LABOR AND FTAs

We recently looked at the ALP policy relating to the operation of competition policy.

Another area of interest is the proposed Labor approach to international trade agreements.

Labor waved through the TP11 legislation – the Trans Pacific Partnership (without the US) to the chagrin of the unions.

As Labor Senator Kim Carr said in the Senate:

The most important thing to understand about the Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018 and the related bill is that they are customs and tariff measures. They are not a ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as TPP-11, which the government signed in March this year. Australia’s parliament is not given the opportunity to ratify trade treaties of this sort, which is why Labor is proposing that substantial reform of the treaty-making process is necessary.

Labor have always been absolutely clear that we have serious concerns about aspects of TPP-11, as we did about TPP-12. Supporting these customs and tariff bills does not amount to the full endorsement of the agreement in its present form. The agreement includes investor-state dispute settlement—or ISDS—provisions, which Labor opposes. ISDS provisions allow foreign companies to sue national governments. These provisions compromise Australia’s sovereignty by limiting the ability of Australian governments to act in the national interest. In government, Labor will not agree to include such provisions in trade agreements and will seek to remove them from existing agreements.

A Shorten Labor government will not stop there. As the member for Blaxland announced in his speech on these bills in the other place, Labor will introduce legislation prohibiting the inclusion of ISDS provisions or waivers of labour market testing in future free trade agreements. Labor will establish a system of accredited trade advisers from industry, unions and civil society groups to consult on the draft text of agreements during negotiations. Labor will legislate to require that an independent national interest assessment be conducted on every new trade agreement before it is signed. Labor will strengthen the role of parliament in trade negotiations by increasing the participation of the Joint Standing Committee on Treaties, JSCOT. JSCOT will also be provided with a statement of objectives for the negotiations for consideration and feedback, and will be briefed at the end of each round of negotiations.

It will be interesting to see whether Labor will actually legislate in this way when in government to tie its hands when negotiating international agreements.

The ISDS agreement is a staple in many FTAs, for instance. Will this position stand if other counterparties want something like this mechanism?

Moreover, Parts 2 and 3 of the Government Procurement (Judicial Review) Act 2018 can give parties access to some form of compensation and (in particular) injunctive relief where there the process under which the purchase of a  covered procurement  breached Commonwealth Procurement Rules.

Some Rules, particularly Rule 10.32, which reads:

10.32 The policy operates within the context of relevant national and international agreements and procurement policies to which Australia is a signatory, including free trade agreements and the Australia and New Zealand Government Procurement Agreement.

can give rise to outcomes similar to those that could be made under a ISDS mechanism (albeit one reached within a judicial framework).

Finally, if the ALP is going to legislate to restrict the right of the executive to make treaties through prohibiting entering into instruments proposing repugnant, why not go the full hog and require the Senate to provide support for a treaty prior to an act of ratification?

Now, that would be transparency.

If you require assistance in the design or implementation of policy or legislation, drop us a line at corke@kmcorke.com.au

We look forward to hear from you.

By | 2018-11-22T04:10:59+00:00 November 22nd, 2018|International, Trade|0 Comments