- Human rights, labour and environmental standards
Overview
4.1The Committee received evidence proposing that Australia’s trade and investment agreements should be consistent with its commitments on human rights, labour, and the environment. Further, some were of the view that Australia’s trade agreements should specify and include binding commitments to relevant international standards and conventions regarding human rights, labour, and the environment.
4.2Submitters suggested that the inclusion of international standards would ensure that Australia’s trade activity does not undermine its values and commitments by contributing to increases in the violation of human rights and labour rights, as well as environmental destruction. Further, to ensure that domestic producers and workers are not subject to increased competition from countries without commitments to such standards. It was also noted that international trade has the capacity to advance social and ethical objectives such as sustainable development, improving gender equality, contributing to climate change goals, and enhancing animal welfare.
4.3On the other hand, some raised concerns with the inclusion of non-trade provisions in Australia’s trade and investment agreements. It was suggested that social and ethical objectives may be better and more appropriately achieved through other mechanisms, while others noted that the inclusion of the policy objectives of trading partners can increase barriers to trade and may have negative impacts on domestic industries. This was particularly raised in relation to the impact of some sustainability and environmental provisions on Australia’s agricultural sector.
Upholding international standards
4.4The Australian Fair Trade and Investment Network (AFTINET) contended that trade policy should be consistent with, and not undermine, Australia’s commitments on human rights, labour, and the environment.
4.5To that end, some submitters specified that commitments to relevant international standards on human rights, labour, and the environment should be included in Australia’s trade and investment agreements. For example, AFTINET stated:
To ensure that the benefits of trade are shared both globally and nationally, and that environmental standards are protected, trade agreements should be underpinned by commitments to agreed international United Nations [UN] and International Labour Organisation [ILO] standards on human rights, labour rights and environmental standards including agreements on Indigenous Peoples’ rights and climate change.
4.6Submitters in favour of including specific commitments to relevant international standards generally suggested that Australia should not enter into trade agreements without such commitments, and some added that it should be a legislative requirement.
4.7There was also a focus on the need for the inclusion of human rights, labour, and environmental standards in trade agreements to be binding and underpinned by robust enforcement mechanisms. For example, ActionAid Australia recommended that Australia’s agreements include an accessible mechanism to enable workers and communities to seek redress for human rights and environmental violations.
4.8Both AFTINET and CPSU-SPSF Group emphasised that Australia’s agreements should not undermine international standards by facilitating increased trade with countries without commitments to those standards. CPSU-SPSF Group explained that:
Whilst trade does offer opportunities to improve the living standards of Australia, trade must be fair and not do so at the expense of labour, environment or human rights here or elsewhere… agreements without requirements for human rights, environmental and labour standards simply allow a trade agreement to reward a race to the bottom…
4.9CPSU-SPSF Group also suggested that some trade agreements have operated in conflict with Australian Government policy priorities by enabling lower labour and manufacturing standards, greater preferential migration flows, and an increase in imported goods with reduced environmental standards. As an example, it referred to the Australia-India Economic Cooperation and Trade Agreement (A-IECTA) stating that India: ‘… has a well-documented presence of child and (forced) labour, making significant contributions to the population of the world in modern slavery. Meanwhile Australian jurisdictions have all been legislating to combat modern slavery.’
4.10The Department of Foreign Affairs and Trade (DFAT) advised that Australia’s: ‘…more recent agreements include a range of provisions which promote a positive agenda on issues such as the environment and protection and promotion of labour rights.’ It specified that of Australia’s 18 trade agreements in force, five have environment and labour chapters.
Human rights, rights of indigenous peoples, gender equality and sustainable development
4.11Many submitters and witnesses broadly emphasised the need for Australia’s trade and investment agreements to be consistent with international commitments to human rights.
4.12AFTINET and the Australian Council of Trade Unions (ACTU) specified that Australia’s trade agreements should include enforceable commitments to UN human rights conventions and declarations, including:
- The Universal Declaration of Human Rights
- The International Covenant on Civil and Political rights
- The International Covenant on Economic, Social and Cultural Rights
- The UN Convention on the Elimination of All Forms of Racial Discrimination
- The UN Convention on the Elimination of All Forms of Discrimination Against Women
- The Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment
- The Convention on the Rights of the Child
- The Convention on the Rights of Persons with Disabilities
- The UN Declaration on the Rights of Indigenous Peoples.
- The Public Health Association of Australia (PHAA) and ActionAid Australia referred to the need for assessing the impact of trade and investment agreements on human rights to identify, understand and respond to issues as part of broader independent economic, social, and environmental impact assessments (discussed further in Chapter 3).
- In addition to broad alignment with human rights, some submitters specifically referred to the need for trade agreements to be consistent with Australia’s domestic and international commitments on the rights of indigenous peoples, gender equality and women’s rights, and encouraging sustainable development.
Rights of indigenous peoples
4.15Several submitters raised the importance of ensuring that Australia’s trade and investment agreements protect the rights of First Nations people and are consistent with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP). AFTINET explained that fundamental rights contained in UNDRIP should not be compromised by trade agreements including the right to non-discrimination, cultural recognition, protection of land rights and the minimum standards for the survival, dignity and well-being of indigenous peoples.
4.16Union Aid Abroad-APHEDA and the ACTU underscored that trade agreements must safeguard the right to free, prior and informed consent. Public Services International (PSI) suggested that agreements with any potential to undermine indigenous rights and priorities should include a comprehensive exemption that retains Australia’s ability to adopt or maintain measures necessary to protect or promote the rights and interests of First Nations people, including fulfilling obligations under legal, constitutional or treaty arrangements.
4.17The Australian Nursing and Midwifery Federation (ANMF), AFTINET and PSI specifically drew attention to the potential impact of investor state dispute settlement (ISDS) provisions on the rights of First Nations people, including the right to free, prior, and informed consent about investment in projects on traditional lands. In the context of global ISDS cases that have undermined indigenous peoples’ rights, AFTINET observed that: ‘… While there are some exemptions in Australian trade agreements for laws relating to Aboriginal and Torres Strait Islander communities, there is no general exemption which would totally exclude a similar ISDS case.’ ISDS provisions are considered further in Chapter 5.
4.18ActionAid Australia noted that human rights impact assessments should include assessment of the impact of trade agreements on First Nations people and Australia’s obligations under UNDRIP.
Gender equality and women’s rights
4.19Some submitters drew attention to the impact of international trade on gender equality and women’s rights and advocated for Australia’s trade agreements to better reflect commitments to improve gender equality outcomes.
4.20ActionAid Australia observed that while international trade can make a positive contribution to gender equality, trade agreements designed without consideration of gender impacts can worsen outcomes for women. It specified that trade rules that reduce workers’ rights, facilitate the privatisation of public services, and reduce access to affordable medicines can particularly exacerbate gender inequities in the economy and increase poverty among women.
4.21ActionAid Australia detailed the importance of employment to gender equality and pointed to the potential effect of international trade on women’s employment, such as in export-oriented manufacturing sectors that are characterised by insecure work, poor working conditions, and few entitlements. It elaborated that:
Australia should take this opportunity to lift women workers out of poverty by ensuring that Australia’s trade agreements include enforceable labour rights provisions that support the transformation of women’s work by progressing the realisation of decent employment and living wages, alongside a wider action to mandate Australian companies to undertake human rights due diligence across their supply chains.
4.22It was observed that increased transparency in the process for negotiating Australia’s trade agreements, as well as improved consultation with civil society and experts in women’s rights is important to ensure provisions that may result in negative impacts for women are identified and addressed. Several submitters also underscored the importance of assessing the impacts of trade and investment agreements on gender equality to identify, understand and respond to issues as part of broader independent economic, social, and environmental impact assessments (discussed further in Chapter 3).
4.23ActionAid Australia welcomed recent steps to improve the gender-responsiveness of Australia’s trade policy, including the move to include gender chapters in trade agreements, while also emphasising that gender chapters need to be enforceable under dispute resolution processes.
4.24DFAT advised that the Australia-United Kingdom Free Trade Agreement (A-UKFTA) contains the first ‘trade and gender equality’ chapter for Australia and outlined Australia’s approach to the inclusion of gender quality provisions in trade agreements:
Australia supports the inclusion of gender equality provisions in trade agreements, where such provisions reinforce the relevance and importance of gender equality to trade, investment and economic prosperity.
Australia’s objectives for gender equality provisions in trade agreements include commitments to gender equality (including incorporation of our international commitments) and women’s economic empowerment through trade; enhanced cooperation activities with our trading partners to improve capacities and conditions for women, including for women-led businesses; and establishing a forum for dialogue on trade and gender equality.
Sustainable development
4.25Several submitters drew attention to the potential for international trade to contribute to improved sustainable development outcomes and advocated for Australia’s trade policy to better support its development objectives. For example, ActionAid Australia explained that trade can have a positive impact on sustainable development, however it can also lead to unequal social and economic outcomes, undermining progress towards the Sustainable Development Goals (SDGs).
4.26Union Aid Abroad–APHEDA and ActionAid Australia were of the view that there should be greater alignment between Australia’s trade policy and the objectives under Australia’s new International Development Policy. Union Aid Abroad-APHEDA stated that: ‘… there is clearly no benefit in negotiating trade agreements that undermine development goals’ and called for Australia to set a new bar for fairer trade agreements to ensure that: ‘… trade negotiations serve Australia’s development policy as much as its trade policy.’
4.27AFTINET, Union Aid Abroad–APHEDA and the ACTU suggested that Australia should work with developing country trading partners and provide resources through its Official Development Assistance (ODA) programs to adopt, develop and implement international standards on human rights, labour, and the environment. The ACTU proposed that:
In addition to working with partner governments to lift labour standards, the Australian Government should support programs through Official Development Assistance (ODA) that enhance and resource the capacity of unions to protect workers’ rights, including promoting and supporting ILO standards, monitoring and assisting in the enforcement of clauses in labour chapters in trade agreements, and engaging with temporary migrant workers, including pre-departure and on return from Australia.
4.28DFAT advised that Australia’s regional and multilateral economic cooperation is an important tool for delivering development assistance in the Indo-Pacific. It explained that:
Australia’s aid for trade supports partners to implement their FTA [free trade agreement] obligations and integrate into the rules-based multilateral trading system, with the WTO [World Trade Organization] at its core. Areas of support include economic infrastructure, trade and investment regulations and standards, trade facilitation, supply chain resilience, and inclusive access to international markets and trade finance.
4.29DFAT highlighted the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) as a regional, development-centred and comprehensive agreement covering goods, services and investment. It also outlined Australia’s $46 million contribution through the Regional Trade for Development initiative to provide technical assistance and capacity building – with a particular focus on the needs of lesser developed ASEAN [Association of Southeast Asian Nations] members Cambodia, Laos and Vietnam – to support implementation of commitments under the RCEP [Regional Comprehensive Economic Partnership] and the A-A-NZFTA [ASEAN-Australia-New Zealand Free Trade Agreement].
Labour rights
4.30Many submitters advocated for Australia’s trade agreements to better support internationally agreed labour rights. For example, PSI stated that: ‘Trade and investment agreements should be protecting and promoting internationally committed labour standards and should not be lowering current domestic labour and employment rights, occupational health and safety legislation and standards.’
4.31It was broadly argued that labour rights should be included in Australia’s trade and investment agreements to ensure that domestic producers are not subject to competition from countries with lower labour standards and to avoid contributing to further exploitation of workers in those countries. For example, the ACTU explained that trade should not be a ‘race to the bottom on workers’ rights’ and contended that the inclusion of enforceable labour rights is important in setting a level the playing field to ensure that companies cannot just locate themselves in jurisdictions with lower wages and conditions.
4.32Similarly, the Electrical Trades Union (ETU) submitted that including international labour rights in agreements: ‘… protects Australia from perverse outcomes such as domestic production being undercut by exploited overseas workforces or the erosion of our own labour standards at home.’ PSI also stated that including core labour rights in agreements would ensure: ‘… that governments are not encouraged to utilise low wages, poor conditions, insecure work and an absence of effective trade unions as a competitive advantage.’
4.33Some also focussed on the role that ensuring commitments to international labour rights in trade agreements can play in lifting working conditions and improving economic development in partner countries. DFAT advised that the promotion and protection of international labour standards in Australia’s trade agreements does contribute to economic growth and development in partner countries.
4.34Ms Michele O’Neil, President of the ACTU, outlined how Australia’s trade policy has implications for overseas workers, noting that the decline in Australia’s textile, clothing and footwear industries resulted in domestic jobs being shifted to countries with low labour standards. Further, Ms O’Neil told the Committee that:
The ultimate result of that was over 1,100 garment workers, mainly young women, were killed when Rana Plaza collapsed on them. They were sewing clothes for export into Australia and many other countries that had done trade changes resulting in that work going to Bangladesh. So this is a very human consequence. We can’t say that we don’t have a responsibility in terms of workers’ rights both in Australia and internationally.
4.35The ACTU raised concerns that the RCEP between the ten members states of the ASEAN and Australia, China, Republic of Korea, Japan, and New Zealand (NZ) contains no labour or human rights provisions. It noted that: ‘… over half of the 15 countries party to RCEP are ranked among the worst countries in the world for workers’ rights.’ The ETU also suggested that many of Australia’s trade agreements, including those with China, India, Indonesia, and Malaysia, do not recognise international labour rights.
4.36Submitters proposed that Australia should not enter trade agreements with countries that violate international labour rights and that it should require countries to demonstrate commitments to such rights. For example, the ACTU submitted that: ‘The Australian Government should require potential trading partners to demonstrate respect for fundamental workers’ rights before agreeing to negotiate a deal with them.’
4.37Several submitters advocated for Australia’s trade and investment agreements to include a labour chapter that aligns with commitments made to ILO core conventions. The ANMF, AFTINET, the ETU and the ACTU specified the need for agreements to reference the following ILO conventions:
- The right of workers to freedom of association and the effective right to collective bargaining (ILO Conventions 87 and 98)
- The elimination of all forms of forced or compulsory labour (ILO Conventions 29 and 105)
- The effective abolition of child labour (ILO Conventions 138 and 182)
- The elimination of discrimination in respect of employment and occupation (ILO Conventions 100 and 111)
- A safe and healthy working environment (ILO Conventions 185 and 187).
- The ETU and the ACTU were of the view that labour chapters in some of Australia’s trade agreements, such as the Australia-United States Free Trade Agreement (A-USFTA) are not effective because they do not reference core ILO conventions when defining internationally recognised labour rights. The ACTU further suggested that labour chapters in some of Australia’s current agreements are not effective due to narrow provisions meaning the burden of proof required is too high to be practical, no reference to core ILO conventions, lack of effective enforcement mechanisms, no role for unions and no avenue for workers to seek remedy for violations of their rights.
- Submitters that advocated for the inclusion of labour rights in trade agreements underscored the need to ensure that provisions are supported by strong enforcement mechanisms. For example, the ACTU stated that: ‘Australia must ensure robust, fully enforceable labour rights provisions in agreements it negotiates, with accountability mechanisms for governments and businesses. These provisions must be as enforceable as the rest of the trade agreement with material consequences if these commitments are not followed.’
- DFAT outlined that Australia seeks to include robust labour provisions in trade agreements, including: ‘… commitments to uphold internationally recognised labour rights through the adoption and enforcement of associated laws and standards and consultation on implementation issues.’ It added that ILO Declaration on Fundamental Principles and Rights at Work usually forms the benchmark for labour chapters in Australia’s more recent trade agreements.
- DFAT also highlighted that the proposed Australia-European Union Free Trade Agreement (A-EUFTA) includes ambitious and enforceable outcomes on labour issues and workers rights’ including: ‘… cooperation between Australia and the EU [European Union] on the inter-linkages between trade and employment, labour market adjustment, core labour standards, decent work in global supply chains, social protection and social inclusion, social dialogue, gender equality, and forced or compulsory labour.’
Environment, biodiversity, climate change and animal welfare
4.42Submitters and witnesses provided evidence in relation to the inclusion of environmental protections in Australia’s trade agreements, including biodiversity and conservation, sustainability, climate change, and animal welfare.
4.43Some submitters proposed that Australia’s trade agreements should reflect and contain commitments to international environmental standards. For example, in reference to the A-EUFTA, the Australian Alliance for Animals (AAA) proposed that the recognition of the importance of multilateral environmental agreements and the requirement for each party to implement the standards of such agreements should be specified in trade agreements.
4.44AFTINET and the ACTU specified that Australia’s trade agreements should include enforceable commitments to UN multilateral environmental agreements, including:
- The Montréal Protocol on Hydrofluorocarbons
- The International Convention for the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978
- The UN Convention on International Trade in Endangered Species
- The UN Convention on Biological Diversity
- The UN Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (in force as from 11 December 2001)
- The UN Framework Convention on Climate Change 1992, the Paris Agreement 2015, and subsequent Climate Change Agreements at COP 26 2021 and COP 27 2022.
- AFTINET stated that Australia’s trade agreements should not contain provisions that negatively impact on or undermine environmental standards by increasing competition from countries without commitments to those standards.
- Five of Australia’s 18 FTAs include an environment chapter: the A-USFTA, the Korea-Australia FTA, the Peru-Australia FTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the A-UKFTA. The upgraded A-A-NZFTA, expected to enter into force in 2024, contains a dedicated trade and sustainable development chapter.
- The AAA described the CPTPP as the most far-reaching agreement to which Australia is a signatory with regards to environmental protections. It noted that the agreement recognises the importance of multilateral environmental agreements in protecting the environment and includes provisions requiring parties to fulfil obligations under the Convention on International Trade in Endangered Species of Wild Fauna and Flora amongst other commitments.
- The Red Meat Advisory Council (RMAC) identified that the CPTPP and the A-UKFTA include provisions to ensure high levels of environmental protection. It added that the A-UKFTA includes provisions to allow Australia and the United Kingdom (UK) to collaborate on trade-connected environmental issues, such as climate change, the low-carbon transition, overfishing and illegal wildlife trade. The A-UKFTA also acknowledges the role of implementing international climate change treaties, such as the Paris Agreement, to support effective environmental protection.
Climate change
4.49The Committee received evidence that focussed on the interaction between international trade and global climate change commitments. Professor Margaret Young, Melbourne Climate Futures (MCF) at the University of Melbourne outlined the relationship between trade and greenhouse gas emissions, and argued that trade agreements have significant scope to support efforts to address climate change:
… trade is so heavily bound up with climate change. For example, the World Trade Organisation [WTO] has compiled figures that suggests that the greenhouse gas emissions generated by trade are, on average, 20 per cent to 30 per cent of global greenhouse gas emissions. This suggests that it’s within trade agreements and within trade relations between states that you can actually really harness the potential to reduce that very large proportion of greenhouse gas emissions.
4.50MCF submitted that Australia could enhance climate considerations in its trade negotiations to help realise the potential for agreements to contribute to climate change goals. It elaborated that this could be achieved through:
- Provisions to strengthen climate commitments, including net zero goals by advancing the mitigation, adaptation, and finance goals of the Paris Agreement.
- Provisions to facilitate trade and investment in climate-related areas such as the liberalisation of green goods and services and promoting low-carbon investments.
- Dispute resolution to ensure accountability and cooperation between parties to deepen engagement towards climate change goals.
- The German Australian Business Council (GABC) indicated that Australia has significant opportunities to benefit from an increase in climate-focussed international trade, particularly with regard to green hydrogen, and noted the need for a trade agreement between Australia and the EU to secure these opportunities.
- DFAT highlighted the Singapore-Australia Green Economy Agreement as a specific arrangement to progress green economy objectives and to support the transition to net-zero emissions. It noted that as a less-than-treaty level agreement, it does not include market access obligations or legally binding commitments.
Animal welfare
4.53RSPCA Australia advised that animals, animal products and animal by-products make up a substantial amount of Australia’s trade. In 2022, 39 per cent ($30 billion) and 26 per cent ($9 billion) of Australia’s exports and imports respectively included live animals, animal products and animal by-products.
4.54Several submitters advocated for a greater consideration of animal welfare in Australia’s trade agreements. The AAA noted the increasing importance of animal welfare in international trade and observed that: ‘… it has not traditionally featured in trade and investment agreements to which Australia is a party, nor has it been considered a high priority by Australian trade negotiators.’
4.55Both RSPCA Australia and the AAA identified the A-UKFTA as a recent exception that includes a dedicated animal welfare chapter. RSPCA Australia noted that the chapter recognises animal sentience, requires collaboration on animal welfare improvements, and includes a provision aimed at combatting the illegal trade of native animals.
4.56Dr Jed Goodfellow, Director of Policy at the AAA, suggested that Australia faces two key consequences if it does not give animal welfare greater consideration in trade:
… in the context of negotiating with trading partners which have lower standards of animal welfare compared to Australia. The risk there is that our domestic standards of production could be undermined by cheaper imports. In the context of negotiating with trading partners which have comparatively higher standards of animal welfare, the risk there is that we have market access issues for Australian exports.
4.57RSPCA Australia suggested that a lack of consideration of animal welfare in trade agreements: ‘… exposes Australia to reputational damage …’ and leads to the ‘… erosion of exporting industries’ social license to operate, and declines in consumer trust amongst national and international communities.’ Similarly, Dr Goodfellow told the Committee that during the A-UKFTA negotiations animal welfare concerns received significant media attention in the UK, which damaged the reputation of Australia’s agriculture industry.
4.58RMAC suggested that animal welfare organisations have misrepresented the nature of animal welfare practices in agriculture to harm Australia’s international reputation:
It is incredibly frustrating for the red meat industry to observe activist groups operating directly against our national interest as an agricultural exporting nation. These groups have sought to undermine Australian agriculture’s reputation internationally through their recent interventions associated with the United Kingdom and European Union free trade agreement negotiations. They generally present self-serving representations of the state of animal welfare or other sustainability matters in Australia that are not reflective of the reality or broader community views about agriculture and our production systems.
4.59RSPCA Australia, the AAA, and Humane Society International Australia (HSI Australia) recommended that DFAT formulate an animal welfare trade policy in collaboration with animal welfare groups to inform Australia’s trade negotiations. Ms Nicola Beynon, Head of Campaigns at HSI Australia, elaborated on the benefits of developing an animal welfare trade policy for Australia’s trade negotiations:
Setting such a coherent policy would have advantages for negotiators in that they would be approaching each new agreement with consistent goals and objectives, rather than being reactive and ad hoc in response to proposals from other countries. This would surely bring negotiating efficiencies. For example, when the EU first proposed animal welfare provisions for its FTA with Australia and then the UK it was quite novel for Australia, and Australia’s comparatively lower animal welfare standards caused difficulties in negotiations … The policy wouldn’t be static; it would evolve and learn from each negotiation, respond to precedents, and be regularly updated with public consultation.
Approach taken by the European Union
4.60Some submitters detailed elements of the approach taken by the EU to support and promote commitments to issues such as human rights, labour, and environmental standards in its trade agreements.
4.61The ACTU drew attention to the EU’s policy of requiring countries it negotiates trade agreements with to commit to implementing international labour and environmental standards through Trade and Sustainable Development Chapters (TSD). This requires countries to commit to implementing the Paris Agreement, obliges countries to implement basic workers’ rights and environmental standards, and promotes the respect of core human rights and workers’ rights standards set out in UN and ILO conventions. It also noted that plans are in place to enhance the inclusion of these rights and standards by introducing monitoring and compliance mechanisms, including the possibility of trade sanctions for breaches of core TSD provisions.
4.62The AAA described that the trade agreements currently under negotiation by the EU: ‘…reflect the EU’s approach to trade policy, which places a strong emphasis on values-based trade, particularly with respect to sustainable development – both in terms of labour rights and environmental protection.’
4.63The GABC described the EUs approach as developing a level playing field on labour and environmental laws that apply in other countries, in response to their impact on costs and competitiveness.
Inclusion of non-trade provisions
4.64DFAT advised that while Australia seeks to embed high-quality commitments on issues such as labour, gender equality, the environment and climate change in trade agreements, some trading partners may not regard trade agreements as an appropriate vehicle to advance these issues or may be reluctant to make binding commitments. It explained Australia’s approach when this is the case:
To this end, Australia has sought to demonstrate that maintaining high environmental, gender equality and labour standards need not harm economic competitiveness, but rather support shared economic prosperity. Effective advocacy, capacity building and cooperation activities are crucial to reinforcing and demonstrating such arguments. It can be difficult to overcome perceptions that trading partners that do not sign up to binding commitments on these issues have a competitive edge in regional value chains.
4.65On the other hand, the Department of Agriculture, Fisheries and Forestry (DAFF) observed that Australia’s trading partners are increasingly asking for sustainability and environmental objectives and conditionalities to be included in agreements, as well as adherence to multilateral environmental agreements.
4.66Some submitters were of the view that the inclusion of non-trade provisions in trade agreements (e.g. human rights, labour and environmental standards) is either not necessary or is detrimental to trade objectives.
4.67The Productivity Commission stated that: ‘… It is not clear why the objectives being targeted by the non-trade provisions of broad cooperation agreements are best addressed through inclusion in these agreements, rather than through other means.’ The Productivity Commission suggested that including non-trade provisions in trade agreements is often not the most effective way of pursuing policy objectives. It explained that: ‘More conventional means are often more effective, such as through diplomacy, other (that is, non-trade) agreements or through fora such as, for issues relating to labour standards and working conditions, the International Labour Organization [ILO].’
4.68The Productivity Commission also observed that including provisions aiming to achieve social and ethical objectives by requiring countries to adopt practices in the areas such as labour, environmental, and cultural and human rights risks increasing barriers to trade and investment.
4.69The National Farmers’ Federation (NFF) emphasised that trade agreements should only be about trade and with regard to the EU’s recent approach stated that: ‘FTAs should promote liberalisation, economic growth and expand market access. The NFF is very concerned about the government’s willingness to participate in the creation of an international norm which imports trading partners’ domestic policy agenda onto Australian shores.’
4.70Mr Kade Denton, General Manager, Trade and Economics at the NFF told the Committee that: ‘The EU does have a very determined approach to using their heft and their weight in international forums to push policies, especially in the sustainability space, that benefit them and that are in line with their worldview, potentially to the detriment of other countries.’
4.71The Productivity Commission noted the role of international trade in economic development and explained that non-trade provisions may reduce the potential economic benefits of trade: ‘… including broader issues within trade and investment agreements risks diverting the focus away from trade and investment and may well be counterproductive by stifling the economic development that would, in due course, bring about improvements in labour and environmental standards.’
Impact of non-trade provisions on the agriculture sector
4.72Several submissions raised concerns about the inclusion of non-trade provisions by trading partners that impose regulatory requirements on Australia’s agricultural exports. For example, the NFF expressed reservations about the inclusion of additional terms, such as sustainability requirements, within trade agreements that extend beyond market access and tariff reduction.
4.73DAFF identified that: ‘… market access requirements have become increasingly complex, with trading partners placing regulatory burdens that exporters must meet.’ It added that such conditions in biosecurity, food safety, animal welfare, sustainability, traceability and geographical indications could: ‘… lock Australia into meeting regulatory requirements that are not in the national interest and could effectively act as barriers to trade or place restrictions on domestic production.’
4.74The NFF advised that linking policy objectives to market access arrangements can occur through specific sustainability chapters or more directly through a conditionality clause relating to a certain objective, for example the NZ-EU FTA only allows the import of grass-fed beef into the EU. The NFF explained that linking sustainability provisions to market access may require Australian farming practices to change in order to access the trading partner’s market and that such provisions: ‘… cannot consider or account for the unique context of Australian production systems. Practice change driven by imported policy objectives rather than evidence-based research and on-farm decision-making will create unpredictable and adverse economic, environmental and social implications.’
4.75CropLife Australia contended that the EU’s Farm to Fork Strategy aims to control the use of crop protection products, such as chemical pesticides, within the territory of its trading partners. It added that to implement this measure, the EU considers environmental aspects when determining its import tolerances (that is, maximum residue limits) for pesticides no longer permitted in the EU. CropLife Australia outlined that:
This policy … undermines the ability of trading partners to maintain an [sic] increase food production and deliver measurable sustainability outcomes in a way that is suitable for their own production environment. This erodes the ability of the world to deliver global food security, reduce greenhouse gas emissions associated with global food production and protect the world’s unique environments.
4.76Mr Denton of the NFF outlined concerns that the inclusion of some environmental provisions in trade agreements can resemble protectionist measures:
We are concerned about it. How countries use environmental regulations, whether they're in the carbon reduction space or in the chemical space, and how they use them as protectionist measures or stealthy protectionist measures is a concern for us. We have a pretty strong position that there is opportunity to collaborate and there is opportunity that you can get from collaboration on these issues. They should be dealt with separately to trade agreements and they should be dealt with separately to market access.
4.77The Productivity Commission also noted that including certain non-trade provisions in agreements: ‘… may amount to protectionism by stealth.’
Committee comment
4.78The Committee believes that Australia has an obligation to uphold international standards in relation to human rights, labour, and the environment. Trade and investment agreements should be consistent with and not undermine commitments to internationally agreed standards in these areas.
4.79In alignment with Australia’s economic, social, and environmental values and interests, it is imperative to ensure that trade agreements do not undermine human rights and labour rights or cause environmental degradation in other countries. This is not only consistent with our international commitments, but helps to ensure that domestic producers are not undercut by cheaper imports which do not have to comply with more stringent standards.
4.80As such, the Committee is of the view that it is preferable that trade agreements should make reference to the same basic international rights and standards to which Australia has committed. This includes where appropriate, making specific reference and binding commitments to multilateral agreements such as ILO conventions and UN declarations to which Australia is a signatory.
4.81The Committee welcomes the inclusion of the chapters in the A-UKFTA relating to environmental protection, trade and gender equality, and animal welfare.
4.82The Committee suggests that it may not always be appropriate nor practical for Australia to use trade agreements as a vehicle to impose its values and interests on other countries. Broadly, the Committee considers that if Australia does not want the values and interests of trading partners imposed on it, then Australia should be careful about the values it seeks to introduce via trade agreements.
4.83The Committee also notes that in many cases, the inclusion of social and environmental objectives in trade agreements may be at the proposal of the other negotiating party. In this case Australia may not be able to avoid including such provisions if they are necessary to obtain an agreement.
4.84The Committee notes the suggestion that the inclusion of non-trade provisions such as social and environmental objectives has the potential to be used to conceal protectionist measures and that Australia must continue to be mindful of this in its approach to trade negotiations.
Recommendations
4.85The Committee recommends that the Australian Government seek to include human rights, labour and environmental chapters in its trade agreements that reflect, and where appropriate contain specific references to, relevant United Nations and International Labour Organization conventions and declarations to which Australia is a signatory.