Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019


Peter Khalil: Labor supports the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 and the related bill to enable the government to enter into the free trade agreements with Indonesia, Hong Kong and Peru. We’ve heard from many previous speakers that if Labor were in government of course we would have negotiated agreements with these countries that were somewhat different. But, nonetheless, we have tried, valiantly, to work through the processes available to us to try and ensure that a number of Labor principles on free trade are reflected in the agreements going forward and in future negotiations for free trade agreements. Part of that has been obviously the work done by the shadow minister and the minister for trade as well as by the Leader of the Opposition in negotiations with the government to try and reflect some of these important principles.

The other part of it of course has been the work of the Joint Standing Committee on Treaties, of which I’m deputy chair. As Deputy Speaker Karen Andrews would know, the important although understated work that committees do in this place is very, very important in making sure that some of our legislation is better than it is in the initial stages of drafting. It is a part of the important process to improve legislation in the national interest. The committee work is actually vitally important. I had that unique perspective of working on the JSCOT, as it’s called, in the last couple of months on these free trade agreements. Obviously, the public hearings and the submissions that were put to the committee by a whole range of stakeholders and organisations were very important.

In summary, I want to acknowledge the chair of the JSCOT, the member for Wentworth, Dave Sharma, for his work and also the secretariat, who did a lot of great work in the last couple of months, in what was a very tight time frame around these free trade agreements given the government’s timetable and schedule in wanting to ratify at a certain point in time. The Labor members on the JSCOT, from our perspective, worked very hard to try and ensure that some of those principles were reflected in the committee’s Report 186.

Starting really with one of the main issues that has exercised not just the Labor Party but the labour movement more generally is the issue around labour market testing. The wording in this report reflects the importance of ensuring that any agreement that Australia enters into with Indonesia in the future is made at a treaty level—not a subtreaty level—and that it does not waive labour market testing with respect to contractual service suppliers. I note the Leader of the Opposition’s announcement earlier today—that he had negotiated this with the government—was welcome news. That’s very, very important because what it does is give preference to Australian jobs. It makes sure the skills testing and the labour market testing are there to make sure that any temporary foreign workers meet the same standards as Australian workers. That is of critical importance for Australians and for Australian jobs.

The other important recommendation I highlight out of the report is recommendation 4, in which the Australian government would pursue the termination of the survival clause in the old bilateral investment treaty between Australia and Indonesia, which effectively means terminating the old ISDS provisions that existed under that agreement signed back in 1992 obviously in favour of far more improved and better ISDS provisions in the current agreement that’s been signed. This really goes to reducing Australia’s potential exposure to claims under the superseded agreement and is very much in line with ensuring that there are safeguards, carve-outs around public policy that will make a huge difference to investors going into Indonesia and also into Australia.

It should be noted, too, the achievement of this agreement with one of our largest and closest neighbours is of utmost importance, in my view, given this time of global trade uncertainty. It is important to note, too, that the Labor Party has always been a party of trade on fair terms. We’re hopeful that the agreement will lead to a greater number of exports and a closer trading relationship with what is such an important neighbour in Indonesia and an economy that is growing at such a rapid pace.

The other important recommendation to note in the report is the recommendation that the Australian government give due consideration to implementing independent economic modelling around these agreements, particularly with respect to having that occur through the Productivity Commission, or an equivalent organisation, and providing that to the JSCOT in future, alongside what is given to the committee with respect to these agreements, and that is the national interest analysis. That is something that has been called for over many parliaments, with respect to ensuring that the trade deals we enter into actually work for Australians, with some evidence based independent economic modelling that can give us some certainty around the benefits and the opportunities that flow out of these agreements.

Regarding the point that was raised this morning about the importance of consultation with civil society, particularly the union movement, a number of submissions that came to our committee made the argument that much of civil society, and the union movement in particular, felt that they were shut out of the negotiations with DFAT officials during the course of the preparation of the agreement and the negotiations around elements of the agreement. They made the argument that many other stakeholders, such as business, were given much more time in that process. We had some language in the report that went to resolving that there be further consideration around consultation mechanisms in the context of trade treaties during this 46th Parliament. This actually means much more than that. It means having the committee look at the whole treaty-making process in the 46th Parliament—how we can improve it in order to ensure that we get better results. Part of that is the inclusion of civil society stakeholders, such as the union movement, within the consultation process, just like any other stakeholder. That’s been an important element in the committee’s work over the last couple of months. It’s important that we are able to conduct hearings on this in the 46th Parliament in order to see how we can improve those processes.

I want to make a point about the Hong Kong free-trade agreement. We had much discussion and debate about the language on the unique status of Hong Kong that goes into this report. We have signed an agreement with an autonomous entity within what everyone knows is the one country, two systems framework. I note the arguments made by the chair of the JSCOT, the member for Wentworth, and the government’s broader argument that the characteristics that make Hong Kong unique under this system are being recognised by the very active signing of a separate agreement with the territory. These, obviously, are the rule of law, freedom of expression and some of the democratic rights that are afforded or have been afforded to residents of Hong Kong under the basic law. There is certainly a strong argument that if we are signing this type of agreement with Hong Kong we are further emphasising and supporting the unique autonomous status that exists. I have made the point though—and I’ve made this public—that if the ongoing civil disturbance and political instability in Hong Kong leads to a diminution of those rights, those very unique elements that make Hong Kong the special autonomous territory that it is, then real consideration should be given by government to the ratification timeline, because the very act of ratifying the agreement may, in those circumstances, actually lead to the diminution of those rights. That’s why it’s so important that the government and the opposition, through the committee as well, have noted the importance of continuing to monitor the situation on the ground in Hong Kong with respect to those unique elements of the autonomous territory, in order to ensure that that can be resolved as peacefully as possible. That is a slight difference in positioning, I guess, between myself and the member for Wentworth, but I think it’s important to note that for the record.

With respect to Indonesia, we’ve heard many speakers raise what I think are extremely important points. One is the fact that the Indonesian economy is on track to being the fourth-largest economy in the world by 2050, with a consumer class of around 135 million people by 2030—providing a great opportunity for Australia’s exports into that country. We’ve heard time and time again that this trading relationship with one of our closest neighbours, our northern neighbour, right on our doorstep, has been woefully underdone. Currently, Indonesia accounts for only around two per cent of our exports. That is a remarkable statistic given the size of the country that’s just to our north. It’s currently our 14th-largest trading partner—again, a remarkable statistic given the fact that there are over 240 million Indonesians just to our north.

In many respects, this agreement fits into the broader objective that I think we should all share, and that is to improve our relationship with Indonesia. It’s certainly a bipartisan objective in the general sense. It has been a relationship which I think has been woefully underdone. Many Australian businesses have kind of leapfrogged Indonesia to go to other parts of Asia. There are different reasons for that. At the public hearings and in submissions there were points raised about how difficult it is to do business in Indonesia—and there were valid reasons given for that. We realised that we had to do much better in enhancing our relationship with Indonesia in order to give Australian businesses and Indonesian businesses a better opportunity for the economic relationship to flourish. This is one step towards that and one that we should all support.

Another point to make is that Australia needs to look at diversifying its trade—not have a trading relationship that is limited or narrowly focused on one or two countries but really trying to diversify our economic and commercial trading relationships right across the Asia-Pacific. This free trade agreement with Indonesia is also a step in that diversification objective. This agreement will allow our relationship with Indonesia, an important regional partner, to grow. I support the agreement on that basis, as much as for any of the other reasons that have been enunciated today.

As I’ve mentioned, the Australian Labor Party believes that our trade agreement processes should be more open and consultative. This is a really important point. I welcome some of the improvements that have been agreed to with respect to the process and, as deputy chair of the JSCOT, I look forward to working on these. The JSCOT is one of the few avenues that allow business, civil society, the union movement, other stakeholders and ordinary people—citizens—to provide input and feedback on Australia’s treaty-making process. Reviewing and improving this process is of utmost importance, and I welcome the step that we’re taking.