Dissenting Report from Coalition Senators
Coalition Senators welcome the Federal Government’s strong
commitment to creating more jobs through free trade agreements. Since 2013,
trade agreements with China, Japan and Korea have been delivered, while
negotiations have been completed for agreements with Peru and Indonesia. As a
result, Australia’s exports increased to $401 billion in 2017-18, up from
$307 billion in 2012-13.
In 2017-18 Australia had a trade surplus of $6.4 billion (compared to a deficit
of around $20 billion in 2012-13).
Free trade is vital to the economic success of both
Australia as a whole and to individual Australian workers and households with
trade contributing one quarter of Australia’s economic growth over the past
five years and one in five jobs being trade related.
The TPP-11 Agreement between Australia, Brunei Darussalam,
Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and
Vietnam is a ground-breaking agreement by dramatically expanding market access
for Australian farmers, producers, services firms and exporters. Indeed,
modelling undertaken by economists from Brandeis International Business School
and Johns Hopkins University shows Australia is forecast to see $15.6 billion
in net annual benefits to national income by 2030 as a result of this
This kind of expansion in our nation’s income will mean more
jobs, higher wages and greater investment right around Australia and help to
build a stronger more diverse economy.
Coalition Senators strongly support the urgent passage of
Trans-Pacific Partnership has long been envisaged with initial talks commencing
in 2008 with the United States agreeing to enter into discussions around the
potential liberalisation of trade. By 2016, these initial and early discussions
had turned into a much larger bi-lateral agreement that was signed on 4
February 2016 by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New
Zealand, Peru, Singapore, Vietnam and the United States.
this earlier agreement, during the 2016 Presidential election campaign both the
then Republican nominee Donald J. Trump and the Democratic nominee Hillary
indicated that if they were successful they would withdraw from the TPP. On 23
January 2017, President Trump signed a Presidential Memorandum to withdraw from
these statements, then Prime Minister, the Hon. Malcolm Turnbull MP, worked
with Japanese President Shinzo Abe to secure a continuation of the deal without
the United States. Coalition Senators firmly agree
with Mr Turnbull’s assessment
that this shows how the Federal Government was fully prepared to stand up and
fight for Australian jobs.
Mr Shorten’s earlier declaration
that the TPP was not worth pursuing following the decision from President Trump
to withdraw from the TPP, we nonetheless note the Labor Party’s announced
for the TPP-11 agreement and the passage of legislation through the Parliament.
reaching agreement on the Australian-led TPP-11, it was noted that it will
eliminate more than 98 per cent of tariffs in a trade zone with a combined GDP
of $13.8 trillion.
For Australia that means new trade agreements with Canada and Mexico and
greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei.
also noted that Britain has reportedly indicated an openness to join the TPP-11
following its withdrawal from the European Union.
Coalition Senators strongly welcome the possibility of a post-Brexit Britain
joining the TPP-11 noting that this would effectively achieve the aspirations
of many for a CANZUK (Canada, Australia, New Zealand and United Kingdom) trade
The TPP-11 Agreement
Senators accept the evidence that has been presented by the Department of Foreign
Affairs and Trade that this agreement will significantly increase market access
for our exporters of goods and services and deliver gains across the board.
Modelling undertaken by
economists from Brandeis International Business School and Johns Hopkins
University shows Australia is forecast to see $15.6 billion in net annual
benefits to national income by 2030 and increases in exports of $29.9 billion.
The analysis also forecasts significant boosts to investment by 2030, with
investment into Australia projected to increase $7.8 billion and additional
overseas investment by Australian businesses increasing by $26 billion. This
directly translates into jobs for Australians, in particular, for regional
modelling reinforces the benefits identified in earlier modelling by the
respected Peterson Institute for International Economics that found that the
TPP-11 would boost Australia’s national income by 0.5% and boost exports by 4%.
means that this agreement will further enhance the trade surplus, create jobs,
support families and build a stronger and more diversified economy.
this agreement will provide:
- better access
for farm exporters, including beef and sheep meat producers, dairy producers,
cane growers and sugar millers, as well as cereal and grains exporters, rice
growers, cotton and wool growers, horticultural producers and wine exporters;
elimination of all remaining tariffs on Australian raw wool exports to TPP-11
countries from entry into force of the Agreement;
elimination of tariffs on sheep meat, cotton, seafood, horticulture, wine and
levels of access for services and improved regulatory regimes for investment,
notably in mining and resources, telecommunications and financial services;
access to markets where Australia already has FTAs, such as Japan (for example,
building on our existing bilateral FTA, accelerated reductions in Japan’s tariffs
on beef and elimination of a range of Japan’s cheese tariffs); and
- the creation
of Australia’s first free trade agreement with Canada and Mexico – which gives
Australian exporters preferential access to two of the world’s top 20 economies
for the first time, including new high-quality goods and services market access
commitments by Canada and Mexico for our exporters.
Additionally, the TPP-11 will
enhance the level of transparency and predictability for Australian services
exporters across the board, reducing the regulatory risks these enterprises
confront internationally, for example:
reforms in the professional services sector in TPP-11 countries, for example in
legal, architectural, engineering and surveying services, will be legally
guaranteed and enforceable; and
- mining equipment
services and technologies and oilfield service providers will benefit from
energy sector reforms in Mexico and Vietnam, and new rules on large State-Owned
Enterprises, which will help Australian providers compete on an equal footing.
This agreement will be the first
regional trade agreement to contain a dedicated SME chapter, which encourages
small and medium-sized enterprise participation in government procurement in
TPP countries. The agreement also creates common and transparent trade and
investment rules among TPP-11 parties, making it easier for smaller companies
to navigate the region. This will be of particular benefit to small businesses
This agreement has been strongly
supported by numerous stakeholders that have noted the important benefits
across the economy. For example, the National Farmers Federation said:
a regional free trade agreement of unprecedented scope and ambition. It has
great potential to drive job creating growth across the Australian economy.
TPP-11promises far greater access to some of the world’s largest and fastest
growing markets, including three G20 nations. The agreement opens new
opportunities in these markets, over and above Australia’s existing bilateral
opportunities for our farmers, manufacturers and exporters underpin job
creation and economic growth right across our economy. The NFF considers that there
is no doubt [emphasis added] TPP-11 will improve trading conditions for
Australia’s farm sector.
Export Council of Australia similarly notes benefits to the Australian economy:
ECA strongly supports the TPP-11 because it is a very beneficial agreement for
Australia. It opens up new markets for Australian businesses and gives better
access to existing free trade agreement (FTA) partner markets. It facilitates
business across TPP-11 parties by making it easier to move goods and people,
and manage services, data and investment. It gives Australia a major role in
driving the next generation of trade rules.
By contrast, there are costs to
not ratifying the TPP-11. The choice Parliament faces is not whether or not the
TPP-11 should go ahead, it is whether the Agreement should include Australia or
not. If it goes ahead without Australia, Australia’s competitors would gain
advantages from the Agreement and Australia would be worse off as a result.
With a history of bipartisan support, not ratifying the TPP-11 would also
damage Australia’s reputation and its credibility as a negotiating partner.
found these submissions highly persuasive.
Skills Testing and Labour Market Testing
A number of submissions to the
Committee raised concerns about skills testing and experience requirements,
some of which are relied upon in the Committee report. Coalition Senators were
unconvinced by the submissions made to this effect.
The TPP-11 does not change the
skills and experience requirements that need to be met by electricians or any
other foreign workers applying for a temporary skilled visa to work in
That means workers from TPP-11 signatory countries (including electrical
workers) remain subject to, and must satisfy, any skills assessment required by
the visa process (which, for electricians and other trades, is administered by
Trades Recognition Australia).
All of Australia’s trade
agreements with provisions on the temporary movement of professionals also
include waivers of labour market testing.
It is important to note that
similar concerns have been made in relation to previous Free Trade Agreements
negotiated by both Liberal and Labor Governments that have not resulted in the
feared influx of workers from those countries. Indeed, following the
negotiation of the Korea, Japan and China Free Trade Agreements, there has been
a 10% reduction in the number of 457 visas granted.
Investor-State Dispute Settlement
It is noted that some submissions
to the Committee have restated their organisation’s long-standing opposition to
Investor-State Dispute (ISDS) Resolution provisions being included in Free
Trade Agreements. Coalition Senators see the value of ISDS mechanisms to
provide protections to Australian investors overseas whilst safeguarding the
Australian Government’s ability to regulate in the public interest and pursue
legitimate public welfare objectives.
Contrary to the claims often made
by unions, ISDS mechanisms do not in any way protect an investor from a mere
loss of profits following a change in government policy nor do they prevent
Australia or any other sovereign nation from making decisions in their public
It is noted that ISDS mechanisms
have been included in many Australian Free Trade Agreements, including those
negotiated under both Liberal and Labor Governments.
the extensive publicly available economic modelling, Coalition Senators note
that a number of submissions raised concern that there wasn’t even further
modelling conducted. It is clear that no amount of evidence will convince some
submitters who refuse to accept the lived experience of previously highly
It is noted that the former
Minister for Foreign Affairs provided the National Interest Analysis, which
includes the foreseeable economic effects of the treaty action and any direct
financial costs to Australia, as well as a Regulatory Impact Statement.
That said, Coalition Senators
remain open minded about the prospect of an economic review of the benefits to
the Australian economy of the free trade agreements with China, Korea and Japan.
Successful as they have been, any review to help ensure future agreements can
be even more successful is encouraged.
Senators firmly agree with the submissions made by both the National Farmers
Federation and the Export Council of Australia that Australia should be one of
the first six nations to ratify the agreement, preferably by the end of 2018.
noted that the City of Darebin and Yarra City Councils have troubled themselves
with making submissions to the Committee.
Senators are concerned that the rate-payers of Darebin and Yarra are unwittingly
funding local councils which instead of focusing on their business of roads,
rates and rubbish are spending their time and money on trying to change national
and international policy, matters well beyond their expertise.
Coalition Senators are astounded by the undeserved weight given to the
unqualified left-wing activist group GetUp submissions in the Labor Majority’s
report particularly given the hyper-partisan nature of the group.
Senators observe that the confected concerns raised by GetUp both in their
written submission and in their evidence to the Committee mirror the concerns
raised in the Communist Party of Australia’s submission to the Committee.
Senators are pleased to recommend – that:
- The Trans Pacific Partnership
Agreement be fully embraced by the Parliament noting the benefits to job
opportunities for Australians, the economy, as well as to individual workers
- The Customs Amendment
(Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation)
Bill 2018 and the Customs Tariff Amendment (Comprehensive and
Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018
be passed as a matter of urgency;
- The Australian Government fully
support the addition of the United Kingdom to the TPP should they wish to join;
- The Hon. Malcolm Turnbull be
congratulated on his personal stewardship of the TPP and ensuring that an
agreement could be reached between the 11 nations; and
- The City of Darebin and the Yarra
City Councils refocus their use of ratepayer resources to their core business
of roads, rates and rubbish instead of dabbling in areas where they have
neither experience nor mandate.
Senator for Tasmania
LNP Senator for Queensland
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