Trade – Free Trade agreements with the European Union, 11 May 2023

Senator BABET (Victoria—United Australia Party Whip) (14:43): My question is for the Minister representing the Minister for Trade and Tourism, Minister Wong. We live in a global economy, and Australia has a lot to contribute to international trade. We are blessed with an abundance of natural resources and an agricultural sector that produces the best food and fibre in the world. I commend the government on their recent success in negotiating trade agreements with the UK and India. Can the minister please update the Senate on the current progress in negotiating a free trade agreement with the European Union?

Senator WONG (South Australia—Minister for Foreign Affairs and Leader of the Government in the Senate) (14:44): Thank you, Senator Babet. As you know, as a consequence of Senator Farrell going to China also on trade issues—and I’m happy if you go to that in a supplementary question—I will update on the EU as well as the UK, and thank you for your recognition of the UK agreement- Securing an ambitious trade deal with the European Union would obviously be a significant step towards creating more opportunities for Australian exporters. One of the points that we have made since coming into government is that diversification of our export markets, which we recognise is a diversification of what we export as well as where we export to, is an important part of improving our economic resilience. We benefit greatly from bilateral trade with many countries, and we are better off and more resilient as a nation if we can diversify our export markets, which requires, in turn, not only trade agreements but also a diversification of the goods and services exported. Obviously, the European Union is a very large part of the global economy. It’s a high-income market with about 450 million people and a GDP of around $24 trillion.

I know Minister Farrell is seeking to progress the EU trade agreement. I think there’s already been quite a lot of media and discussion about it, including under the previous government. There are issues that will have to be resolved, around provenance and so forth. I know Minister Farrell is working very hard to try and ensure there is progress on that for the reasons I have outlined.

The PRESIDENT: Minister Babet, a first supplementary?

Senator BABET (14:46): Free trade agreements are a good example of how bipartisanship delivers great outcomes for the Australian people. On 6 March, the government member for Fremantle and chair of the treaties committee stated in the Federation Chamber that the independent tribunal system used to resolve investor-state dispute settlements is dodgy—his words. Minister, does your government agree with this statement—yes or no? Is the ISDS dodgy?

Senator WONG (14:47): I have two points. First, in relation to bipartisanship, I think you will find, Senator Babet—and I know you weren’t here when I was shadow trade minister, nor would you probably remember anything about that, because it may not have been that interesting!—I did work quite hard as shadow trade minister to deliver bipartisanship. It was through that period that the Labor Party supported the China free trade agreement, the Korean free trade Aagreement—

The PRESIDENT: Senator Babet?

Senator Babet: I make a point of order on relevance. I would like to know if the ISDS is dodgy. That’s all. Yes or no?

The PRESIDENT: Thank you, Senator Babet. The rest of your question also went to free trade agreements and bipartisanship.

Senator WONG: Senator Babet, I wasn’t trying to obfuscate; I was actually trying to be helpful, and I was actually agreeing. I think bipartisanship does matter. I’m also on record from that time—and I think since that time our party’s position has developed—raising concerns about ISDS. We all know, for example, that it was—my recollection is this, and I might be wrong—a Hong Kong free trade agreement. There was an investor-state dispute settlement clause under that which led to tobacco companies seeking legal action against Australia for— (Time expired)

The PRESIDENT: Senator Babet, a second supplementary?

Senator BABET (14:48): It is important for the integrity of current and future trade agreements that the Commonwealth of Australia abide by the terms of its agreement. We note that the same member of government made further statements on 30 March about—and I quote—’the dodgy system known as ISDS’. Are we to take it that the arbitrator recently appointed by the Commonwealth to an ISDS arbitration is also dodgy—yes or no? Is he or she dodgy?

Senator WONG (14:49): I’m not going to comment on an individual, and, I’m sorry; I don’t actually know what detail you’re referring to. But I would make this point: the ISDS clause that I referenced in the Hong Kong agreement was used by tobacco companies to try and take legal action against an Australian government for plain packaging. I think that demonstrates, amongst other things, the concerns that many in the Australian community have about those sorts of provisions in these trade agreements—that they obviate or constrain a country’s sovereignty. We in government have said that we won’t be doing trade agreements with those clauses in them, and we will be going through a process of trying to improve or remove those agreements which have those clauses.

The PRESIDENT: Minister Wong, please resume your seat. Senator Babet.

Senator Babet: A point of order, once again, on relevance: is the person who is appointed by the Commonwealth to perform ISDS arbitration dodgy? That’s it.

The PRESIDENT: Senator Babet, Minister Wong went to that part of your question. Minister, please continue.

Senator WONG: I again say that we have concerns about ISDS clauses when it comes to ensuring that an Australian government can make appropriate decisions on behalf of the Australian community, and we put those on the record.