Why is it that politicians only ever tell the truth after they have resigned from office?
Today, former Trade Minister Andrew Robb has admitted that the once hailed super trade deal, the Trans-Pacific Partnership (TPP), was actually a pretty useless agreement for Australia. From The Australian:
Mr Robb said that for Australia, the loss of the TPP was not so grave, since ironically the US had been set to be the biggest beneficiary of its multilateral trade concessions…
“There are benefits too in not having the TPP for Australia, for example in the Japanese FTA we have a 13-20 per cent advantage on tariffs over the US, which was going to be equalled in the TPP.
“ We have buffers now because in our Korea and China FTAs there are hundreds of concessions that have been given to no other countries.”
Of course, Robb failed to mention that the TPP would also have enshrined stricter intellectual property laws, which would have been detrimental to Australia. Nor did he mention that it would have introduced Investor State Dispute Settlement provisions that would allow a foreign corporation to launch legal action against the government if it enacted legislation or regulations that could harm a company’s business interests.
In another rare glimpse of honesty, Robb also admitted that Australian farm exporters are not gaining as expected from the China-Australia FTA (ChAFTA):
[Rob] said he was tired of hearing exporters complaining about Chinese quarantine, customs, disease or food safety standards and claiming they were being used by the Chinese as non-tariff trade barriers to block Australian produce from freely and easily entering China.
“Yes the Australian ‘clean-green’ brand is outstanding and our food products are seen as the yardstick of quality, but you still have to get in there, find the right partner to work with and clear the way and invest time in that relationship, ” Mr Robb said.
“Sometimes the attitude I hear is almost like ‘I’m Australian, they should be grateful to get our product’. No, China is a sovereign nation and they have the right to protect their people with their own regulations, rules and food standards that they think are necessary.”
This admission from Robb follows similar reports in January of Australian farmers being locked-out of China, contrary to the spirit of ChAFTA):
…non-tariff measures made worse by slow bureaucratic processes are imposing costs and delays, leaving farmers and the food sector feeling the agreement is not delivering to its potential.
…more than a year on the trade pipes remain clogged by this mass of technical barriers that need to be scoured out for the full benefits of the trade agreement to both Australia and China to flow.
Hardly a day goes by without companies experiencing delays, rejections, uncertainty and extra costs because of regulatory barriers, inconsistent application of import rules between different ports, and lengthy, uncertain processes to register products and export facilities.
It’s affecting farmers and value-added food exporters alike. And all the while competitors from lower-cost countries are actively chasing market share in China, eroding the advantage Australia should gain from tariff cuts.
Evidence from Australia’s other FTAs has also not been kind, with a HSBC survey revealing that 81% of Australian exporters had opted not to utilise Australia’s FTAs concluded with Thailand, Singapore, and the US due to “limited or no understanding” of the agreements and “complexity of trade terms”. In a similar vein, the Australian Chamber of Commerce and Industry (ACCI) in 2015 claimed that many FTAs are so poorly drafted and complex that they are next to useless in a commercial sense.
Of course, there are other potential gremlins lurking in the ChAFTA. For example, Australia agreed to allow Chinese companies building projects in Australia to bring in Chinese workers on 457 visas, effectively continuing its program of deregulating labour migration and under-cutting Australian workers’ pay and conditions.
The sad truth is that Australia’s FTAs have rarely delivered benefits as promised, while often imposing hidden costs.
