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Issue #1628      February 26, 2014

Australian Parliamentary process for trade agreements

Over the last decade the growing opposition to secrecy in trade negotiations has resulted in some examples of greater transparency. Since 2003, World Trade Organisation proposed texts, offers and background papers have been placed on the WTO public website. In the case of the Anti-Counterfeiting Trade Agreement (ACTA), which dealt with extension of intellectual property rights, there was so much controversy that governments agreed to release the text in 2011 before it was signed. So there are precedents for release of the text before it has been signed by governments.

The demand for release of the text has been a feature of campaigns on the Trans Pacific Partnership and other trade agreements, and has been endorsed by the Senate, but so far the Australian government has not agreed to do this.

In Australia the current process for trade agreements is that the text remains secret until after it is has been agreed by the negotiators and signed by governments.

The Trade Minister presents the text to the Cabinet, which is made up of the Prime Minister and other Cabinet Ministers. The decision to sign the text is made by Cabinet, not the whole Parliament.

The text cannot be changed after it is signed.

After signing, the text is tabled in Parliament for 20 sitting days and goes to the Joint Standing Committee on Treaties for review before the legislation to implement the agreement is presented to parliament. The final ratification of the agreement will take place after the implementing legislation has been passed by both the House of Representatives and the Senate.

At this point the text becomes public. There is an opportunity for public submissions to the review. But the Committee cannot change the text of the agreement and can only make recommendations. Because it is a Joint Standing Committee of both the House of Representatives and the Senate, the government of the day, which has a majority in the House of Representatives, will have a majority on the committee, and the committee is likely to recommend that the agreement be finalised through the Parliament passing the implementing legislation, even if there are critical submissions.

Parliament only votes on the implementing legislation, not on the whole text of the agreement. The Trans-Pacific Partnership (TPP), for example, has 29 chapters and only a few of these will require changes to legislation. One example which would require legislation change is changes to tariffs or taxes on imports.

However, many other chapters will restrict the ways in which current and future Australian governments can legislate, but will not require legislation. For example, the inclusion of the right of foreign investors to sue governments over domestic legislation (investor-state dispute settlement or ISDS) does not require a change to Australian legislation. Other changes, like changes to the Pharmaceutical Benefits Scheme, could be done by changing regulation rather than through legislation.

If the government does not have a majority in the Senate, as is the case with the Abbott Coalition government, the Senate can have an impact on agreements like the TPP by holding its own inquiry or review of the agreement, and by voting against or amending some or all of the implementing legislation.

Voting against the implementing legislation would prevent or delay the final ratification of the agreement.

* Australian Fair Trade and Investment Network –aftinet.org.au

Next article – “Our kids, our way, their future”

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