Preliminary Pages

Foreword

In recent years the Joint Standing Committee on Foreign Affairs and Defence and Trade has focused on Australia’s relationship with its northern neighbours. This has included major reports on relations with Indonesia, and with Malaysia. This report extends this focus by reviewing Australia’s relationship with ASEAN, an organisation comprising ten countries to Australia’s north.

ASEAN has become an important trading partner. ASEAN is now the sixth most important export destination for Australian goods and services, and Australia is the eighth most important source of imports for ASEAN.

The countries of ASEAN are also of a strategic importance to Australia. Political stability in the region and good international relations with ASEAN countries are therefore integral to Australia’s security and prosperity.

Over the years ASEAN has expanded its engagement with the region through its dialogue partners, the creation of the ASEAN Regional Forum, and the East Asia Summit. This trend culminated in the 2003 Bali Concord II and the 2008 ASEAN Charter which formalised ASEAN as a legal entity and inter-government organisation.

Australia’s relationship with ASEAN is multifaceted and operates on different levels. The report discusses the nature of those interactions which occur at government and non-government level and with ASEAN as a discrete entity or with individual member countries. Often that relationship proceeds through different avenues and levels simultaneously.

To illustrate this point, Australia has the free trade agreements (FTAs) with two countries in ASEAN—Singapore and Thailand—and treaties with Indonesia and Malaysia are contemplated.

During the course of the enquiry, Australia and New Zealand concluded an FTA with ASEAN. The agreement was the first multi-country FTA Australia had negotiated and was the most comprehensive treaty ASEAN had entered into. This FTA is regarded as a platform for further trade liberalisation both between Australia, New Zealand and ASEAN, and as a way of assisting ASEAN’s plans to establish an ASEAN economic community by 2015.

The Committee considers that FTAs—bilateral and multilateral—will become an increasing part of the trade environment in which Australia operates. This will be ensured by the continued growth of Asia, and the trend towards trade and other forms of integration between countries.

Australia has had equivocal outcomes with respect to the FTAs with Singapore and Thailand. In particular the gains made by the Australian automotive industry in the Australia–Thailand FTA (TAFTA) have been countered by the emergence of non-tariff barriers.

The outcomes arising from TAFTA underscores the importance of quantifying the benefits or costs of such agreements once they are concluded. To date it appears that the policy of applying a greater focus on tariff barriers in trade negotiations, leaving a ‘tail’ of negotiation for non-tariff barriers, has not always appeared to work  to Australia’s immediate advantage.

Better information about the cost of non-tariff barriers would greatly assist Australia’s trade negotiators. To this end the Committee has recommended that the Department of Foreign Affairs and Trade (DFAT) develop a single method of costing non-tariff barriers, to assist Australian FTA negotiators to identify, evaluate and target barriers to trade. As well, there should be annual reports to the Parliament on the impacts of individual trade agreements.

Trade in services provides significant opportunities for Australia and the telecommunications sector has been identified as a high priority for expansion of Australia’s export trade. Further development in telecommunications, and knowledge-economy activities in general, would allow Australia to build on and go beyond the reliance on education and tourism, and enhance its efforts to achieve a more favourable balance of trade. Evidence provided by Telstra, however,  suggested that telecommunications has tended to fall into the ‘too-hard basket’ within the process of free trade negotiations.

The Committee is convinced that telecommunications should be an important component of FTAs being negotiated with other countries and has recommended that DFAT ensure future agreements contain effective telecommunications chapters.

The recognition of professional qualifications is an important aspect of Australia’s ability to trade with ASEAN member countries. The more widely Australian professional qualifications are recognised, the better Australia’s position to cater to emergent demand in the region. The Committee has therefore made recommendations concerning the recognition of professional qualifications and that FTAs should include a professional services working group to assist in creating professional linkages, including mutual recognition agreements.

The Committee recognises the wide ranging and comprehensive contribution of Australian agencies to the security of the ASEAN region. The security status is bound to fluctuate, but the Committee is confident that the level of co-operation will ensure long-term success. Australian agencies should use the various forums provided by ASEAN and the focal point of Australia’s diplomatic missions to establish and maintain agency-to-agency links and communications.

The Committee also notes the work being undertaken in the areas of biosecurity and health by Australia in collaboration with ASEAN member countries. The enhancement of biosecurity in ASEAN can expand outwards Australia’s quarantine border and provide early warning and improved response to emerging threats. As well, work in the health area not only improves the well-being of ASEAN member countries and thereby its security, but also protects Australians travelling abroad.

The Committee considers that it is in Australia’s interests to assist ASEAN member countries in securing their nascent nuclear infrastructure and their radioactive sources. ANSTO through its ongoing engagement with the region is well placed to provide that assistance and in the long term may be able to assist should ASEAN the member countries introduce nuclear-power.

The Committee welcomes the development of the ASEAN Charter and the creation of an ASEAN human rights body. The new body will raise the profile of human rights and will create an opportunity to bring human rights issues before ASEAN Ministers.

Banks such as the Asian Development Bank and the World Bank are in a position to progress human rights issues by setting conditions for loans. The Committee believes there is merit in Australia using its influence with the Asian Development Bank to have it meet the benchmark set by the World Bank as regards requiring core labour standards as a precondition for loans.

The Committee considers the ASEAN Social Charter, which is based on four international declarations, while limited in its coverage is nevertheless a positive development for human rights in the ASEAN region. Other matters of human rights concern in the ASEAN region include the exploitation of children, the sexual exploitation of women, and child trafficking.

The Committee is satisfied with the response provided by DFAT and the AFP concerning the provision of aid to Burma, and involvement of the AFP with the Burmese police force. Nevertheless, there needs to be constant awareness of the possibility that the Burmese authorities will misuse the Australian assistance provided, and a willingness to withdraw this assistance should such evidence come to light.

The continuing detention of the Burmese opposition leader Aung San Suu Kyi continues to be of concern. The Committee notes the recent statement by the Minister for Foreign Affairs welcoming the ‘strong show of support by ASEAN and its constituent members for Aung San Suu Kyi and her immediate and unconditional release.’ The Committee shares the Minister’s grave concern over her continuing detention and calls for her immediate and unconditional release.

The Committee believes there are significant opportunities for Australia to offer leadership and technical assistance to ASEAN member countries as they face the challenge wrought by climate change.

In the Committee’s view, Australia’s present climate change engagements in the region, both government and non-government, are a good basis for meeting these challenges. They contribute to positive relationships in the region and, by enhancing capacity within ASEAN member states, build a foundation upon which future collaborations can occur.

Arising from its review of human rights issues and environment issues, the Committee considers that human rights including core labour standards and the environment should be pursued in future FTAs. Australia should also take the opportunity to introduce such issues (if they are not already included) when current FTAs are reviewed.

A theme pervading this report is that Australia’s relationship with ASEAN is broadening and deepening. The relationship will continue to mature and change. Doubtless there will be challenges, but the Committee is confident the goodwill exists to overcome them.

Mr Michael Danby MP
Chair, Foreign Affairs Sub-Committee

Membership of the Committee

Membership of the Foreign Affairs Sub-Committee

Committee Secretariat

Terms of reference

The Joint Standing Committee on Foreign Affairs, Defence and Trade shall examine and report on opportunities for expanding Australia’s relationship with the countries of ASEAN, with particular attention to:

·         opportunities to improve Australia’s involvement in ASEAN;

·         opportunities to enhance regional security through Australian involvement;

·         free trade agreements with individual ASEAN countries;

·         opportunities to enhance the regional economy;

·         opportunities to improve cultural links; and

·         the impact of global warming on the region.

List of abbreviations

List of recommendations

Recommendation 1

The Committee recommends that the Department of Foreign Affairs and Trade develop a single method of costing non-tariff barriers, to assist Australian FTA negotiators to identify, evaluate and target barriers to trade.

Recommendation 2

The Committee recommends that the Department of Foreign Affairs and Trade reports annually to the Parliament on the impacts of individual free trade agreements.

Recommendation 3

The Committee recommends that when Parliamentary delegations visit South East Asian countries with which Australia has a free trade agreement, the Department of Foreign Affairs and Trade facilitate meetings with Asian policy makers to monitor progress with these treaties.

Recommendation 4

The Committee recommends that the Department of Foreign Affairs and Trade should ensure that future free trade agreements contain effective telecommunications chapters.

Recommendation 5

The Committee recommends that the Australian Government make representations to the Singapore Government with a view to assisting Engineers Australia, and other professions not covered by the free trade agreement, to obtain a mutual recognition agreement with Singapore.

Recommendation 6

The Committee recommends that future bilateral free trade agreements include a professional services working group to assist in creating professional linkages, including mutual recognition agreements and when existing free trade agreements which do not contain a professional services working group are reviewed, this issue should be pursued.        

Recommendation 7

The Committee recommends that the Commonwealth Government should use its influence with the Asian Development Bank to ensure that the adherence to core labour standards become a precondition for loans.

Recommendation 8

The Committee recommends that human rights, core labour standards, and the environment be pursued in future free trade agreements and, when existing free trade agreements which do not contain such issues are reviewed, these issues should be pursued.

Recommendation 9

The Committee recommends that when the Department of Foreign Affairs and Trade reports annually to the Parliament under Recommendation 2, progress with regard to human rights, core labour standards, and the environment be included.