Australia’s Bilateral Investment Treaties (BITs) and AANZFTA ISDS Review

Australian Council of Trade Unions submission to the Department of Foreign Affairs and Trade

The ACTU supports fair trade as a vehicle for economic growth, job creation, tackling inequality and raising living standards. The most important objective of trade policy should be to deliver benefits to workers, the community and the economy by increasing opportunities for local businesses,creating quality local jobs, and protecting public services. The benefits of trade must be shared among our community and promote equitable development abroad.

We welcome the opportunity to contribute to the DFAT review of Australia’s Bilateral Investment Treaties (BITs) and ISDS provisions in the ASEAN Australia–New Zealand Free Trade Agreement (AANZFTA). This review encompasses six BITs—Czechia (1994), Egypt (2002), Hungary (1992), Lithuania (2002), Poland (1992), and Romania (1994), all of which contain ISDS provisions. It also includes the ISDS mechanism in AANZFTA, which entered into force for Australia in January 2010.

The ACTU has consistently called for the removal of Investor-State Dispute Settlement (ISDS) clauses from current and future trade agreements.2 We therefore welcome Trade Minister Farrell’s commitment that ISDS will not be included in new agreements and will be reviewed in existing ones. This review represents a critical opportunity to implement this policy.

ISDS provisions have no place in modern trade policy. They limit the capacity of governments to regulate in the public interest by exposing them to punitive claims when they introduce legitimate and democratically mandated reforms. These provisions do not provide certainty for Australian investors or the public; instead, they undermine democratic expectations that governments will act to protect community welfare without the threat of costly international litigation.

Removing ISDS provisions is essential to enabling governments to regulate effectively in areas including labour rights, environmental protection, public health, education, and national security. It also promotes equitable development internationally: ISDS-related liabilities and legal costs can inflict severe financial burdens on low-income countries.

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