Priorities and objectives for participation in the Trans Pacific Partnership
Views expressed in public consultations
On 20 November 2008 in the margins of the APEC Ministerial Meeting in Lima, Peru, the Trade Minister, Mr Crean, announced that Australia will participate in negotiations for a Trans-Pacific Partnership Agreement (TPP) expanding on the current Trans-Pacific Strategic Economic Partnership Agreement (Trans-Pacific Agreement) between Brunei Darussalam, Chile, New Zealand and Singapore (P4), which entered into force in 2006.
The first round of TPP negotiations is planned for March 2009.
In line with the Government’s commitment to ensuring Australia’s trade objectives are pursued on the basis of full community consultation, public consultation on Australia’s possible participation in the TPP commenced on 3 October 2008.
The Department of Foreign Affairs and Trade, via its website, called for public submissions on the expected costs and benefits of participation and specifically invited comment on the economic, regional, social, cultural, regulatory and environmental impacts expected to arise from Australia’s participation. In addition, consultations were held with industry, business, community and labour representatives and government agencies in meetings around the country, and with State and Territory officials. The Department received written submissions from a variety of stakeholders. All non-confidential submissions received will shortly be available on the Department’s website.
Overall, there is widespread interest in and support for Australia’s participation in the TPP. Most participants in the consultation process believe there to be strategic benefits and potential for longer term commercial gains. Input received through the consultation process will inform the Government’s priorities and objectives for Australia’s initial participation in the TPP negotiations.
The Government is committed to conducting ongoing public consultations with stakeholders throughout negotiations on the TPP. The priorities and objectives, key points of which are outlined below, will evolve to address developments in negotiations.
Priorities and Objectives
Submissions identified significant strategic advantages for Australia through participation in this Agreement, particularly with respect to Asia-Pacific regional engagement. If successful, it could promote the multilateralisation of existing free trade agreements (FTAs). It could lay the foundation for an APEC region-wide FTA as proposed by the (Mortimer) Review of Export Policies and Programs, and also contribute towards the Government’s vision of an Asia-Pacific Community.
The stakeholder assessments of the costs and benefits underlined the importance of Australia’s early involvement and the benefits of active participation with our regional neighbours.
Given Australia already has bilateral FTAs with New Zealand, Singapore and the United States, and has concluded an FTA with Chile, and a regional FTA including Brunei Darussalam, it is anticipated that these agreements will provide a sound platform for further engagement and trade liberalisation.
- Strategic/Regional Advantages: Most participants in the public consultation process saw the potential for the TPP to form a building block for Asia-Pacific regional economic integration and agreed that it was in Australia’s interests to be involved from the outset in order to shape the direction of the initiative. Confirmation of United States’ involvement was seen as crucial to the initiative going forward.
The Australian Industry Group noted that the negotiations “which will hopefully lead to as broad an agreement as possible, will be welcomed by the business community”.
In the view of the Australian Sugar Industry Alliance, Australia’s early “participation at the outset would enable Australia to be involved in and influence the development of the “ground rules” for the proposed expansion of the Trans-Pacific Agreement.” ABB Grain Ltd believes “that our involvement in this agreement is necessary to ensure we are seen as a key partner in the region and can influence the structure of trade discussions relevant to the region.”
The Minerals Council of Australia concludes that “an expanded Agreement would send an important signal to all APEC members that greater region wide liberalisation and integration is possible.”
Support for Australia’s involvement from a strategic perspective was also received from the Australian Services Roundtable, intellectual property rights groups such as the Music Industry Piracy Investigations and the Screen Producers Association of Australia and research institutes and academics including the Institute for International Trade, and Dr Ann Capling, University of Melbourne.
- Commercial Potential: Participants were interested in the prospects for further commercial market access gains from existing FTA partners, and in the longer term, from other regional trading partners should they decide to join. If other regional countries are drawn into the Agreement over time, this could lead to improvements in Australia’s market access arrangements.
Participants are keen to ensure that market access gains under the existing FTAs are preserved whilst recognising that the near-term commercial gains under a TPP for Australia might be expected to be limited given the quality of our existing bilateral arrangements with the United States, current P4 members and now with Brunei Darussalam under the ASEAN FTA.
Participants are seeking to strengthen trade opportunities particularly with the United States as well as with Latin America identifying in particular the potential for better access for dairy products and mining services to Peru, a country with which we do not have an existing bilateral trade arrangement. A TPP provides a framework for engaging with Peru.
The Australia Dairy Industry Council stressed that “dairy must be at the heart of the initiative to genuinely liberalise trans-Pacific trade.” They specifically sought “A high degree of ambition in terms of setting the parameters of agricultural and specifically dairy trade liberalisation; that is elimination of all tariff and non-tariff barriers to trade in as short a time frame as possible.”
The Australian Sugar Industry Alliance Limited suggested that further gains may be possible in an expanded Trans-Pacific Agreement.
The Construction, Forestry, Mining and Energy Union (CFMEU) argues for greater flexibility in government procurement practices. The Government notes these views but must also take into account the benefits for Australian businesses in accessing free trade agreement partners’ government procurement markets.
The P4 does not currently include chapters on financial services, investment, telecommunications or e-commerce. The Investment & Financial Services Association, which represents retail and wholesale funds management, superannuation and life insurance industries, endorsed the inclusion of Investment and Financial Services chapters and viewed the TPP as “an opportunity to improve access for Australian financial services providers through mitigating barriers” such as foreign restrictions on capital and investment flows.
Other supportive submissions were received from the Australian Tourism Export Council and Securency.
- Cultural/Social: The CFMEU and the Australian Fair Trade and Investment Network (AFTINET) advocated the inclusion of labour standards in the TPP and raised issues relating to the movement of natural persons and the exclusion of public services. AFTINET also advocated respect for human rights and the rights of indigenous people.
The Government is conscious of the need to retain control over the setting of domestic policy in particular with respect to labour standards, environmental standards, the provision of public services, immigration policy and indigenous people.
- Regulatory/Environment: Some participants cautioned that trade policy not undermine the ability of governments to regulate in the public interest and in the interest of protecting the environment. The CFMEU and AFTINET raised concerns about investor-state dispute settlement and the regulation of foreign investment. AFTINET also urged that Australia’s trading relationships support and strengthen multilateral environmental agreements.
Dr Ann Capling states in her submission that “……participation in the TPPA would enable Australia and the other signatories to make significant steps towards addressing the discriminatory and systemic problems posed by PTAs [preferential trade agreements]” such as increasing regulatory costs. In her view, a common set of Rules of Origin should be a key objective of the TPP.
Securency advocates the potential benefits of the “harmonisation of IP, goods trade and investment frameworks” in growing their business in Latin America and Asia “as long as the framework extends to commercial dealings with government as well as the commercial sector.”
Both the CFMEU and AFTINET called for a more structured community consultation process, greater Parliamentary consideration as well as impact assessments in advance of a decision to enter into FTA negotiations, including the TPP. The Australia Dairy Industry Council called for transparency and openness in government/private sector consultation covering all aspects of the TPP initiative. The Government in implementing this TPP consultation process is seeking to address this call for wider, earlier and ongoing public consultations.
The Government acknowledges the reservations of Australia Pork Limited (APL). APL noted that our existing FTAs have already delivered significant market access gains for Australian pork, but is not in favour of participation on the basis that FTA negotiating efforts should instead be focused on China, Japan and Korea.
The Government will seek to ensure that the TPP negotiations do not detract from our negotiations with other trading partners and that all our trade negotiations whether bilateral, regional or multilateral continue to achieve and promote continuing trade liberalisation and exemplify Australia’s strong commitment to open markets.
- Public submissions received by the Department of Foreign Affairs and Trade on the TPP negotiations