The Australian Greens have demanded greater parliamentary oversight of so-called free trade agreement (FTA) negotiations and approval of deals before they are signed, as well as an end to investor-state dispute settlement provisions that allow foreign corporations to sue taxpayers. From Sky News:
‘A fundamental problem with trade deals is that the benefits are not distributed equally,’ the party’s policy document says.
So the party wants an independent economic evaluation process put in place to inform government of disproportionate impacts of trade deals.
‘The Liberals promised rivers of gold would flow from their trade deals but the rivers ran dry. Australia has had a period of record trade deficits,’ Greens trade spokesman Peter Whish-Wilson said.
The party is also concerned trade deals were creating two sets of workplace laws and taking away employees’ rights, particularly with the China free trade agreement.
‘Every single agreement of this kind that Australia has signed has eroded our ability to have local procurement policies … to support local jobs and industries,’ Greens industrial relations spokesman Adam Bandt said.
There is no doubt that the Department of Foreign Affairs and Trade’s (DFAT) consultations on trade deals are a sham.
The Productivity Commission (PC) has previously called on the texts of Australia’s trade deals to be publicly released for scrutiny before they are signed:
The emerging and growing potential for trade preferences to impose net costs on the community presents a compelling case for the final text of an agreement to be rigorously analysed before signing. Analysis undertaken for the Japan-Australia agreement reveals a wide and concerning gap compared to the Commission’s view of rigorous assessment.
Similarly, a Parliamentary committee last year released a report slamming the lack of adequate “oversight and scrutiny” pertaining to the Trans-Pacific Partnership (TPP), and lamented that “parliament is faced with an all-or-nothing choice” on whether or not to approve trade agreements and can only officially review trade laws once they have officially passed.
While DFAT claims that it consulted widely on the TPP, these consultations were largely a sham, as argued by Peter Martin at the time:
The department runs consultation sessions with community groups, providing “over 1000 stakeholder briefings on the TPP alone since 2011”, but they have been curiously bereft of information. Alan Kirkland from the consumer group Choice said the meetings take the form of “tell us your views”. The Australian Industry group said attending them is like “voicing concerns blindfolded”…
There’s no greater believer in free trade than the Productivity Commission, and few organisations more enthusiastic than the Chamber of Commerce and Industry. It’s the new layers of red tape that worry them, and the add-ons – changes to Australian law that wouldn’t stand a chance of making it through Parliament if they were proposed and debated in in their own right.
Even Liberal Senator, Bill Heffernan, has raised concerns at the lack of due process pertaining to the TPP:
“Politicians and governments need to have enough self-confidence to be able to have a contest of ideas, rather than doing something in secret and dropping it on the table”…
“I’m concerned about unintended consequences. I’m worried about how much will be fait accompli”…
[Heffernan] wants to see the TPP released to the public so that it can be tested by people with “dirt under their fingernails”. He said: “It ought to pass the paddock test.”
“The average person here in Parliament hasn’t got their head around a range of things. If you don’t know what’s on the table, how do you know what questions to ask?”
The TPP is the greatest example of why there needs to be greater parliamentary oversight before trade deals are signed and ratified. The agreement is incredibly complex whose text numbers some 6,000 pages and 30 chapters. The draft text was never provided to parliament for review before signing, and it is far too complex for parliament to properly review before ratification.
Therefore, the PC’s expert assessment is vital. However, the Coalition has already ruled it out, presumably because it risks uncovering any gremlins lurking in the text.
We have seen this story before.
While working as the Australian Treasury’s trade analyst in 2003-04, I witnessed the Howard Government commission the Centre for International Economics (CIE) to undertake the modelling on the Australia-US Free Trade Agreement (AUSFTA), even though the PC was available and wanted the job.
It was the belief of many at the time that the CIE was chosen over the PC because it would provide more favourable modelling results, making it easier for the Government to sell the deal to the public. By contrast, the PC was inherently skeptical of preferential trade agreements (for good reason), and it was feared that it would provide a poor assessment of the AUSFTA if commissioned to undertake the work.
Alas, the CIE delivered a glowing report on the AUSFTA, claiming that it would boost Australia’s GDP by nearly $6 billion. A large proportion of these gains came from a fanciful decrease in Australia’s “equity risk premia” – a result described by Professor Ross Garnaut at the time as “not passing the laugh test”.
A decade on, The Crawford School at the ANU delivered its assessment of the AUSFTA, which showed the agreement diverted Australia’s trade away from the lowest-cost sources. Australia and the United States reduced their trade with rest of the world by US$53 billion and are worse off than they would have been without the agreement.
The AUSFTA also included extensions to both patent and copyright terms, which has raised the cost of pharmaceuticals and copyrighted materials in Australia.
Of course, the last thing the Coalition wants is transparency and accountability, which is why they prefer to use paid consultants to do the analysis of trade deals, or refuse to undertake any analysis at all.
Either way, Australians deserve better. Due process must be restored to FTA negotiations with proper assessment by the PC preferably before signing, or at a minimum, before ratification by parliament.
The Labor Party should commit to referring all trade deals to the PC for assessment should it form government.
