Australia's trade agreements and the treaty-making process
While not an explicit part of the terms of reference of the inquiry,
many submissions made specific comments on two related subjects—Australia's
trade agreements and the treaty-making process.
Australia's trade agreements
A key argument made in the NIA for Australia's participation in the TPP
was that it would 'protect Australia's competitive position in the markets of
the TPP Parties'. The NIA notes that '[m]arket access gains under the TPP will
be delivered more quickly than any other current multilateral or plurilateral
negotiations underway such as in the World Trade Organization (WTO) or in the
Regional Comprehensive Economic Partnership (RCEP)'.
The Analysis of Regulatory Impact on Australia (RIA), attached to the
NIA, included an assessment of alternative means to achieve similar regional
trade outcomes for Australia. It notes there has not been a significant global
trade agreement since 1994. In particular, the WTO Doha Round negotiations have
stalled and would not address Australia's priority trade and investment
interests as extensively, or in as timely a way, as is possible under the TPP.
While noting that Australia was working closely with all RCEP countries, the RIA
considered 'it does not provide an alternative option for delivering the same
First, the scope of the TPP is far broader than RCEP, along
with its stated ambition of liberalising trade in goods, services and
investment. Second, although there is some overlap in membership, there are
important differences that make the two regional FTAs complementary. In
particular, the TPP brings in the North American market and gives Australia
access to supply chains in that region that would not be addressed by RCEP.
The significance of the TPP in relation to Australia's existing trade
agreements and possible future trade agreement was often discussed in
submissions. For example, Chatto Creek Advisory observed that the 'WTO's
inability to conclude the Doha Agreement has left trade-dependent economies,
like Australia, with an important need to seek out practical and achievable
alternatives'. It considered that 'a failure of the TPP Agreement to come into
force would represent a significant setback to trade liberalisation...a lost
opportunity for all economies, including Australia, that would not be easily or
The capacity of the TPP to add new participating countries was also
considered an important feature. For example the Minerals Council noted:
While the agreement first started as a negotiation between
four countries, it expanded to 12 members and has purposeful provision to
accept new members...[T]he TPP is one of the most compelling frameworks to
encourage China – Australia's largest trading partner and mineral resources
client – to deepen its market reforms and sign on to more ambitious
liberalisation commitments. The TPP has the potential to create the long suggested
Free Trade Area of the Asia-Pacific.
The importance to Australia of regional trade agreements was highlighted
by several submitters. For example, Dr Jeffrey Wilson from Murdoch University
urged the committee to focus on the systemic effects the TPP could have 'for
the trade architecture of our region'. He explained:
The TPP is more than just a set of market access
opportunities that need to be balanced against the costs of domestic policy
reforms. It also promises wholesale change in the way the Asia-Pacific trade system
The proliferation of bilateral FTAs in the Asia-Pacific has
led to a phenomenon trade economists call the 'noodle bowl problem'. Rather
than having a single, integrated set of trade rules that apply equally to all
governments, the region is now criss-crossed by over a hundred bilateral deals.
Compounding matters, the bilateral FTAs are often wildly inconsistent. Each
contains its own rules for tariff reduction, non-tariff trade policy reforms,
and standards for administrative procedures...
An important, but often overlooked, feature of the TPP is
that it is an explicit attempt to address the noodle bowl problem. By providing
a single, overarching set of trade rules with relatively broad regional
coverage, it is one of the first steps in returning Asia-Pacific trade
architecture to a multilateral model.
Dr Aoife O'Donoghue and Dr Ntina Tzouvala noted that failure of the Doha
Round of the WTO and the move to regional trade agreements, such as the TPP,
has significantly reduced the leverage available to developing states within
trade negotiations. They urged that Australia take into account of the
implications of regional trade deals for developing states who may be poorly
resourced to adapt to rapid tariff elimination, increased patent protection or ISDS
The ACCI considered that the 'Australian Government should consider
alternate pathways for trade and investment liberalisation under the potential
scenarios of both entry into force or not for the TPP'. It noted:
In the end Australia has already negotiated to undertake
further liberalisation of our own tariffs and investment regimes plus other
areas covered by the TPP. Australia is also negotiating a range of other
agreements including the Regional Comprehensive Economic Partnership (RCEP) and
numerous bilaterals. We imagine that the terms of the TPP will be the basis for
"landing zones" for these other negotiations.
In this context, the ACCI urged the Australian Government to commit to
unilaterally removing existing barriers to trade and investment to enable full
benefits to flow to the Australian economy.
Australia's treaty-making process
For Australia, the next key step to ratification of the TPP is for the
Parliament to consider and pass any legislation, or amendments to existing
legislation, that may be necessary to implement the specifics of the agreement.
However, a number of submitters expressed concerns with the manner in which the
TPP had been developed and more broadly Australia's treaty-making process. Often
these criticisms had been raised during the committee's previous inquiries into
trade agreements and were reiterated in relation to the development of the TPP.
For example, Dr Matthew Rimmer noted that '[i]n spite of significant
criticism of the treaty-making process, there has been a failure to reform the
system of treaty-making in Australia'.
Negotiation and consultation
The NIA outlines the consultations undertaken for the TPP including with
the state and territory governments, Commonwealth government departments and
agencies, business, industry and civil society. It noted:
Stakeholder views were actively encouraged and considered
throughout negotiations on the TPP, including through an initial call for
public submissions. In November 2008, the Australian Government publicly announced
that Australia would participate in the TPP negotiations. Australia's decision
to participate in the TPP negotiations followed extensive consultations
involving a wide range of stakeholders and State and Territory Governments.
Overall, there was widespread support for Australia's participation in the TPP.
The Department of Foreign Affairs and Trade (DFAT) engaged in
over 1000 TPP stakeholder briefings and consultations over the time period of
the negotiations with a wide range of domestic stakeholders, including representatives
from peak industry bodies, individual companies, academics, unions, consumer
groups, special interest groups and other organisations representing civil
society. Many stakeholders were consulted on several occasions and provided
more than one written submission.
Senior TPP negotiators provided briefings and information on
the progress of negotiations to stakeholders on request during the course of
the negotiations. In addition, DFAT held public stakeholder consultations in
state capitals, for example on 26 March 2014 in Melbourne and 27 March 2014 in
Sydney. Such consultations were open to businesses, civil society and
interested members of the public, and were advertised on the DFAT website. DFAT
provided updates on the TPP negotiations via its website, and consulted stakeholders
and interested members of the public via group email address...
However, the lack of transparency in the consultation and negotiation of
the TPP was repeatedly criticised by submitters opposed to the TPP. For example
Electronic Frontiers Australia (EFA) believed that 'the secrecy surrounding the
negotiations of the Trans-Pacific Partnership (TPP) fundamentally undermines
the legitimacy of the agreement'. It considered the approach was 'inherently
antidemocratic and has led to an outcome that clearly favours the interests of
a select group of corporations and industry sectors, who have had privileged
access to and input to the negotiating process, at the expense of consumers and
society more generally'.
Similarly, the Friends of the Earth commented:
That the TPP text remained secret for so long, that
negotiations took place behind closed doors, and that independent bodies, the
parliament and the community are still unable to alter or vote on the adoption
of the deal, is a testament to the undemocratic nature of Australia's treaty
Similarly, Dr Hazel Moir stated:
What 'consultation' does take place with DFAT is very much
one-way. Because of the secrecy around trade negotiations, DFAT provides only
very high-level general information to participants in such consultations. Its 'consultations'
involve DFAT listening but rarely responding. This wastes the time of the many
groups and individuals who attempted to participate.
The ACCI considered that Australia's limited domestic consultation
during trade negotiations meant that 'treaties often contain provisions that
stakeholders, including business, are only aware of after the treaty
negotiations are concluded'. This lack of transparency could lead to
misunderstanding and alarmist politicisation of treaty provisions. The ACCI made
a number of recommendations to reform the manner in which treaties are
negotiated, considered and monitored. It considered these reforms should be
implemented even if the TPP does not enter into force.
These proposed reforms included:
an independent Government body that is arms-length from
negotiations – such as the Productivity Commission – should prepare the trade
treaty National Interest Analysis (NIA) and Regulatory Impact Statement (RIS)
documents that are provided to the Joint Standing Committee on Treaties and
tabled in Parliament;
the Productivity Commission – or similar independent body at
arms-length from negotiations – should be tasked with an objective regular
review and report on the agreement;
performance of all in-force Australian trade treaties, comparing
the economic objectives cited at their commencement;
the direct costs to the Australian Government for the conduct of
treaty negotiations should be transparently reported to the Parliament through
the annual budget process;
the Australian Government should examine the merits of retaining
current bilateral agreements where they have been superseded by larger and more
modern agreements covering the same Parties; and
the Australian Government should introduce an enhanced
consultative procedure for the development of improved trade treaties, which
would allow representative bodies to register for access to the draft treaty
text within the terms of the relevant confidentiality agreements, in order to
provide advice to negotiators throughout the negotiation process.
A high level of frustration with the current treaty-making process was
expressed in a number of submissions. For example, Gene Ethics were 'extremely
disappointed and angry that a section on Trade of Products of Modern Biotechnology
appears in the TPP':
DFAT officials and the Minister's office advised us that no aspect
of [Genetically Manipulated] (GM) techniques or their products were on the
table during TPP negotiations. DFAT officials said our concerns about GM
provisions were unfounded when we raised them with DFAT, with the Minister...
Their disinformation was reiterated during three TPP
briefings that DFAT officials convened in Melbourne. Now the published TPP text
contains provisions that intend to permit the 'low level presence' (LLP) at
unspecified levels, of unapproved GM contaminants in traded food commodities and
the SPS provisions are also unsatisfactory.
Many submissions argued the current treaty-making process involved
insufficient parliamentary oversight, scrutiny and approval. For example, the Friends
of the Earth supported 'a transparent, democratic and accountable process, that
should include full parliamentary debate and approval before a Minister or
Cabinet is able to sign off on a regional or global agreement'.
The ETU recommended the 'TPP should be referred to the full Parliament for an
open debate, including aspects that do not require implementing legislation'.
AFTINET proposals for reform included:
Prior to commencing negotiations, the Government should table
in Parliament a document setting out its priorities and objectives. The
document should include independent assessments of the projected costs and
benefits of the agreement.
Such assessments should consider the economic, regional,
social, cultural, regulatory and environmental impacts which are expected to
arise. The Australian Government should release its proposals and discussion
papers during trade negotiations. Draft texts should be also released for
public discussion, as occurs in the WTO and is now the practice in some EU negotiations.
The final text should be released for public and parliamentary debate before it
is authorised for signing.
Assessments of trade agreements
The NIA for the TPP was also criticised. For example,
Dr Hazel Moir unfavourably compared Australia's NIA of the TPP with
that produced by New Zealand:
In regard to DFAT's NIA for the [TPP], it is clear that this
is not independent. There is a marked contrast between the Australian and New
Zealand documents. The New Zealand analysis is far more even-handed,
identifying costs very clearly. It also clearly identifies as a negative
feature the loss of domestic policy control in a number of areas.
Several submitters disputed the contents of the NIA for the TPP. For
example, Associate Professor Kimberlee Weatherall recommended the committee
recognise that 'the National Interest Analysis misrepresents the effect of
Chapter 18 by failing to acknowledge the costs imposed by the chapter, and
failing to acknowledge that the chapter will not offer tangible benefits to
Australian creators or inventors'.
A number of alternative and additional methods to assess of the TPP and
other future trade agreements were advocated. For example, the New South Wales
Nurses and Midwives' Association recommended the development of legislation
requiring that all free trade agreements undergo a publically transparent
health impact assessment prior to signing:
Healthcare policy should not be subject to
'commercial-in-confidence' style negotiations. Rather, all government policies
should be assessed as to their healthcare impact and this assessment process
should be transparent, evidenced based and accessible to the public. Healthcare
matters should not be a part of any Free Trade Agreement that fails the test of
transparency. For the TPP healthcare professionals and academics were denied
access to the text, were not included in negotiations and had limited access to
the trade negotiators and when they were detailed information was not provided.
In raising legitimate, evidenced based concerns the Minister for Trades'
response was to refer to concerns as being 'shrill'...
[T]he negotiation process and outcomes of the TPP highlight
an urgent need to ensure that there is health governance process applied to all
free trade agreements and treaties. Such a process must be transparent,
independent and involve an 'all-of-government' approach to ensure that
agreements in seemingly unrelated areas do not impact on health or healthcare
Similarly, ActionAid recommended:
To ensure that Australia protects, respects and fulfils human
rights in Australia and overseas, the Australian Government must undertake the
following with respect to the TPP and other trade agreements:
Undertake a human rights impact assessment on trade agreements as
required under the Universal Declaration of Human Rights and in line with the
International Covenants on Civil and Political Rights and the Economic Social
and Cultural Rights
Specifically undertake a gender analysis of the impacts of the TPP Take
the lead in ensuring that trade agreements are transparently discussed and
shared with the public
Ensure that civil society in all signatory countries is fully consulted
and provided information in a timely manner to ensure that they understand the
full implications of trade agreements and can be involved in decisions on the
Other transparency reforms were also raised. Under the TPP, a commission
will be established which will review the operation of the TPP three years
after entry into force of the agreement and at least every five years
Dr Rebecca LaForgia proposed that Australia adopt an interpretive declaration
'to ensure that in the practice of Australia, all reports by the 'committees,
working groups and any other subsidiary bodies' created under the TPP are open
and available to the public'. She stated:
The public like, the
[TPP] Commission, in order to comprehend the operation of the TPP also requires
access to the reports prepared by the 'committees, working groups and any other
subsidiary bodies' established under the TPP. Without such access the agreement
is secret, non-democratic and cannot be comprehended by the public...It is a
mistake to consider that the only and primary time for openness is in the
creation and negotiation stage of the TPP. Of equal importance is the open
reporting over the life of the agreement, in order for public to be able to
observe and comprehend the operation of international trade...
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