Treaty making process
Submissions to the inquiry highlighted a series of concerns about the
treaty making process, with particular reference to the consultation undertaken
during the negotiation of the TPP-11 and consultation about free trade
agreements (FTAs) more broadly. Another area of concern highlighted in evidence
related to the availability of independent modelling of the impact of the
Agreement. This chapter will summarise the issues raised on these matters.
Consultation on the TPP-11
The National Interest Analysis (NIA) noted:
The process for engaging stakeholders in relation to the
Agreement was an extension of the Government's efforts to bring the original
TPP into force. Stakeholders' views were actively encouraged and considered
during consultations undertaken in relation to the original TPP, which
commenced in 2008. This consultation process culminated in two parliamentary
enquiries. The Government continued to consult stakeholders, State and
Territory Governments, interested members of the public throughout the TPP-11
negotiation process from February 2017.
Part 7 of the Analysis of Regulatory Impact on Australia (ARIA) notes
that 'stakeholder views were actively encouraged and considered throughout
negotiations on the original TPP and the TPP-11'.
It also noted that the original TPP process was followed by two parliamentary
inquiries, one by the Joint Standing Committee on Treaties (JSCOT) and the
second by this committee.
The ARIA details the consultation undertaken specifically in relation to
TPP-11 and advised that DFAT continued to consult stakeholders and to make
information publically available on its website and responded to emails. In
In relation to the TPP-11, it is estimated that there were 50
meetings, consultations and contacts undertaken over the period February 2017 -
At the public hearing on 30 July 2018, DFAT outlined the consultation
undertaken during the development of the TPP-11:
I also recall the extraordinary efforts made to consult
stakeholders and seek the views of interested individuals and organisations,
both in relation to the original TPP and the revised TPP-11 Agreement. During
the negotiating process for the original TPP alone, we engaged in over 1000
briefings with 485 stakeholders, consulting a wide range of groups including
peak industry bodies, companies, academics, unions, and consumer and civil
society groups. Including today's proceedings, the TPP process as a whole has
been the subject of four separate parliamentary inquiries, which have received
over 450 public submissions.
The committee sought information on what evaluation DFAT had conducted
about its consultation process. DFAT stated that:
Individuals and organisations consulted throughout the TPP
negotiations were able to provide feedback on the adequacy of the process
either to officials in person or through correspondence. The Department of
Foreign Affairs and Trade did not implement any additional formal feedback or
evaluation mechanisms in respect of TPP stakeholder consultations.
DFAT provided information about its engagement with parliamentarians,
including an initiative towards the end of negotiations 'whereby
parliamentarians were invited to view the text upon signing of a
DFAT also provided private briefings to the JSCOT and the Joint Standing
Committee on Foreign Affairs, Defence and Trade to 'facilitate their better
understanding of the negotiations and the text'.
Stakeholder perspectives on
The committee received evidence from stakeholders detailing different
experiences with DFAT consultation processes. Industry bodies including Australian
Pork Limited, GrainGrowers, Meat & Livestock Australia, Red Meat Advisory
Council and Australian Sugar Industry Alliance told the committee about their
experience with the consultation process. Each organisation was able to make
representations at the National Farmers' Federation trade committee as well as
bringing particular concerns from their industry directly to the attention of the
negotiating team in DFAT.
Mr Andrew McCallum, Global Manager, Trade and Market Access, Meat &
Livestock Australia explained their participation during the negotiation
The negotiations, particularly on the TPP, we felt were very
valuable, because they involved a number of broader stakeholder forums. A
number of us travelled there and participated in the margins of the negotiating
rounds. We had access to the negotiators, to our counterparts in the other TPP
member countries and to the trade minister, and that's all invaluable in
understanding the process and understanding what the pitfalls might be and in
trying to help overcome any roadblocks.
Other witnesses expressed concern about the lack of opportunities to
participate in the process. For example, a representative from the Australian
Council of Trade Unions (ACTU) explained her experience in the following way:
I'd like to note that it is with some interest that I
listened to the answers from our colleagues from the National Farmers'
Federation about their access to government and DFAT when it comes to trade
deals, because I can tell you that we do not have the resources to follow them
around the world when they are negotiating the agreements. My experience has
been that, the one time that I actually asked a DFAT TPP negotiator to come and
meet with the affiliates of the ACTU working on trade, I was told that that was
In its submission, GetUp expressed their concerns about the
Beyond the text of the deal itself, we also hold deep
concerns about the process of negotiation for the Trans-Pacific Partnership --
a process which we saw to have far more accessibility for large corporations
than everyday people, and minimal transparency around process. We are troubled
by the text of the agreement not being made public until after our Trade
Minister had signed the deal, and given in-principle agreement on behalf of
Dr Patricia Ranald, Convenor, Australian Fair Trade and Investment
Network (AFTINET) explained:
DFAT is right to say that they
held meetings with business and civil society groups and talked about the
agreement. But because we were never able to see the text—business groups have
complained about this too—we didn't have sufficiently detailed information for
us to actually discuss what was in the text. There were many of these
consultations, but the form that they generally took were us presenting our
views to DFAT and then asking questions and DFAT saying, 'Well, at a certain
point we can't answer that question, because the negotiations are
commercial-in-confidence. We can't go into that level of detail.'
Concerns about transparency
Many of the concerns raised about the consultation suggested a lack of
transparency. Several submissions suggested that the Government conducted the
negotiations in secret and that the Agreement has been entered into without
genuine public input.
AFTINET submitted that the current Australian trade agreement process
...secretive and undemocratic, with the text not made public
until after the decision to sign it. The decision to sign agreements is made by
Cabinet before they are tabled in Parliament and only then examined by the
Joint Standing Committee on Treaties.
AFTINET also highlighted that '[p]arliament has no ability to change the
agreement and can only vote on the implementing legislation'.
Suggested changes to the
In light of the concerns raised about the consultation process, several
submissions and witnesses advocated for change.
Instead of the current process, AFTINET indicated that they support:
...publication of negotiating texts, and publication and
independent evaluation of the economic, health and environmental impacts of
agreements before the decision is made to sign them. Parliament should vote on
the whole text of the agreement.
The committee received evidence suggesting there may be a role for
industry associations and other bodies to play during treaty negotiations. In
its submission, the Australian Chamber of Commerce and Industry (ACCI) noted
that they 'have consistently raised concerns about aspects of Australia's
treaty making processes and have monitored the response of government to
recommendations from recent treaty inquiries'.
These concerns include: permitting security cleared representatives from
business and civil society to see the government position being put forward as
part of treaty negotiations and the provision of independent modelling and
analysis of proposed trade agreements by the Productivity Commission, or
equivalent organisation, and provided to the relevant parliamentary committee
ACCI stated that processes are yet to be reformed in a way that meets concerns
from the business community.
When highlighting concerns with the drafting of particular clauses, Open
Source Industry Australia (OSIA) suggested that if the TPP-11 parties had
involved industry bodies throughout the negotiating and drafting process,
issues would have been raised earlier and alternate drafting options offered.
The ACCI advocated for a:
...national think tank to assist to provide thought leadership
and analysis to our negotiators in order to ensure the best deal is in fact the
outcome from the negotiations...
[The think tank would] recognise that there is expertise in
academia, industry and society...that can be brought together and harnessed so
that we are all pointed in the same direction.
As outlined in the prospectus, the Australian Trade Centre (ATC) would
be established as a public-private partnership and supported by national and
international networks to employ a multidisciplinary approach:
The ATC will employ a multidisciplinary approach. Trade
practitioners, policy-makers and regulators will collaborate across areas such
as international law, political science, criminology, economics and business
management. These teams will be located at research hubs positioned across
Australia and organised according to four specific work programs: goods,
services, investment and society. The work programs will be hosted by partner
universities in major cities including Brisbane, Melbourne, Adelaide and Perth.
They will be directed by the ATC Executive based at ANU in Canberra, with
oversight by a high-level Board.
Consultation used in other
Witnesses drew attention to the consultation processes used by other
jurisdictions. Ms Andrea Maksimovic provided some detail about some processes
in the European Union (EU) whereby the European Commission publishes all
proposals for new negotiating mandates. Ms Maksimovic continued:
They have an advisory group on EU trade agreements, which
includes trade unions and other civil society groups, particularly consumer
groups. They publish all the EU proposals in the negotiations as soon as those
negotiations have happened, so every round they publish everything. They make
sure that the negotiated agreement is published as quickly as possible so the
public have access to it.
Ms Maksimovic argued that Australia should be working towards
implementing a model similar to that in the EU. It was further noted that the United Kingdom
has an advisory group which involves trade unions.
When discussing consultation, ACCI reminded the committee that they have
previously suggested an improved process 'might be modelled on the US model for
approved accredited advisers to be able to get closer to the text as it is
Dr Ranald also provided some detail about the US system:
The US has a system of committees based on industry or
interest groups. Selected people can be on those committees. I don't know that
they're actually allowed to take copies of the text away. They can sometimes
view bits of the text or discuss bits of the text, but it's still very limited
because they're not allowed to tell anyone else what's in it. It's a kind of
behind closed doors process with selected people.
The committee discussed with DFAT the feasibility of DFAT adopting some
of the consultation mechanisms used in other jurisdictions, with particular
reference to whether other TPP-11 parties have a system of accredited and/or
declared advisers who participate in consultation during the negotiation
process. Mr Mina noted that he was 'not aware of current TPP-11 member states'
using such a process although Mr Mina confirmed that the United States
does accredit advisers in that way.
When asked whether DFAT could facilitate a mechanism whereby advisers
are cleared and accredited, Mr Mina advised:
All I'll say on this is what I was about to say earlier,
which is that we have had elements of that practice in our experience, even in
respect of the TPP-11, where we shared the text of the agreement with members
and senators in Canberra on a confidential basis. That was part of our
practice. To that extent, we have already got practice that gives effect to
DFAT further noted that it:
...has an extensive program of outreach on its free trade
agreement (FTA) agenda, including broad and regular consultation with all
interested stakeholders. The US’ system of cleared advisers is long-standing
and reflects the particular circumstances of the US. This process provides some
stakeholders a greater level of access than other stakeholders. Australia’s
practice has been to maintain an open, inclusive and flexible approach to
consultation, to ensure all stakeholders who want to contribute views can
Recommendations from previous
inquiries about the treaty negotiation process
The committee notes that previous parliamentary inquiries have
recommended changes to the treaty negotiation process with particular reference
to consultation mechanisms and facilitating stakeholder contribution during the
Many of these recommendations have not been supported by government.
Assessment of trade agreements
The need for comprehensive assessment and evaluation of FTAs was of high
importance to many of the contributors to this inquiry. Several witnesses and
submissions advocated for independent economic modelling to be conducted early
in the process as well as broader evaluation of FTAs during the implementation
Economic modelling on the TPP-11
The modelling included in the NIA pointed to updated modelling by the
Peterson Institute for International Economics (PIIE) which found that TPP-11
would increase Australia's income by 0.5 per cent by 2030 (compared to 0.6 per
cent under the original TPP).
The NIA also highlighted modelling by the Canada West Foundation which found
that Australia's exports to other TPP-11 parties would grow by 0.12 per cent,
compared with a reduction of 0.14 per cent in Australian exports to other TPP
parties under the TPP.
The NIA concluded:
The economic benefits to Australia can be expected to increase
in the event that other significant economies join the TPP-11. The PIIE's
modelling showed that in a TPP-16 scenario (TPP-11 plus Indonesia, the Republic
of Korea, Philippines, Taiwan and Thailand), Australia's income would increase
by 0.7 per cent by 2030. Some of these economies, such as Indonesia, the
Republic of Korea and the Philippines, have publicly shown interest in the TPP
in the past.
In its submission, the Australian Manufacturing Workers' Union (AMWU)
referred to research undertaken by Tufts University which shows that 'Australia
is likely to lose some 39,000 jobs in the energy products, primary commodities,
manufacturing and services industries'.
The AMWU also pointed to World Bank modelling of the former TPP-12 which showed
that 'it will increase Australia's GDP by just 0.7% by 2030 – less than one
tenth of 1 per cent each year over the next 15 years'.
The AMWU also noted that the PIIE 'forecast a total boost to Australia's GDP of
a mere 0.5% over the next decade to 2025-26'.
The AMWU concluded that the 'low growth rates for TPP-11 are likely to be
similar to the TPP-12 modelling and potentially less'.
Other submissions also provided detail about other economic modelling
that has been conducted on the TPP-11. The Minerals Council of Australia
Several modelling studies have estimated the economic
benefits which the TPP-11 and/or the original TPP (including the United States)
would deliver for Australia and other countries. The most detailed modelling
has been carried out by Professor Peter Petri of Brandeis University and
Michael Plummer of Johns Hopkins University. Their most recent study finds that
by 2030 the TPP-11 will boost Australia's:
- Real national income by US$12 billion (A$15.4 billion) or
0.5 per cent
- Real GDP by US$14 billion (A$18 billion) or 0.5 per cent
- Exports by US$23 billion (A$29.6 billion) or 4 per cent (in
A review of 10 modelling studies shows the average finding
for Australia is an increase of 0.54 per cent in real GDP, in line with Petri
and Plummer's most recent study. A Tufts University modelling study finding job
losses under TPP suffers from serious methodological flaws, has been widely
criticised by economists and uses inaccurate data and unrealistic assumptions
for Australia. Its results lack credibility and contradict Australia’s
The Victorian Government provided a submission to the JSCOT inquiry
which contained a report they had commissioned to 'provide detailed analysis of
the commercial opportunities that TPP-11 will provide'.
The executive summary included the following summary of the Agreement:
The TPP-11 offers some modest gains for exports of Australian
goods in the immediate term, with greater gains likely as implementation
proceeds. However, some gains are likely be negated to some extent by
heightened competition in the TPP-11 area, with a number of member countries
undertaking an FTA with each other for the first time.
In the longer term, as the various aspects of economic
integration bear fruit (mutual recognition of professional qualifications,
technical standards conformity, streamlined processes supporting cross-border
trade and so on), further and wider reaching benefits are likely to be
In a response to a question taken on notice at a JSCOT hearing, DFAT
advised that multiple economic studies have found that 'the TPP would have
positive economic benefits for all TPP Parties'. It was also noted by DFAT that
an often quoted study undertaken by Tufts University did not use the mainstream
GTAP [Global Trade Analysis Project] model to examine the effects of trade
liberalisation arising from the TPP and 'is an outlier in finding negative
impacts from the TPP'.
At the hearing on 30 July 2018, Mr Mina pointed out that 'this agreement
has been extensively evaluated, through economic evaluation'.
Mr Mina went on to note:
There has been no shortage—happily—of such interest by the
economic modelling community globally. So we have a good sense of the economic
impacts. Of course, with trade reform and the consistent messages and lessons
from the economics discipline about the allocative and other efficiency gains
that arise from trade reform, successive Australian governments have a view—and
this government certainly has a view—about the economic benefits of trade
Criticisms of the economic modelling
Submissions argued the need for independent modelling and suggested that
such modelling is necessary to enable a comprehensive understanding of the
proposed benefits to the Australian economy. In particular, several submissions
were critical of the lack of independent modelling for an Australian context.
AFTINET argued that the NIA presented is 'not independent but is
conducted by the same department which negotiated the agreement'.
Several submissions called for broad analysis of the TPP-11 to be
undertaken. Friends of the Earth Australia called for an independent economic,
social and environmental impact assessment.
The Public Health Association of Australia advocated for a comprehensive Health
Impact Assessment (HIA) to be undertaken on the final text of the TPP-11.
ActionAid Australia expressed the view that the Australian Government should commission
'independent analysis of potential economic, health, environmental and gender
impacts' and this analysis should be 'publicly available for debate and
The AMWU indicated that 'all finalised trade agreements should be
subject to independent assessment of their costs and benefits before parliament
is asked to ratify them'.
In a number of forums, DFAT has not accepted the criticism that there
has not been sufficient economic modelling undertaken of the TPP-11. DFAT
responded to these criticisms in its Myth Busters document published on
its website and referred to the modelling undertaken by the PIIE. DFAT also
noted that modelling:
...including of the kind done by the PIIE, understates the
potential benefits of the TPP-11 because it is mainly focussed on tariff reductions.
Modelling the impacts of other aspects of the TPP-11, such as services market
access, improved customs procedures, enhanced investment conditions and rules
on transparency, are very difficult.
Similarly, modelling is not currently able to quantify the
benefits from a regional deal, such as the TPP-11, which provides a framework
in which value chains can function more efficiently and at lower cost among the
countries in the Agreement.
Ultimately, free trade agreements (FTAs) like the TPP-11 help
to break down trade barriers. The fewer trade barriers Australian businesses
face, the easier it is to trade, which in turn brings productivity improvements
and higher competitiveness levels across our economy.
Recommendations from previous inquiries
about independent modelling
Several previous inquiries have made recommendations that the Australian
Government consider implementing a process to ensure that independent modelling
and analysis of proposed FTAs is undertaken by a body such as the Productivity
Commission and provided alongside the NIA.
The government has not accepted such a recommendation.
The recent JSCOT report, tabled on 22 August 2018 again recommended that
independent modelling and analysis be undertaken by the Productivity Commission
or equivalent organisation and be provided at the same time as the NIA.
Navigation: Previous Page | Contents | Next Page