The level of support for our FTA agenda seems to have peaked with the completion of the China FTA (to be known as the ChAFTA), as part of the Asian FTA ‘Trifecta’, writes Andrew Hunt.
However that trend has been abruptly reversed by the recent public debate about the merits of Australia entering into the Trans Pacific Partnership Agreement (TPPA). There has been a marked increase in antagonism towards the TPPA with its opponents taking to public forums with a wide variety of objections formed without the benefit of the text itself. The debate has been so intense and exhausting that the ABC even resorted to interviewing me (in my capacity as a director of the Export Council of Australia) to seek my views on the TPPA, apparently hoping to provide an opposing position to those attacking the TPPA. Very disconcerting for all concerned, although I have been assured that my hair was the star of the entire segment.
So, with the interview having omitted the ‘good stuff’,. I thought it would be a good idea to address some of the comments regarding the FTA agenda broadly and specifically the TPPA
• No FTA will be perfect. An FTA is like any other agreement in that it reflects the relative desires of the parties to the agreement and their ability to achieve those outcomes. In that context, Australia, with its largely open economy and with low levels of tariffs, does not have much to negotiate. Accordingly that limits the capacity of Australia to secure comprehensive outcomes that satisfy the interests of all parties. In regional FTAs with major trading partners such as the TPPA, our ability to influence the agenda is very limited – the major trading partners will dictate the majority of the agenda.
• Australia has largely done well in its negotiated FTAs, especially in the Asian FTA Trifecta. In particular, securing the deal with China under the ChAFTA appears to be a wonderful achievement. That said the ongoing delay in sighting the text of the ChAFTA is frustrating and begs the question as to what deal had actually been secured to support the announcements of the deal in November last year.
• I do not subscribe to the conspiracy theories that Australia has sold out vital national interests in the TPPA. For a start, we have no text to support that theory. Plus, if we were to have relinquished fundamental interests then we would have done so previously to get the FTA negotiation agenda moving.
• Successive Federal Governments have been accused of secrecy in negotiations on its FTAs, especially in relation to the TPPA. I believe that there has been extensive consultation on the TPPA with interested parties in Australia to the extent possible given the reasonable expectations of secrecy of the other negotiating parties. It is unlikely that any negotiation between sovereign nations could succeed if their progressive positions and the text of their negotiations (in draft only) were subjected to ongoing criticism.
• The inclusion of an Investor – State Dispute Resolution Provision (or ISDS) is probably a likely outcome and has been included in other FTAs to date. There are merits to its inclusion including merits to Australian exporters operating overseas and we have successfully “carved out” sensitive areas from other ISDS provisions. No reason to believe that we cannot do so now, especially given the need by the US to include such a provision
• Experience suggests that we reserve our rights on sensitive areas. We still retain anti - dumping and countervailing provisions, along with FIRB review and our biosecurity regime. These are positions respected and adopted by other parties to the TPPA so we can expect similar outcomes.
• The TPPA includes countries such as Canada, Peru and Mexico with whom we do not have FTAs and may not have secured FTAs on a bilateral basis for some time.
• The TPPA includes us in important regional supply chains and affords economies of scale that we may not have been able to secure in other ways
• While there is no need for Parliamentary approval as in the US, such deals are subject to review by a number of Parliamentary Committees. It is surprising how few submissions are made to such reviews
• While massive, the TPPA only includes 12 countries. The next big regional deal is the Regional Economic Comprehensive Economic Partnership Agreement (RCEP) with 28 countries, including China. This is still being actively negotiated and yet there has yet to be any concerns regarding the RCEP. Many of those who object to US influence under the TPPA similarly object to the influence of China under ChAFTA, yet there has been no outcry to date.
All things considered, on current ‘exposed form’, our FTA agenda including the TPPA represents the best efforts of successive governments, working toweards what they see as the best interests of Australia. It’s not perfect but it may reflect our real position in the world. If people feel otherwise then they should say so but in a constructive and not relentlessly negative manner.
Andrew Hudson Partner, Gadens Melbourne. E: This email address is being protected from spambots. You need JavaScript enabled to view it.
Fear and loathing in our Free Trade agenda
airCargo #236 archive stories
Tuesday, 28 April 2015
The level of support for our FTA agenda seems to have peaked with the completion of the China FTA (to be known as the ChAFTA), as part of the Asian FTA ‘Trifecta’, writes Andrew Hunt.
However that trend has been abruptly reversed by the recent public debate about the merits of Australia entering into the Trans Pacific Partnership Agreement (TPPA). There has been a marked increase in antagonism towards the TPPA with its opponents taking to public forums with a wide variety of objections formed without the benefit of the text itself. The debate has been so intense and exhausting that the ABC even resorted to interviewing me (in my capacity as a director of the Export Council of Australia) to seek my views on the TPPA, apparently hoping to provide an opposing position to those attacking the TPPA. Very disconcerting for all concerned, although I have been assured that my hair was the star of the entire segment.
So, with the interview having omitted the ‘good stuff’,. I thought it would be a good idea to address some of the comments regarding the FTA agenda broadly and specifically the TPPA
• No FTA will be perfect. An FTA is like any other agreement in that it reflects the relative desires of the parties to the agreement and their ability to achieve those outcomes. In that context, Australia, with its largely open economy and with low levels of tariffs, does not have much to negotiate. Accordingly that limits the capacity of Australia to secure comprehensive outcomes that satisfy the interests of all parties. In regional FTAs with major trading partners such as the TPPA, our ability to influence the agenda is very limited – the major trading partners will dictate the majority of the agenda.
• Australia has largely done well in its negotiated FTAs, especially in the Asian FTA Trifecta. In particular, securing the deal with China under the ChAFTA appears to be a wonderful achievement. That said the ongoing delay in sighting the text of the ChAFTA is frustrating and begs the question as to what deal had actually been secured to support the announcements of the deal in November last year.
• I do not subscribe to the conspiracy theories that Australia has sold out vital national interests in the TPPA. For a start, we have no text to support that theory. Plus, if we were to have relinquished fundamental interests then we would have done so previously to get the FTA negotiation agenda moving.
• Successive Federal Governments have been accused of secrecy in negotiations on its FTAs, especially in relation to the TPPA. I believe that there has been extensive consultation on the TPPA with interested parties in Australia to the extent possible given the reasonable expectations of secrecy of the other negotiating parties. It is unlikely that any negotiation between sovereign nations could succeed if their progressive positions and the text of their negotiations (in draft only) were subjected to ongoing criticism.
• The inclusion of an Investor – State Dispute Resolution Provision (or ISDS) is probably a likely outcome and has been included in other FTAs to date. There are merits to its inclusion including merits to Australian exporters operating overseas and we have successfully “carved out” sensitive areas from other ISDS provisions. No reason to believe that we cannot do so now, especially given the need by the US to include such a provision
• Experience suggests that we reserve our rights on sensitive areas. We still retain anti - dumping and countervailing provisions, along with FIRB review and our biosecurity regime. These are positions respected and adopted by other parties to the TPPA so we can expect similar outcomes.
• The TPPA includes countries such as Canada, Peru and Mexico with whom we do not have FTAs and may not have secured FTAs on a bilateral basis for some time.
• The TPPA includes us in important regional supply chains and affords economies of scale that we may not have been able to secure in other ways
• While there is no need for Parliamentary approval as in the US, such deals are subject to review by a number of Parliamentary Committees. It is surprising how few submissions are made to such reviews
• While massive, the TPPA only includes 12 countries. The next big regional deal is the Regional Economic Comprehensive Economic Partnership Agreement (RCEP) with 28 countries, including China. This is still being actively negotiated and yet there has yet to be any concerns regarding the RCEP. Many of those who object to US influence under the TPPA similarly object to the influence of China under ChAFTA, yet there has been no outcry to date.
All things considered, on current ‘exposed form’, our FTA agenda including the TPPA represents the best efforts of successive governments, working toweards what they see as the best interests of Australia. It’s not perfect but it may reflect our real position in the world. If people feel otherwise then they should say so but in a constructive and not relentlessly negative manner.
Andrew Hudson Partner, Gadens Melbourne. E: This email address is being protected from spambots. You need JavaScript enabled to view it.
ts of Australia. It’s not perfect but it may reflect our real position in the world. If people feel otherwise then they should say so but in a constructive and not relentlessly negative manner.
