Disquiet within the Turnbull Government continues to grow with a Government-dominated parliamentary inquiry calling for greater independent scrutiny of future trade deals. From The AFR:
The Greens spokesman for trade, Peter Whish-Wilson, slammed the assessment [of the TPP] as a “set of talking points” and said the Productivity Commission needed to do a proper independent analysis of the deal…
Now, a joint parliamentary committee analysing the deal, chaired by Liberal MP Stuart Robert, has recommended that the Commission or an equivalent organisation looks at future trade deals…
As well as recommending that Parliament ratify the TPP, the committee also said the Australian government should allow “security-cleared representatives from business and civil society” to have access to confidential Australian government positions put forward in international trade negotiations.
There is no doubt that the Department of Foreign Affairs and Trade’s (DFAT) consultations on trade deals are a sham.
The Productivity Commission (PC) has previously called on the texts of Australia’s trade deals to be publicly released for scrutiny before they are signed:
The emerging and growing potential for trade preferences to impose net costs on the community presents a compelling case for the final text of an agreement to be rigorously analysed before signing. Analysis undertaken for the Japan-Australia agreement reveals a wide and concerning gap compared to the Commission’s view of rigorous assessment.
Similarly, a Parliamentary committee last year released a report slamming the lack of adequate “oversight and scrutiny” pertaining to the Trans-Pacific Partnership (TPP), and lamented that “parliament is faced with an all-or-nothing choice” on whether or not to approve trade agreements and can only officially review trade laws once they have officially passed.
While DFAT claims that it consulted widely on the TPP, these consultations were largely a sham, as noted by Peter Martin at the time.
Even Liberal Senator, Bill Heffernan, raised concerns at the lack of due process pertaining to the TPP.
The TPP is the greatest example of why there needs to be greater parliamentary oversight before trade deals are signed and ratified. The agreement is incredibly complex whose text numbers some 6,000 pages and 30 chapters. The draft text was never provided to parliament for review before signing, and it is far too complex for parliament to properly review before ratification.
Therefore, the PC’s expert assessment is vital. However, the Coalition ruled it out, presumably because it risked uncovering any gremlins lurking in the text.
We have seen this story before.
While working as the Australian Treasury’s trade analyst in 2003-04, I witnessed the Howard Government commission the Centre for International Economics (CIE) to undertake the modelling on the Australia-US Free Trade Agreement (AUSFTA), even though the PC was available and wanted the job.
It was the belief of many at the time that the CIE was chosen over the PC because it would provide more favourable modelling results, making it easier for the Government to sell the deal to the public. By contrast, the PC was inherently skeptical of preferential trade agreements (for good reason), and it was feared that it would provide a poor assessment of the AUSFTA if commissioned to undertake the work.
Alas, the CIE delivered a glowing report on the AUSFTA, claiming that it would boost Australia’s GDP by nearly $6 billion. A large proportion of these gains came from a fanciful decrease in Australia’s “equity risk premia” – a result described by Professor Ross Garnaut at the time as “not passing the laugh test”.
A decade on, The Crawford School at the ANU delivered its assessment of the AUSFTA, which showed the agreement diverted Australia’s trade away from the lowest-cost sources. Australia and the United States reduced their trade with rest of the world by US$53 billion and are worse off than they would have been without the agreement.
The AUSFTA also included extensions to both patent and copyright terms, which has raised the cost of pharmaceuticals and copyrighted materials in Australia.
To date, the last thing the Coalition has wanted is transparency and accountability, which is why they have used paid consultants to do the analysis of trade deals, or refused to undertake any analysis at all.
Either way, Australians deserve better. Due process must be restored to trade negotiations with proper assessment by the PC preferably before signing, or at a minimum, before ratification by parliament.
