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Monday, 15 October 2018
Page: 7058

Senator BROCKMAN (Western Australia) (13:03): Before I move on to speak about the Trans-Pacific Partnership and, in particular, these associated bills, I will just point out that one of my favourite words in the English language is 'furphy'; I think it's a great word. And what we've just heard is a very large number of furphies about this legislation, in particular about the ISDS provisions. I ask those listening and those in the gallery: for all the criticism of the ISDS provisions that we've heard—provisions supported by governments of all persuasions over 30 years—how many times has the Australian government actually been taken to a tribunal on the basis of ISDS provisions? The answer is once—once in 30 years. So this is not, as it is painted to be by the Greens and, sadly, by some in the Labor Party, a huge thing to fear.

The ISDS provisions are there for a very good reason: to protect Australian companies investing abroad. ISDS promotes investor confidence and can protect our sovereign and political risk. If a country does not uphold its investment obligations, an investor can have their claim determined by an independent tribunal, usually consisting of three arbitrators. As I said, ISDS provisions have been around for a very long time—30 years, in fact. There are ISDS provisions in six FTAs, including the China-Australia, the Korea-Australia, the Chile-Australia, the Singapore-Australia, the Thailand-Australia and the ASEAN-Australia-New Zealand free trade agreements. Obviously, there are also ISDS provisions in the Trans-Pacific Partnership. This is a fairly standard part of international trade agreements.

Sadly, though, we are in a world where the benefits of trade are being forgotten and where the benefits of trade are being undermined by populists from all sides of politics, unfortunately. In this debate, we've heard it from the left of Australian politics but we've seen it in the US from the right side of their politics. They are uncertain about the benefits of trade and the importance of trade, but we on this side of the chamber know the benefits of trade and know the benefits of increasing our trade with the rest of the world. Australia is at the end of the line when it comes to trade. We are a trading nation; we have to trade. We have to trade for our wealth, we have to trade for our security and we have to trade in order to grow our economy and in order to give future opportunities to the next generations of Australia. That's why this government has been so committed, right throughout its period of office, to delivering free trade agreements that grow the economy, that grow jobs, that grow wages and that actually give this country the opportunity for the next generation to succeed and thrive, doing what we do best. I will move on to talk about something that's very close to my own heart—the agricultural sector—in a little while.

Just in general, the TPP-11 is one of the most comprehensive trade agreements ever concluded, including Japan, Chile, New Zealand, Malaysia, Singapore, Peru, Brunei, Vietnam, Canada and Mexico. Those last two, which I'll speak a little bit more about later, obviously open up markets and open up preferential access to two of the top 20 economies in the world. The TPP-11 eliminates more than 98 per cent of tariffs for these 11 countries. Those 11 countries have a combined GDP over A$13 trillion and 500 million consumers. Those consumers want our high-quality produce, our minerals and our high-tech exports that Australia does so well.

The TPP-11 will eliminate all remaining tariffs on Australian exports of non-agricultural products to the TPP-11 countries. Australian farmers, Australian manufacturers, Australian service providers and Australian small businesses—in fact, all exporters—will be big winners from this free trade agreement. That is because it will be easier to sell their goods and supply their services into a free trade area that spans the Americas and Asia. In 2017, nearly one-quarter of Australia's total exports, worth nearly $92 billion, went to the TPP-11 countries. This will continue to grow as those tariffs start to go down. This sort of boost will drive the future of growth. It will drive future jobs, it will drive higher wages and it will drive investment to allow the next generation to have the sort of opportunities that we all had.

It also provides improved access to markets where we already have FTAs, such as Japan. In the process, there is an acceleration of the reduction in Japan's tariffs on beef and the elimination of a number of tariffs on cheese. The Trans-Pacific Partnership, as I mentioned earlier, also creates the first opportunity to have a free trade agreement with Canada and Mexico, giving Australian exporters preferential access to two of the top 20 economies in the world for the first time. That's why it is so important that the TPP is put in place as soon as possible—to lock in those benefits and allow those small and medium-sized businesses who are doing the hard work of growing the economy and creating jobs to secure those new market opportunities around the world but particularly in the Trans-Pacific Partnership countries.

The Trans-Pacific Partnership will enter into force 60 days after the first six TPP-11 members complete all necessary ratification procedures. Our government, the Morrison government, will continue to pursue a trade agenda that opens new markets for Australian businesses, contributes to a stronger economy and creates Australian jobs. It was not that long ago that those opposite—in particular Bill Shorten—said this deal was dead in the water. Well, this government didn't accept that. This government got on with the job. Even though there were challenges to having this agreement finalised, it got on with the job with the 11 countries who were still interested in having one of the largest free trade areas in the world and managed to get the deal done. Opponents are risking $15.6 billion in annual benefits to the Australian economy, forecast to be realised by 2030.

As I said earlier, agriculture is close to my heart. Again, we are a trading nation. Australian farmers export around 77 per cent of what they produce. We need to get our trade policy right for our farmers to ensure they have ongoing access to the markets they need but also have growth opportunities to supply the clean, green produce from Australia to the rest of the world. Australian farm exports were valued at $44.5 billion in 2016-17, and obviously that's been one of the significant growth sectors in our economy. TPP-11 does ensure better access for farm exporters, including beef producers, sheepmeat producers, dairy producers, canegrowers and sugar millers as well as cereal and grain exporters, rice growers, cotton growers, woolgrowers, horticulture producers and wine exporters. That certainly covers the gamut of the major agricultural assets in Australia.

I will go through some of these in detail. I will start with beef. Japan's beef tariffs will be reduced to nine per cent within 15 years of entry into the TPP. This will improve access for fresh, chilled and frozen beef exports into Japan. We'll also see elimination on tariffs on offal exported to Japan. That will give us the potential to boost those exports. Canadian beef tariffs will be eliminated within five years of the TPP coming into force. Currently, those tariffs run at 26½ per cent. We do have a market in Canada at the moment. It was around $100 million in 2016-17. But we certainly see the potential there to increase significantly with the removal of a 26 per cent tariff. There's also elimination of Mexican tariffs on beef carcasses and cuts, which are currently 25 per cent. That will take place over a 10-year period. Tariffs on offal, which are currently at 20 per cent, will come into force immediately the TPP is ratified by those six countries. So there will be significant gains for the beef sector.

We exported around $8.5 billion worth of grains and cereals in 2016-17. Nineteen per cent of that, worth $1.6 billion, was exported to the TPP countries. Again, the TPP builds on the existing free trade agreement with Japan, where there will be increased quotas for Australian grains and the mark-up on wheat and barley will be reduced by 45 per cent over an eight-year period. There will also be elimination of Mexican tariffs on wheat, currently at 67 per cent. I think many people thought the world had already moved on a lot of these tariffs and had started to bring down these barriers over the last 30 years, when people did widely share the view that tariffs were detrimental to the economy and particularly detrimental to those who bought products within an economy—detrimental to consumers. But there are still some very significant tariffs out there, including 67 per cent on wheat and 115 per cent on barley in Mexico. These will be reduced progressively over the years ahead. In Canada there will be the elimination of tariffs on grains and cereal. Canada is a significant grain and cereal producer and exporter in its own right, but there may be some niche market opportunities into Canada that our very high quality producers in Australia can access.

Dairy products exported from Australia were valued at more than $2.1 billion in 2016-17. Almost half were exported to Trans-Pacific Partnership countries. The TPP includes significant improvement to access to the Japanese, Canadian and Mexican dairy markets. The National Farmers Federation stated that the TPP-11 will lock in new valuable market access for our farm exports. Improved access to global markets is critical to achieving increased farm gate returns. We've been talking a lot in this place—and I'm sure many in this place would have heard from dairy farmers in their states—about some of the difficulties dairy farmers are facing, so opening market access will improve the bottom line for dairy farmers.

Australia's wine export volumes have improved over the last year. The value of wine exports is up 20 per cent to $2.7 billion and export volumes are up about 10 per cent, which I believe is a new record. Around 20 per cent of our exports go to the TPP-11 countries. The Winemakers' Federation chief executive said that the TPP-11 is a very good deal for Australia and a very good deal for rural and regional Australia in particular:

At a time when farmers around the country are experiencing crippling drought, deals like TPP-11 give hope for a long-term sustainable future.

That hope is real, that hope is there and that hope is built on increasing our market access to countries right round the world, which the TPP-11 does.

It is great news for the wool sector, which has been going gangbusters in the last six years or so after a very lean period. From entry into force the TPP eliminates all remaining tariffs on Australian raw wool exports to TPP-11 countries. We have all seen the burgeoning of high-quality merino wool in fashion labels right around the world. It is a fabric of choice now across so many different parts of the market, from the suit I'm wearing to sporting gear. People love wool. People love Australian wool. This will, as I said, eliminate all remaining tariffs on raw wool exports. That's great news for the Australian wool industry.

A majority of mining income is derived out and about in rural and regional Australia. It contributes about eight per cent of Australia's GDP and around 60 per cent of our exports. Iron ore accounts for 52 per cent of world trade. My home state of Western Australia accounts for 38 per cent of the global iron ore export market. Iron ore sales reached a record 270 million tonnes in 2016-17, valued at $63½ billion. Our mining sector depends on exports for its survival. The Minerals Council of Australia said:

Australian workers, jobs and business will benefit significantly from the Trans-Pacific Partnership (TPP-11) trade agreement, with increased national income, exports, investment and wages …

It is pretty clear from the above that industries in rural and regional Australia are positive about trade and about the TPP in particular, and this isn't a surprise. There has been modelling conducted for Australian industry associations by Professor Peter Petri and Professor Michael Plummer, which looked at the impact of improved market access for goods, services and investment under the TPP-11 trade deal. The modelling showed that by 2030 the TPP-11 would increase national income by $15.6 billion, boost Australia's exports by about $30 billion, generate additional direct investment into Australia of $7.8 billion and additional overseas investment by Australian businesses of $26 billion, and lift real wages with higher wage gains for lower skilled workers.

Just briefly in the time left, I want to get back to the ISDS issue and why it isn't something that needs to be worried about. ISDS provisions have been in operation as part of free trade agreements for 30 years. They have only been used once. They're not automatically a part of free trade agreements; they're included on a case-by-case basis, always based on whether an ISDS mechanism is in Australia's national interest.

An ISDS mechanism is very clearly not a threat to Australian sovereignty. It does not prevent the government from changing its policies. It does not prevent the government from regulating in the public interest. It does not prevent the government from regulating in the interests of the environment or regulating in the interests of our own health system. It does nothing to freeze existing policy settings. Australian companies have used ISDS in proceedings against other countries to protect their investments overseas, so this isn't a one-way street. It isn't about giving evil multinationals the ability to tie up the Australian government in tribunals, because 30 years of evidence shows it's only happened once—whereas, on a number of occasions, it has given Australian companies the right to protect their investments overseas in that tribunal setting.

That's a very important note to end on. The TPPs are an excellent addition to our armoury of free trade agreements around the world. The government continues to negotiate a range of free trade agreements, including the Australian-European Union Free Trade Agreement; we have ongoing discussions with Indonesia about the comprehensive economic partnership agreement, and there has been some movement on that; the Australia-India Comprehensive Economic Cooperation Agreement; the Australia-Hong Kong Free Trade Agreement; the Pacific Alliance Free Trade Agreement; and the Regional Comprehensive Economic Partnership. And, of course, we are also talking to the United Kingdom about the possibilities of a free trade agreement with them in the post-Brexit era. Trade is good for Australian business. It's good for Australian families. It's good for consumers. It will reduce the cost of imports. It gives us increased opportunities to do what we do best and sell it to a global market. I absolutely commend these bills to the chamber.