1. Introduction

Overview

1.1Throughout the inquiry, evidence reflected the significance of international trade and investment to Australia, noting that it forms the basis for the success of many Australian industries and contributes to increased living standards. Australia’s trade is underpinned by an extensive architecture of trade and investment agreements, which are negotiated by the Department of Foreign Affairs and Trade (DFAT).

1.2Submitters and witnesses widely emphasised the importance of Australia’s trade and investment agreements being in the national interest or providing a net benefit. Some raised concerns with the current approach to assessing the national interest, with regard to how broad impacts are considered, how costs are identified, and the need for analysis to be independent. Subsequently, suggestions were made for broad and independent economic, social, and environmental impact assessments to assist in determining whether trade agreements are in the national interest.

1.3The Committee received evidence proposing that Australia’s trade and investment agreements should be consistent with its commitments to human rights, labour, and the environment, including specifying commitments to relevant international standards. Some raised concerns with the inclusion of non-trade provisions in Australia’s trade agreements, suggesting that such objectives are best achieved through other mechanisms, or that they may increase barriers to trade and have negative impacts on domestic industries.

1.4Submitters and witnesses outlined the importance of public interest regulation and raised concerns that the inclusion of certain provisions in Australia’s trade and investment agreements may restrict or undermine the Australian Government’s ability to act in the public interest across a range of policy areas. It was widely proposed that stronger safeguards are needed including specific exemptions in agreements and the exclusion of certain provisions from agreements.

1.5The Committee received evidence outlining a range of priorities and considerations for Australia’s approach to trade. Some identified the need for new trade agreements and better utilisation of existing agreements to continue to build export opportunities. Others discussed that the multilateral framework and rules-based trading system is in Australia’s best interests, while some noted the benefit of the bilateral and plurilateral approach in the absence of progress at the multilateral level.

1.6During the inquiry, evidence was provided in relation to the benefits of enshrining the content of trade agreements in a legislative framework, as well as the suitability of a legislative approach and key considerations and risks.

About this inquiry

Objectives and scope

1.7On 9 August 2023, the Joint Standing Committee on Trade and Investment Growth (the Committee), adopted the inquiry following a referral from Senator the Hon Don Farrell, Minister for Trade and Tourism.

1.8Throughout the inquiry the Committee received substantial evidence proposing how the Australian Government’s approach to negotiating trade and investment agreements could be improved with regard to both the process for developing agreements and the content of agreements.

1.9The Committee published an interim report for the inquiry on 6 February 2024 titledInterim report: Inquiry into the Australian Government's approach to negotiating trade and investment agreements(Interim Report). The Interim Report provided an examination of the evidence proposing the need for greater transparency, accountability, and oversight in the process for negotiating trade agreements, with a focus on stakeholder consultation and engagement, the provision of information to the public and the role of the Parliament. The Interim Report made five recommendations to strengthen the Australian Government’s approach to trade negotiations and contribute to better outcomes for Australia.

1.10The Committee’s final report builds on the Interim Report to explore the evidence relating to the content of trade and investment agreements, with particular consideration given to determining that agreements are in the national interest, upholding international standards in relation to human rights, labour, and the environment, and protecting the ability of the Australian Government to regulate in the public interest across a range of policy areas. It also reflects on evidence outlining priorities, focus areas and considerations for Australia’s future approach to trade and considers the suitability of a legislative framework for the content of Australia’s trade and investment agreements.

1.11In undertaking this inquiry, the Committee acknowledges the strong track record of the Department of Foreign Affairs and Trade (DFAT) over many years in negotiating Australia’s extensive architecture of trade and investment agreements.

1.12Overall, as noted in the Interim Report, the Committee is of the view that the Australian Government’s approach to the negotiation of trade and investment agreements has served Australia well and largely remains fit for purpose. However, the Committee believes that Australia’s approach to trade can be strengthened by more robust processes for determining that agreements are in the national interest, as well as certain protections that uphold core values and retain the Australian Government’s ability to regulate in the public interest. Such improvements would contribute to trade agreements that ensure greater opportunities and benefits for more Australians.

Conduct of the inquiry

1.13On 10 August 2023 the Committee issued a media release to announce the inquiry and call for submissions. The Committee invited submissions from a range of people and organisations with an interest in Australia’s approach to negotiating trade and investment agreements by 22 September 2023. This included federal and state government departments and agencies, industry groups and peak bodies, think tanks, academics, unions, and the general public.

1.14The Committee received 54 submissions and an additional 11 supplementary submissions. The full list of submissions and other additional information presented to the inquiry are available in Appendix A.

1.15The Committee held eight days of public hearings:

• 13 September 2023 in Canberra, ACT
• 20 October 2023 in Canberra, ACT
• 3 November 2023 in Melbourne, VIC
• 15 November 2023 in Canberra, ACT
• 1 December 2023 in Canberra, ACT
• 13 December 2023 in Canberra, ACT
• 1 March 2024 in Canberra, ACT
• 14 March 2024 by videoconference.
  16. A list of witnesses who attended these public hearings is available in Appendix B. Transcripts for all public hearings can be found on the Committee’s website.

Acknowledgements

1.17The Committee would like to thank everyone who provided written submissions and gave evidence at public hearings.

Report structure

1.18This report is structured in seven chapters, including this introduction:

• Chapter 2 highlights the benefits of trade and investment for Australia and the importance of open trade to many Australian industries. It also provides an overview of Australia’s trade and investment agreement architecture and notes some key factors that have shaped the context for Australia’s trade negotiations over time.
• Chapter 3 focusses on the need for trade and investment agreements to be in the national interest and how the national interest is determined. It discusses the current approach to determining the national interest and assessing economic impacts and reviews proposals for broader economic, social and environmental impact assessments in determining the national interest.
• Chapter 4 details views on the inclusion of international standards in relation to human rights, labour and the environment in Australia’s trade and investment agreements to ensure that trade does not undermine international commitments, that domestic industries are not subject to uneven competition, and the potential for trade agreements to improve conditions. It also considers that social and ethical objectives may be more appropriately achieved by other mechanisms, as well as concerns about negative impacts arising from the inclusion of non-trade provisions on domestic industries.
• Chapter 5 identifies the importance of public interest regulation and summarises concerns that provisions in Australia’s trade and investment agreements may restrict or undermine the Australian Government’s ability to act in the public interest in certain policy areas including investor state dispute settlement provisions, creative and cultural industries, government procurement, digital trade and e-commerce, and intellectual property rights.
• Chapter 6 provides an overview of a range of priorities, focus areas and considerations raised by submitters for Australia’s future approach to trade. It covers the need for new and upgraded trade agreements to secure market access and better facilitating trade opportunities under existing agreements. It also discusses types of trade agreements and reform, including the preference for a multilateral approach, and the role for bilateral and plurilateral agreements.
• Chapter 7 considers the benefits of a legislative approach to the content of Australia’s trade and investment agreements and outlines evidence relating to the suitably of a legislative approach.