Committee activities (inquiries and reports)

Australia ’s free trade agreements with Singapore , Thailand and the United States

November 2005
Canberra

© Commonwealth of Australia 2005
ISBN 0 642 78697 6 (printed version)
ISBN 0 642 78698 4 (HTML version)

Contents

Foreword
Membership of the Committee – 41 st Parliament
Membership of the Trade Sub-Committee
Terms of reference
List of abbreviations
List of recommendations
Program
List of participants

Chapter 1 Background to the inquiry
Chapter 2 Themes and issues

Foreword

The Trade Sub-Committee convened a half-day hearing to review the progress of Australia’s free trade agreements (FTAs) with Singapore, Thailand and the United States. Such a review is timely because, although these agreements have been in force for a short time—the Singapore agreement since July 2003 and the other two since January 2005— Australia has embarked on negotiations on several other free trade agreements. The committee hoped the inquiry would identify issues arising from the current agreements that could assist with negotiating and implementing future FTAs.

In an attempt to identify issues common to the three FTAs, the morning’s sessions were broken into themes: negotiations and consultations; the impact on trade and on business and industry; and lessons learned. Discussion was wide-ranging and a number of themes emerged, which are outlined in the report.

The main message to emerge from the hearing is that it is too early to assess the impact of the agreements with Singapore, Thailand and the United States. The effects of some changes under each FTA could take five to ten years to become apparent. During the hearing it also became clear that assessing the impact of FTAs is not straightforward. Australia’s trade performance, especially when measured by increases in imports and decreases in exports, can be explained by factors unrelated to the FTAs. These include exchange rate variations and one-off or temporary events, such as a cancelled wheat shipment.

Despite the difficulty of assessing the FTAs the roundtable participants, consisting of government, business and industry, unions and trade experts, were largely satisfied with the conduct of negotiations and the performance of the FTAs to date. They also identified early benefits of the agreements, in particular increased interest from Australian exporters in doing business with Singapore, Thailand the United States. Although the timeframe might be longer than some had expected, participants were generally confident that the agreements will result in tangible benefits for Australian business, industry and consumers.

One of the reasons for this confidence was that the FTAs were viewed as living rather than fixed agreements, by virtue of provisions that enable aspects of each agreement to be reviewed and improved upon over time. This point was made several times during the hearing and the need to ensure such provisions exist in future FTAs was felt to be one of the most important lessons of the agreements with Singapore, Thailand and the United States.

The committee would like to thank the Department of Foreign Affairs and Trade and the participants who contributed their time and expertise at the roundtable. The roundtable format led to a constructive dialogue which the committee hopes to replicate in future reviews of Australia’s FTAs. The committee would also like to thank the secretariat of the Trade Sub-Committee for their assistance with the hearing and preparation of this report.

The Hon Bruce Baird MP

Chair

Trade Sub-Committee

Membership of the Committee – 41 st Parliament

Committee Secretariat

Membership of the Trade Sub-Committee

Terms of reference

Pursuant to paragraph 1 (b) of its resolution of appointment, the Joint Standing Committee on Foreign Affairs, Defence and Trade is empowered to consider and report on the annual reports of government agencies, in accordance with a schedule presented by the Speaker of the House of Representatives.

On 15 June 2005 the Trade Sub-Committee resolved to examine the 2003-2004 annual report of the Department of Foreign Affairs and Trade, focusing specifically on Australia’s free trade agreements.

List of abbreviations

List of recommendations

2 Themes and Issues

Recommendation 1

That, where possible, trade figures identify the items that fall within the scope of an FTA.

Program

PUBLIC ROUNDTABLE HEARING

REVIEW OF AUSTRALIA ’S FREE TRADE AGREEMENTS

FRIDAY 19 AUGUST 2005

9:00 am to 12:00 pm

Committee Room 1R4

List of participants

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