House of Representatives

Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019

Second Reading Speech

Mr WOOD (La Trobe - Assistant Minister for Customs, Community Safety and Multicultural Affairs)

I move:

That this bill be now read a second time.

The Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Bill 2019 amends the Customs Act 1901 to implement Australia's obligations under three concluded free trade agreements with Indonesia, Peru and Hong Kong.

This government is committed to creating more export opportunities across the Asia-Pacific region. For the first time, a government is bringing to the House not just one or two but three free trade agreements to be considered.

These three agreements with Indonesia, Peru and Hong Kong reinforce the Morrison Liberal and Nationals government's commitment to growing Australia's strong economy through free trade and open trade, promoting Australian jobs and providing new opportunities for businesses of all sizes. In the last six years of the coalition government, our trade covered by trade agreements has grown from 26 per cent to around 70 per cent.

Australia has now concluded free trade agreements with seven of its top eight export markets for goods and services.

This government's record on trade speaks for itself: a record number of goods-exporting businesses - over 53,000, the second longest consecutive run of trade surpluses, and more trade than ever before covered by free trade agreements.

This comes on top of bringing into force trade deals with China, Korea, Japan and of course the TPP-11. Those opposite failed to start and conclude a single free trade agreement, and oversaw the total number of Australian businesses exporting decrease when in office. The member for Maribyrnong even said the TPP was 'dead in the water' when the US withdrew, yet the coalition stood up for our farmers and businesses to do the hard yards and we saw that agreement delivered, just as we have with these three agreements.

Today is about supporting Australian businesses and farmers to get better access and more opportunities to export their goods and services, allowing them to grow, diversify and employ more Australians.

The agreement with Indonesia, the Indonesia-Australia Comprehensive Economic Partnership, or IA-CEPA, will be critical in building Australia's strategic, economic and investment relationship with our largest near neighbour.

This agreement will allow 99 per cent of Australia's goods exports to enter Indonesia duty free or with significantly improved preferential arrangements. Australian agricultural producers will enjoy better market access and greater certainty, including for red meat and live cattle, grains, dairy, horticultural products and sugar. Australian manufacturers will have better access for products such as steel, plastics and copper cathodes. The IA-CEPA builds on the ASEAN-Australia-New Zealand Free Trade Agreement by, for example, having additional tariff cuts.

All of Indonesia's goods exports will enter Australia duty free. For the first time ever in an Australian FTA, there will be a dedicated chapter on non-tariff barriers to trade, which the Export Council of Australia said was 'one of the most important parts of the agreement'.

This agreement will also create more opportunities for Australians to help meet Indonesia's growing needs for investment and demand for Australia's world-class services, including in sectors like education and tourism, with universities and vocational training providers already looking at opportunities in Indonesia.

The two-way benefits of the IA-CEPA will launch a new chapter in our bilateral relations with Indonesia. It will foster partnerships between business, communities and individuals in both countries and support the shared interest of Australia and Indonesia in a secure and prosperous region.

Under the agreement with Peru, Australia has achieved significant new access to one of South America's fastest-growing economies. This agreement secures new quotas for Australian dairy, rice and sorghum free from tariffs. Australia has been able to get market access to Peru that was not possible under the TPP-11. Peru will eliminate its relatively high tariffs, up to 29 per cent in some cases, on major Australian exports like dairy, beef, grain, sheep meat, sugar, wine, pharmaceuticals, manufactured goods, medical devices, paper products, iron and steel.

The agreement with Peru is not just about goods; it also opens up an array of new opportunities for Australian service providers, recognition of Australian university degrees, and enables Australian tertiary education providers to establish campuses in Peru. This agreement delivers greater access for Australian financial, legal and other professional service operators, as well as for Australian businesses supplying mining-related and oilfield services in Peru, where Australian businesses are significant investors.

The PAFTA further expands on our close investment links. The number of Australian companies operating in Peru has grown significantly from 10 in 2003 to currently over 90. The Australian and Peruvian mining sectors, in particular, are already closely integrated. The PAFTA provides a platform for expanding and deepening these relationships.

Hong Kong is a leading business and financial centre in Asia and a significant and well-established commercial partner for Australia. Hong Kong is Australia's seventh-largest export destination. We have a strong investment relationship with Hong Kong, as our fifth-largest source of total foreign investment.

This agreement provides increased certainty for Australian exporters and investors and locks in zero tariffs on all Australian goods exported to Hong Kong. This ensures Hong Kong cannot apply tariffs to Australian goods in the future, benefiting Australia for generations to come.

Hong Kong will guarantee open market settings for services suppliers so Australian exporters of education, financial and professional services can continue to explore growth opportunities in Hong Kong's large and competitive market.

The agreement will significantly improve conditions for two-way investment, including through updated investment rules to protect investors on both sides. The agreement with Hong Kong, and the associated investment agreement, will underpin our growing economic engagement and support Australia's long-term economic and commercial interests by strengthening this already substantial and important relationship. The agreements are balanced and have best practice protections for governments to legislate in the national interest, including in public health and the environment. These protections are absent in the older-style investment agreements.

It, also, importantly, reaffirms Australia's support for the 'one country, two systems' principle, through which Hong Kong's autonomy has underpinned its success as a regional business hub.

We know that some raise issues about the movement of natural persons. None of the agreements include any new commitments on labour market testing waivers.

But it is not just the government saying there are benefits and value in these agreements. Importantly, Australian businesses and industry groups also strongly support these agreements because they recognise these agreements will bring benefits for Australian exporters, Australian jobs and the Australian economy.

Some of these industry groups and businesses include the Australia Indonesia Business Council, the National Farmers Federation, Australian Grape and Wine, Meat and Livestock Australia, TAFE Directors, the Group of Eight universities, the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Export Council of Australia, the Minerals Council of Australia, Pork Australia, CANEGROWERS, the Australian Industry Group, Citrus Australia, the Red Meat Advisory Council, the Australian dairy industry, GrainGrowers, the Australia Peru Chamber of Commerce, CPA Australia, the Perth USAsia Centre, AUSVEG, Bluescope, Consolidated Pastoral Company, the Food and Grocery Council and the Australia-Latin America Business Council, as well as many others. I thank them for their strong advocacy and support, in some cases over many years.

I note that the Joint Standing Committee on Treaties has considered each of the three agreements in detail and recommended that binding treaty action be taken for all agreements. I thank the committee for its work on the agreements with Indonesia and Hong Kong, and the former committee for its work on Peru. Swift passage of this bill will enable the agreements to enter into force promptly and unlock the benefits of these agreements for the Australian economy.

The three agreements covered by this bill support Australia's national interest. They will enable our exporters and investors to build on our already strong and growing commercial relationships and to take up further opportunities across the Asia-Pacific.

This bill will allow Australia to ratify these three free trade agreements with Indonesia, Peru and Hong Kong and, at a time of global uncertainty and trade tensions, open up more opportunities for Australian businesses, Australian investors and Australian farmers to export and invest across the Asia-Pacific.

The Morrison Liberal and Nationals government is focused on creating more opportunities and more jobs for Australians, and that is exactly what this legislation and these trade agreements with Indonesia, Peru and Hong Kong will achieve.

I say to the parliament: we need to pass this legislation like we did for the TPP-11 last year and continue to take a bipartisan approach to trade, as we have done for the past 30 years, so that this parliament can pass these agreements to benefit Australian businesses, farmers and investors.

I commend the bill to the House.

Debate adjourned.

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