AFTINET Convener Dr Patricia Ranald gave evidence to the Joint Standing Committee on Treaties (JSCOT) public hearing on the Australia-UK FTA on September 20. The Committee will report to Parliament on November 17, 2022, before Parliament votes on the enabling legislation for ratification.
The Committee heard evidence from a range of industry and community representatives including several AFTINET member organisations. Dr Ranald noted that the agreement was negotiated in haste by the previous government before the May election. While predicted benefits from tariff reductions on imports and expanded agricultural exports have been well publicised, it is less well known that the agreement could restrict government regulation for local industry development, especially at state government level.There has been no independent evaluation of the economic, social and environmental costs and benefits of the agreement. The agreement also opens more Federal and state government entities, including TAFE training, to international competition for government procurement, and foreshadows applying international competition to local government procurement for the first time in any Australian trade deal.
She noted that these provisions present problems for the current Labor government’s strategy for development of local renewable energy industries and other low-carbon industries to meet emissions reduction targets and to replace jobs in high-carbon industries The Labor strategy includes use of government procurement to assist local industry development.
The agreement also removes labour market testing for temporary overseas workers, which is contrary to the current government’s policy of focusing on permanent migration and increased skills training for local workers. The A-UK-FTA commitments on labour rights and environmental standards are less legally enforceable than the other chapters in the agreement.
The AFTINET submission makes a number of recommendations for changes to the agreement before ratification including:
review of the Investment and Services chapters to ensure that there is regulatory space to proceed with active government policies to support local renewable industries and other low-carbon industries
review of government procurement commitments, and cancellation of future negotiations on local government commitments
restoration of labour market testing for temporary skilled workers and review of other proposals for temporary workers to ensure they are consistent with government policies on permanent migration and skills training for local workers
strengthening of the Labour and Environment chapters to ensure they are no less legally enforceable than the other chapters in the agreement.
Dr Ranald also welcomed the exclusion of ISDS from the Australia - UK agreement but warned about the danger of ISDS cases from UK companies if the UK joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This danger could be easily avoided if the Australian and UK governments sign side letters with commitments that neither government will apply the ISDS provisions, similar to the CPTPP side letters signed between Australia and New Zealand. See her Conversation article below which documents how British fossil fuel company Rockhopper used ISDS to win A$365 million in compensation from the Italian government because it regulated offshore oil drilling.AFTINET will pursue these issues with Members of Parliament before they vote on the enabling legislation in November.
European Union FTA
Dr Ranald also met with the visiting delegation from the EU Parliament to discuss the ongoing negotiations for the EU-Australia Free Trade Agreement. The EU has a more open process for trade negotiations, publishing some of its negotiating proposals at the beginning of the negotiations in 2017, and the EU Parliament takes a keen interest in the negotiations. The delegation met with a range of industry, union and environment organisations.
Dr Ranald stressed that AFTINET opposed proposals from the EU pharmaceutical industry for longer monopolies which would delay the availability of cheaper medicines. She also argued that the agreement should not restrict government policies for local renewable energy development, and advocated against EU proposals to expand commitments on government procurement, including local government procurement. Finally she argued that commitments on labour rights and environmental standards should have the same legal enforceability as other commitments in the agreement. The EU delegation responded well to this presentation and followed up with detailed questions.
AFTINET has asked the Labor government to implement its policy for a more open and accountable trade policy process, which should result in more involvement by Australian parliamentarians in future trade agreements.