Key points and recommendations

Australian unions are not anti-trade. We recognise the value of increased exports and greater access to overseas markets for Australian businesses. We welcome the opportunities for workers that come from participating in the 21st century global economy. The ACTU is a supporter of trade as a vehicle for economic growth, job creation and rising living standards. Having a strong export sector is imperative for Australia’s prosperity. 

We can believe in all these benefits of free trade agreements, and at the same time have a rock-solid commitment to ensuring that other provisions of free trade agreements do not jeopardise Australian jobs, or compromise the ability of current and future Australian governments to exercise their sovereign rights to regulate in the public interest. 

We should also expect that trade agreements are subject to proper scrutiny and that unions and others in civil society, as well as business, have the opportunity for genuine input into the negotiations on behalf of those they represent. 

Unions and others should not be expected to be ‘cheerleaders’ for the trade agenda. Where free trade agreements, or provisions of those agreements, are not in the national interest and the interests of our members and workers generally, we have a responsibility to make that case. Parliament also should not simply be a rubber-stamp for agreements already entered into and negotiated by the executive arm of Government. Union are only in favour of trade agreements if there are overall benefits for all Australians.

Too often in our experience, the overall benefits of free trade agreements are over-sold by governments and the downsides are dismissed. 

This is not a ‘protectionist, union view. For example: 

  • The Productivity Commission has found that predicted economic benefits from bilateral and regional agreements are often exaggerated and the actual economic benefits likely to be modest, while such preferential trading arrangements ‘add to the cost and complexity of international trade… with an emerging and growing potential for trade preferences to impose net costs on the community.’ 

  • Professors Peter Dixon and Maureen Rimmer at Victoria University found that the Centre for International Economics estimated that the gain in economic welfare from the three FTAs with Japan, China and Korea, will be only 0.4% of GDP. The CIE study also found that as a result of the three FTAs, Australian jobs would increase by 5,434 by 2035. Yet the government has claimed the China FTA and others will create hundreds and thousands of jobs 

  • The FTA signed with the US 10 years ago actually resulted in a reduction of $53 billion in our combined total trade with the rest of the world.

    In the case of the agreement now before this inquiry, World Bank modelling of the TPP shows that it will increase Australia’s GDP by just 0.7% by 2030 – less than one half of one tenth of 1 per cent each year over the next 15 years. Similar results came from the Peterson Institute for International Economics – a supporter of the TPP – which forecast a total boost to Australia’s GDP of 0.5% over the next decade to 2025. 

    Against those meagre projected benefits, there are major flaws with the TPP in the key areas that this submission focuses on. 

  1. The TPP was conducted with a lack of transparency throughout the negotiations and was entered into and signed without genuine public input from the Australian community. While this Senate Foreign Affairs Defence and Trade References Committee inquiry provides the chance for welcome, if belated, parliamentary scrutiny of the agreement as a whole, in the end Parliament will only have the chance to vote on the implementing legislation and not the whole agreement. We urge this Senate enquiry to continue to push for reform in the treaty-making process, including a more democratic and open process for meaningful civil society engagement and parliamentary scrutiny throughout trade negotiations. The TPP and all other finalised trade agreements should be subject to independent assessment of their costs and benefits before parliament is asked to ratify them. 

  2. The Australian Government has yet again entered into a free trade agreement where it appears to have removed the obligation on employers to conduct labour market testing before temporary overseas workers fill Australian jobs. If that is the case, Australian and overseas companies will be able to employ unlimited numbers of workers from TPP member countries in hundreds of occupations across nursing, engineering and the trades without any obligation to provide evidence of genuine efforts to first recruit Australian workers. In doing so, Australia has agreed to the worst deal of any TPP country in terms of what it has given up in relation to migration safeguards. Unions cannot support an agreement that removes this basic protection in support of Australian jobs. 

  3. The TPP has a labour chapter, but the labour rights are weaker than promised and it fails to provide for effective enforcement of those provisions. 

  4. The TPP contains an investor-state dispute settlement (ISDS) clause that will allow foreign investors from TPP member countries to sue the Australian Government if changes to domestic law and regulations harm their investment. The ISDS clause in the TPP provides a safeguard in regard to tobacco regulation to avoid a repeat of the Phillip Morris ISDS saga, but this still leaves a wide range of policy areas open to challenge. ISDS clauses are a restriction on national sovereignty and the ability of governments to regulate in the public interest. The ACTU has a consistent position that ISDS clauses should not be included in any trade agreement that Australia enters into, including in this case, the TPP. 

    The submission that follows expands on each of these matters. 

    The matters identified above are serious deficiencies with the TPP. The ACTU recommends that Australia not ratify the TPP unless and until these matters have been adequately addressed through necessary changes to the text of the agreement and the implementing legislation.