Issues with the TPP need to be addressed before, not after
The Work of the Committee and the Parliament
1.1
I thank the committee for the work it has done in relation to this
inquiry, and note that there has been an extensive level of parliamentary
scrutiny of the Trans-Pacific Partnership (TPP), including three inquiries by
the Joint Standing Committee on Treaties and one inquiry by the Senate Foreign
Affairs, Defence and Trade References Committee.
1.2
While this level of parliamentary scrutiny may be unprecedented for a
trade agreement, it is for good reason.
1.3
Centre Alliance does not support the committee's recommendation to pass
the bills. Centre Alliance is of the view that bills must be amended to ensure
that harmful Investor-state dispute settlement (ISDS) clauses do not apply to
this trade agreement and that labour market testing is not waived under the
trade agreement.
ISDS Provisions
1.4
As noted in my additional comments to the Foreign Affairs, Defence and
Trade References Committee report into the TPP, ISDS provisions allow foreign
corporations to sue the Australian Government if they believe they have been
affected by changes in public policy. The sole aim of the provisions is to
protect foreign investment, shifting sovereign risk from the investor to the
taxpayer.
1.5
It is completely improper that Australia is signing up to an agreement
that still contains rights for foreign investors to bypass national courts and
sue governments for millions and potentially billions of dollars in
international tribunals if they can argue that a change in law or policy has
reduced the value of their investment.[1]
1.6
ISDS provisions are an attack on Australia's legal sovereignty and must
be removed from this trade agreement and any future trade agreements that
Australia is a party to.
Labour Market Testing
1.7
I also noted in my additional comments to the Foreign Affairs, Defence
and Trade References Committee report that while concerns of underemployment
and low wages are at an all-time high in Australia, the TPP-11 in its current
format would see labour market testing waived for 'contractual service
suppliers' for six signatory countries. This would mean workers from Canada,
Peru, Brunei, Mexico, Malaysia and Vietnam would be able to fill jobs in
Australia without these jobs being offered to Australians first.
1.8
The waiving of labour market testing is unacceptable and must be
reinstated.
Support from the Labor party
1.9
It is clear that the Labor party is not comfortable with ISDS provisions
or the waiving of labour market testing. It is disappointing that when Labor
had the opportunity to push back, even if it were to achieve some minor
concessions, they have signalled they will not.
1.10
It is great that Labor believe the way Australia negotiates free trade
agreements need to change[2] but the current trade agreement presents the best opportunity to do so.
1.11
Labor also moved a second reading amendment to the TPP enabling
legislation in the House of Representatives. It is quite remarkable. Paragraph
1 of that amendment notes the following:
...the Coalition Government has waived labour market testing
for contractual service suppliers for six new countries in the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership as well as including
investor state dispute settlement mechanisms which Labor does not support.[3]
1.12
But Labor has stated publicly it isn't going to stand in the way of
the enabling legislation; they are going to wave it through. If they don't
support the waiver of labour market testing, and if they don't support the
inclusion of ISDS clauses, then one must wonder why they are supporting the
very legislation that gives effect to them.
1.13
Labor's support for these bills will mean that the enabling
legislation will sail through the Senate and become law. Labor says they will
fix things when they get into government. They are certainly feeling confident,
but it's still a pretty big assumption that they will form government after the
next election.
1.14
Even if they were to form government in the next parliament it is
highly likely that Labor won't be changing course on trade policy. There will
be a lot of talk about greater openness and transparency in the negotiations.
There will be policy reviews. Numerous experts will be called in to look at
things. But I doubt it will amount to much. I doubt very much that there's much
stomach on the part of Labor's frontbench to challenge the trade orthodoxies
within the Foreign Affairs and Trade bureaucracy.
1.15
If Labor's policy backflip is anything to go by, there will be much
talk about the difficulties of revisiting existing agreements and about the
challenges of trade policy in the context of the US presidency of Donald Trump.
They will eventually say that it's all too hard and will seek to move the policy
conversation elsewhere.
The pathway forward
1.16
While it is acknowledged that the TPP cannot be amended by these bills,
or by amendments to these bills, there is a way around this 'take it or leave
it' approach.
1.17
Labor is in a position to delay the commencement of these bills, and
therefore the TPP, if it supports an amendment to prevent the bills from
commencing until bilateral side letters are exchanged between Australia and
each other party to the Agreement agreeing that:
- Chapter 9 of the Agreement, which deals with Investor-State
disputes, does not apply in relation to an investment in Australia; and
- Labour market testing must occur in relation to contractual
service suppliers entering, or proposing to enter, Australia from the other
Party.
1.18
If the above amendments are unsuccessful, alternative amendments should
be passed to include a sunset clause so that unless bilateral side letters are
exchanged relating to ISDS provisions and labour market testing by 1 January
2020 the legislation will automatically be repealed.
1.19
Labor has the numbers in the Senate to stop the TPP-11 coming into
effect until after the cancer is cut out of the agreement. Labor has the
numbers in the Senate to legislate its recently announced intention to have the
bad parts of the TPP-11 removed next year, irrespective of the election
outcome.
Recommendation 1
1.20
That the commencement date of the legislation be delayed until
bilateral side letters are exchanged between Australia and each other party to
the Agreement agreeing that:
- Chapter 9 of the Agreement, which deals with Investor-State
disputes, does not apply in relation to an investment in Australia; and
- Labour market testing must occur in relation to contractual
service suppliers entering, or proposing to enter, Australia from the other
Party.
Recommendation 2
1.21
That in the event recommendation 1 is not agreed, alternative
amendments should be passed to include a sunset clause so that unless bilateral
side letters are exchanged relating to ISDS provisions and labour market
testing by 1 January 2020 the legislation will automatically be repealed.
Recommendation 3
1.22
That unless either of the above recommendations is adopted, the
bills be opposed.
Rex Patrick
Senator for South Australia
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