Thursday 31 May 2012 - Budget Estimates - Foreign Affairs Defence and Trade Committee
Australian Trade Commission
Senator LUDLAM: My apologies for holding everybody back. Do we have the right people here to talk about the Trans-Pacific Partnership Agreement?
Mr McCormick : Yes.
Senator LUDLAM: Beaut, thank you. Firstly, can I get some details of expenditure related to Australia's participation in the TPPA-travel and accommodation expenses and the cost of consultations.
Mr McCormick : I will take that on notice.
Senator LUDLAM: I figured you might. That is no trouble. As a separate line item, could I get the costings of hosting the Melbourne round of negotiations, including administration, secretarial support and that kind of stuff?
Mr McCormick : I can tell you that now. It was effectively $600,000.
Senator LUDLAM: If you could maybe just provide us on notice with some disaggregated figures when you get the opportunity-
Mr McCormick : We will take that on notice.
Senator LUDLAM: What are the anticipated economic gains for Australia from the TPPA?
Mr McCormick : Before the government decided to participate in the negotiations they set out in a parliamentary statement a whole range of issues they were interested in relating to the trans-pacific partnership negotiations. I think there were three broad areas. One is that this is meant to be a very high-quality, ambitious free trade agreement. Therefore, it is an important part of trying to further multilateral trade liberalisation as well. Secondly, it is designed to expand over time and provide a pathway to the APEC objective of a free trade area in the Asia-Pacific. It is, if you like, a strategic agreement or set of negotiations because it has this broader, longer term expansion approach-that we want to bring in as many members as possible. That, in itself, turns on building on multilateral trade liberalisation objectives as far as we can. Then of course there are specific market access outcomes for Australian exporters of goods and services that we would be issuing through the negotiations.
Senator LUDLAM: When you say 'expand over time', you do not just mean expanding in scope but expanding the number of countries that will join it?
Mr McCormick : Both. We have set this out quite clearly. Leaders met in Honolulu last year and they set out their vision for the statement and a range of issues that were under discussion. As I said, there are all these different elements that go to what the government sees as its potential benefit for Australia.
Senator LUDLAM: Have you or anybody done a sector-by-sector cost-benefit analysis of signing on to such an agreement?
Mr McCormick : In terms of modelling, do you mean?
Senator LUDLAM: In terms of being able to quantify the benefits.
Mr McCormick : No, we have not sought to quantify in that sense the benefits of the TPPA negotiations.
Senator LUDLAM: I asked before-maybe it was slightly loose language-what the anticipated economic gains are for Australia from signing the TPPA. If I asked you to estimate the actual economic gains-employment growth, GDP growth or however you want to quantify it-you would not be able to say?
Mr McCormick : Not to come up with a modelled number. You would be aware that the government released its trade policy statement in March last year. There had been a practice before that there would be a study which also did modelling to predict what the economic gains would be from an agreement. Having looked at that previous practice, the government said that they were not going to pursue that anymore, because there were questions about the assumptions built in to modelling. We have a system where we go out very broadly to all sorts of stakeholders who identify the sorts of things that they would be interested in pursuing and identifying. We obviously have some FTAs with some of these parties already. We can see some of the benefits coming out of those bilateral or subregional FTAs, and this provides an opportunity to build on some of those areas as well.
Senator LUDLAM: I was going to come to that. We have bilateral trade or regional trade agreements with all but one of the TTP negotiating countries, Peru. Is this not a case of doubling up somewhat?
Mr McCormick : No.
Senator LUDLAM: I understand that emerging world economic superpowers China, India and Brazil have openly condemned TPPA negotiations in the World Trade Organisation council and have no intention of joining. How can trans-Pacific partnership be considered a model for regional integration when you have serious emerging economies hoping that it will not happen?
Mr McCormick : I am not aware of those statements.
Senator LUDLAM: That is interesting. If I provide some of those statements to you after the committee has concluded, or once you have had a chance to look at what I am referring to, maybe you can provide us with a rebuttal.
Mr McCormick : What I can say is that we have discussions on a semiregular basis with China about the TPP. We are in discussions with anybody who wants to know about TPP. For example, we brief through APEC. We also talk to them bilaterally. There is certainly an interest in China in the TPP. They are interested in knowing more about it, but they certainly have not said that they are never interested or that they do not ever want to join the TPP. I think they have expressed an interest in knowing more about it.
Senator LUDLAM: Is Australia hoping they will join? Is that the purpose of those discussions?
Mr McCormick : We would hope over time that, consistent with the objective of a free trade area of the Asia-Pacific, the membership would expand to all members of APEC and potentially beyond that as well.
Senator LUDLAM: What is the view of the Japanese government?
Mr McCormick : The view of the Japanese government about what?
Senator LUDLAM: As to the agreement. I will give you some context: ASEAN, as I think you alluded to, has proposed an East Asian economic partnership agreement which would include Japan, China, India, South Korea and Australia. I understand the Japanese government has indicated it would prefer that, rather than the TPP, to proceed through the ASEAN forum. Are we seriously at risk of doubling up or going down a blind alley here?
Mr McCormick : No. These are separate enterprises. There are separate discussions going on-and there are a number of them-and some of them have overlapping memberships, but I do not think your portrayal of the TPP is accurate.
Senator LUDLAM: Are you aware of whether or not the foreign minister has seen the current negotiating texts for the agreement?
Mr McCormick : The Australian foreign minister?
Senator LUDLAM: Yes.
Mr McCormick : I do not believe he has.
Senator LUDLAM: Is that because he is relatively new to the job? Should he have? Will he?
Mr McCormick : No. The agreement is the responsibility of the minister for trade. Obviously, we have not got a text that is agreed; therefore, the text has not been shown to the foreign minister. It is a text that is under development rather than a text that exists at this moment. The negotiations are ongoing.
Senator LUDLAM: Has the trade minister seen it?
Mr McCormick : An FTA agreement, when completed, will be approximately 1,000 pages long. As I said, it is not an agreement that is on the table for anybody to have a look at. We are negotiating in different negotiating groups on text when we have not yet agreed on text. It is not something that exists physically where you can say, 'Here, have a look at the text.' That is not the way these negotiations proceed.
Senator LUDLAM: That is fair enough. Very few members of the public have seen the text, so we are all in the dark. I am just wondering to what degree the minister has been brought into the loop. Perhaps DFAT could share the anticipated economic benefits, or the justification, for permitting provisions in the IP chapter of the agreement restricting parallel importations.
Mr McCormick : There is no agreement on that outcome. We are involved in a negotiation in which different parties have different objectives, and we are discussing those, but there is certainly no agreement.
Senator LUDLAM: The reason I am referring to that-and the only reason we know about that-is that there was a draft text that was leaked to the public last year that included language on rigid parallel importation restrictions. Is that missing from the versions we are negotiating now?
Mr McCormick : What I can say is that the text of the agreement is confidential between the parties. I know there are claims that there has been text released. We do not talk about claims of that, but certainly nothing is agreed until all the current nine-or more if we move to 10, 11 or12-members have agreed to it. Nothing has a status until it has been agreed at the end of the negotiations, so anything that people talk about is purely speculation.
Senator LUDLAM: So there was no draft text leaked? You are not acknowledging that some of the language of at least the IP chapter was released?
Mr McCormick : Again, as I said, there is an agreement, as you know. We have discussed this before, I think, in a briefing in JSCOT.
Senator LUDLAM: That was an off-the-record briefing, so I am trying to pull a little bit of information into the public domain.
Mr McCormick : The text and the proposals that people put in the TPP are confidential between the parties.
Senator LUDLAM: That does not help if you are trying to do any kind of public interest analysis, if the public has been left on the other side of the door. That is kind of the point that I am making. Is Australia proposing ACTA-style language in the TPP and specifically in the IP chapter? Are you able to tell us about the negotiating positions that we are bringing?
Mr McCormick : What I can say is that we are not proposing to change our intellectual property system, and we are not proposing that there would be changes as a result of the TPP to our IP system as a whole.
Senator LUDLAM: Okay. I could go on all night, but I know people are keen to get home. And without any copies of the draft text available it is difficult to have this discussion in the abstract, so I will leave it there.
CHAIR: There are no further questions, so that concludes the examination of the trade portfolio. I thank the officers of the department, of EFIC and of Austrade for appearing before the committee today and for your assistance. It is appreciated. That concludes this budget estimates session. I thank Ministers Carr and Carr, and Minister Conroy, for their attendance, as well as the officers of all the departments and agencies. Thank you to Hansard and Broadcasting, to the secretariat for your assistance, and to other senators for your cooperation.