Joint Standing Committee on Treaties on the Trans-Pacific Partnership

Tuesday, 7 February 2017

Mr PITT (HinklerAssistant Minister for Trade, Tourism and Investment) (16:27): I rise to speak on the report of the Joint Standing Committee on Treaties on the Trans-Pacific Partnership, which was released on 30 November last year. In its report the committee recommends that Australia ratify the TPP. That is a view that is welcomed by the coalition government. There are another five recommendations made in the JSCOT report which are currently being considered by government.

There is no denying that the TPP has been a hot topic over past weeks and months. Whilst it is disappointing that President Trump has withdrawn the US from the TPP at this time, we of course respect the decision of the new US administration. But the TPP is too important as a driver of more Australian jobs not to do all that we can to lock in the benefits of the agreement. The TPP is an agreement of unprecedented scope and ambition. It promises to deliver many benefits for Australian businesses. It will create new market access for Australian exporters and investors, providing preferential access to some of the world’s largest economies. It would support the growth of trade in the region additional to Australia’s existing FTAs and contribute to economic growth and new jobs. Commonly agreed rules would provide greater certainty for business, reduce costs and red tape, and facilitate participation in regional supply chains. It would also address contemporary trade challenges important to business, such as e-commerce and transparency, in ways that they have not previously been addressed in Australian FTAs.

It is indisputable that trade delivers more opportunities for business and more jobs. I am sure it is the case in many regional electorates throughout Australia just as it is my seat of Hinkler that more trade means more jobs. My colleague the Minister for Trade, Tourism and Investment, Steven Ciobo, has been speaking at length with his TPP counterparts on ways to lock in the benefits of the TPP without the United States, if need be. That has included discussions at the World Economic Forum with trade ministers from Japan, Canada, Mexico, Singapore, New Zealand and Malaysia.

Paths for locking in TPP outcomes will be the subject of discussion over coming months. There are a number of options which are open to us, and there is a shared determination to ensure that the benefits of the TPP are not lost, despite the objections of the opposition—even though the former Minister for Trade, Simon Crean, in 2008 actually said:

Our announcement to join negotiations on the trans-Pacific Partnership is perhaps the most important initiative the Rudd government has taken to fulfil that aim.

Australian farmers and business groups support the government’s efforts not to abandon the TPP as the opposition has. The National Farmers’ Federation chief executive, Tony Mahar, said:

… the benefits of the landmark deal were too significant for Australia’s farming sector to give up.

He said:

The opportunities presented by the TPP have the potential to be transformational for our already-strong export industry.

… Commodities across-the-board stand to gain including red meat, dairy, fruit and vegetables, cotton, wool, sugar, grain and seafood.

In a media release dated 20 January, Mr Mahar said that, if the US pulled out of the TPP, it ‘was not necessarily dead in the water’. Mr Mahar said:

There’s more than one way to skin a cat. While it would be preferable to have the US remain a party the most significant gains for Australia lie with the deals struck with Japan, Mexico, Argentina and Canada.

He said:

To this end we were buoyed by discussions between Prime Minister Turnbull and his Japanese counterpart Prime Minister Abe last weekend on how to progress negotiations.

… We particularly welcome Prime Minister Turnbull’s commitment to ratifying the deal – despite the uncertainty following the result of the US election …

The wine sector said we ‘must do everything in our power to ensure the agreement comes into force’. That is a quote from Tony Battaglene, the Chief Executive of the Winemakers’ Federation of Australia, in a media release just two weeks ago. It said:

Despite President Trump’s decision not to ratify the TPP at this time, the agreement provides such great opportunities for the Australian wine sector, that we must do everything in our power to ensure the agreement comes into force.

Mr Battaglene said:

The TPP offers tremendous opportunities for our sector and the promise of wealth creation in regional Australia as well as to the national economy …

He went on to say:

This is the first agreement to specifically address significant non-tariff trade barriers restricting our export growth as well as promoting significant opportunities within the region. It also provides a template for future agreements.

The media release said:

Ratification of the Agreement will send a strong message on the importance of the TPP and WFA has called on all parties to get behind the Free Trade agenda.

The worst thing for the prosperity of the Australian people will be to embrace protectionism. We need strong export growth and trade liberalisation through Free Trade Agreements is key to our success.

Further support comes from the Export Council of Australia, which said:

Australia … cannot afford to go backwards on trade.

The following lines are from its media release on 24 January:

In Australia, jobs are best created and protected over the long term through an open and competitive economic system.

Further increasing opportunities for Australian companies to trade and invest around the world is crucial to unlocking our economic potential, and to ensuring jobs for Australians today and tomorrow.

Australia simply cannot afford to go backwards on trade.

…   …   …

In the current international environment, the lack of support for agreements such as the Trans Pacific Partnership … from the new US administration does not have to mean the end of the agreement. Rather, this can present a new opportunity for Australia and other like-minded nations to take the lead on creating new market openings for our companies, and ensure the jobs and prosperity of tomorrow are as secure as possible.

Australia must therefore continue to pursue new liberalising trade deals, as well as other international agreements that prioritise the interests of prosperity-creating SMEs.

On behalf of all SMEs, the ECA stands behind the Australian government’s focus to pursue an alternate agreement under the TPP framework.

Finally, the peak sugarcane farming group CANEGROWERS said:

… growers were disappointed that US President Donald Trump had chosen to formally withdraw from the 12-nation trade agreement process.

They said:

The big prize that we have lost is an improved framework for selling sugar in the Asia-Pacific for the foreseeable future and the opportunity of moving towards selling up to 500,000 tonnes to the US in the future.

They said:

CANEGROWERS is urging the Australian Government to continue to work to close the TPP deal with the 11 other Pacific nations involved.

… We have been encouraged by the discussions between Australia and Japan recently and the Prime Minister’s talk of a revised TPP…

… This US decision puts greater importance on the other avenues Australia is negotiating for improved trade access – a stronger deal with China, the Asia-focused Regional Cooperative Economic Partnership and free trade agreements with the European Union and United Kingdom.

It is important to remember that uncertainty around the TPP has not stopped the government taking forward its trade agenda.

The Indonesian and Australian governments have agreed to conclude the Indonesia-Australia Comprehensive Economic Partnership Agreement by the end of this year. Australia is pushing for an ambitious Regional Comprehensive Economic Partnership—the RCEP. Like the TPP, RCEP is a megaregional trade agreement involving 16 countries, including China, Korea, Japan, India and ASEAN countries. It includes nine of Australia’s 13-largest trading partners. The RCEP countries account for around half the world’s population and a third of the global GDP. A successful RCEP has the potential to boost regional economic confidence and integration. ASEAN, which celebrates its 50th anniversary next year, is at the centre of the RCEP negotiation. Australia wants to reach a successful conclusion with ASEAN and the other major regional economies of the RCEP agreement: China, Japan, Korea, India and New Zealand. Concluding a comprehensive, forward-looking RCEP agreement will send a strong signal about the economic future of the region.

Considerable progress has been made on the trade and services agreement between 50 economies, with 23 parties, including the EU, and 28 WTO members. The government have also made clear our intention to broaden and deepen our trade and investment relationships with both the EU and the UK. We are continuing to work on a free trade agreement with India. The government will also seek to make the most of the valuable agreements already in place, including the trade agreements with Korea, China and Japan.

I have seen and heard firsthand many of the success stories due to the free trade agreements which we have already signed. In Western Australia, I visited the world’s biggest exporter of rock lobsters: the Geraldton Fishermen’s Co-operative. Australia’s free trade agreement with China saw the tariff on fresh or chilled rock lobster cut to nine per cent in 2016, and it fell to six per cent on 1 January this year. For the first nine months of 2016, direct Chinese imports of live, fresh and chilled Australian rock lobsters almost trebled compared to the same period last year, reaching $28 million. On 1 January this year, further tariff cuts on more than 7,000 Australian products came into effect, creating more export opportunities for Australian businesses.

These wide-ranging tariff cuts are continuing to deliver a competitive advantage for businesses, including those in my electorate of Hinkler. Bundaberg, in the northern part of my electorate, is now the largest macadamia-growing region in this country. The tariff on shelled macadamias was 30 per cent before KAFTA. It was cut to 12 per cent, and it is now being cut further to six per cent. Almost $10 million worth of macadamias were exported to Korea between January and September in 2016, with Australian exports now triple those of two years earlier. These are just a few of the many benefits Australian businesses are seeing from FTAs. The coalition government will continue to advocate for what is in the national interest; the benefits of the TPP are no different.

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