Purpose of the report
1.1
This report contains the Joint Standing Committee on Treaties’ review of the following treaty action:
Comprehensive and Progressive Agreement for Trans-Pacific Partnership between the Government of Australia and the Governments of: Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam and associated side letters (Santiago, 8 March 2018).
1.2
The Committee’s resolution of appointment empowers it to inquire into any treaty to which Australia has become a signatory, on the treaty being tabled in Parliament.
1.3
The treaties, and matters arising from them, are evaluated to ensure that ratification is in the national interest, and that unintended or negative effects on Australia will not arise.
1.4
Prior to tabling, major treaty actions are subject to a National Interest Analysis (NIA), prepared by Government. This document considers arguments for and against the treaty, outlines the treaty obligations and any regulatory or financial implications, and reports the results of consultations undertaken with State and Territory Governments, Federal and State and Territory agencies, and with industry or non-government organisations.
1.5
A Regulation Impact Statement (RIS) may accompany the NIA. The RIS provides an account of the regulatory impact of the treaty action where adoption of the treaty will involve a change in the regulatory environment for Australian business. This Treaty required an RIS.
1.6
The Committee takes account of these documents in its examination of the Treaty text, in addition to other evidence taken during the inquiry program.
1.7
Copies of the Treaty considered in this report and its associated documentation may be obtained from the Committee Secretariat or accessed through the Committee’s website at:
https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/TPP-11/Treaty_being_considered.
The inquiry
1.8
In November 2016, the Joint Standing Committee on Treaties tabled its report into the Trans-Pacific Partnership Agreement (TPP).
1.9
By the time the Report was tabled, it was clear that the chances of the TPP coming into force were slim. Both candidates for the President of the United States, the election for which was being held in the same month the Report was tabled, had committed to withdrawing from the TPP.
1.10
In January 2017, the United States Trade Representative notified the other parties to the TPP that the United States would not be ratifying the Agreement.
1.11
The Committee’s 2016 Report was lengthy, covering a range of issues raised in relation to a comprehensive trade agreement.
1.12
The active provisions of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (referred to as TPP 11) are much the same as those in the TPP.
1.13
The Committee generally does not conduct an extensive inquiry when considering treaties that retain similar provisions to treaties already negotiated. However, in this instance, a number of factors warranted a more extensive inquiry. These factors are:
since the Committee’s initial report into the TPP was tabled, an extensive body of additional research into the provisions of the TPP has emerged, especially in relation to Investor-State Dispute Settlement (ISDS) and modelling;
the withdrawal of the United States, the largest economy in the TPP, means that the TPP 11 will have a different impact; and
the TPP 11 has suspended a number of provisions of the original TPP, which attracted debate amongst inquiry participants.
1.14
Another reason for undertaking an extensive inquiry is the ongoing uncertainty amongst the Australian community as to the benefits of free trade and the active implementation of protectionist economic policies in a number of economies.
Background
1.15
Negotiations for the TPP commenced in Melbourne in 2010 and concluded five years later in Atlanta on 5 October 2015.
1.16
In its scope and ambition, the TPP was the most significant international trade agreement since the completion of the World Trade Organisation (WTO) Uruguay round twenty years ago.
1.17
The TPP was intended to be a comprehensive agreement. In addition to chapters that are generally regarded as part of trade agreements, including those relating to the removal of tariff barriers, rules of origin and non-tariff barriers, access for business persons, investment, and intellectual property, the TPP included commitments on:
labour and environment standards;
competition with state owned enterprises;
transparency and anti-corruption; and
small and medium enterprises.
1.18
The TPP 11 is an attempt by most of the TPP parties to implement the provisions of the TPP.
1.19
The TPP was abandoned after it became clear that it could not meet one of the requirements necessary for it to enter into force.
1.20
Article 30.5 of the TPP stated that the Agreement could not enter into force unless it had been ratified by six Parties which together account for at least 85 per cent of the combined gross domestic product of the parties.
1.21
This requirement could only be met if the United States ratified the TPP.
1.22
The TPP 11 has been signed by 11 of the original 12 Parties to the TPP, including: Australia; Brunei Darussalam; Canada; Chile; Japan; Malaysia; Mexico; New Zealand; Peru; Singapore; and Vietnam.
1.23
Because the intention of TPP 11 is to retain as much as possible of the original TPP, the TPP 11’s architecture is different to that of a conventional trade agreement.
1.24
The TPP 11 is a separate legal instrument to the TPP, but it incorporates nearly all of the provisions of the TPP. The exceptions include mechanical provisions such as those relating to entry into force and withdrawal.
1.25
In addition, the TPP 11 includes a number of bilateral side letters that incorporate the provisions of the TPP’s side letters into the TPP 11 to the extent that these apply to the TPP 11’s Parties.
1.26
The TPP 11’s entry into force will occur when a simple majority of the parties have ratified the Agreement.
Suspended provision
1.27
The TPP 11 Parties have agreed to suspend 22 of the incorporated TPP provisions. These will consequently have no effect in international law until the Parties agree to end their suspension.
1.28
The 22 suspensions include:
an obligation on Parties to review the threshold below which customs duties are charged on express packages;
provisions allowing companies to use Investor-State Dispute Settlement Provisions (ISDS) claims in relation to private investment contracts with a Government;
an obligation on monopoly postal services to refrain from cross subsidising express postal services;
an entitlement for foreign investors in financial services to bring ISDS claims in relation to a Government violating the minimum standard of treatment obligation;
a commitment to international labour rights as part of Government procurement;
a commitment to negotiate for enhanced Government procurement provisions within two years (this commitment has been extended to five years);
a requirement that new patents be made available for: new uses of a product; new processes using a known product; and inventions derived from plants;
the ability for a patent holder to extend their patent if there is a delay in approving a patent, or if the sale of a pharmaceutical product is delayed as a result of marketing approval;
a provision establishing a five year protection for patent holders on test data supplied to a government as part of the process for approval for pharmaceuticals;
copyright protection for the life of the author plus 70 years;
the application of civil and criminal penalties for a number of types of changes to protected copyright works;
the obligation on on-line service providers to cooperate with rights holders to deter online copyright infringement;
an obligation on Parties to the Agreement to take measures to combat the trade in endangered flora and fauna traded in another jurisdiction; and
obligations relating to the timing of entry into force of provisions by specific Parties.
Conduct of the Committee’s review
1.29
The Treaty action reviewed in this report was advertised on the Committee’s website from the date of tabling. Submissions for the Treaty were requested by 20 March 2018. The Committee received 69 submissions.
1.30
The Committee held four public hearings into the Treaty, two in Canberra on 7 May 2018 and 25 June 2018 and one each in Melbourne on 1 June 2018 and Sydney on 15 June 2018. The transcripts of evidence from the public hearings may be obtained from the Committee Secretariat or accessed through the Committee’s website listed above.
1.31
A list of submissions received is at Appendix A. A list of exhibits received is at Attachment B. A list of witnesses who appeared at the public hearing is at Appendix C.