This chapter will outline evidence received in relation to key issues in
the terms of reference of the inquiry. These include the impact of the TPP on:
the economy and trade;
social, cultural and environmental policies;
the investor-state dispute settlement provisions;
copyright and other intellectual property; and
Economy and trade
The economic and trade outcomes of the TPP for Australia are highlighted
in the TPP's National Interest Analysis (NIA) which states that '[i]ncreased
and more efficient trade and investment in the region will benefit the Australian
Improved market access for Australian goods and services exports
and lower import prices will increase capital accumulation, raise productivities
and improve utilisation of resources...The TPP market access outcomes build on
existing access Australia has with its FTA partners of Japan, the US, Chile,
New Zealand, Malaysia, Singapore, Brunei and Vietnam. The TPP also creates
valuable new market access opportunities for Australian exporters in the three
TPP countries where Australia does not have a FTA, namely Canada, Mexico and
A number of Australian business and industry organisations emphasised
the benefits for their sectors that were likely to accrue from the TPP coming
Areas where the TPP's outcomes improved on existing trade agreements or
established arrangements with countries with which Australia did not have an
FTA were often highlighted. For example, Wine Australia noted that, assuming
political obstacles to ratification are overcome, 'the TPP promises significant
benefits for Australian wine exporters'. It was particularly excited by the
opportunities in Mexico 'where an imported wine market of 61 million litres
will be opened up for Australia through the removal of the 20 per cent tariff,
thus levelling the playing field with wines from Chile and the USA'. While it
acknowledged that there were also defensive interests for the Australian
domestic wine market, it observed that Australia already has FTAs eliminating
tariffs with other major wine producing countries participating in the TPP.
Others industry groups, while generally supportive of the TPP, had a
more balanced view of the outcomes achieved. For example, AUSVEG observed that
the Australian vegetable industry's export potential is primarily covered by
other FTAs which are already in effect. It stated:
While the benefits delivered to our industry by the TPP in
isolation are relatively few at this time, the continued work being performed
to enhance Australia's relationships with key trading partners supports
Australian growers' expansion of their export capabilities, and we look forward
to future export development into the future.
Significant impediments to market access for Australian exporters which
were not addressed in the TPP were also identified. For example, Australian
Other pork-exporting TPP members will share the market access
wins available to Australian exporters under the agreement. [Australian Pork]
would welcome this competition if it were to be conducted on a level playing
field. Unfortunately, a number of TPP members, most notoriously Canada, provide
large, trade-distorting subsidies to their domestic industry, undermining the
ability of Australian producers to compete in third markets.
Rules of Origin
The TPP includes a number of commitments intended 'to lower the cost of
doing business' between TPP countries.
The Business Council of Australia (BCA) observed that 70 per cent of
Australia's exports flow to TPP countries:
Global supply chains underpin the global economy. Reducing
barriers and costs across the global value chain will improve the ability of
businesses to trade internationally. Businesses face a range of regulatory
barriers that slow down processing and delivery. The TPP addresses these
through a range of commitments to ensure that over 40 per cent of the global
economy is operating under consistent, harmonised rules.
In particular, the BCA made the point that the TPP will improve the
conduct of trade by simplifying regulations and procedures. It considered that
a key reason for the low-utilisation of Australia's existing FTAs was the overlapping
and sometimes confusing Rules of Origin. Rules of Origin are the criteria used
to determine whether goods will qualify for preferential treatment under trade
agreements (that is, whether a good originates within the territory of a party
to trade agreement, such as the TPP).
The TPP will establish a set of regional Rules of Origin and a single set of
documentary procedures for products traded under the TPP.
The BCA stated:
These arrangements will support the development of regional
supply chains by encouraging global multinationals to establish operations
within TPP countries. This will permit inputs used in the production of a good from
one TPP country to be treated as the same as inputs from any other TPP country when
producing the good...These arrangements will also allow businesses to save on administrative
costs and allow them to trade under the one set of rules, rather than under
existing multiple bilateral FTAs.
Blackmores also considered this was an important development. It noted
that as it entered new export markets, it faced increasingly complex
administrative arrangements through multiple Rules of Origin and multiple
documentation requirements. It stated that the TPP would set 'a new standard
for the harmonisation of administrative processes for international business'.
However, the Australian Chamber of Commerce and Investment raised
significant concerns regarding the calculated benefits of the Rules of Origin
in the TPP. It argued that '[c]reating novel and divergent regulatory
requirements for exporters and producers increases red tape' and that the TPP could
introduce 'yet another set of rules and compliance for Australian importers and
It recommended that the Australian Government instruct its negotiators to
ensure that new regional agreements 'harmonise the existing practices of the
preceding bilateral agreements and Australia ASEAN, New Zealand Free Trade
Agreement (ANZFTA), and also embrace the WTO Trade Facilitation Agreement and
the provisions of the Revised Kyoto Convention of Simplification and Harmonisation
of Customs Procedures – including Annex K – Rules of origin'.
The Australian services sector was perceived as gaining additional
opportunities under the TPP. The NIA emphasises that the beneficiaries of the
TPP include 'Australian service suppliers across a range of sectors including:
education, financial, mining-related, professional, telecommunications and
transport and logistics services'. ITS Global highlighted the importance of the
TPP's coverage of the services sector, noting that in 'developed economies,
70-90 percent of growth is generated by services industries'.
ANZ also argued the TPP will provide many opportunities for Australian
businesses, particularly in the services sector, at a time when diversification
is important to the Australian economy:
Australia already has a relatively open economy in terms of
tariffs on goods. Around half the expected gains from the agreement will be
from liberalisation of services and investment. This is a boon for Australia's
growing services sector; services now represent more than 70 per cent of Australia's
GDP and comprise 54 per cent of Australia's total exports.
Similarly, Universities Australia believed the TPP would 'facilitate
greater education engagement and expand Australia's education services across
the region and into Latin America, further strengthening a vital pillar of the
Australian economy, whilst delivering considerable non-economic benefits
through research collaboration and public diplomacy'. It was particularly pleased
by the Australia–Vietnam Memorandum of Understanding which would 'support a
pilot program enabling Australian universities to provide online education to
The NIA states that modelling by the World Bank 'suggests that Australia
is set to benefit from the TPP through GDP growth of around 0.7 per cent by
2030'. It also notes that 'similar findings were made in modelling by the
Peterson Institute for International Economics and the Research Institute of
Economy Trade and Industry, which found increases of 0.6 per cent and 1.9 per
cent respectively to Australia's GDP, over similar time periods'.
However, the overall economic benefits of the TPP for the Australia
economy were questioned. For example, Dr Anis Chowdhury characterised the
Peterson Institute studies of the benefits of the TPP as making 'heroic
assumptions about growth, mainly by attributing relatively large, but very
dubious growth gains from 'non-trade measures''. She noted that the World Bank
acknowledges that 'estimating the impact of deep and comprehensive trade
agreements is still very much a work in progress' and the TPP's 'ultimate
implications, however, remain unclear'.
AFTINET and a number of other submitters highlighted that there has been
no independent economic modelling of the specific impacts of the TPP on the Australian
economy as a whole measured by GDP.
Similarly, the CFMEU considered that 'the overall economic benefits of the TPP
have been found to be marginal and no rigorous independent assessment has been
undertaken as to the likely costs to the Australian economy'. It noted that:
The United States Department of Agriculture released a report
that found that even under the most favourable assumptions the TPP would result
in zero change in GDP for Australia. Other analysis has all found benefits of
less than 1 percent of GDP over a decade or more.
AFTINET pointed out that any benefits from the TPP for Australia need to
be balanced against 'the loss to government revenue...resulting from tariff
If the TPP entered into force in early 2017, the estimated loss of tariff
revenue for Australia would be approximately $25 million in 2016-2017 and $135
million over the forward estimates period.
Chapter 19 of the TPP deals with Labour issues. The NIA described the
TPP as addressing contemporary trade challenges, in part, through 'the recognition
and emphasis by TPP parties on the importance of internationally recognised labour
rights'. It states:
Each Party is required to adopt and maintain in its legislation
and practices the rights contained in the International Labour Organization
Declaration, such as elimination of forced labour, abolition of child labour,
freedom of association and the right to collective bargaining. The TPP will
also enhance cooperation and consultation on labour issues, and effective
enforcement of labour laws in TPP Parties.
However, a number of specific criticisms were made of this aspect of the
TPP. AFTINET described the inclusion of a chapter on labour rights as welcome
but suggested 'the DFAT description paints a rosier picture than is revealed by
the details in the text'. It noted:
Labour law experts have criticised the chapter because much
of it is aspirational rather than legally binding, even in relation to forced
and child labour. The enforcement process for those few provisions which are
legally binding is more qualified, lengthy and convoluted than in other
chapters of the agreement. These processes have not proved effective in other agreements.
Similarly, the CFMEU argued that the TPP in its current form 'fails to
protect the rights of workers'. It noted that the 'TPP does not make reference
to detailed International Labour Organisation (ILO) Conventions, but only to
the shorter and more general principles in the ILO Declaration'.
Chapter 12 of the TPP deals with the temporary entry of business persons
and includes exemptions from labour market testing. Labour market testing means
that Australian employers seeking to access the subclass 457 visa programme
must first test the local labour market to ensure that there is no suitably
qualified and experienced Australian citizen or permanent resident or 'eligible
temporary visa holder' readily available to fill that position.
Exemptions from labour market testing have been controversial aspects of previous
The NIA notes that in order to implement the TPP a 'Ministerial
determination will need to be made under section 140GBA of the Migration Act
1958 to exempt from labour market testing the intra-corporate transferees,
independent executives and/or contractual service suppliers of those TPP Parties
to which Australia extended temporary entry commitments.
The scope of proposed changes were highlighted in the ACTU submission:
In the case of Australia, its commitments to grant temporary
entry extend beyond business visitors and high-level independent executives and
include the category of 'contractual service suppliers'. This category is
defined expansively to include all 'business persons' with trade, technical and
professional skills. Essentially, this commitment would appear to cover
temporary entry for all skilled occupations under the 457 visa program, such as
nurses, engineers, electricians, plumbers, carpenters, bricklayers, tilers, mechanics
and chefs. The DFAT explanatory materials confirm these commitments will be
implemented though the 457 visa program...
Under the TPP, Australia has signed away labour market
testing for an additional six countries: Canada, Mexico, Malaysia, Peru, Brunei
The ACTU argued:
We have no objection to overseas workers from any country
being employed in Australia, provided there is genuine, verifiable evidence
through labour market testing that the employer has not been able to find a
suitable, qualified Australian to do the job, and those workers are treated
well and receive their full entitlements. However, we cannot support this
fundamental obligation on employers to support Australian jobs first, simply
being waived as part of the cost of pushing through free trade agreements.
The CFMEU repeated its argument, previously made in relation to the
China-Australia Free Trade Agreement (CHAFTA) that 'the removal of adequate
labour market testing for engaging temporary overseas workers would undermine
local working conditions and safety'.
Similarly the Electrical Trades Union (ETU) recommended that the TPP should
require 'mandatory skills assessment and labour market testing for licenced
trades and occupations'. It argued:
Removing the requirement for overseas trades workers to be
assessed to see if their skills meet our standards is dangerous for the
workers, their colleagues and for the public. To allow foreign companies to
bypass the Australian labour market and bring in a workforce comprised of
people untrained and unfamiliar in Australian practices (including an
electrical wiring standard that differs substantially from most countries), and
entirely dependent on their employer for residence in Australia, is unsafe and unfair
for all parties and economically unsound.
Several submissions highlighted recent examples of the exploitation of
temporary workers in Australia, including underpayment, long hours and
insufficient health and safety training leading to injuries. AFTINET argued
that it was 'not acceptable that the TPP expands temporary entry without
requiring labour market testing, and without any provisions to prevent such
Academic studies comparing various recent trade agreements
have demonstrated that a range of governments are using temporary work visas
without local labour market testing as a means of deregulating labour markets.
Such arrangements create groups of workers with less bargaining power who are
more vulnerable to exploitation because loss of their employment can lead to
The potential impacts of the TPP on employment and inequality was also
raised. Research by the Global Development and Environment Institute at Tufts
University was frequently cited as evidence the TPP could have adverse impacts
in these areas. This research projected that the TPP could cause employment
losses overall with employment in Australia contracting by 39,000 jobs by 2025.
The TPP was also projected to increase inequality with a lower labour
share of national income both in Australia and overseas. The Tufts University
paper expected competitive pressures on labour incomes, combined with
employment losses, to push the share of national income for labour further
down, redistributing income from labour to capital in all countries. Dr Anis
While production for export may grow production for domestic
markets is likely to decline in the face of import competition. But exports may
be less labour-intensive with adverse consequences for employment while more
imported inputs for export-oriented production will reduce national linkages
and multiplier effects compared to domestic production. Businesses may seek to
become more competitive by cutting labour costs. This will negatively affect
Real incomes for employees, especially the less skilled, are
likely to be further depressed, as in recent decades, due to greater
international competition following trade liberalization. The TPP, thus, will
likely lead to higher inequality due to declining labour shares of national incomes.
This will in turn weaken domestic demand.
The NIA states that the TPP will 'create new investment opportunities
and provide a more predictable and transparent regulatory environment for
investment'. It outlines:
The TPP will promote further growth and diversification of
Australian outward investment by liberalising investment regimes in key sectors
for which the TPP region accounts for a major share of global investment, such
as mining and energy, telecommunications and financial services...
The TPP will also promote further growth and diversification
of foreign investment in Australia by liberalising the screening threshold at
which private foreign investments in non-sensitive sectors are considered by
the Foreign Investment Review Board (FIRB), increasing it from $252 million to
$1,094 million for all TPP Parties.
Under the TPP, Australia has retained the ability to screen
investments in sensitive sectors to ensure they do not raise issues contrary to
the national interest. All investments by foreign governments will continue to
be examined and lower screening thresholds will apply to investments in
agricultural land and agribusiness.
Comments received were generally supportive of these aspects of the TPP.
For example, ITS Global made the point that Australia 'has always depended on
foreign investment to build economic growth' and noted that while Australia
once was a net recipient of foreign capital, it is now as much an investor
offshore and an importer of capital. It made the argument that 'Australia needs
more outward investment and more inward investment to secure the benefits on
offer in the global economy'.
Similarly, ANZ considered the TPP would encourage both inward and outward
Inward FDI stocks are projected to increase by around AUD13
billion; an increase of 1 per cent. Australia's outward FDI stocks are likely
to increase by around $30 billion (3 per cent). This means that Australian
investors and companies will become more engaged with the global economy.
Social, cultural and environmental policies
A series of concerns were expressed that Australia's social, cultural
and environmental policies would be undermined by provisions in the TPP. In
particular the lack of enforcement for environmental measures and the possible
impact on health policies in Australia were raised.
DFAT's supporting documentation observes that the TPP Environment
Chapter 'aims to promote sustainable development through mutually supportive
trade and environmental policies, and to achieve higher levels of environmental
protection in TPP countries'. It states:
The TPP Environment Chapter promotes the effective
enforcement of domestic environmental laws and lays the foundation for TPP
Parties to work together to address a range of trade-related environmental
challenges, such as protecting the ozone layer, protecting the marine
environment from ship pollution, combatting illegal wildlife trade, and
combatting over-fishing and illegal fishing.
Environmental Defenders' Offices of Australia considered that 'Chapter
20 of the TPP outlines a series of obligations which if fully implemented could
improve Australia's national environmental laws, in particular the Environment
Protection Biodiversity Act 1999 (EPBC Act), Fisheries Management Act
1991 (FM Act) and Illegal Logging Prohibition Act 2012'. For
example, it noted that Article 20.4 requires each Party to affirm its
commitment to the multilateral environmental treaties. It argued this was an opportunity
to improve the implementation of multilateral environmental treaties under the
However, Friends of the Earth considered the TPP would have detrimental
effects on the ability of Australia to effectively protect the environment. It
Legally meaningless rhetoric pervades the text with few
conservational and environmental issues actually addressed...The environment
chapter neglects to ensure a standard of commitment from the countries involved,
allowing each nation to 'establish its own level of domestic environmental
protection', however, this is in juxtaposition to the fact that enforcement of
those laws is dependent on breaches affecting trade and investment.
Of the four multilateral environmental agreements (MEAs)
included in the text only one is enforceable – Trade in Endangered Species
(Article 20.17 .2) ...
The section in the TPP that deals with climate change never
uses the words 'climate change' nor does it mention the global treaty under the
United Nations, the [United Nations Framework Convention on Climate Change],
which contains binding agreements that every country in the TPP has signed
Many those who provided correspondence to the committee were concerned
that the environment standards mentioned in the TPP had weak enforcement
measures and did not acknowledge climate change issues. The ETU recommended
that 'a full, public study of the environmental impacts of the TPP be carried
out urgently, with the findings to inform the inclusion of a new chapter in the
agreement that deals with environmental standards that includes commitments by
governments to implement agreed international environmental standards which
should be enforced by the government-to-government disputes process of the
In relation to health, many submitters and persons who contacted the
committee were concerned regarding the impact of the TPP on Australia's health
system and particularly the Pharmaceutical Benefits Scheme. For example, the Public
Health Association of Australia (PHAA) stated:
Trade agreements are a significant determinant of health.
They can affect many aspects of health care and public health...PHAA is
particularly concerned about the emerging trend of trade agreements that aim to
extend into areas that have previously been matters for domestic policy making.
The PHAA, together with other health organisations, had undertaken a
health impact assessment (HIA) on the early versions of the TPP text which were
available prior to the TPP being agreed. It described a HIA as a 'systematic
process that considers the potential health effects of a proposed policy, plan,
or project, and offers recommendations to mitigate health harms and improve benefits'.
The PHAA outlined:
The HIA identified concerns related to regulation of alcohol
control, tobacco control, and food labelling (potential impacts to the cost of
medicines have been discussed in other parts of this submission). The HIA found
that the technical barriers to trade chapter, the wine and spirits annex, and
the intellectual property chapter may make it more difficult for Australia to
implement innovative control measures, such as health warning labels on alcohol
containers, particularly where the evidence base for the intervention is still developing.
Similarly, rules in the technical barriers to trade chapter may limit future
legislation for food labelling. The regulatory coherence and transparency
chapters could also enable a greater role of the processed food industry in
policymaking, which may influence the food labelling system used in the future.
In addition to the impact of the ISDS provisions, the PHAA outlined a
number of other potential areas of the TPP which could affect Australia health
policy. These included ambiguous provisions in relation to biologic products, which
are produced through biological processes and account for a significant and
growing share of government expenditure on pharmaceuticals. 'Generic' or 'follow-on'
versions of biologics are called 'biosimilars'. The PHAA noted that monopolies
on just ten biologic drugs listed on Australia's Pharmaceutical Benefits Scheme
cost Australian taxpayers over $205 million in 2013-14.
DFAT supporting documentation outlines there is a two-track outcome on
biologics protection in the TPP:
Parties can choose to provide effective market protection
through at least 8 years of data protection. Alternatively, Parties can choose
to provide effective market protection through at least 5 years of data
protection, along with other measures, including existing measures in the case
of Australia, and recognising market circumstances. These measures and
circumstances include regulatory settings, patents, and the time it takes for follow-on
medicines to become established in the market. Australia will follow the 5 year
option, which reflects our current system and requires no changes. This
acknowledges that different tracks can deliver comparable outcomes.
Australia is not required to change any part of its current
law, including data protection for biologics, or our patent regime. There will
be no adverse impact on the Pharmaceutical Benefits Scheme and no price
increases for medicines.
However, the PHAA considered that the final text of the TPP's
Intellectual Property (IP) Chapter contained 'problematic language and troubling
ambiguities'. It stated:
If the poorly drafted and ambiguous biologics provisions are
interpreted in such a way that the Australian Government is not able to bring
biosimilars to market in a timely fashion, the TPP could add substantially to the
costs of the Pharmaceutical Benefits Scheme. These costs are likely to be
passed on to consumers through higher co-payments, resulting in a financial and
health burden for already vulnerable people including those on low incomes,
older people, and people with chronic illnesses.
Medicines Australia considered it was 'misleading to suggest that data
protection will add costs to patients when accessing prescription medications
through the pharmacist'. However, it submitted that the Australian Government
needed to provide insight and clarity as to whether and how the TPP articles on
data protection for new pharmaceutical products would be domestically
implemented. It argued that this clarity will 'encourage greater consistency
and transparency in both the domestic and international business environment
within which innovative pharmaceutical companies make their investment
Investor-State Dispute Settlement
ISDS provisions provide foreign investors with the right to access an
international arbitration tribunal if they believe actions taken by a host
government are in breach of its investment obligations. Australia has signed a
series of bilateral investment treaties which include ISDS provisions. ISDS
provisions were also part of free trade agreements with Chile, Singapore,
Thailand, Korea, Japan and China. Notably, Australia did not agree to ISDS
provisions as part of the Australia-United States Free Trade Agreement.
Sharply opposing views were expressed regarding the ISDS provisions in
the Investment Chapter of the TPP. Many of the arguments made in relation to the
ISDS provisions in the TPP were familiar to the committee from previous
inquiries into major trade agreements. For example, Ms Steffie Baird
In its 2010 report, the Productivity Commission stated that
there did not 'appear to be an underlying economic problem that necessitates
the inclusion of ISDS provisions within agreements'. The report also noted the 'policy
and financial risks' for governments posed by ISDS.
A number of submitters also reminded the committee of then High Court
Chief Justice Robert French's commentary in 2014 regarding ISDS provisions.
Arbitral tribunals set up under ISDS provisions are not
courts. Nor are they required to act like courts. Yet their decisions may
include awards which significantly impact on national economies and on
regulatory systems within nation states... The possible inclusion of an ISDS provision
in the TPP has become an issue of intense debate with some critics seeing it as
a Trojan horse for the enhancement of the power of international corporations
at the expense of national sovereignty and interests.
The inclusion of ISDS provisions in the TPP was a point of particular
concern for many individuals who wrote to the committee to urge that the TPP be
rejected. For example, Ms Chay Neal wrote:
This system is not about protecting a foreign investor from
direct expropriation of assets, and instead has long been a system for foreign
investors to block or control regulation by the host government in the public
interest. This system is a gross violation of the ordinary concept of national
sovereignty, because it overrides the constitutional legislative functions of
federal, state and local government, and the constitutional functioning of
Australia's judicial system.
The increasing use of ISDS provisions by overseas investors worried many
submitters. For example, the Logan and Albert Conservation Association noted:
The Australian government is entering into this risky space
at a time when there is an enormous ramping up of ISDS challenges globally. Only
50 ISDS challenges occurred in the 50 years to 2000. Since 2000 more than 600
cases have been launched, the majority of these challenging environmental and
Dr Kyla Tienhaara provided the committee with a paper on possible costs
of ISDS provisions for Australia based 'on available global data and a direct comparison
with the experience of Canada' under the North American Free Trade Agreement.
This paper outlined that:
American investors initiate a large portion of ISDS cases globally
(20 per cent);
the TPP's carve-out of tobacco is of very limited value given
that ISDS claims are initiated by investors from a wide variety of industrial
sectors over a wide range of issues;
ISDS cases can arise over measures brought by any level of
states lose or settle ISDS cases more often than they win them;
even when states 'win' ISDS cases, they 'lose' because they have
unrecoverable legal costs;
damages awarded by tribunals and compensation settlements vary
it is difficult to quantify the cost of 'regulatory chill' but
there is mounting evidence that it is an identifiable phenomenon; and
ISDS provides no discernible public benefits—the only
beneficiaries of the system are corporations, and particularly large
In contrast, the Centre of Independent Studies also provided the
committee with papers relevant to the inquiry including those which made the
case for investor-state arbitration. It characterised ISDS provisions as strengthening
the rule of law, providing legal predictability and equality in the
international arena among disputing parties, introducing competition in the
delivery of justice by allowing 'international investors to choose whether to
pursue their grievances in either domestic courts or ad-hoc tribunals' and
reducing 'the sovereign risks associated with investments across borders.
Dr Jeffrey Wilson argued the TPP would promote certainty in relation to
ISDS provisions. He noted:
Despite featuring in many bilaterals, differing ISDS
implementations have resulted in a lack of clarity over precisely what rights
and obligations these impose. A particular concern has been around the definition
of 'expropriation', to what extent this impacted on governments' ability to
engage in public welfare regulation. Providing a single ISDS template via the
TPP can help end this regulatory uncertainty for both businesses and
The TPP NIA stresses the safeguards which had been 'built into the rules
guiding ISDS, making this one of the most protective treaties in existence
worldwide in terms of its protections for legitimate regulation':
Procedural safeguards in the TPP provide enhanced levels of
transparency in the management of ISDS claims. In addition, specific Australian
policy areas are carved-out from certain ISDS claims including: social services
established or maintained for a public purpose, such as social welfare, public
education, health and public utilities; measures with respect to creative arts,
Indigenous traditional cultural expressions and other cultural heritage; and
Australia's foreign investment policy, including decisions of the Foreign
Investment Review Board. Australia's tobacco control measures as defined under
the TPP will not be able to be challenged.
The BCA considered that the TPP ISDS provisions had appropriate
safeguards and would create investment certainty by allowing Australian
investors to protect their investments from discriminatory treatment overseas.
It is important to note that the TPP's ISDS provisions do not
protect an investor from a mere loss of profits following a change in
government policy or regulation. ISDS also does not prevent the Australian
Government from changing its policies or regulating in the public interest. It
also does not freeze existing policy settings. Investors cannot mount a case
against the government merely because an investor does not agree with a new policy
or that a policy adversely affects its profits....
The ISDS text will not prevent either government from
regulating in the public interest. Explicit safeguards are included to
re-affirm the right of governments to take decisions in the public interest,
including explicit caveats covering areas such as health and the environment.
However, other submitters were not assured by the ISDS safeguards in the
TPP. For example AFTINET stated:
Claimed ISDS 'safeguards' for health, environment and other
public welfare measures have not prevented ISDS cases. These 'safeguards' do
not address the main structural deficiencies of ISDS tribunals, which have no
independent judiciary, no precedents and no appeals process. Tribunals have
enormous discretion in interpreting the meaning of 'safeguards'...
The claimed 'safeguards' which actually apply to the ISDS
section of the investment chapter cannot be described as clear carveouts or
exclusions. The only clear carveout or exclusion is that governments have the
option of excluding future tobacco control laws from ISDS cases...[T]his begs the
question of why other public interest laws are not clearly excluded...
Copyright and other intellectual property
TPP's Intellectual Property (IP) chapter (Chapter 18) covers patents,
trademarks, copyrights, industrial designs, geographical indications, trade
secrets, other forms of intellectual property, and enforcement of intellectual
The NIA states that the chapter is consistent with Australia's existing intellectual
property regime and will not require any changes to Australia's legislation. In
order to implement the TPP '[m]inor regulatory changes relating to encoded
broadcasts will be required in order to extend benefits in Part VAA of the Copyright
Act 1968 that Australia already extends to parties to the Rome Convention
and AUSFTA to broadcasts from Malaysia, Singapore, Brunei Darussalam and New
Despite this assurance, Chapter 18 was a key area of criticism in
submissions received. For example, the Intellectual Property Committee (IPC) of
the Business Law Section of the Law Council of Australia (Law Council) stated:
The TPP IP Chapter is the latest in a series of recent trade
agreements to include detailed commitments regarding the form and substance of
domestic IP law. Of all of the agreements concluded in the last decade or so,
the TPP is the most complex, in part owing to its plurilateral nature.
A first problem with this complexity is that it is becoming
increasingly difficult to ascertain exactly what Australia's international IP
A second problem with detailed and complex rules is that they
can tend to limit reform options. Australia's IP laws are not perfect and the
need for future reform is foreseeable based on the experience of the recent
...[C]onsistency in at least basic IP rules – is not being
achieved. In fact, it is notable that in the case of the TPP, the IP Chapter
does not in fact create a ‘common set of rules’ (National Interest Analysis,
3) for IP law. For example, in relation to online intermediary liability,
the chapter provides at least 4 different regimes applicable to different
parties to the TPP.
The Law Council also disputed the NIA's statement that Australia's TPP
obligations are consistent with Australia's existing intellectual property
regime and require legislation changes. It pointed to a number of areas
including online service provider liability and technological protection
measures where amendments to Australian law may be required.
Associate Professor Kimberlee Weatherall argued that the key effect of
Chapter 18 of the TPP was to 'lock in' existing Australian IP law:
This is not a good thing unless Australia's current IP laws
(1) are perfect; and (2) will continue to be perfect in the medium to long term
regardless of changes in technology, changes in business models, changes to Australia's
areas of comparative advantage, and changes to other countries' IP settings. Obviously
this cannot be true. The number of reviews we have had of current Australian IP
law, and the number of changes that have been proposed for Australian IP law by
those reviews, suggests otherwise.
She recommended the committee 'condemn Chapter 18 for locking in
existing IP law; hindering or preventing future reform; and creating a
breathtaking degree of complexity and legal uncertainty'.
Dr Matthew Rimmer also considered the TPP was unbalanced and distorted the
aims, objectives, and principles of copyright law:
There is a failure to properly represent the traditional objectives
of copyright law in promoting learning, access to knowledge, and scientific
progress. Moreover, the Trans-Pacific Partnership does not promote copyright
goals – such as creativity, innovation, competition, and access to goods and
The broader impacts of the TPP's treatment of IP regulation was also
discussed in submissions. For example, Electronic Frontiers Australia
considered the 'TPP has failed to internationalise a balanced and modern
copyright regime and is instead a reflection of controversial concepts and
ideas which negatively impact users and have not been proven to increase
innovation and creativity so as to justify this invasion of user rights'.
Dr Aoife O'Donoghue and Dr Ntina Tzouvala argued that increased patent
protection in the TPP would disproportionately affect developing states 'who
are unable to take advantage of the looser regulation that accompanied fast economic
development in the Global North'.
Parts of the TPP directed to the benefit of consumers included
commitments on personal information protection, enforceable consumer rights,
addressing 'spam' and the high costs of international mobile roaming.
However, in submissions for the inquiry, discussion regarding the possible
impact of the TPP on consumer rights centred on tariff reductions and the
influence of the TPP, particularly the ISDS provisions, on future regulation intended
to benefit consumers.
The NIA characterises Australia's tariff elimination schedule as 'ambitious',
with 93 per cent of all tariff lines eliminated or bound at zero tariff rates
upon entry into force. Almost all remaining tariffs, covering sectors where
tariffs still provide some level of protection against imports, would be eliminated
in either three or four years.
The Business Council of Australia argued that '[o]pen markets deliver
material benefits to consumers through greater competition and access to a greater
variety of goods and services. It noted that 'eliminating tariffs on goods
imported from key import markets' would benefit Australian consumers and
businesses using imported input.
The TPP will enhance transparency, cooperation and promote
good practice with regard to establishment and maintenance of technical
regulations. A better understanding of each party's regulatory systems will
improve public safety and benefit Australian consumers.
The Financial Services Council argued that lower barriers to trade would
allow Australian consumers of financial services 'access to a greater range of
products'. It noted that 'while Australia's market for financial services is
already one of the most open and well-regulated in the world, free trade
agreements provide the opportunity to broaden the range of products available
to Australian consumers'.
In contrast, CHOICE focused its submission on the potential effect on
consumers of the ISDS provisions of the TPP. It highlighted its concern that
the TPP would place 'future reform to benefit Australian consumers at risk':
Specifically, CHOICE is concerned about ISDS action against
Australia should the Federal Parliament pass legislation or if the Government
implements regulations to:
Require specific-ingredient labelling on food products, like palm oil;
Change or strengthen our country of origin labelling system;
Require the display of 'health stars' or 'traffic lights' on the front
of packaged foods;
Ban the import of products that are dangerous or potentially dangerous;
Improve the Australian Consumer Law to, for example, ban unfair trading
or to strengthen consumer guarantees.
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