Coalition signs giant secret trade deal

The Morrison Government has signed a giant secret trade called the Regional Comprehensive Economic Partnership (RCEP).

The RCEP will comprise members of the Association of Southeast Asian Nations plus Japan, China, South Korea, New Zealand and Australia.

The Morrison Government was busy spruiking the ‘benefits’ of the deal over the weekend:

Australian farmers and businesses are set to benefit from better export opportunities with the signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement between Australia and 14 other Indo-Pacific countries.

Prime Minister Scott Morrison said the signing of this long-awaited agreement signalled our region’s shared commitment to open trade and investment, despite the challenges of COVID-19.

“Our trade policy is all about supporting Australian jobs, boosting export opportunities and ensuring an open region with even stronger supply chains. RCEP builds on our trade successes and is good news for Australian businesses,” Prime Minister Morrison said.

“With one in five Australian jobs reliant on trade, the RCEP Agreement will be crucial as Australia and the region begin to rebuild from the COVID 19 pandemic.

“This agreement covers the fastest growing region in the world and, as RCEP economies continue to develop and their middle classes grow, it will open up new doors for Australian farmers, businesses and investors.”

Trade Minister Simon Birmingham said RCEP would be the world’s largest free trade agreement and would improve export opportunities for Australian farmers and businesses, especially in the services sector.

“This deal will further integrate Australian exporters into a booming part of the globe, with RCEP countries making up nearly 30 per cent of world GDP and the world´s population,” Minister Birmingham said.

“RCEP has been driven by the ten ASEAN nations, who collectively constitute Australia’s second largest two-way trading partner and have successfully brought Australia, China, Japan, New Zealand and South Korea into this regional trading block with them.

“This agreement may have taken eight years to negotiate but it could not have come at a more important time given the scale of global economic and trade uncertainty.

“Economic cooperation of this scale sends a strong signal that our region is committed to the principles of open trade for the post COVID-19 recovery, just as we advanced them during the previous years of strong economic growth.

“Greater openness within our region, as well as the greater integration of value chains and more common rules of origin which this deal delivers, will make it easier for Australian businesses and investors to operate throughout our region, helping Australia to continue to grow our exports.

“There are particular gains for Australian providers within the financial services sector, education, health, engineering and other professional services, who can become better integrated within the region and have more access within RCEP countries.

“Australia is committed to fully ratifying RCEP as soon as possible so Australian farmers, businesses and investors can start to access the benefits of this agreement. It will also be an inclusive agreement, with the door open for others, especially India, to join if and when they are ready.”

Australia will also commit $46 million to provide technical assistance and capacity building to help eligible ASEAN countries implement their RCEP commitments, ensuring RCEP delivers on its full potential.

When finalised, the main benefits for Australia will be:

  • A new single set of rules and procedures for accessing preferential tariffs in any of the 15 RCEP markets
  • New scope for trade in services throughout the region including across telecommunications, professional and financial services.
  • Improved mechanisms for tackling non-tariff barriers including in areas such as customs procedures, quarantine and technical standards.
  • Greater investment certainty for businesses.
  • Rules on e-commerce to make it easier for businesses to trade online.
  • A common set of rules on intellectual property.
  • Agreed rules of origin that will increase the competitiveness of Australian inputs into regional production chains.

The ACTU immediately attacked the lack of transparency and secrecy surrounding the deal:

Thanks to our broken and anti-democratic trade system the details of the agreement will not be released until after it has been signed. The system requires no public or even parliamentary oversight of deals as they are negotiated and has frequently resulted in trade deals which fail to protect local jobs and enable the exploitation of migrant workers while providing no protections for workers or the environment.

The ACTU is calling on the Morrison Government to immediately commission an independent social, economic and health assessment of the RCEP to determine its value for Australian workers…

“This is one of the biggest trade deals in history but the Morrison Government doesn’t know if it will create a single job in Australia.

“With unemployment nearing 8 per cent and still in the depths of a historic economic downturn we need an independent assessment of the value of this deal for Australian workers.

“Workers deserve to know what is being negotiated on their behalf. The system is broken and anti-democratic.

“The Australian trade union movement supports expanding exports and trade deals that are fair.

“Despite Government claims, past trade deals have delivered negligible benefits for the Australian economy and left Australian workers worse off.

“The deal includes countries where there is significant evidence of labour rights and human rights abuses such as China, Brunei and Cambodia. But we know of no provisions in the agreement to deal with issues like forced labour or child labour.

“The agreement could also open up essential services like health, education, water, energy, telecommunications, digital and financial services to private foreign investors and restrict the ability of future governments to regulate them in the public interest.

“We need greater accountability and oversight to protect Australia’s national interest in this process.”

RCEP may also cement China’s position more firmly as an economic partner with Southeast Asia, Japan and Korea. RCEP, in turn, could let China shape the region’s trade rules and wedge Australia’s vital strategic relationship with the US.

Thus, just like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), we have another giant trade deal signed by the Morrison Government without the release of the text and without seeing what the impacts are on industry and other areas.

Remember, too, that the Productivity Commission (PC) warned that Australia’s trade negotiations have been “characterised by a lack of transparent and robust analysis, a vacuum consequently filled at times by misleading claims”, and has called on the “final text of an agreement to be rigorously analysed before signing”.

No doubt the RCEP will now be rammed through parliament without a thorough assessment by the PC, as was the case with the CPTPP.

Unconventional Economist
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