RCEP rules on trade in services will apply to the aged care industry because unlike other publicly funded essential services aged care has not been specifically exempted from those rules..
The Regional Comprehensive Economic Partnership (RCEP) involving Australia, China, Japan, South Korea, New Zealand and the 10 ASEAN countries including Myanmar and the Philippines was negotiated with minimal consultation and the text was not released until after it was signed in November 2020. It is now being reviewed by the Joint Standing Committee on Treaties which will report to parliament in late August before parliament votes on the implementing legislation prior to ratification.
Since Australia already has free trade agreements with all RCEP members, there is no additional market access for Australian exports and as usual there has been no independent study of the costs and benefits of the agreement.
The RCEP has no commitments at all by governments to uphold human rights and labour rights and its ratification would legitimise a brutal military regime in Myanmar at a time when the US and other allies are implementing economic sanctions. The RCEP also ignores serious violations of human rights and labour rights in China, the Philippines and other RCEP countries.
RCEP rules also restrict local industry development. It was negotiated before the COVID-19 pandemic which has revealed our dependence on imports for essential products. The Australian government acted during the pandemic to assist local manufacturing of medical equipment, vaccines and other essential products. There is now bipartisan support for longer term policies to develop local industry capacity. But the RCEP text contradicts these intentions through strict rules which discourage government assistance to local industries at a time when more active industry policies are needed to rebuild the economy.
RCEP rules on trade in services will apply to the aged care industry because unlike other publicly funded essential services aged care has not been specifically exempted from those rules..
Aged care is in the spotlight now because the Final Report of the Royal Commission into Aged Care Quality and Safety in March exposed extensive neglect and mistreatment in residential aged care resulting from a lack of regulated standards. It made specific recommendations for legally enforceable quality of care standards, higher levels of staffing, especially qualified nurses, and improved training standards.
RCEP rules for trade-in-services are designed to encourage foreign investment in services. They lock in current levels of regulation, and restrict future changes. These rules suit the needs of international investors but could restrict the changes needed for dealing with the aged care crisis
Australia included all services unless they are specifically reserved. The reservations are listed in an Annex which includes “the specific sectors and sub sectors or activities for which Australia may maintain existing, or adopt new or more restrictive, measures.”
The reservations list for essential services includes income security or insurance; social security or insurance; social welfare; public education; public training; health; childcare; public utilities; public transport and public housing. It is puzzling that aged care, with similar funding and structure to childcare, is not included in the list of reservations.
RCEP rules restrict governments from regulating numbers of staff in all services. Chapter 8, Article 8.5 d) states that governments “shall not adopt or maintain limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ”. Article 8.15 states that qualifications, licensing and technical quality standards cannot be “more burdensome than necessary” for the investor. Since aged care has not been reserved from these obligations both of these clauses could restrict the implementation of the Royal Commission recommendations.
The failure to reserve aged care may be related to the fact that when the RCEP negotiations began in 2012, the aged care industry was dominated by local not-for-profit providers, and not exposed to trade rules.
This has now changed. Studies show almost half of all aged care beds are now provided by for-profit providers and that international investors are growing rapidly. One of the largest companies is the Singapore jointly-owned company Opal. Singapore is a party to the RCEP and since regulation cannot be discriminatory, RCEP rules apply to the whole sector.
If the government makes regulatory changes to improve staffing and quality of care that are contrary to RCEP rules, Singapore could initiate a state-to-state dispute before an international tribunal. If the tribunal finds the complaint valid, Singapore could ban or tax Australian products
This is an unacceptable restriction on the right of the Australian government to regulate aged care, and exposes the threats to democratic regulation posed by the structure of such agreements.
AFTINET, the ACTU, the Australian Nursing Federation and other community groups have made submissions to the review that the RCEP not be ratified but be amended to exclude Myanmar, to include commitments to human rights and labour rights, to ensure it does not impede local industry policy and to clearly exclude aged care from RCEP rules.
