The Productivity Commission’s (PC) latest Trade & Assistance Review, released in April, was scathing of the processes surrounding ‘free trade agreement’ (FTA) negotiations and demanded thorough independent assessment both prior to negotiations commencing, as well as before an FTA is passed by parliament:
…the Commission concluded in 2010 that the economic benefits of bilateral trade agreements have generally been oversold and the risks have been understated. The Commission recommended that agreements should be reached only when they provide outcomes that are in Australia’s interest and they are the most cost-effective way of achieving those outcomes. The Commission further recommended that there should be more transparent and rigorous assessments of such agreements. This should encompass two elements. To ensure agreements are in the Australia’s interest, before negotiations commence, modelling should include realistic scenarios and be overseen by an independent body. After negotiations have concluded and prior to signing of the agreement, a full and public assessment should be undertaken covering all of the actual negotiated provisions. As with all areas of policy, trade agreements need to be considered on a case-by-case basis, and the balance of benefits and costs for future agreements may be different, for example because they cover a smaller share of Australian trade.
The PC has also explicitly warned about the risks inherent in the Trans-Pacific Partnership (TPP) trade agreement:
…based on US media access to the current draft text, it appears likely that the TPP will include obligations on pharmaceutical price determination arrangements in Australia and other TPP members, of an uncertain character and intent. The history of IP arrangements being addressed in preferential trade deals is not good. Indeed, to the extent that the return to IP holders awarded by more stringent IP laws outweighed the benefits to the broader economy, the provision would also impose a net cost on both partners, lowering trading and growth potential across the bloc…
There is also a risk that specific provisions within these agreements including those relating to intellectual property, investor-state dispute settlement and product-specific rules of origin will impose net costs on trading partner economies.
With this background in mind, the TPP looks set to be passed by parliament without the PC’s expert assessment:
Labor will support a massive Pacific trade deal involving 11 countries after a long debate among MPs in the party room on Tuesday.
The Trans-Pacific Partnership now looks set to pass the Senate with bipartisan support, after the government could not secure crossbench votes.
Despite some opposition from Labor MPs in the party room on Tuesday, the party will support the deal.
So much for due process. Labor / Liberal: both unrepresentative swill.