Jun 24, 2004

US Free Trade Agreement Implementation Bill 2004 Cognate Bill


24 June 2004

Mr ALBANESE (Grayndler) (12.50 p.m.) —I rise to support the second reading amendment moved by my colleague the member for Rankin and to make a contribution to this very critical debate on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004, which will impact on not just the people currently in Australia but also future generations of Australians. If we are going to enter into a free trade agreement with an economy such as the United States—an agreement where Australia’s GDP is something like four per cent of it—we need to be very clear that it is indeed a good agreement and that it is in Australia’s interests. So we need to have the ability to examine the detail, and Labor is committed to examining the detail and making a decision on whether to accept or oppose the Australia-US free trade agreement based upon what is in Australia’s interests. The government has attempted to portray that view as somehow being anti-American. Nothing could be further from the truth. It is indeed a pro-Australian attribute that one would hope all members of the Australian House of Representatives and the Australian Senate hold.

We have seen this legislation rushed into this parliament in order to pressure Labor into making a decision prior to the Senate committee handing down on 12 August its report resulting from the inquiry. Of course, this is well before the government’s proposed imple-mentation date for the free trade agreement of 1 January 2005. Indeed, the US Congress is unlikely to vote for the Australia-US free trade agreement until mid-July. Based on the government’s logic, the US Congress is anti-Australian and anti-American for actually wanting to consider the detail and to see if it is an agreement which the United States is prepared to support. [start page 31504]

This legislation fails critical tests. For months we have been asking for the detail on the appeal mechanism to examine unsuccessful drug-listing applications by pharmaceutical companies. In spite of that, there is still no detail in this legislation as to how that appeal mechanism will be funded, who will participate in the committee or what the structure of the committee will be—the very details which are absolutely vital if we are to be able to make an informed decision on the impact of the agreement on the price of pharmaceuticals. That is just one aspect of the agreement in which this legislation is inadequate.

Labor will only support the agreement if it is in Australia’s interests. We will not be rushed into a decision, a decision that will impact on future generations of Australians. We certainly will not be intimidated by the government’s unsophisticated, crude attempts to portray the opposition as anti-US and to somehow link the agreement with our attitude towards the Australia-US alliance, an alliance forged by the Australian Labor Party and supported by the Australian Labor Party for more than five decades. The linking of trade with national security issues raises many questions about the government itself.

Labor will make a decision on the merits of the agreement, and those merits perhaps can be character-ised as two primary issues: firstly, the economic impact of the agreement; and, secondly, the social impact of the agreement. On the economic impact, the govern-ment engaged consultants, CIE, to give a report based upon what the economic benefits of this agreement would be. The consultant’s report said that there would be some quite extraordinary benefits for the Australian economy. Of course, this assumed that there would really be a free trade agreement in agriculture—something that the members who represent sugar electorates in Queensland and New South Wales said was absolutely critical to the agreement. Of course, sugar was excluded from the free trade agreement because it was not in the interests of the United States.

Mrs De-Anne Kelly —We got a better outcome. It is a good package.

Mr ALBANESE —The member for Dawson has given up on the interests of her sugar growers. They have a package in which a whole lot of money has been transferred in order to get people out of the sugar industry. The second issue of course is beef. The limited access to beef markets after 18 years is also a severe re-stric-tion on the agricultural benefits of this agreement.

The government, in spite of their rhetoric prior to going away and being feted by the US negotiators, came back, literally with their tail between their legs, and said, `We’ll have to do a reassessment because the whole basis of the benefits of the agreement was something that is not even there.’ So the CIE—surprise, surprise—were engaged to do another study for the government. It is interesting that the same company got to do both models on behalf of the government. The second time around, they came up with more benefits for manufacturing and other sectors of the economy than they had the first time around, in order to compensate for the fact that agriculture was not there.

A number of economists question this report and argue that essentially the government is exaggerating the benefits of this agreement and is downplaying the losses. Professor Ross Garnaut in fact has said that this report fails the `laugh test’, as he put it. We need to be sceptical about what the economic benefits of this agreement are. [start page 31505]

With regard to employment, I am concerned about the impact of this agreement, particularly on manufacturing in Australia. Much of the recent growth in the economy has occurred in areas seen as being part of the new economy. But if Australia does not retain a vibrant, growing manufacturing sector the impact on overall economic growth—as well as the specific impact on those who gain employment in that sector—will be quite devastating. With regard to manufacturing, one issue that comes up is government procurement. At the moment, governments are able to gain access to markets and gain advantages for Australian manufacturing through purchasing policy. If that is outlawed there will be a very negative impact on jobs in Australia.

Peter Brain of the NIEIR has estimated the potential loss in manufacturing areas to be some $49.6 billion, and in his assessment there may well be some 17,000 fewer jobs per year as a result of changes to government procurement policy and from tariff cuts in areas such as TCF and motor vehicles and parts. These are good jobs for Australians that would be lost. The largest single employer in my electorate, Tristar—which is located in Marrickville—produces suspension and other parts for motor vehicles. I am very concerned about the impact on jobs not just in my electorate but in the whole of the Australian economy. We cannot continue to grow and be a successful economy if we have a situation whereby we simply rely upon agricultural products and other non-manufacturing sectors.

The other issue that raises concern when it comes to the economic impact of this agreement is the impact on pharmaceuticals. I have raised that briefly already. But what we have seen in the United States is the very explicit use of courts and legal proceedings to stop competition coming in—particularly competition from generic drugs. That has a negative impact not just on the economy and on jobs and on the prices of pharmaceuticals but also on the types and quality of pharmaceuticals produced. Many companies tend to spend more money trying to protect their market share and trying to stop cheaper products which have exactly the same health benefits coming onto the market than acting in the public good.

There are other economic concerns in the agreement. The reduced right to review foreign investment in Australia is of considerable concern. There will also be restrictions on regulation of investment and services. The Senate committee is arguing very much over issues such as what the impact of this agreement will be on water and other regulated essential services. Indeed, a side letter of the agreement speaks about Telstra being fully privatised. That is a matter for this parliament and the Australian people, not a matter that the United States should have a determining influence over. That highlights the loss of sovereignty which can occur under an agreement that is not closely scrutinised to ensure that it is in Australia’s interests.

Indeed, one of the concerns is political sovereignty. The trade tribunal will look at disputes over future legislation. When it examines that future legislation it will determine whether there is a breach of the agreement and therefore the potential imposition of trade sanctions. That will not be on the basis of whether there is some economic, social or cultural benefit to Australia but simply on the basis of the impact on trade. That will restrict our future political sovereignty and our ability to determine legislation based upon our own interests.

The final concern I wish to outline is the concern over our cultural sovereignty. Australia, as an island continent, has a unique culture and one which we should cherish. The arts and cultural community do a superb job, often against the odds, to make sure that Australian voices are heard. I am proud that there are more people who work in the arts living in my electorate than in any other electorate in Australia. This agreement would limit, or cap, the Australian content provisions that are currently in free-to-air commercial TV, radio broadcasting and subscription television to the current levels which have been determined by past Australian parliaments. But it also completely restricts Australian content rules in new media. [start page 31506]

Thirty years ago, it would have been inconceivable that the computer sitting on your desk could look up the Internet, send messages, log on and watch just about any parliament in the world live and send the program to someone’s phone so that they can watch it. These days you can send it to someone’s wristwatch so that they can watch it. We do not know what form new media will take over time, but this agreement says that there will be no Australian content rules on this new media. If, in the future, the Australian parliament decides that this is a problem—because no-one is watching TV or other forms of media in which there are current Australian content rules—the government can then ask for a reconsideration to see whether it will be allowed to put in Australian content rules. This is one of the biggest concerns. There are 15 countries that have regulated new media. So we should be allowed to make sure that we are not making decisions that take away the rights of future generations.

I believe that the details of this agreement must be scrutinised, and we must make an assessment based on Australia’s economic, social and cultural interests. If the concerns can be addressed and the agreement stacks up, we should adopt it. But, if not, we should reject it as not being in Australia’s interests. (Time expired)