Financial Review | Jul 29 2015
TPP: Australia considers ’modified’ ISDS clause
by Primrose Riordan
Trade Minister Andrew Robb has not agreed to any investor-state dispute clauses in the Trans-Pacific Partnership agreement yet.
He said he would only agree to the rules - which are increasingly used by multinationals to sue foreign governments - if there was consideration for Australian health and environmental policies.
Asked whether he had agreed to the provisions in the Trans-Pacific Partnership, which may be signed as early as Saturday, he said Australia was "considering a modified version".
Academic reviews of the deal have raised concerns that its provisions could push up the price of medicines and it would be harder to restrict the sale of tobacco and alcohol if ISDS clauses are included.
"We won’t move on ISDS until we’re satisfied that there’s a carve out for public policy on health and the environment," he said.
Former Labor Treasurer, Wayne Swan, came out in blanket opposition to the clauses on Wednesday.
"ISDS trade clauses damage our economy, are undemocratic ceding control of some policy to foreign corporations," he tweeted.
Other critics of the clauses include Reserve Bank board member Heather Ridout, High Court chief justice Robert French and the Productivity Commission, which says the provisions favoured foreign companies over domestic companies which would lead to "regulatory chill."
CHINA FTA DEFENDED
Mr Robb also addressed a union and Labor party campaign-led against provisions allowing the import of foreign labour in Australia’s free trade agreement with China.
The campaign alleges the deal includes the removal of skills assessment for 10 occupations under the 457 visa program for imported workers, including for such trades as electricians.
There is also concerns Investment Facilitation Agreements would allow the importation of entire workforces for investment projects worth at least $150 million, and local labour markets would not be tested first.
Mr Robb said any import of labour would need to pass government assessment.
"That’s the level in which [Chinese companies] can bring in labour quickly and effectively if there is a shortage here, but even then it operates under existing 457 guidelines, which are very stringent.
"A labour agreement will only take place if the department is satisfied that Australians have been provided for the first opportunities for jobs," Mr Robb said.
Mr Robb said the China FTA had "basically the same" labour conditions as previous FTAs.
"This free trade agreement basically represents the same provisions Labor Introduced either under the enterprise migration agreement or in other FTAs where they said there is no need for market testing in regards to business executives and senior managers," Mr Robb said.