Trans-Pacific Partnership – Independent Economic Modelling for Free Trade Agreements


Peter Khalil: I rise to speak on the motion put forward by the member for Forde, and I also wish you a very happy birthday Deputy Speaker Mitchell. As I understand it, it was yesterday. The Labor Party and the Labor movement have a very proud record, as we know, of reform. Much of that reform has boosted trade and investment, created new jobs, and increased the incomes of Australians. When we were last in government, Labor entered Australia in the negotiations for the original Trans-Pacific Partnership—the TPP.

This work of opening up to the world, where Australia engages with its regional partners and globally, is a tradition that Labor hold. Who can forget the efforts of Gough Whitlam, even in opposition—going over to China, starting that relationship and building it from there—and the work of the Hawke and Keating governments. Labor’s done this work because, as a trading nation, and we are a trading nation, our current and future economic success is underpinned by a consistent rules based system that actually enhances our ability to trade and our ability to sell our goods and services overseas.

One in five Australian jobs are currently linked to trade. The more we export, the more jobs we create, and they are better paying jobs as well. Furthermore, two in every three dollars we make from trade comes from Asia, and this is likely to increase in the years ahead. One of the keys to the success of Australia’s international trade then is to make sure that we make the most of this rise of the Asian century—the rise of the Asian countries in our region, which we are very much a part of. This is the Asian century, and Australia is actually perfectly positioned geographically to take full advantage of it. We are no longer constrained by that dreaded tyranny of distance. However, as we know, President Donald Trump withdrew the United States from the TPP, effectively killing the original agreement. This new agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is much smaller, and many of the more contentious sections of the original TPP have been suspended.

Labor believe, of course, that all trade agreements should be subject to independent economic modelling, as the member for Grayndler has pointed out. That is why we have announced a policy for scrutiny of free trade agreements and will ask the Productivity Commission and government to conduct an independent economic analysis of each new FTA before they’re signed and also conduct 10-year reviews post signing. The coalition has refused to do this; however, it’s good to see that the Victorian Labor government has commissioned independent economic modelling of the CPTPP.

This independent modelling indicates that the agreement will deliver modest economic benefits in the short-term, and there is the potential for more significant economic gains in the longer term if more countries sign up to the agreement. The independent economic analysis concludes that, while the agreement does not benefit all sectors equally, no sector or business would be worse off as a result. There are also other potential strategic benefits to this agreement. Simplifying trade rules and building stronger trade ties between the countries in our region will help make us more stable, more prosperous and more secure. And it is important in this age where middle powers such as Australia have a greater responsibility in ensuring a rules based order continues so that we can continue to benefit from such a rules based trade order.

There are a number of concerns, however, that Labor has raised with respect to this agreement—in particular, the inclusion of investor-state dispute settlement provisions and the waiver of labour market testing for contractual service suppliers. The same clauses have been included in other trade agreements signed by this government. Labor have made it very clear that, if we win the next election, we will not sign trade agreements that include ISDS clauses and we will not waive labour market testing for contractual service suppliers. In addition to that, Labor will remove these provisions from existing trade agreements, including this one, by negotiation. We have seen this happen. The New Zealand Labour government under Prime Minister Jacinda Ardern has shown how this can be done. They have recently negotiated side letters or bilateral agreements with four countries, removing the application of ISDS clauses in the CPTPP that had been agreed by the previous conservative New Zealand government. The same approach can be used to reverse the waiver of labour market testing.

We also need to make sure of this because, before a carpenter, electrician or plumber is brought in from overseas, employers should be required to first check and see if an Australian can do the job. In addition, Labor have announced that we will establish an Australian skills authority, an independent labour market testing body to determine genuine skills needs and restrict temporary work visas so that they are only made available when a genuine skills gap cannot be met with local workers. The authority will work in consultation with industry, unions, higher education and the TAFE sectors as well as state and local governments to protect Australia from future skills shortages and train Australian workers for those jobs. This is very important because this is a benefit for Australian workers and for the Australian economy.