Dear Committee

Submission to Joint Standing Committee on Treaties. Treaty tabled on 9 February 2016 The Committee Secretary Joint Standing Committee on Treaties, PO Box 6021, Parliament House, Canberra ACT 2600 By e-mail [email protected] Dear Committee, I write to you with great concern regarding the trade deal that Australia has signed with eleven additional countries (Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam) known as the Trans-Pacific Partnership Agreement (TPP). The Executive arm of the Australian Government, through the High Court interpretation of Section 51(xxix) of the Australian Constitution which gives the Federal Government an ‘external affairs’ power, intend to bind the Australian Government into the TPP Agreement. Introduction Firstly, let me introduce myself. I have no team of researchers, no financial backers or party affiliation, I am merely a concerned tax payer trying to understand the workings of what appears to be a very secretive transaction conducted between the above mentioned governments at the highest level. All my research is supported by information in the public domain and I have reference this information at each point. Update to my previous submission I previously wrote to the Committee under the Submission to the Inquiry on the Trade and Foreign Investment (Protecting the Public Interest) Act 2014 by the Foreign Affairs, Defence and Trade Legislation committee. Due to time constraints I have used much of my research material from my previous submission so I apologies for any duplication. Treaty process I note that all treaties, including amendments to and withdrawal from treaties, are required to be tabled in Federal Parliament at least 15 days before the Government may take any binding action. In some cases this means that treaties are tabled after they are signed but before Australia ratifies – this having a binding action under international law. Every treaty is supposed to be tabled with a National Interest Analysis. The Analysis should articulate: 1. The reasons Australia would take to the proposed treaty action; 2. Australia’s obligations under the treaty; 3. The manner the treaty will be implemented; 4. The costs of the treaty; 5. The outcome of community consultations; and 6. The proposed binding treaty action. All 19 pages of the Ministry’s National Interest Analysis [2016] ATNIA was released on 4 February 2016. This report offers several motherhood statements and insufficient factual analysis, statements such as: The TPP will significantly boost Australia’s economic relationships through the region: creating seamless preferential supply chains with the TPP Parties; bolstering relations with those with whom we already have existing Free Trade Agreements (FTAs) (bilateral or regional); and, in the case of Canada, Mexico and Peru, by becoming preferential trading partners for the first time. With the exception of Canada, Mexico & Peru, Australia already has established FTA’s in place. It is difficult to determine where additional trade is expected to materialise from. Standardised FTA’s will increase competition for markets and potentially reduce Australia’s trade with existing markets. The World Bank issued a report on global trade (https://www.worldbank.org/content/dam/Worldbank/GEP/GEP2015a/pdfs/GEP2015a_chapter4_report_tra de.pdf ). This report highlights the linkage between trade and income growth and states: In recent years, world trade has become less sensitive to changes in global income. Estimates from an error correction model for the period 1970–2013 yield a long -run elasticity of 1.7, although the response of trade to income differs considerably across decades. For the period 1986–2000, a 1 percent increase in world real GDP is associated with a 2.2 percent increase in the volume of world trade (Figure 4.11). This “elasticity” of 2.2 is substantially higher than that in preceding (1970– 85) and subsequent (2001–13) years; for both of these periods, the trade elasticity was about 1.3. Formal tests confirm that there was a significant structural break in the trade-income relationship in the period 1986–2000 relative to the preceding and subsequent periods.5 These results suggest that global trade is growing more slowly not only because world income growth is lower, but also because trade has become less responsive to income growth. TPP may further erode non-participating nation’s trade, creating additional global trade imbalances leading to increased wealth inequality in a time when our world is increasing unstable. Page 2 The National Interest Analysis makes further ridiculous claims such as: The TPP will also protect Australia’s competitive position in the markets of the TPP Parties. Market access gains under the TPP will be delivered more quickly than any other current multilateral or plurilateral negotiations underway such as in the World Trade Organization (WTO) or in the Regional Comprehensive Economic Partnership (RCEP) These statements are pure fiction. How will Australia’s market share be protected against competition from other TPP countries who will enjoy the same protected access? For example: Australia’s dairy exports totalled AUD$ 1,688,541,335 (source: http://www.dairyaustralia.com.au/Markets-and-statistics/Exports-and-trade/Latest-export- statistics.aspx) in 2015/16. New Zealand’s dairy exports was in excess of NZ$ 13.7Bn. Trade treaties cannot be used in place of inefficient industries. Is it the presumption that the TPP will suddenly see Australia’s exports in dairy rival New Zealand’s? The National Interest Analysis on one hand uses words such as significant and beneficial but in its own report acknowledges: Modelling by the World Bank suggests that Australia is set to benefit from the TPP through GDP growth of around 0.7 per cent by 2030. Similar findings were made in modelling by the Peterson Institute for International Economics and the Research Institute of Economy Trade and Industry, which found increases of 0.6 per cent and 1.9 per cent respectively to Australia’s GDP, over similar time periods. Expanded liberalisation of trade is likely to stimulate further economic activity in Australia, leading to job creation As the Sydney Morning Herald points out this translates to “The annual boost to growth would be less than one half of one 10th of 1 per cent”. A pretty poor return. This also does not factor into production losses due to potentially inefficient local industries losing market share to countries that can produce more due to a range of factors such as better technology, droughts, proximity to markets etc. This 0.7% increase also does not take into consideration the slowing global economy and any significant recession that may further reduce GDP growth. I further fail to understand the job creation benefits if GDP is growing at such a low rate. This report also has not factored into its calculations the rise of automated and artificial intelligence activities which are likely to erode employment opportunities across certain industries. Page 3 Enter into force The National Interest Analysis states: Article 30.5.1 (Entry into Force) of the TPP provides that the TPP will enter into force 60 days after the date on which all original signatories have notified the Depository in writing of the completion of their applicable legal procedures. Article 30.5.2 provides that in the event that not all original signatories have notified the Depository in writing of the completion of their applicable legal procedures within a period of two years of the date of signature of the Agreement, it shall enter into force 60 days after the expiry of this period if at least six of the original signatories, which together account for at least 85 per cent of the combined gross domestic product of the original signatories in 2013, 1 have notified the Depository in writing of the completion of their applicable procedures within this period. It is proposed that Australia provide such notification as soon as practicable following consideration by JSCOT, the passing of legislative amendments and the enactment of any necessary regulations. The Government of Australia and the Governments of Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam are working towards entry into force of the TPP as soon as their respective domestic legal procedures will allow, in order to maximise the economic advantages to all Parties to the Agreement It appears that the Australian Government is keen to work toward an expeditious implementation of the TPP. This approach seems to ignore the fact that several of the identified potential “key” markets have been five to 15 years to fully comply with certain regulations. Australia may further disadvantage itself by being “TPP-ready” early. TPP and the environment The National Interest Analysis asserts that the TPP will be beneficial to the environment by: Promoting high levels of environmental protection, including by liberalising trade in environmental goods and services, and ensuring TPP Parties effectively enforce their domestic environmental laws. Since ISDS clauses create the opportunity for corporations to sue governments for laws that may impede, restrict or reduce their ability to generate revenue and profits this statement is meaningless. TPP and the rights of indigenous people The United Nations has stated that (http://www.commondreams.org/views/2016/02/29/un-says-tpp- threatens-indigenous-rights): 'The clause of non-discrimination between a local and an international investor ... (it) grants more rights to transnational firms, often at the expense of indigenous rights' Page 4 The Aboriginal Land Rights (Northern Territory) Act 1976 was the first attempt by an Australian government to legally recognise the Aboriginal system of land ownership and put into law the concept of inalienable freehold title. The Land Rights Act is a fundamental piece of social reform.

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