6.1
During the inquiry, the Committee took evidence on a number of issues on wider trade and diplomatic matters related to the Regional Comprehensive Economic Partnership Agreement (RCEP), including:
human rights and labour standards, and in particular the current situation in Myanmar;
consultation and transparency during negotiations; and
trade agreement modelling.
Human rights and labour standards
6.2
A number of trade agreements Australia has ratified include provisions relating to human rights and labour standards. The Department of Foreign Affairs and Trade (DFAT) advised the Committee that Australia currently has labour or social rights articles within the body of five ratified trade agreements:
the Peru-Australia Free Trade Agreement;
the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP);
the Korea-Australia Free Trade Agreement;
the Australia-Chile Free Trade Agreement; and
the Australia-United States Free Trade Agreement.
6.3
According to DFAT, there was push back from nearly all other Parties to the inclusion of human, labour, and environmental rights provisions within RCEP in 2012 – as raised by the Australian Government at the beginning of the negotiation process – and the matter was not raised further.
6.4
However, DFAT confirmed at the public hearing on 10 May 2021 that:
There's nothing specific in the provisions on the general review of the agreement about the inclusion of provisions on trade and labour or trade and environment, but there's nothing that prevents us or any other party raising that issue. It's something that should be considered in the course of that general review should we wish to do so.
6.5
Several submitters criticised the lack of a labour or human rights chapter, or any protective articles within RCEP that might set a minimum rights standard.
6.6
According to the International Trade Union Confederation’s (ITUC’s) 2020 Global Rights Index, over half of the 15 countries party to RCEP are ranked as among the worst countries in the world for workers’ rights access.
6.7
ActionAid criticised the Government on its failure to commission independent gender and human rights assessments on RCEP, and expressed concerns about the effect of RCEP provisions on women in developing economies, including the prospect that the market access and national treatment provisions in RCEP could increase the power of international corporations, thus undermining workers’ rights, especially poorer women workers.
6.8
Dr Matthew Rimmer, also advised the Committee that ‘[t]he negotiation of RCEP again raises the question of how human rights should be taken into account in trade negotiations.’
Myanmar
6.9
The principal focus of attention in relation to human rights was the recent military coup and subsequent repression in Myanmar. Many inquiry participants were particularly concerned about Myanmar’s participation in RCEP.
6.10
Mr Damian Kyloh of the Australian Council of Trade Unions (ACTU) echoed the views of a these participants:
The ACTU does not believe the Australian government should be ratifying a trade deal with Myanmar while the Tatmadaw military junta is in power.
6.11
Mr James Baxter from DFAT responded to these concerns at the public hearing on 2 August 2021:
While we have consistently raised our concerns about the situation in Myanmar, and will continue to do so, it's a fact that Myanmar remains a member of ASEAN [Association of South East Asian Nations]. Stepping aside from RCEP, which has ASEAN at its core, would be perceived in our region as walking away from our commitment to ASEAN as a force for regional stability and prosperity and our support for ASEAN centrality.
6.12
Since the public hearing on 2 August 2021, ASEAN has appointed a Special Envoy who:
… will be tasked with ‘building trust and confidence with full access to all parties concerned’ with the aim of ending violence in Myanmar and opening dialogue between the military junta and its opponents.
6.13
The Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) presented a report on Australia’s response to the coup in Myanmar in June 2021. In that report, the JSCFADT noted:
… the advice by DFAT in May that the Australian Government has decided to not impose additional sanctions, taking into account their assessment that further sanctions would be detrimental to negotiations among ASEAN nations.
6.14
In response to this advice, the JSCFADT agreed, however, that the issue of additional sanctions does warrant further consideration, and recommended that:
… the Australian Government further consider imposing targeted sanctions upon additional senior figures in the Tatmadaw and Tatmadaw-linked entities … who have played a role in the overthrow of democracy and subsequent violent repression of protests.
6.15
The Committee encourages the Australian Government adopt this recommendation by the JSCFADT.
6.16
Submissions to the Committee highlighted the importance of enacting Magnitsky-style laws, and the relevance of these laws in responding to the situation in Myanmar.
Consultation and transparency
6.17
Various submitters have raised concerns about consultation and transparency during the treaty-making process, both generally in relation to trade agreements and specifically in relation to the negotiation of RCEP.
6.18
The Government maintains that, for trade agreements, confidentiality is essential to Australia’s national interest. Previously, DFAT explained that the negotiation process necessitated confidentiality:
The government of the day is constrained in what it can disclose about current and ongoing treaty negotiations, partly because standard international practice is for the negotiating texts of bilateral and plurilateral treaties to be kept confidential between the parties prior to signature … In addition, disclosure of Australia’s negotiating positions could adversely affect the capacity for the government to pursue the national interest by negotiating the best attainable outcomes.
6.19
The Australian Chamber of Commerce and Industry (ACCI) stated that:
Business continues to encourage Government to provide greater access at an earlier stage to the negotiating process, to help Australia’s negotiating teams secure agreements that will optimise the benefit to Australian businesses and, through them, all Australians.
6.20
ActionAid recommended the Government reform negotiation and ratification processes of trade agreements to ensure the following:
Negotiating texts are published throughout trade negotiations and the final text of agreements are published before each agreement is signed.
Mandatory public consultations are conducted prior to the commencement of trade negotiations and regular consultations are conducted throughout trade negotiations. Opportunities are provided for women’s rights organisations and civil society groups, including in partner countries, to input into consultation processes.
JSCOT [Joint Standing Committee on Treaties] is mandated to review all trade agreement texts to assess their alignment with Australia's commitments on gender equality, human rights and the environment, and to make recommendations to Parliament prior to signature.
All trade agreements are subject to Parliamentary debate and the ratification of trade agreements is subject to a parliamentary vote on the whole agreement, not just the implementing legislation.
6.21
DFAT highlighted that consultations with industry and civil society stakeholders for RCEP were similar to those undertaken for other trade agreements and included:
seeking submissions at the start and throughout negotiations;
regular consultations with a range of industry and civil society stakeholders throughout negotiations;
six-monthly consultations as part of consulting on all trade agreements;
depending on levels of interest, a fairly constant exchange with negotiators on specific topic areas, frequently via phone or email; and
access to negotiators from all RCEP countries.
6.22
Noting DFAT’s advice, the Committee will not consider further issues of consultation and transparency in relation to RCEP. The Committee will be considering consultation and transparency in relation to trade agreements in its forthcoming report on the treaty-making process in Australia.
Trade agreement modelling
6.23
Economic modelling of trade agreements prior to ratification was again an issue during the RCEP inquiry. Several submitters criticised the Government for not commissioning and publishing an independent evaluation of the economic costs and benefits, or a social and environmental impact assessment, prior to negotiations or signature.
6.24
The Australian Manufacturing Workers’ Union (AMWU) noted that:
… despite giving away all this decision-making power and exposing Australian workers and communities to further uncertainty, there is no tangible, empirical evidence that this agreement will create any benefits for Australian worker or families.
6.25
ACCI considered that as ‘trade agreements can foster trade diversion as well as trade creation’ proper analysis with the various components and drivers of trade is vital.
6.26
A significant number of inquiry participants called for economic modelling to be conducted including ACCI, ACTU, Electrical Trade Union (ETU), Australian Fair Trade and Investment Network (AFTINET), Public Health Association of Australia (PHAA) and the Northern Territory Department of Industry, Tourism and Trade. Others, such as DFAT, questioned the overall benefits of economic modelling. Article Three represented by Ms Kristen Bondietti argued against economic modelling of trade agreements like RCEP. Ms Bondietti from Article Three stated:
There's probably no economic analysis that can really assess the benefits of FTAs [Free Trade Agreements], keeping in mind it's easy to measure a tariff benefit in terms of cost savings. But many of these benefits that the FTAs deliver over time are dynamic. They relate to the competitiveness of services and investment, and they relate to the interconnectedness between the three—so services inputs that go into making goods and investments that support services that support goods. It's very difficult to measure in terms of numbers.
6.27
The Committee has considered in more detail the matter of economic modelling in relation to trade agreements in Report 193 on the treaty-making process in Australia.
Conclusion
6.28
While RCEP was negotiated at the same time as the CPTPP, it is a very different trade agreement, with different outcomes for Australia.
6.29
RCEP has been directed by the ASEAN nations, but also includes a number of Australia’s other major trading partners, notably China, Japan and the Republic of Korea.
6.30
RCEP does not contain much in the way of innovation from a trade agreement perspective, and its tariff reductions are not as significant as Australia’s other trade agreements with RCEP Parties.
6.31
However, the benefits to Australia from RCEP lie in the inclusion of both ASEAN and Australia’s other major trading partners under a single agreement, enabling easier trade for Australian businesses across the region and the commitment by RCEP Parties to integrate their economies into the international trade environment.
6.32
A number of issues raised during the inquiry reflect ongoing concerns expressed to the Committee in the past, including the complexity for Australian business in navigating the range of available trade agreements with countries in the region, the need to protect Australia’s capacity to regulate on matters of public importance, and the extent of consultation undertaken by the Government and need for transparency during the negotiation process.
6.33
Other issues, such as how to respond to the coup in Myanmar and the impact of the removal of tariffs on Government revenues in less developed countries, are by and large, specific to RCEP, but do not warrant recommending against ratification.
6.34
Nevertheless, the Government should continue to pursue the restoration of civilian, democratic rule in Myanmar as a foreign policy priority and the Committee makes a recommendation to this effect.
6.35
The Committee is of the view that, on balance, it would be in Australia’s interest to ratify RCEP, and recommends accordingly.
6.36
The Committee supports the Regional Comprehensive Economic Partnership Agreement and recommends that binding treaty action be taken.
6.37
The Committee recommends the Government continue to pursue the restoration of civilian, democratic rule in Myanmar as a foreign policy priority, and considers making a declaration to this effect at the time of ratification.
6.38
The Committee recommends the Government continue to pursue the inclusion of labour, human rights and environmental provisions within the Regional Comprehensive Economic Partnership Agreement at the time of the first review.
Mr Dave Sharma MP
Chair
30 August 2021