This Report is the result of a reference from the Minister for Foreign Affairs, Senator the Hon Marise Payne, to the Joint Standing Committee on Treaties (JSCOT) asking it to undertake an inquiry into certain aspects of the treaty-making process in Australia including:
considering the role of JSCOT in respect of trade-related agreements, including during the negotiation phase;
considering the consultation process undertaken by the Department of Foreign Affairs and Trade (DFAT) before and during the negotiation of trade agreements;
considering the effectiveness of independent analysis to inform negotiation or consideration of trade agreements; and
reviewing the process around the categorisation of treaty actions.
The creation of JSCOT was the result of reforms in 1996 that provided a greater formal role for the Parliament in overseeing treaties and treaty-making. Since the creation of the Committee, there have been a number of further reviews of the treaty-making process in Australia, including eight reports by JSCOT itself and five reports by the Senate Foreign Affairs, Defence and Trade Committee (SFADTC).
In this Report, the Committee has sought to identify and provide constructive recommendations for improvement to the process, whilst recognising that the prerogative to negotiate and conclude treaties remains, under Australian constitutional arrangements, the fundamental preserve of the executive arm of government.
The Report makes five recommendations dealing with transparency and consultation, and independent analysis of trade agreements. The Committee intends that its processes are as transparent as possible, and considers minor treaty actions are an area where greater transparency may appropriately be accorded. Consequently, and to ensure the public is aware of proposed changes, the Committee recommends documents relating to minor treaty actions are uploaded on the Committee’s website and thus publicly available.
In relation to consultation, the effectiveness of the consultation process undertaken by DFAT has been a consistent issue in JSCOT inquiries since its establishment in 1996, particularly with regard to trade treaties.
On one hand many businesses and industry representatives express satisfaction with the level and quality of consultation they receive and praise the accessibility and professionalism of DFAT staff. On the other hand, some smaller business representatives and civil society and union representatives claim the consultation process is inadequate.
The Committee acknowledges and accepts that the dynamics of trade treaty negotiations means that consultation that involves a high degree of transparency would compromise Australia’s negotiating position and ultimately be inimical to Australia’s national interests.
Nonetheless the Committee is of the view that improvements can be made in the consultation process that would provide greater oversight and visibility of trade treaty negotiations as they unfold, and allow improved access to industry and stakeholder expertise to inform negotiating positions.
One such improvement has already been made, with the formation of a Ministerial Advisory Council (MAC) in 2020, which generally meets twice a year and brings together a broad cross-section of business, industry and community representatives with trade expertise to help inform Australia’s negotiations and policies. The Committee commends the Government for taking this step.
To help increase the degree of transparency in relation to trade treaty negotiations, the Committee recommends that the Government publish negotiation aims and objectives for all future trade treaty negotiations.
In addition, the Committee recommends that the Government brief JSCOT biannually on the status of upcoming and current free trade agreement negotiations, potentially as part of the same briefing to the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade.
Finally, the Committee recommends the Government consider the use of non-disclosure agreements with key stakeholders to allow for improved consultation in certain areas of trade agreement negotiation, having regard to the approaches and mechanisms used by the United States and by the European Union.
In relation to the independent analysis of trade agreements, the Committee notes that the Government only commissions independent analysis of trade agreements on a case-by-case basis and is reluctant to commit to such a process for all trade agreements. Whilst the Committee acknowledges the inherent limitations in seeking to model a modern free trade agreement, the Committee is of the view independent economic analysis would reveal the basis of the economic gains expected from a trade agreement—something that should form an important consideration. Recalling the Productivity Commission view that something is better than nothing, the Committee considers that credible and independent economic analysis of trade agreements would increase public confidence in the benefits of trade agreements.
Consequently, the Committee recommends the Government consider implementing a process through which independent modelling and analysis of a trade agreement, at both the macro and sectoral levels, is undertaken in the future by the Productivity Commission, or similarly independent and expert body, and provided to the Committee alongside the National Interest Analysis to improve assessment of the agreement, increase public confidence in the benefits of trade agreements, and facilitate the longitudinal assessment of actual trade outcomes.