Joint Standing Committee on Treaties
Report

In rising to speak on the report and the additional comments that Labor has made about the report, I would particularly like to record my thanks to the member for Bass for his contribution to the process of interrogating this treaty. He has made an enormous contribution in the short time that I have worked with him on the Joint Standing Committee on Treaties, and I would like that commitment recorded in Hansard. It's lovely to be able to speak directly after him. 

It is well established that Labor has a long history of support for free trade. The reforms of the Hawke and Keating
governments included a really big reduction in tariffs. I was fortunate enough to be a journalist in that era and
to report it and talk to people about the consequences that that might have.

I don't think that anyone back then realised that it would be a key contributor to the record 26 years of continuous economic growth that Australia has experienced. Of course, when Labor was last in government three trade agreements were signed and negotiations were begun on seven others, including the former Trans-Pacific Partnership, the TPP.

We obviously support high quality free trade agreements, because trade does encourage greater economic activity and lead to the creation of jobs. Trade and open markets have lifted millions of people out of poverty globally and provided consumers with cheaper products. International trade has also lifted Australia's rate of economic growth and productivity.

I rise, though, with some reservations about the TPP-11, this newest version of a trans-Pacific partnership, known
fully as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, but colloquially known as
TPP-11. It is a new and different agreement to the one signed in February 2016.

The original agreement included 40 per cent of the world's GDP, whereas the current one, TPP-11, includes only 13 per cent. TPP-11 also suspends 22 provisions of the original TPP and features additional side letters, many of which we are very pleased to see.

I think the concern about the side letters—there are 10 new side letters between Australia and other signatories
alone and many others—is that at what point will those matters that have been set aside come back into active
play. I think this parliament will need to look very closely should that point come.

The independent economic modelling of the finalised TPP-11 has been conducted not by a federal government
supported organisation to see that happen but on behalf of the Victorian government. It indicates that the TPP-11
will actually deliver very modest initial gains to Australia, predominantly for agricultural goods.

That will certainly be good for the agricultural sector, but they are very modest gains. The things that seem to make the biggest difference will be the preferential access to Mexico and Canada. There is potential for more significant
gains, but we would like to see very close scrutiny and monitoring to see what gains can be put towards this
agreement: what can we actually say is a direct result of this sort of agreement? That would help with future
modelling of other agreements of this nature.

My main concerns about the agreement are not the trade aspects of it but are more about the non-trade-related
aspects. You have to wonder why a trade agreement has non-trade things in it, and that is probably a pretty
good question to be asking.

In any case, the Labor members of the committee have particular concerns about the aspects of TPP that are not essential to the trade benefits of the agreement. These include the lopsided concessions on temporary labour market access, with a weakening of regulations that cover labour market testing and skills assessment. There is what we would consider to be unnecessary and risky exposure to investor-state dispute settlement arrangements, which I will speak about shortly, and a lack of modelling.

Let me speak about the labour market testing. There are some provisions of the TPP-11 with which we have
particular concerns. The TPP-11 waives labour market testing for 'contractual service suppliers' for six signatory
countries. This will mean that jobs in Australia will be able to be filled by workers from Canada, Peru, Brunei,
Mexico, Malaysia and Vietnam without first being offered to Australians.

This comes at a time when many in Australia are concerned about employment and low wages. More than 450 professions could currently be covered by the term 'contractual service supplier', and they include electricians, plumbers, carpenters and nurses.

No other country has provided Australia with such generous reciprocal visa rights, and it is still unclear why
such concessions were given by the government.

While Labor acknowledges that foreign workers do play an important role in the success of the Australian
economy, it is fundamental that Australians are offered employment first and that overseas workers are brought
into the country only once there is a demonstrated need.

The temporary migration system is supposed to supplement the skills of Australians, not replace them. A Shorten Labor government will not waive labour market testing as part of any free trade agreement that it signs going forward and will seek to reinstate labour market testing in existing agreements as part of the scheduled reviews.
Skills testing is also an issue.

We are concerned about the erosion of skills testing in the TPP-11. We have the best trained tradespeople in the world, and this standard must be protected. I'd like to acknowledge the submissions, particularly from the ETU and the ACTU, that raised concerns and gave us some detail about how less-qualified and inexperienced tradespeople could be working in Australia without being subject to the current rigorous testing processes. I think that is something we need to keep a very close eye on.

The consequences of employing electricians without sufficient standards can be fatal. Certainly in Sydney we are already seeing incidents of poor work practices. I think this is something the parliament needs to be very mindful of.

It is very interesting to see that the ISDS provisions have remained in this new agreement. They were excluded
by the former Labor government in the early negotiations for the original TPP. The former Howard government
shared Labor's concerns and did not include ISDS in Australia's free trade agreement with the United States. We
are deeply critical of this aspect of the agreement.

It is the view of Labor members that, because of the many concerns that we took evidence on, ISDS should not be part of this agreement. The example that really rings true is the Philip Morris case, where they used ISDS provisions to attempt to take action against the Australian government.

Australia would have been faced, if Philip Morris had won their case, with abandoning the public health initiative of plain packaging for cigarettes or paying a huge amount of compensation. That would have been the consequence. The fact the claim wasn't successful in some ways is almost irrelevant, because the cost of any ISDS claim will be borne by the government and the taxpayer, notwithstanding whether that claim is successful.

The TPP introduces an ISDS mechanism between Australia and three other countries—namely, Japan, Canada
and Peru—for the first time. Under the TPP, an ISDS arrangement between Australia and New Zealand will
be excluded by a side letter agreement.

Of course, between the signing of the first TPP and the TPP-11, there was a change of government in New Zealand. The current New Zealand Labour government doesn't support the inclusion of ISDS provisions and was able to remove ISDS provisions, through four additional side letters, with Brunei, Malaysia, Peru and Vietnam. A future Labor government in Australia will not agree to ISDS provisions and will seek to remove those provisions from existing trade agreements as part of scheduled reviews.

The independent modelling has been much talked about, and the whole committee agreed that it is absolutely
basic that independent modelling of trade agreements is provided to the Joint Standing Committee on Treaties,
but, more importantly, done well before an agreement is signed.

That has been recommended by other parliamentary committees, as well as the Productivity Commission, the Harper review, the Australian Chamber of Commerce and Industry, the Minerals Council of Australia and the Australian Council of Trade Unions. So there's a pretty strong across-the-community view that we should get modelling and information before we sign up to something.

I'd like to thank Pat Ranald, of AFTINET, who particularly focused on this issue in her evidence, as did Alan
Kirkland, the CEO of CHOICE. I think both of those resonated with the committee. I commend this report to
the chamber.