With TPP signed, let’s have the Productivity Commission’s assessment

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By Leith van Onselen

Australia’s trade minister, Steve Ciobo, signed the revised Trans-Pacific Partnership (TPP) in Chile last night amid much fanfare. From The Australian:

The deal will eliminate 98 per cent of tariffs in a marketplace worth close to $US14 trillion.

Speaking at the signing ceremony in Chile, Mr Ciobo said the legislation to formalise the pact would be introduced to parliament this month ahead of a joint standing committee an inquiry into the TPP.

He expects Australia’s domestic processes to be settled by the end of September. “This is a very good day for trade,” Mr Ciobo told a media conference in Santiago this morning.

“We are sending a mutual signal that we recognise the policy orthodoxy of trade”…

“Trade is good for economic growth, trade is good for jobs, trade is good for promoting prosperity,” Mr Ciobo said.

He said Australian farmers, manufacturers, service providers and small businesses would be the big winners…

Okay, Steve Ciobo, the TPP is awesome because you’ve said it is. But the agreement has still not been made public, so we don’t know what gremlins are lurking between the thousands of pages of text.

We know that the original TPP has all kinds of nasties including Investor-State Dispute Settlement (ISDS) provisions – which would open the door to multinational companies suing the Australian Government for implementing rules against their interests (e.g. on environmental, health and safety grounds) – as well as extensions to patent and copyright protections. Are these still in the revised deal?

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We have also heard that the revised TPP will commit Australia to allowing the employment of workers from six new countries – namely Mexico, Chile, Japan, Canada, Malaysia and Vietnam – without requiring them to first check if there is an Australian that could do the same job.

If so, these gremlins will effectively sell-out Australia’s sovereignty and democracy for tiny potential economic gains (and possible employment losses):

ScreenHunter_11148 Jan. 21 09.28
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If your are so sure that the TPP is in the national interest, Steve, then why not have the Productivity Commission (PC) assess the deal for its economy-wide impacts. After all, the PC has previously called for greater oversight and scrutiny of FTAs 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.

Whereas a Parliamentary committee slammed the lack of adequate “oversight and scrutiny” pertaining to the original 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.

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The original TPP was an incredibly complex agreement whose text numbered some 6,000 pages and 30 chapters. It was far too complex for the Joint Standing Committee on Treaties (JSCOT) to comprehensively review in less than six months and requires expert scrutiny from the PC prior to any parliamentary vote to ratify the agreement.

So, c’mon Steve. Do the right thing and have the PC scrutinise the TPP before Parliament votes to ratify the deal. Let Parliament and Australians be fully informed on what we are both giving up and gaining from this agreement.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.