agriculture, processed foods and beverages, mining and automotive products in particular will be affected. Controls on foreign investment in Thailand by Australian companies will be reduced in most sectors, allowing majority control of important industries by Australian companies in Thailand for the first time. The target date for the entry into force of the Thai-Australia free trade agreement is 1 January 2005 or as soon as possible thereafter following the completion by both countries of the domestic processes necessary for implementation. That is the debate we are having here today. In 2003 Thailand was Australia's 12th largest market for exports and 13th largest source of imports. Two-way trade was worth $5.9 billion.

Moving on to the issue of tariffs, the legislation—the Customs Amendment (Thailand-Australia Free Trade Agreement Implementation) Bill 2004 and the Customs Tariff Amendment (Thailand-Australia Free Trade Agreement Implementation) Bill 2004—will have a negative impact on some Australian industries, as I said earlier. This is not reflected in the economic assessments of this trade agreement conducted by our government. Australian industries that will be most impacted on by the free trade agreement with Thailand are the automotive industry and the textile industry. Australia has very low tariff barriers—averaging around five per cent—except in the vehicle industry and the clothing, footwear and textile industry where tariffs vary between five and 15 per cent. There are schedules in this agreement for the reduction of tariffs on Thai imports, with 47 per cent of total Thai import tariffs being reduced to zero immediately. The vehicle industry tariffs will be reduced to zero by 2010 and TCF tariffs will be reduced to zero by 2015. Both of these industries in Australia employ large numbers of non-English-speaking workers in regional parts of this country where there is high unemployment. Regional employment studies are needed and should have been carried out to show the impact of these tariff reductions. This could be the very biggest impact of this agreement in Australia.

In Thailand, Thai farmers have demonstrated in protest against the agreement because of real concerns about the impact on their industries. They oppose the agreement because of the impact on Thai agriculture and food sovereignty, with the Thai dairy and beef industries leading the opposition in Thailand to this agreement.

In the services industry there is a big problem with the way in which services are defined in this agreement, which could negatively impact on public services in Australia and also Thailand in the future. The Australian Free Trade and Investment Network provided a submission to the JSCOT inquiry into this agreement, an inquiry which is still currently under way and which has not reported. The AFTINET submission states:

The TAFTA agreement contains the same flawed definition of public services as the GATS agreement—

that is, the General Agreement on Trade in Services. The submission continues:

Article 803 clause 2 of TAFTA provides that the services chapter shall not apply to “a service supplied in the exercise of governmental authority... which means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers”.

This means that the Thai-Australia free trade agreement does not relate to services that are public services. The definition of `public services' is very ambiguous. It is the same definition of `public services' that is found in the General Agreement on Trade in Services in article 1.3. AFTINET's submission further states:

Ambiguity arises about which services are covered by this exemption because in Australia, as in many other countries, public and private services are provided side by side. This includes education, health, water, prisons, telecommunications, energy and many more.

However, in past discussion papers relating to GATS, the Department of Foreign Affairs and Trade has asserted that public services will not be caught under such a definition. It has drawn a distinction by way of example between public education services and private education services. However, no argument has been presented as to why these services should be seen as qualitatively different within the definition used. Comments by the WTO secretariat do not offer support for the Australian government's assertion or interpretation; rather, they suggest a more narrow interpretation of article 1.3. We have a circumstance where the Australian government is saying, `Don't worry, public services won't be impacted.' That is very different from what is being said by the WTO secretariat. I return to AFTINET's submission:

The government has given assurances that it does not intend that public services or government's capacity to regulate services be diminished. If this is the case, public services should be formally and unambiguously exempted from trade agreements, including TAFTA. If not, the likely resolution of this ambiguity will be through rulings of Dispute Panels, deciding on challenges by a government or an investor to a government's public service arrangements.

That is the end of AFTINET's contribution by way of submission. The Australian government asserts that public services will not be caught in definitions within these trade agreements, but the WTO secretariat does not support the Australian government's view. Where there is a dispute that arises, it is not the Australian government that will be the determiner of whether `public services' will be included. It will be the disputes panel—a process of the WTO. It is ridiculous for the government to claim, when there is a dispute, that public services will not be included when the decision maker has already said, prior to disputes coming up, `Yes, public services are included.'

I move now to the issue of foreign investment. The Thais are also very concerned about the loss of economic sovereignty by Australian corporate takeovers in Thailand. Most economic sectors in Thailand currently have a maximum limit of 49.9 per cent foreign ownership. The Thai-Australia free trade agreement will mean that many sectors will now be open to majority Australian ownership. This includes 100 per cent Australian ownership of distribution services for goods manufactured in Thailand, construction services and management consulting services. Other changes will allow 60 per cent Australian ownership of major restaurants or hotels, tertiary education institutions specialising in science and technology, provided they are located outside Bangkok, certain maritime cargo services and mining operations.

Thailand has given an undertaking to have further negotiations on services and investment within three years to further liberalise financial services and telecommunications services. These issues of investment in Australia and Thailand have prompted allegations of improper process and conflict of interest by the Thai government in relation to the agreement. I will expand on that now. The Thai public have not been involved in the negotiations and consultations necessary for this agreement. For example, the trade agreement was not translated into Thai. What capacity is there for the public in Thailand to understand and be involved in consultation and discussion about this trade agreement and the impact on the community if it has not even been translated into Thai? The English version of the trade agreement was not made public until there was a public outcry.

The Greens note and share the concerns of non-government organisations in Thailand about a potential conflict of interest involving the Thai government. Members of the Thai cabinet are involved in the automotive industry and the Thai Prime Minister's telecommunications company is a dominant player in the marketplace. Both these industries stand to gain from the free trade agreement and investors in them stand to benefit, whilst poor Thai farmers will struggle to survive against an onslaught of Australian farm export products. Thai groups are very concerned about the precedent the agreement sets for negotiations of further trade agreements—in particular, any free trade agreement they may negotiate with the United States and regional agreements, such as the proposed ASEAN FTA, which Thailand would be a party to. These Thai groups are worried, as the Greens are, that the agreement does not make reference to labour or environmental standards, and I note this is the subject of concern in the Labor Party's second reading amendment which has been moved.

The Greens' view is that trade agreements should not undermine labour or environmental standards and governments should abide by UN and ILO—International Labour Organisation—agreements on labour and environmental standards. I will touch on that issue later when dealing with Labor's amendment. There is also serious concern about the investor state disputes mechanism that exists in this trade agreement, which was not a part of the US free trade agreement in the same form. The investor state disputes process, which is in this agreement, gives corporations the right to complain to a trade tribunal and to seek damages if their investments are harmed by government law or policy. The trade tribunal to be used is UNCITRAL, which is run by the United National Commission on International Trade.

The processes are not open and transparent. The Greens; groups such as AFTINET, the Australian Fair Trade and Investment Network; other civil society groups; and, indeed, the Labor Party on occasions have opposed this investor-state disputes mechanism as it gives corporations unreasonable legal powers to challenge government law and government policy. Thailand is a poor country, with agriculture the key to its economy and much of its population living in rural parts of the country. There are huge human rights issues in Thailand, with the recent killing by suffocation of over 80 people by the Thai security forces in southern Thailand being only the most recent example. Thai society is in the midst of quite intense civil conflict, and issues such as this need to be taken into account when pushing agreements such as these onto our neighbours. Unlike those of countries like Canada, the Australian government do not take into account the development needs and the goals of countries we are making deals with; they seek only to see what is good for certain sections of the Australian business market.

This deal is not fair. This deal is not balanced. It will not contribute to the economic security of Thailand and therefore will not contribute to security for Australia. The Greens are opposing this legislation, because what this free trade agreement does to the people of Thailand is very similar to what the Australian government agreed and allowed the US to do to us in the form of the US-Australia free trade agreement. There were unbalanced negotiations, where the country with the greatest economic power and the greatest negotiating power had the capacity to force upon the smaller country involved in that agreement a whole range of requirements to suit the profit margins of the companies based in the larger country. In the case of the US-Australia free trade agreement, it is the US corporations; in the case of the Thai-Australia free trade agreement, it is Australian companies. That is not an equitable way to engage in negotiating such trade agreements.

In conclusion I want to deal with the opposition's second reading amendment. The Greens will be supporting it. We have heard a number of speeches now from the opposition, and this debate is reminding me of the debate on the US-Australia free trade agreement. Criticisms were put forward, concerns were raised yet there was an intention to vote for the trade agreement anyway. There is the same circumstance here. We have heard Senator Lundy and Senator Conroy talk extensively about their concerns—that is, about the fact that environmental standards are not part of this agreement and were never a part of the process and about the labour standards that do not exist in this trade agreement but that they would like to see there. That is great; we agree. The Greens agree, and we are not going to support free trade agreements that do not have respect for international labour standards, that do not have as part of them adherence to stringent international environmental standards and requirements and that do not respect international human rights standards. We should be negotiating free trade agreements on a multilateral basis, in an open and transparent way and with respect for all of those international standards.

We are seeing a pattern. As I say, this is the fourth free trade agreement that Australia is signing onto. The degree to which we are or are not the dominant economic player in those trade agreements has varied, but we are setting up, being a part of and perpetuating a system around the world where unequal agreements which have nothing to contribute to dealing with global inequity—which could be dealt with through these trade agreement processes—are being made. We can deal with the issues of global inequity only when we do so in a multilateral forum with respect for international standards on labour, human rights and the environment. Whilst we continue to agree to these bilateral trade agreements, we are not improving the plight of disadvantaged peoples in communities all across the world. Whether it be with respect to the Thai farmers, who have been demonstrating and who have been out on the streets opposing this free trade agreement, or to the women who are working on community projects in India—wherever it may be that we are negotiating trade agreements—we are not being responsible global citizens. We are not being citizens who are committed to improving poverty and global inequity whilst we continually sign off on these uneven, unequal, unbalanced and inequitable free trade agreements.

I will foreshadow at this point that the Greens will also move a second reading amendment. I note that Senator Conroy's amendment has been moved. The Greens amendment reads:

“(a) further consideration of the bills be postponed and the bills be made an order of the day for the next day of sitting after the Joint Standing Committee on Treaties reports on the Thailand-Australia free trade agreement ...

It then goes on. The reason the Australian Greens are moving this amendment is that there is currently an inquiry—that is, a parliamentary process—being conducted by the joint standing committee. It is made up of senators and members of the House of Representatives, who are looking at this free trade agreement and hearing from the community. They are asking, `What are your concerns about this trade agreement?' The inquiry is part of a process of parliamentary accountability that exists within this parliament for the purpose of consulting and involving the public in the discussion about the decisions that government is making. Yesterday we saw both of the major parties say: `Oh, that's all right. We'll just continue with this debate.' That is why we are debating this issue now. We had debate yesterday on whether or not we should proceed. Both of the major parties, the coalition and the Labor Party, decided that, even though there is a committee inquiry—that is, a parliamentary process of accountability, scrutiny and involvement of the public—going on, we shall proceed with this debate anyway. So here we are today proceeding with the debate regardless.

The Greens' second reading amendment, which I shall move after we deal with Senator Conroy's amendment, says: `Let's wait. Let's hold our horses. Let's at the very least wait until we hear what that committee has to say about the trade agreement.' We know from past examples that, even if we did, it would not mean that the government would listen to the concerns that were raised by the Joint Standing Committee on Treaties. But let us at least wait until the committee provides its report to the parliament so that we can hear what the views of the public and the parliamentarians who have looked at this issue are. I have heard the Labor Party raise this issue during their contributions and I hope I can look forward to their support. Being here having this debate and the Labor Party having said, `Oh, no worries; we'll support it anyway,' is really ringing those bells about the US free trade agreement. The Greens are not going to support these inequitable trade agreements. We are going to work with the other greens parties in over 80 different countries around the world for multilateral trade agreements which respect international standards with respect to labour law, human rights and the environment.