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How do we make free trade fair?

By Peter Whish-Wilson - posted Thursday, 13 February 2014

It is time for a national conversation about trade and free trade agreements and about the importance of re-focusing the debate in this country around what is fair trade and the importance of incorporating fair trade in future free trade agreements. The events of the last few days and weeks, with the Toyota closure and the SPC Ardmona decision, have made it clear that this conversation is necessary and urgent.

Yesterday Toyota, and only a few weeks ago, Ford, claimed that free trade agreements, both present and future, played a role in their demise and the shutdown of their businesses in this country. Also, we often see farmers complaining about the impacts free trade deals have had, particularly in relation to the import of cheap agricultural products. But you will not hear these types of conversations or comments from the government.

The current spruiking of free trade agreements reminds me of a scene in The West Wing where Josh Lyman was trying to get the president to sell the idea of trade agreements to the public using simple language. Lyman wanted the president to say, 'Free trade creates jobs. It creates better, higher-paying jobs.' He did not want the president to talk of costs and benefits or winners and losers. He wanted to dumb down the discussion of trade to a simple tag line.


Somehow, somewhere in this government there is a Lyman-like adviser who is telling the government to adopt equally glib and superficial language about current free trade deals under negotiation. They are not exactly word for word Josh Lyman lines, but Minister Robb's 'Embrace pact for prosperity' fawning opinion piece on trade is pretty close.

The Productivity Commission and Treasury have both said that the benefits of the trade deals on the table—like the Korean free trade agreement, or the Trans-Pacific Partnership Agreement—have been oversold, and the costs have been largely unexamined. I think we have had evidence of that in recent days. This is exactly what Andrew Robb is doing: overselling the positives and leaving the costs unexamined. They are treating the community like fools.

Governments always concentrate on the positives of free trade agreements. In the case of the Korean free trade agreement, the minister has cited independent economic modelling to back his case. The minister and DFAT have asserted that independent modelling showed both agricultural and manufacturing exports to Korea would be higher as a result of the Korean-Australian free trade agreement. The figure of $650 million a year was cited as the annual boost to the Australian economy as a result of this agreement. I note the minister has also asserted that the Korean-Australian free trade agreement is good for Australian manufacturers. The events and statements of yesterday with Toyota, and with Holden only a few weeks ago, strongly discount this statement.

While the minster is happy to assert the figures that allegedly arise from the modelling, the modelling is not available for public release or scrutiny. The DFAT fact sheet on their website also quotes figures based on economic modelling that is not available to the public. According to the website the modelling was prepared by the Centre for International Economics, a consulting firm based in Canberra. This is all the information on the modelling that is provided to the parliament and to the public.

The minister can go around spruiking modelling as if it is the best thing that has ever happened to the country without there being any right of reply. How this could possibly lead to appropriate discussion about what is in the national interest is anyone's guess. Unfortunately, I think the government is doing this exactly because they do not want a discussion on the merits and costs of the agreement; they want to tick it off and move on. I acknowledge that there will be benefits to free trade agreements, although I question whether the term 'free trade' is an oxymoron, because there is no such thing.

The Trans-Pacific Partnership is a 29-chapter agreement that covers topics beyond straight export and import concepts—like tariffs to areas of broad public interest such as environmental law, labour law and copyright and patent issues, to name just a few—as well as an issue that I am very interested in, flexibility and sovereignty in relation to food labelling and regional branding.


I assume the Korea-Australia modelling had some negative things to say, because the DFAT fact sheet identifies what they call sensitive sectors which may face increased competition from Korean imports. Sectors identified are motor vehicles, automotive parts, steel products and textiles, clothing and footwear. But if the modelling is not released publicly how can Australians possibly assess what these arrangements actually mean for them and the industries they work in? How can the modelling be assessed to ensure it was actually measuring the right things?

I have an article from an automotive magazine, which dates back to December last year ( It is two pages long and entitled 'South Korea free trade deal could crush car industry: FTA will mean cheaper cars, but will wipe out Australian car industry.' It says:

The proposed Free Trade Agreement with South Korea will lead to cheaper cars—but it will almost certainly crush what’s left of the Australian auto manufacturing industry, experts have warned.

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About the Author

Senator Peter Whish-Wilson is the Australian Greens Trade Spokesperson.

Other articles by this Author

All articles by Peter Whish-Wilson

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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