Oz politicians SUCK at drafting trade agreements

Productivity Commission blasts TPP-style negotiations while US passes 'fast-track' bill


Opponents of the Trans Pacific Partnership have had a key defeat in America, with the Senate passing crucial “fast track” legislation that lets President Barack Obama push ahead with the deal.

The vote is crucial to letting the White House get the stalled negotiations moving again.

Meanwhile, one of Australia's most doctrinaire free-market advocates, The Productivity Commission, has flipped a six-shooter out of its holster and shot holes in how trade pacts are negotiated.

In its “Trade and Assistance Review”, the Commission tries to quantify both industry assistance programs – otherwise known as corporate welfare – and free trade deals.

About the latter, the commission's report says that the Australian government isn't doing a good job of assessing the benefits of trade pacts. Based on the Australia-Japan free trade agreement, commissioner Karen Chester says “today's assessment processes fall well short of what is needed before committing us to these agreements”.

While governments trumpet their free trade pacts as good for business, the Productivity Commission report says that the global value chain is too complex for such glib statements.

Business inputs, the commission says, often cross the boundaries of a FTA, and that means the trade pacts can “add to the complexity of international trade and investment.”

They're also “costly and time-consuming to negotiate and add to the compliance costs of firms and administrative costs of governments”.

The commission also ticked off concerns that have been raised by anti-TPP campaigners: trade pacts have a “not good” history of addressing intellectual property arrangements; and investor-state dispute settlement (ISDS) provisions also get a smack-down.

ISDS provisions “depart from national treatment principles by affording substantive appeal rights to foreigners not available to domestic firms”, the commission writes, hampering governments' ability to regulate business activity.

Likewise, environmental and health provisions in FTAs “lack transparency and have inadequate parliamentary scrutiny”.

The FTAs might even be slowing down the cause of free trade, the report says: “A related issue is whether negotiated agreements work to maintain and further liberalise existing levels of market openness through ‘standstill’ and ‘ratchet’ provisions, or whether they simply codify existing arrangements — potentially making future reform more difficult or slowing the willingness to reform domestically”. ®


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