- Stakeholder consultation and engagement
Value of stakeholder consultation and engagement
2.1Submitters outlined the value of effective stakeholder consultation and engagement processes to achieving positive trade negotiation outcomes for Australia. For example, Grains Australia observed that: ‘The success of trade negotiations hinges not only on the government’s ability to represent national interests effectively but also on its capacity to meaningfully engage with industry stakeholders.’
2.2The Productivity Commission emphasised the importance of wide-ranging consultation to ensure that trade and investment agreements achieve the objective of delivering higher living standards for Australians.
2.3The Australian Chamber of Commerce and Industry (ACCI) explained how effective consultation and engagement contributes to trade negotiations: ‘Both government and stakeholders benefit from genuine two-way dialogue, which equips Australian negotiators through an informed understanding of stakeholder positions and commercial interests and through leveraging their knowledge and expertise.’
2.4Similarly, the Australian Cotton Shippers Association commented that ‘… industry consultation and the opportunity to offer market intelligence and expertise is integral to achieving a long-term workable proposition in trade relations.’
Current stakeholder consultation and engagement
2.5The Australian Government undertakes a wide range of stakeholder consultation and engagement activities in the development of trade and investment agreements. Consultation processes are primarily managed by the Department of Foreign Affairs and Trade (DFAT), with the Department of Agriculture, Fisheries and Forestry (DAFF) and Austrade also playing an important role.
2.6In its submission DFAT signified its objective to undertake effective consultation with all interested stakeholders and provided an overview of its consultation and engagement framework:
Consultations and stakeholder engagement begin before formal trade negotiations start, continue throughout the negotiations and after a new agreement enters into force.
The consultations and stakeholder engagement process on trade agreements generally includes publishing aims and objectives for a negotiation, inviting submissions, formal stakeholder consultation meetings, involving community groups, non-government organisations (NGOs), trade unions, academics, peak industry bodies and business representatives, and consultations with state and territory governments, including through the Ministerial Council on Trade and Investment.
2.7Additionally, DFAT emphasised its commitment to ongoing improvement in its consultation and engagement processes:
DFAT continues to review the effectiveness of its consultation mechanisms, developing and implementing new platforms and practices for engagement to align with the Government’s trade policy agenda to ensure a diversity of voices are heard.
2.8DAFF also explained its role in providing technical expertise to support DFAT and outlined its stakeholder consultation and engagement process:
DAFF holds regular consultations with relevant stakeholders, most notably industry groups, businesses and lobby groups to ensure their requests are appropriately considered and reflected. DAFF also engages with state and territory governments on issues where they have jurisdictional responsibility, such as animal welfare. Close engagement with stakeholders continues throughout the negotiating process until signature and entry into force of any agreement.
2.9Austrade described that its role primarily focusses on trade facilitation, including assisting businesses to leverage trade agreements in markets post-implementation. However, it also plays an important role in gathering information and market intelligence from businesses and peak bodies to provide valuable insights to inform trade negotiations:
Austrade is able to signal where negotiators may need to focus their attention, what the hidden barriers to trade may be and potential ways to overcome them, and where real opportunities for Australian businesses exist. Austrade can also provide insights into Australia’s reputation in various markets and where potential issues may arise for negotiators.
2.10Several submitters reflected on their positive experience with formal consultation and engagement during trade agreement negotiations, as well as noting their strong working relationships with DFAT and other relevant government bodies. For example, the Red Meat Advisory Council (RMAC) outlined their experience and stated that: ‘The Government’s current approach via direct and close industry engagement, which is seen as essential, has served the red meat industry well.’
2.11The European Australian Business Council (EABC) acknowledged the Australian Government’s extensive consultation with stakeholders prior to and throughout the negotiation process. Referring to its experience with the Australia-European Union Free Trade Agreement it explained that as the negotiations have progressed ‘… the EABC has had the opportunity to regularly engage with the Australian negotiating teams, and [DFAT] has provided regular briefings on the status of the negotiations to the limit of what could be publicly shared.’
2.12Some submitters also commented that there has been enhanced stakeholder consultation and engagement in the negotiation of more recent trade agreements, particularly for the Australia-India Economic Cooperation and Trade Agreement and the Australia-Indonesia Comprehensive Economic Partnership Agreement.
Limitations of current consultation and engagement
2.13Submitters widely indicated that the effectiveness of current stakeholder consultation and engagement processes are limited by a lack of structure and consistency as well as a lack of transparency.
Structure and consistency
2.14The Public Health Association of Australia (PHAA), the Australian Alliance for Animals, ActionAid Australia and Medicines Australia described current stakeholder consultation and engagement processes as ‘ad hoc’. Dr Jed Goodfellow, Director, Policy at the Australian Alliance for Animals told the Committee that:
We have had multiple meetings with officers from DFAT, for which we have been very grateful, but my understanding is that they have largely been at the volition of the individual officers, rather than having a formal framework for consultation and negotiation.
2.15Ms Elizabeth de Somer, Chief Executive Officer at Medicines Australia also explained that in their experience the process is inconsistent and can rely on the initiative of officials: ‘The engagement from either Austrade or DFAT has varied, sometimes depending on whether we know the people who are at the negotiating table or whether, indeed, they think of engaging with us.’
2.16While noting that DFAT is open to engagement, RMAC reflected that: ‘Ongoing consultation throughout the negotiating process is largely dependent on the proactiveness and level of engagement sought by stakeholders.’
2.17The Business Council of Australia (BCA) noted that some of its members have expressed concerns about being excluded from consultation processes, or being unaware that their interests are affected by proposed agreements. It also commented that timeframes can impact on the effectiveness of engagement: ‘… the pace of the consultation process can sometimes be rushed, limiting the depth and breadth of stakeholder engagement.’
2.18While underscoring the need to actively identify relevant stakeholders and undertake broad consultation, the Productivity Commission observed that: ‘The most appropriate stakeholders to consult will vary depending on what the agreement seeks to achieve, and the provisions being contemplated.’
Transparency
2.19Many submitters and witnesses identified the main limitation to more effective consultation and engagement as a lack of transparency from the Australian Government on the progress and content of trade agreement negotiations.
2.20The inability to see draft agreement text during negotiations was raised frequently in the evidence, with many noting that stakeholders are reliant on generalisations and most often do not see the text of an agreement until after it is signed.
2.21It was widely argued that the level of transparency and reticence to share information about trade negotiations significantly reduces the capacity of stakeholders to provide informed and valuable feedback to the government. For example, Grail Australia explained that:
The Australian government does consult interested and affected parties during negotiations on a proposed agreement, but the benefit of consultations is limited by the amount of information shared with the consulted and often there is a lack of transparency.
2.22Likewise, the BCA advised that some of its members observed that once negotiations commence the opportunity for meaningful consultation is constrained:
Negotiators are often hesitant to share details of the proposed agreements due to concerns about confidentiality and potentially prejudicing negotiations. Consequently, stakeholders can find it challenging to offer constructive feedback on specific agreement provisions.
2.23Similarly, PSI stated that: ‘… consultations cannot be meaningful if those being consulted do not know what has been proposed in the negotiations.’ The Media, Entertainment and Arts Alliance also emphasised that it is essential that ‘… key stakeholders are provided with genuine capacity to inform the agreements being negotiated.’
2.24The ACTU explained the effect of a lack of information during negotiations on the quality of stakeholder engagement:
Sometimes in the past there's been briefings held at a very high level by DFAT during the period of negotiations. But because of the limitations of the approach that has been adopted by successive Australian governments, they have been so high-level and lacking in detail that it has been impossible to engage in any specific or effective way.
2.25In addition, ActionAid Australia suggested that ‘… stakeholder input is limited by the lack of access to agreement texts and DFAT not stating the ways in which this input is taken into consideration during trade negotiations.’
2.26Ms Elizabeth de Somer of Medicines Australia also commented on how stakeholder input received through consultation and engagement processes is taken into consideration:
In our experience with recent trade agreements, the process is a very unidirectional one whereby the industry makes a submission on the free trade agreement, so our views are made clear, but there is no transparency or negotiation about how that information is taken, how it is assimilated or how it is translated in a negotiation.
2.27Several submitters indicated the potential for a lack of transparency in stakeholder consultation and engagement to lead to suboptimal trade agreements for Australia. For example, in relation to the health sector the PHAA explained that: ‘Because we cannot see the proposed wording of text under negotiation, our expert members cannot make an independent assessment of the potential consequences on the health of Australians.’
2.28As an example of where lack of engagement led to poor outcomes, the Maritime Union of Australia (MUA) raised the issues of maritime cabotage services, claiming a lack of effective consultation with the shipping industry during trade negotiations: ‘Had it [DFAT] been more willing to consult at an early stage, listen to all perspectives and accommodate the range of views held by the social partners, it surely would not have agreed to the UK [United Kingdom] position that undermines Australian cabotage it agreed to in the FTA [free trade agreement] negotiations.’
2.29The ACTU acknowledged recent efforts to improve stakeholder consultation and engagement through the establishment of advisory groups and more frequent briefings, while emphasising that these measures remain limited in their effectiveness because the process is inherently one-sided as DFAT remains unable to provide detailed information about negotiations.
Balancing transparency and confidentiality
2.30While calling for greater transparency, some submitters noted that it is necessary and appropriate to maintain certain levels of confidentiality in trade negotiations. For example, the Australian Industry Group (Ai Group) submitted that: ‘By necessity, there are limits to public consultation during FTA negotiations. They include complicated economic, political, and regulatory negotiations, necessitating sensitive trade-offs and compromises that need to be negotiated under conditions of confidentiality.’ Similarly, RMAC noted that: ‘… confidentiality may on occasion be appropriate and required… totally open negotiations may compromise beneficial outcomes…’
2.31While recognising that a degree of confidentiality may be necessary, Grail Australia noted the need to increase transparency where appropriate: ‘It is understood that a genuine commercial-in confidence matter may demand non-disclosure, but maximum transparency will enable best quality advice.’
2.32Similarly, ACCI stated that: ‘Finding an appropriate balance between providing transparency to enable these benefits [of stakeholder consultation] to be realised whilst not compromising Australia’s negotiating position remains a valuable matter for consideration…’
2.33In its submission DFAT advised that Australia’s approach to ‘… trade negotiations seeks to balance the need for confidentiality during the negotiations, the respective roles of the Executive and Parliament, and the interests of the range of stakeholders.’ It further noted that Australia, along with other similar countries, focusses on ensuring ‘… some balance of transparency and confidentiality…’
Benefits of greater transparency in consultation and engagement
2.34Submitters broadly supported claims for more in-depth and transparent consultation and engagement by drawing a link to better trade negotiation outcomes for Australia. For example, AFTINET stated that: ‘Wider community consultation will result in better quality trade agreements which are less likely to have unintended consequences…’
2.35The Productivity Commission emphasised the importance of wide-ranging consultation and linked it to determining the contribution of trade agreements to the national interest:
Agreements designed to contribute to the ‘national interest’ or the wellbeing of the Australian community points to the need for negotiation mandates to be defined through broad ranging consultation, seeking input from parts of the community who might not traditionally contribute to the process.
…
Wide consultation is also a way to identify the barriers that agreements may seek to reduce and help identify priorities. This will require actively seeking out relevant stakeholders and engaging in broad consultation rather than just listening to the loudest voices.
2.36The National Farmers Federation (NFF) agreed that there are benefits to increased transparency in trade negotiations stating that: ‘Any mechanism to further increase transparency would undoubtedly better the outcomes for the agricultural sector and work to alleviate any apprehension that stems from a lack of information.’
2.37Medicines Australia linked effective consultation and engagement with transparency and accountability: ‘Constructive engagement with industry stakeholders before, during, and after deciding on trade policies and negotiating investment agreements, ensures transparency and accountability.’
Expanded scope of agreements
2.38Submitters broadly drew a connection between a need for wider stakeholder engagement and transparency in negotiations and the expanded scope of trade and investment agreements over time, with the potential to have a wider impact on the government, the economy and society.
2.39Ms Michele O’Neil, President of the ACTU told the Committee:
The need for a more open and democratic process for trade agreements is more important than ever because they are no longer simply tariff deals.
…
Trade agreements must be subject to proper scrutiny, and unions, civil society and business stakeholders should have the opportunity for genuine input into the negotiations on behalf of those they represent. Trade agreement negotiations are currently conducted behind closed doors, and Australia lags behind other like-minded countries when it comes to the transparency and public scrutiny of agreements.
2.40The Productivity Commission also noted that wide ranging consultation and engagement ‘… is especially important with the increased complexity and comprehensiveness of agreements that include clauses on a myriad of aspects of civil and economic life.’ Further adding that ‘… the expanding coverage of agreements means that the required consultations are likely to be even broader, and required to occur more often during the lengthy negotiation process.’
2.41Similarly, PSI submitted that:
Given the wide-ranging and serious implications these trade and investment agreements can have for government Departments and regulators at all levels of government…, workers and economic and social sectors, it is important that wide, frequent and timely consultations occur before and during negotiations.
Insights and expertise
2.42Many submitters suggested that wider and more in-depth consultation with industry stakeholders and subject matter experts, rather than relying on government officials, would maximise outcomes and avoid unintended consequences in increasingly complex trade negotiations.
2.43From an industry perspective, Ai Group stated that industry participation during trade negotiations significantly increases their quality. Further adding that: ‘Industry experts contribute essential knowledge and insights to negotiations. Negotiators can gain real-world context and potential implications of proposed trade measures from their knowledge of industry trends, regulatory issues, and technology.’
2.44Likewise, the BCA noted the valuable insights that can be provided by the business sector based on first-hand experience:
The vast majority of international trade and investment takes place between firms… This means that business is uniquely well-placed to advise governments on the most salient barriers and frictions to cross-border trade and investment, barriers behind the border, as well as the potential benefits of trade liberalisation.
2.45Some stakeholders also nominated their strong links to international businesses and trading partners as a benefit of their engagement in trade negotiations.
2.46Other submitters advocated the need for greater involvement of experts and academics. For example, Dr Deborah Gleeson, Political Economy of Health Special Interest Group at the PHAA explained the need for greater involvement of experts in complex areas such as health:
I think one of the problems is that trade officials are not trained in health. At the moment, the way the system works is that it really depends on trade officials identifying the health issues at stake in negotiations and deciding to consult with the department of health or with health stakeholders about those issues.
…
The issue is that relying on trade officials to be able to trace through all of the possible impacts on health and the ways that particular technical and legal provisions in a trade agreement may impact not just the legislation and regulation we have now but also what future governments might want to do to protect health is really difficult. The system that we have relies on that sort of consultation to take place. We think that it should happen much more systematically and that trade negotiators should be required to consult with health officials and with health stakeholders.
Public trust and accountability
2.47Some observed greater transparency and more effective stakeholder consultation as a way to build public trust in trade agreements. For example, the ETU commented that ‘… engaging affected stakeholders openly and acting constructively on feedback received is the best way to achieve strong policy outcomes and create buy-in from the wider community for a policy agenda.’
2.48Similarly, ActionAid Australia stated that: ‘A robust procedure for public consultation during trade negotiations is crucial to build public trust in trade agreements and to ensure the social and environmental impacts of trade provisions are considered in trade negotiations.’
2.49Ai Group also noted that greater engagement with stakeholders can improve public trust and make an agreement more accountable.
Proposals for enhanced stakeholder consultation and engagement
2.50Submitters put forward a range of proposals to improve consultation and engagement processes in the negotiation of trade and investment agreements, with particular regard to establishing a more structured framework and improving transparency.
Identifying stakeholders
2.51Several submitters nominated a benefit to more formal and structured stakeholder identification, with some adding that the Australian Government could be required to systematically consult with all affected or interested stakeholders. For example, Australian Organic Limited stated that ‘… one way to enshrine the approach would be to develop legislation that would require governments to offer engagement on trade negotiations to all relevant stakeholders within the organic industry.’
2.52The BCA proposed a stakeholder registration process and public database to improve engagement both with government and between stakeholders:
Another method of increasing the transparency and the effectiveness of the consultation process may be the development of a public database listing the status of each set of FTA negotiations and the stakeholders who have or will be consulted by Australia’s negotiators. This could be supported by a process where interested stakeholders register with DFAT so that they are formally identified as a stakeholder who will be consulted throughout the negotiations. Such an arrangement would be expected to increase the involvement of interested business organisations.
In addition, it would allow those that are not directly involved in negotiations to more effectively collaborate with other parties who are identified as being part of the consultations process.
Timing, frequency and form of engagement
2.53Many submitters broadly emphasised the need for consultation and engagement with stakeholders prior to commencing negotiations, as well as regularly during the negotiation process through formal submissions, meetings, and briefings.
2.54AFTINET, PSI and the ACTU called for regular consultation during negotiations with business, unions, First Nations groups and other relevant civil society representatives. Likewise, from its perspective, the BCA stated that it ‘… encourages the government to provide business stakeholders with greater access at an earlier stage in the negotiating process for FTAs.’
2.55ActionAid Australia declared that: ‘The Government should address broader concerns with stakeholder consultations by establishing a clear procedure that mandates consultations to be conducted regularly throughout negotiations…’
2.56The Department of Home Affairs noted that providing updates following the conclusion of a negotiation round can assist stakeholders to understand progress made.
2.57Several submitters made suggestions in relation to the form of consultation and engagement, with the objective to improve the ease of engagement and accessibility for stakeholders. For example, the Department of Home Affairs noted the potential to better target outreach by providing stakeholders with summaries of relevant completed text, as well as having a central stakeholder engagement platform.
There is currently not a centrally managed way for the Government to receive feedback from stakeholders, particularly from small and medium enterprises that may not have the resources to draft a substantial submission. Stakeholders would benefit from a simple platform that allowed them to subscribe, keep updated on the status of negotiations and allowed simple methods of making submission to ongoing negotiations.
2.58Similarly, noting challenges for the industry in accessing, analysing, and sharing relevant information about trade negotiations, Grains Australia detailed that consultation could be enhanced by implementing measures to improve the accessibility for stakeholders:
Creating user-friendly online platforms for meaningful consultations could lead to increased efficiency, transparency, collaboration, and security, ultimately resulting in more informed decisions and improved outcomes in trade negotiations.
…
One way of achieving this is to consolidate all relevant data, documents, and updates in a user-friendly centralised Team Australia location, streamlining access and reducing the time and effort required to gather essential information across different agencies and service providers.
Stakeholder advisory bodies
2.59Many witnesses designated formal stakeholder advisory bodies as a mechanism to enhance consultation and engagement. In doing so, many referred to the United States’ (US) trade committee advisory system (discussed later in this chapter).
2.60In its submission, DFAT outlined a range of advisory bodies and groups recently established or in development to strengthen existing consultation and engagement with stakeholders. These included:
- the Ministerial Council on Trade and Investment (established by National Cabinet in September 2022),
- the Government’s commitment to establish a Trade 2040 Taskforce that will … ‘bring together government, industry, unions and community representatives and serve as a consultative mechanism on the Government’s trade policy agenda out to 2040’, and
- working to establish four pilot peak bodies advisory groups covering industry, unions, First Nations and civil society.
- A number of submitters acknowledged and welcomed the establishment of these stakeholder advisory bodies.
- In their submission, the ACTU advocated for the establishment of formal stakeholder advisory bodies across unions, business, and civil society and described how they could operate:
The Australian Government should legislate an advisory committee system based on the system in the US, to enable stakeholders to provide information and advice with respect to negotiating objectives and bargaining positions before Australia enters into a trade agreement. The Committees would be consulted as negotiations progress and provided with negotiation text on a confidential basis in order to provide real-time advice, and be provided with the final text before it is signed in order to provide advice on whether the agreement should be entered into. The committee would also provide advice on the operation of existing trade agreements and other related trade policy issues.
2.63Similarly, the Australian Manufacturing Workers Union (AMWU) recommended ‘…the creation of a legislated, tripartite advisory committee to provide a formal mechanism whereby unions can join other community stakeholders to provide information and advice regarding negotiating objectives and bargaining positions before Australia enters into any trade agreement.’
2.64The ACTU acknowledged that while consultation with First Nations stakeholders regarding trade has improved, there would be further benefit in specifically enshrining First Nations consultation in legislation:
We note the recent steps the current Government has taken to pilot a First Nations trade advisory group, and establish Australia’s inaugural Ambassador for First Nations People, however the Government should go further and ensure that consultative mechanisms for First Nations communities regarding trade is enshrined in legislation.
2.65Some submitters made proposals for specific stakeholder advisory groups. For example, PSI suggested a standing advisory committee of state, territory and local government representatives to be provided with proposals and draft text before each negotiating round. The Australian Small Business and Family Enterprise Ombudsman suggested a dedicated small and medium-sized enterprises (SME) committee to perform a facilitation function as well as an advisory function, including to review relevant trade agreement chapters, as part of a strategy to expand the benefits of trade and investment for SMEs.
Providing draft negotiating mandates and agreement text
2.66Many submitters to the inquiry recommended that the Australian Government make draft negotiating mandates and draft agreement text available, either publicly or under confidentiality arrangements, to enhance transparency and improve the quality of input provided through stakeholder consultation. For example, ActionAid Australia proposed that Australia should publish its negotiation position at commencement, draft negotiating text as negotiations progress, and final agreement text prior to an agreement being signed.
2.67Other submitters outlined the benefits of having draft negotiating mandates and agreement text available to stakeholders, for example:
- RMAC suggested that publication of a negotiating mandate is useful ‘… in strengthening oversight as to progress and providing transparency around the ultimate goals of any agreement.’
- PSI declared that draft negotiating text must be provided for ‘… consultations to be informed, relevant and meaningful.’
- The NFF stated that ‘… draft agreement text should be more readily available to industry, to alleviate concern and build trust between negotiators and stakeholders.’
- The PHAA emphasised the need for stakeholders to see the full text when it comes to trade agreements because ‘… the exact wording is critically important’ and without seeing the text it is not possible to ‘… make an independent assessment of the potential consequences…’
Use of confidentiality agreements
2.68A widely identified solution to improving transparency was the provision of greater access to trade negotiation information, including draft text, under confidential arrangements between the government and key stakeholders through the use of confidentiality agreements. This was often raised in relation to the approach used in the US (discussed later in this chapter).
2.69In its submission, the Northern Territory (NT) Government outlined the potential benefits of using confidentiality agreements in stakeholder consultation:
Utilising non-disclosure agreements (or deeds) between government entities and essential stakeholders can contribute to enhancing transparency in trade discussions… Although not everyone can participate in the negotiation process, pinpointing parties capable of providing crucial evaluations of proposals can assist negotiators in gauging the potential advantages of future agreements and potential drawbacks.
2.70DFAT noted that while their function and membership is still in development, the members of the four proposed pilot peak body advisory groups ‘… will likely be required to sign a Deed Poll of Confidentiality to allow for improved engagement in certain areas of trade agreement negotiation.’
Incorporating stakeholder feedback
2.71Several submitters suggested the overall effectiveness of stakeholder consultation and engagement would be enhanced if the Australian Government were to show how stakeholder input is considered and reflected in negotiations. For example, Grains Australia stated that ‘It is essential for the Australian Government to better demonstrate how industry specific interests have been incorporated into the final terms of an agreement before it is formally ratified so that industry can make better informed endorsements…’
2.72ActionAid Australia recommended that the government demonstrate how feedback and evidence gathered through stakeholder consultation is reflected: ‘The Government should publish consultation reports prior to initiating trade negotiations; and as consultations are conducted throughout trade negotiations. Reports should detail how evidence is taken into consideration in trade negotiations.’
2.73RMAC noted that access to proposed negotiating mandates would assist to demonstrate if and how feedback has been incorporated. Access to a proposed negotiating mandate would be ‘… a useful cross reference to the consultation process i.e. to ensure that industry’s broad objectives have been acknowledged and encapsulated.’
United States approach
2.74The Committee received considerable evidence that pointed to the US approach to stakeholder consultation in the negotiation of trade and investment agreements as informative for Australia, particularly the trade advisory committee system and cleared advisor framework.
2.75The US trade advisory committee system was established by Congress in 1974 to ensure that trade policy and trade negotiation objectives adequately reflect the interests and views of stakeholders. The role and scope of the system has expanded over time.
2.76The trade advisory committee structure consists of 26 primarily industry-based and some issue-based committees that advise the US Trade Representative (USTR) and Department of Commerce on trade policy and sector-specific issues both prior to and during trade negotiations, as well as on the operation of an agreement once in force. At the conclusion of negotiations each advisory committee provides a report on proposed trade agreements at the conclusion of negotiations, which are also made publicly available on USTR’s website.
2.77Within the trade advisory committee system is the ‘cleared advisor’ framework, which permits over 700 trade advisory committee members with access to trade related information and agreement text relevant to their committee on a confidential basis. Cleared advisors are required to have security clearances and sign non-disclosure agreements.
2.78Mr Eric Gottwald, Trade and Globalization Policy Specialist at the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), a cleared advisor on the Labour Advisory Committee for Trade Negotiations and Trade Policy, explained the benefits of the process:
The cleared adviser process ensures that US trade unions have the opportunity to influence an agreement as it evolves, rather than only seeing it after it's signed and it's, frankly, too late to make any meaningful changes. On a practical level, this has deepened our technical understanding of trade agreements and our ability to provide relevant feedback to our government. The cleared adviser process enables stakeholders to provide input in a way that leads to higher quality trade agreements. For instance, we've had the opportunity to provide input into the development of labour chapters in our agreements that ensure the robust and effective protection of labour rights for workers.
…
… our cleared adviser system is proving to be an indispensable tool for enabling workers' voices to be heard in our trade agreement-making process, and it has led to higher quality agreements and more effective protections for workers.
2.79Many submitters identified the US system as informative for improving Australia’s approach to stakeholder consultation and engagement. For example, Ms Clare Middlemas, Senior International Officer at the ACTU told the Committee:
We can certainly take from the US their good example of the stakeholder advisory groups and the cleared adviser system, where stakeholders are given a high level of security clearance in order to be able to fully provide feedback and input on trade negotiations as they continue.
2.80The BCA described the US approach as … ‘a comprehensive and systematic approach…’ that ‘… provides a benchmark against which Australia should evaluate its own consultative processes.’ It further recommended that: ‘The Australian government should study the US Industry Trade Advisory Committee system with a view to establishing what elements of that system could be incorporated into its approach to consulting with the business community.’
2.81The ETU also concluded that Australia should establish a framework based on the US approach:
The advisory committee system that has been in operation in the United States for close to half a century is a more effective model of institutionalising input from a tripartite array of domestic stakeholders.
…
Incorporating such an advisory structure into the infrastructure of Australia’s trade negotiation framework would be an invaluable asset to negotiators and produce better outcomes in the national interest.
2.82Stakeholders also specifically pointed to the cleared advisor framework as a mechanism to improve consultation and increase transparency. For example, the BCA observed that the cleared advisor framework can ‘… address issues around the transparency of FTA negotiations…’ Similarly, Ai Group suggested that the cleared advisor model is an example of how an effective balance can be found between appropriate confidentiality and close industry collaboration during trade negotiations.
2.83The ETU further recommended that: ‘An advisor accreditation scheme modelled after the “Cleared Advisor” program in the US should be established to facilitate regular close consultation with union, industry, and civil society groups throughout the trade agreement negotiation process.’
2.84Medicines Australia indicated that the US committee advisory system strengthens the US’ negotiating position and enables a ‘united front’ when negotiating with other countries.
Limitations of the US approach
2.85While the US trade committee advisory system and cleared advisor framework was widely put forward as informative, submitters also highlighted its limitations and some noted that these should be considered if Australia were to adopt a similar model.
2.86The primary issue with the US approach raised in evidence related to the representation and balance of interests across the trade advisory committees and cleared advisors. For example, Ms Clare Middlemas of the ACTU told the Committee:
Certainly when you look at the cleared adviser system as a whole, it is quite unbalanced towards business. We think in order to be effective, any system that is set up really needs to have equal representation from unions and business in a tripartite sense and include the voices of First Nations people and other civil society organisations…
2.87While advising the Committee of the benefits of the US approach, Mr Eric Gottwald of the AFL-CIO also noted an imbalance in representation amongst cleared advisors with only 15 per cent representing trade unions, non-government organisations or academics.
2.88Similarly, with particular regard to representation of women’s rights, Ms Sophie Hardefeldt, Policy and Research Manager at ActionAid Australia told the Committee that:
… the US has quite a comprehensive approach to stakeholder consultation that Australia could look at replicating… there are still some concerns with the US model around the prioritisation of big business stakeholders. If Australia were going to consider an advisory-committee-style approach to stakeholder engagement, we'd want to see some parameters set around ensuring civil society engagement from women's rights organisations and women's rights experts, and also that we really think about how we're engaging, particularly with developing country partners, and resourcing that engagement.
2.89Ms Kate Lappin, Asia Pacific Regional Secretary at PSI also explained:
I think there would be interest in the public actually know[ing] what is going on, not just those few, which are often lobby groups. Admittedly it does involve unions as well, but overwhelmingly it's stacked by large corporations and their lobby groups, which have enormous resources to be able to follow up and engage in that process. I think that's first and foremost the major concern.
2.90Dr Hazel Moir was critical of the US approach describing it as having ‘… well-developed processes for ensuring the voices of large business are heard across federal government administration’ and which ‘… provide certain business interests with inside access to government.’
2.91Further, Dr Hazel Moir advised caution in taking lessons from the US approach:
The Committee would do well to review the US experience before suggesting legislative approaches. Such a review should consider the ways in which this has led to the interests of large scale US corporations dominating the US trade agenda. In many ways this has operated against broader US interests as well as providing real difficulties for smaller trading nations.
2.92Another potential drawback identified is that the system only offers transparency for select stakeholders within the committee structure and cleared advisor framework, rather than the public more broadly. Referring to the US system, Mr Eric Gottwald of the AFL-CIO explained that: ‘Our system offers transparency, but it's transparency only for those who are invited and who become cleared advisers. It's not transparency where this stuff is made public. In fact, I've signed an NDA [non-disclosure agreements] and I could be in trouble if I made these documents public.’
2.93A related issue raised by witnesses is that stakeholders who are cleared advisors with access to trade information on a confidential basis are constrained from public advocacy on an agreement. In relation to the cleared advisor model, Dr Deborah Gleeson of the PHAA stated that: ‘… the downside of that type of system can be that, if there are very tight confidentiality requirements, it can tie the hands of those advisers so they are not able to keep the public informed about what the issues are, and to raise issues with those who need to be aware of them.’
Legislating a stakeholder consultation and engagement framework
2.94Some submitters advocated for enshrining elements of the stakeholder consultation and engagement process in the negotiation of trade agreements in legislation. For example, the ACTU suggested that legislation could set the baseline for what is expected in terms of stakeholder consultation and engagement while maintaining the flexibility to further develop mechanisms over time.
2.95The primary benefits of a legislative approach, as opposed to a policy approach, nominated by stakeholders were consistency and durability. For example, Ms Kate Lappin, PSI told the Committee that: ‘… it's clear from other jurisdictions where there's some increased transparency that it has to be a legislative framework that enables it. As we know, without a legislative framework, it can be easily discarded.’
2.96Ms Clare Middlemas of the ACTU also explained the benefits of a legislative approach to the Committee:
It is to ensure a consistent approach… there is no consistent approach that stakeholders and the public can expect in terms of consultation.
…
That is why we would see that it needs to be a legislated framework and not just a policy that changes with the government of the day or at the whim of DFAT. As we've mentioned before with the consultation issue, it is not a consistent approach. It can depend on the trading partner or the government of the day. We see legislation as really setting out a standard about what Australians can expect.
2.97Mr Eric Gottwald, AFL-CIO explained the benefits of having the US advisory committee and cleared advisor system legislated: ‘… having these commitments enshrined in legislation has ensured that, regardless of who's in power, we will continue to have a seat at the table. That's a big advantage of having a legislative approach.’
2.98Several stakeholders suggested that the nature of the negotiation of trade and investment agreements is not well-suited to a legislative approach, particularly that legislation could limit the flexibility that is required both during negotiations and across different agreements. For example, RMAC emphasised that: ‘All negotiations differ regarding potential issues, strategies to be pursued, complexity and desired outcomes… As such, legislating the process may present challenges – as well as potentially restricting flexibility...’ Others also reflected on the potential to impact on the capacity for timely responses to trading partners and to extend overall negotiation timeframes.
2.99In its evidence to the inquiry, DFAT emphasised the need to consider whether legislation is the most appropriate means to achieve objectives in relation to Australia’s approach to negotiating trade and investment agreements. It further noted that changes to transparency and consultation processes can be implemented through policy rather than legislation.
2.100DFAT also advised the need to consider the potential legal risks associated with a legislated approach:
The risk of legal challenge in the event of uncertainty regarding whether a mandate, consultation obligation or transparency requirement has been properly followed in accordance with the legislation may lead to uncertainty, both within Australia and for trading partners. This could impact implementation of trade agreements as well as the negotiating process.
2.101Similarly, while stating that it does not support a legislative approach, the BCA suggested that if legislation is introduced, it should be designed to avoid legal challenges that could disrupt the progress of trade agreements.
If the government seeks to legislate specific arrangements for consultation on free trade agreements, it should ensure that these legislative requirements are placed outside the scope of administrative and judicial review so they do not become the subject of vexatious litigation aimed at stifling or disrupting the negotiation and legislation of free trade agreements.
Committee comment
2.102The Committee recognises the importance of broad, in-depth, genuine, and timely, stakeholder consultation and engagement to the achievement of the most favourable trade negotiation outcomes for Australia.
2.103The Committee acknowledges the wide range of stakeholder consultation and engagement activities undertaken by DFAT, as well as its ongoing commitment to improving consultation and engagement processes over time. Further, it notes recent efforts to enhance stakeholder engagement, including the steps taken to establish new advisory bodies, which was also observed by many submitters and witnesses.
2.104The Committee accepts the position put forward in the evidence that greater transparency and access to more information in consultation processes improves the quality of input from stakeholders to feed into trade negotiations. Further, that more informed input from stakeholders, including from those that are directly affected and with relevant insights and expertise, can contribute to better trade negotiations outcomes for Australia.
2.105As such, there is likely considerable value in providing stakeholders with more information, including some access to draft agreement text, as negotiations progress. However, while in principle transparency should be maximised, the Committee is of the view that it is important and appropriate for confidentiality to be maintained in trade negotiations. Australia’s approach must continue to seek to find an appropriate balance between transparency and confidentiality.
2.106The Committee agrees there is benefit in the Australian Government demonstrating how stakeholder feedback is or is not incorporated into trade negotiations. It also strongly agrees that efforts should continue to make information about trade agreements as accessible as possible, both for targeted stakeholders and the wider public. This will support enhanced engagement from stakeholders as well as contribute to increased public awareness, understanding and support.
2.107In the Committee’s view, the US trade advisory committee structure and cleared advisor system is insightful for Australia. The establishment of an Australian trade advisory committee and cleared advisor framework, informed by the US approach, would address many of the issues raised in evidence and significantly strengthen Australia’s approach to trade negotiations. In particular, it would facilitate a more effective balance between transparency and confidentiality to improve the depth of engagement with key stakeholders across business, unions, and civil society.
2.108A framework enabling regular access to information as negotiations progress, including draft text of relevant provisions under confidentiality arrangements, would allow key stakeholders to provide informed and valuable feedback to the Australian Government. It would be pertinent for a framework to outline a clear and consistent structure for who is consulted and what they will be consulted on, as well as the form of engagement and when it will occur. It should also establish a clear feedback loop. Consideration should be given to making advice provided to government through an advisory committee system publicly available where appropriate.
2.109The Committee notes that in adapting the US approach for an Australian context, consideration must be given to issues identified with the US system, with a particular need to design a framework to ensure balanced representation of interests and across sectors. Another challenge will be identifying the most suitable stakeholders while ensuring the committee structure does not become too large and cumbersome. The Committee also observes that greater transparency in the US approach does not necessarily ensure wide-spread support for trade agreements amongst stakeholders.
2.110The Committee believes that an Australian trade advisory committee and cleared advisor framework should be legislated. While there are disadvantages to a legislative approach, on balance the consistency and certainty provided by enshrining the framework in legislation provides an enduring enhancement to stakeholder consultation in Australia’s approach to negotiating trade and investment agreements.
2.111The Committee notes that while any legislation should establish a clear and consistent framework, some flexibility should be maintained in recognition that differing engagement with stakeholders may be required depending on the type, content, and context of an agreement.
2.112While there is considerable merit in a trade advisory committee and cleared advisor framework it is also recognised that such a model only improves transparency and engagement for selected stakeholders. Therefore, the establishment of such a framework must be at the expense of broad and open public consultation processes, and additional efforts should be made to increase transparency and the level of information on trade negotiations that is made publicly available.
Recommendations
2.113The Committee recommends that the Australian Government develop a legislative framework to establish a trade advisory committee and cleared advisor system, informed by the United States model.