Submission | Senate Foreign Affairs, Defence and Trade References Committee TPP inquiry

The Trans-Pacific Partnership allows businesses to benefit from lower tariffs and greater clarity and certainty of trade rules.

The Australian Chamber of Commerce and Industry supports the negotiation of treaties that encourage prosperity in Australia and abroad. Individual treaties should accelerate regional and global trade liberalisation, serving as building blocks for an improved multilateral trading system. To achieve this, we support domestic policy measures that improve the negotiation and monitoring treaties. This way, treaties can have greater potential to deliver their forecast economic benefits.

The use of treaties by Australian businesses should guide future treaty activity. Australia’s limited domestic consultation during trade negotiations means that treaties often contain provisions that stakeholders, including business, are only aware of after the treaty negotiations are concluded. This lack of transparency can lead to misunderstanding and alarmist politicisation of treaty provisions.

Many businesses report difficulties understanding regulatory divergence among Australian trade agreements. This can create administrative barriers for traders that could have been avoided if they were identified during negotiations. Such stumbling blocks add to red tape and prompt businesses to use time-consuming workarounds. This makes the affected trade treaties less desirable.

For it to succeed in Australia the TPP requires a strong foundation of understanding and support by the Australian people. This will be better achieved through assessment by the Productivity Commission at arm’s length from negotiators.

The function of trade and investment liberalisation, and the differences between “free trade” and “preferential trade”, need to be better understood.

It is counterproductive for Preferential Trade Agreements to be promoted using a mercantilist approach. Government need to explain to the public that both positive and negative impacts come from trade and investment liberalisation. Acknowledging that there are “losers” (in the short term) is an important step in building empathy with the public and during the transitional journey to prosperity brought about by liberalised trade.

If the TPP does not enter into force, the Australian Government should unilaterally apply the domestic reforms envisioned. This would reduce costs and red tape, helping Australian firms to remain globally competitive.