Treaties Committee Reports – Free Trade Agreements with UK and India

Published on Mon 21 November 2022 3:20pm

It’s the committee’s view that the Australian government should consider how it can put in place improved consultation processes with all stakeholders as negotiations are undertaken. That is, indeed, a platform commitment of the Australian Labor Party.

Mr Wilson (3:20pm) – On behalf of the Joint Standing Committee on Treaties, I present the following reports: report 201, Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland, and report 202, Australia-India Economic Cooperation and Trade Agreement, incorporating a dissenting report.

Reports made parliamentary papers in accordance with standing order 39(e).

by leave—I’m glad to make a statement on the Joint Standing Committee on Treaties reports into two trade agreements, the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland and the Australia-India Economic Cooperation and Trade Agreement. The agreement with the UK is a modern and comprehensive trade agreement that reflects the longstanding quality and depth of the political, cultural and economic relationship between Australia and the United Kingdom. The agreement’s 32 chapters cover the full scope of trade and regulatory matters. It ventures into new areas but preserves, at the same time, policy and regulatory space for the parties in future, particularly in rapidly evolving sectors such as digital trade and financial services.

It is the case that there remain some barriers to trade in goods, particularly quotas on red meat, but the fact is that, upon entering into force, 99 per cent of Australian goods exports by value would enter the UK without tariffs. The liberalisation of the rules for services and investment also has the potential to open new markets for Australian service suppliers. As with other trade agreements considered by the committee in recent years, there was significant interest by stakeholders in the question of temporary foreign labour access arrangements, particularly provisions in the agreement relating to contractual service suppliers and the recognition of professional qualifications in sensitive areas like education. The committee believes there is value in tracking and assessing the outcomes with respect to temporary foreign labour access that have occurred under trade agreements settled in recent years. The committee will seek an opportunity to consider those data in 2023.

In comparison to the free trade agreement with the UK, the Australia-India Economic Cooperation and Trade Agreement is less comprehensive in scope, reflecting the fact that it’s an early-harvest agreement made in advance of negotiations for a comprehensive economic cooperation agreement. It nevertheless establishes a framework for future liberalisation, market access and investment opportunities—

As the member for Bruce is both aware of and welcomes—and it’s the first such agreement that India has settled with a developed nation in 10 years. That’s quite a remarkable achievement.

Upon entry into force, the agreement with India would mean that approximately 90 per cent of Australia’s current exports to India would be either tariff free or have access to tariff rate quotas. This means there are some beneficial outcomes for tariff reductions on some key Australian exports, while high tariffs on agricultural goods like vegetables and wheat, sadly, remain mostly unchanged. And the Australian wine industry has some justifiable disappointment with respect to the outcomes for its sector. That is disappointing. Hopefully that can be corrected in the future agreement.

In general, outcomes in services liberalisation, according to the Department of Foreign Affairs and Trade, are equivalent to the best commitments India has offered other trade partners, and the terms of the agreement protect what Australia has achieved, in the sense that the terms of any further agreements India enters into will need to be offered to Australia, where they are better than what we have currently secured.

As an interim agreement, the AI-ECTA, as it is being called, is absent provisions dealing with a number of substantive trade policy areas like intellectual property, digital trade, government procurement, competition policy and the facilitated involvement of small and medium-sized enterprises, and it doesn’t deal with other barriers to trade such as the individual tax and regulatory regimes at the state and union territory level in India, which anyone who is engaged in exporting to that nation would know add a level of complexity for Australian exporters.

Needless to say, the value of trade investment agreements do not stand entirely on market access and investment rules. Such agreements do operate as broader instruments of engagement, and on the committee we recognise that India is a like-minded partner of great significance and even greater potential in our region—in the Indo-Pacific region. It’s committed, as Australia is, to the rule of law, to open markets and to stability, and on that basis this agreement, for which negotiations began in 2011, is a hard-won and long-sought achievement.

While the committee determined on a strong multi-partisan basis that both agreements should be ratified, it also made recommendations in relation to longer held concerns around the independent economic assessment of the impact of such agreements and in relation to a system that enables higher quality engagement for stakeholders in the negotiating process, which we do not currently have.

Trade agreements are the products of negotiations and trade-offs; some sectors benefit, others don’t. There are in some cases unwanted—or, at the very least, extraneous—economic and social impacts. In addition to assisting with the proper understanding and assessment of a negotiated trade agreement, independent modelling and analysis would allow us to have proper regard to the quality of public policy decisions and make sure that agreements represent the optimal achievement and the optimal protection of Australia’s interests.

The substance and quality of consultation processes around trade agreements has been a consistent theme of the committee’s interest in recent years, mainly because stakeholders—whether from business, industry or civil society—have noted and argued in favour of the benefits of a consultation which is timely, meaningful and responsive. Presently, unfortunately, what occurs by way of engagement is often best described as information briefings rather than genuine consultation. It’s the committee’s view that the Australian government should consider how it can put in place improved consultation processes with all stakeholders as negotiations are undertaken. That is, indeed, a platform commitment of the Australian Labor Party.

Finally, in both reports, the committee recommended that the Australian government implement the recommendations of JSCOT report 193, Strengthening the trade agreement and treaty-making process in Australia, in relation to greater consultation transparency and on the question of independent modelling and analysis of trade agreements.

But, having said that, on behalf of the committee I commend the reports to the House.

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