Committee view and recommendations
The TPP was an ambitious attempt to create a regional trade agreement
for the Asia-Pacific. If it had been successfully completed, it would have
linked 12 countries, 819 million people and almost 26 per cent of global trade.
The TPP would have included significant trade and investment outcomes which
would potentially have assisted Australian industry, business and consumers.
However, there were also a number of troubling aspects to the final agreement.
the lack of independent economic modelling which indicated
Australia would benefit from the TPP;
the high risks associated with the ISDS provisions in the TPP;
provisions undermining labour market testing requirements;
the lack of enforceable commitments to labour and environmental
ambiguity regarding data protection for biologic products; and
provisions which would 'lock-in' Australia's intellectual
However, the committee's inquiry into the proposed TPP has been
overtaken by events. With the recent withdrawal of the United States, the
committee's expectation is that the TPP will now not enter into force in its
Despite the change of position by the United States, there still appears
to be support amongst the remaining TPP participating countries for a regional
trade agreement and key officials have indicated that alternative trade
arrangements may be pursued. For example, Chile's Minister of Foreign Affairs,
Mr Heraldo Muñoz was reported as stating that '[w]hether it be with the
United States or without the United States, there's a willingness among the
countries that make up the TPP to move forward'.
A revived trade deal may be arranged between the remaining participating
countries. Should this occur, a new inquiry will be required. However, in this
environment of uncertainty, it would not be useful to extend the committee's
inquiry into proposed TPP. The committee will mainly comment on the TPP's
ratification by Australia and the treaty-making processes.
Given the clear position of the Trump administration, it is apparent the
TPP will not enter into force in its current form. Gaining access to the
substantial market of the United States (nearly 62 per cent of the GDP of
participating countries) was a key component and justification for the
negotiation and agreement of the TPP. Japanese Prime Minister Shinzo Abe has
previously described the TPP without the United States as 'meaningless'.
The Minister for Trade, Tourism and Investment, the Hon Steven Ciobo MP,
has indicated that he has 'been speaking at length' with his TPP counterparts
on ways 'to lock in the benefits from the TPP, without the United States if
The prospects for such a future trade agreement appear reasonable. The process
of negotiating the TPP would have enabled participating countries to obtain a
better understanding of each other's priorities. This will be an important
foundation for future trade agreements.
However, the Australian Government has indicated that it still may attempt
to ratify the TPP through introducing implementing legislation into the
Parliament. If the Australian Government has stated it is actively seeking
alternative trade arrangements with the remaining countries who participated in
the TPP, it is not clear to the committee why ratification should be a
legislative priority. A new regional trade agreement could contain
significantly different arrangements and commitments.
Legislation intended to implement Australia's trade agreements usually
provides that the relevant provisions will not commence until the treaty enters
into force for Australia. Given the present situation, it would be unproductive
for the Australian Government to commit resources to passing implementing
legislation which will not commence if the TPP does not enter into force. The
committee's view is the Australian Government should defer any binding treaty
action in relation to the TPP and focus on engaging with its trading partners
to negotiate multilateral, regional or bilateral trade agreements which are in
Australia's interests and can be agreed and implemented in a timely manner.
The committee recommends that the Australian Government should defer
undertaking binding treaty action until the future of the Trans-Pacific
Partnership Agreement is clarified through further negotiations with
Australia's major trading partners.
Reform to the treaty-making process
The committee welcomes and supports the recommendations of the JSCOT majority
report on the TPP which relate to broader treaty-making processes. These
include that the Australian Government:
consider changing its approach to free trade agreement
negotiations to permit security cleared representatives from business and civil
society to see the Australian Government positions being put as part of those
negotiations (Recommendation 1); and
consider implementing a process through which independent
modelling and analysis of a proposed trade agreement is undertaken by the
Productivity Commission, or equivalent organisation, and provided to the committee
alongside the National Interest Assessment (NIA) to improve assessment of the
agreement (Recommendation 2).
The JSCOT recommendations reflect a growing consensus regarding the need
for reform of the treaty-making process which was also evident in the
submissions received for the committee's current inquiry. The TPP was perceived
by some to be emblematic of problems in this area. A broad range of submitters
highlighted issues with the transparency of treaty negotiations, the one-sided
nature of consultations with stakeholders, the lack of adequate and independent
assessment of trade agreements and the challenges the current treaty-making
process presents to Australia's democratic values.
These recommendations also align with the committee's recommendations
for reform made in Blind Agreement: reforming Australia's treaty-making
process in 2015. At that time, the committee's recommendations were
not accepted by the Australian Government. The committee considers these
proposals for reform should be reassessed.
The committee notes that the JSCOT report highlighted a concern 'that
Australia's long-term commitment to free trade, from which Australia benefits
immensely, is currently at risk from a resurgence of nationalism and
isolationism internationally'. However, in submissions to the current inquiry
there was wide acceptance of Australia's approach to trade as a vehicle for
economic growth, job creation and rising living standards. Broad support was
expressed for the development of fair trading relationships with all countries
and the need to regulate trade through the agreement of international rules.
Both in Australia and overseas, a key aspect of community opposition to
recent trade agreements has evolved from a lack of transparency and
consultation in treaty-making processes, the extension of trade agreements into
broader policy areas beyond tariffs and customs arrangements and a perceived
'democratic deficit' in the treaty-making process. The committee recommends the
Australian Government should prioritise action to respond to the growing
bipartisan and community support for reform of the treaty-making process. A
reformed treaty-making process will be an important measure to assure continued
public support for Australia's future trade agreements.
The committee recommends that the Australian Government expedite widely
supported reforms to the treaty-making process in order to assist the
completion of future trade agreements.
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