Past is not the future for trade

Trade is a crucial element of the Australian economy. We live in a globalised world where economic developments in one part of the world ripple across the rest. Trading with other nations has always been important for our development and living standards.

Resources dug up and shipped off are what spring to mind when thinking about trade, however the importance of exporting services and tourism shouldn’t be overlooked.

With the very real possibility that in September a Coalition Government will come to power it is important to scrutinise the possible changes they will bring to Australia’s trade policy.

Their spokesperson Julie Bishop has stated there will be a return to the trade policies pursued by the Howard Government.

Arguably the Howard Government’s most significant trade ‘victory’ was the signing of the Free Trade Agreement with the United States of America in 2004. In many respects this agreement fell short of delivering free trade between the countries. Most barriers and tariffs to importation of US goods into Australia were removed, but there were no changes in US restrictions on imports of sugar from Australia and only small and slow changes on beef and dairy products. The US didn’t change their farm subsidy arrangement which has resulted in excessive supply of agricultural goods being dumped on world markets.

Also Australia agreed to extend the life of pharmaceutical patents. According to the draft report of the pharmaceutical patent review (released April 2^nd 2013) Australian extended these patents “without careful regard to whether this was in our own economic interest.”  As a result 70% of drug patents expire later in Australia than in other countries. This means the development of Australia’s generic drug manufacturing industry has been suppressed.

Are these the kind of trade outcomes Ms Bishop is talking about returning to the country to?

Ms Bishop in her article of 28 March 2013 in On Line Opinion states that the “Coalition would, as a matter of course put ISDS [Investor –State dispute resolution] clauses on the negotiating table.” She also criticises the Government for refusing to include these dispute resolutions provisions in any trade negotiations.

The Greens are supportive of the Government in this stance. ISDS provisions would allow a foreign corporation to sue a Government for public policy decisions, including those that support public health and the environment. Investment arbitrators would decide these cases with no requirement to consider the context in which the policies were developed or the interests of the Australian population.

In fact the Productivity Commission in their November 2010 research report Bilateral and Regional Trade Agreements recommended that the “the government should seek to avoid accepting provisions in trade agreements that confer additional substantive or procedural rights on foreign investors over and above those already provided by the Australian legal system. Nor is it advisable in trade negotiations for Australia to expend bargaining coin to seek such rights over foreign governments, as a means of managing investment risks inherent in investing in foreign countries. Other options are available to investors.”(pg. XXXII)

Where the Greens differ starkly from the Government and the Opposition in our trade policy is around the issue of transparency and appropriate analysis of the costs and benefits.

The Government is currently negotiating the Trans-Pacific Partnership Agreement (TPPA) a multilateral trade deal involving eleven countries, including the United States (Japan is seriously considering joining). Late last year the Government also announced the beginning of negotiations with another trade grouping of 16 countries including China called the Regional Comprehensive Economic Partnership (RCEP). Apart from the overlap issues – Australia and other countries are in both groupings – these negotiations are held with very little public scrutiny. For the TPPA we only know what is being discussed as result of chapters of the draft agreement being leaked.

On the table for the TPPA are issues such as investment provisions and intellectual property.  Clauses that could have large negative impacts on Australian industries and people the same way the Australia -US free trade agreement did. The Australian people deserve more of a look and a public debate on these clauses before they are signed off on by the Government.

The Greens also want all future Governments to provide parliament before negotiations start a statement setting out the anticipated costs and benefits of new trade agreements. This way the public can be part of a dialogue on the implications of trade agreements. The Greens have pressed the Government on this and they have agreed to develop a proposal for this to occur. 

Trade agreements shouldn’t be treated as diplomatic instruments with accompanying press opportunities to be wheeled out when convenient - they have serious implications for Australia.  Australians deserve to see analysis on what social, environmental and economic impacts these agreements may have on them and their community.

If the Coalition is to win Government in September I hope Ms Bishop reconsiders her statement about the Howard Government leading some golden era in trade agreements that we should go back to. There is most definitely room to improve through increased transparency and analysis, to ensure the trade -offs in agreements are appropriately recognised and discussed by the wider community.