Australia’s treaty-making process is so flawed it is hard to have any confidence in the claimed benefits of deals like the China-Australia Free Trade Agreement (Chafta). Scrutinising these agreements is like trying to stand in front of a speeding train. You see it coming but there is nothing you can do to slow it, change its course or stop it.

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From the moment a trade deal is flagged, media coverage is framed by favourable backgrounding from the government. It is accepted there are always winners and losers in trade deals, but you will never hear a word from the government about the costs.

Anyone raising issues such as the loss of revenue from tariff reductions, the jobs lost from industries that compete against imports, or the loss of sovereignty from giving special rights to investors to challenge our laws is labelled a “scaremonger” or “anti-trade”.

Throughout the negotiation stage there is no substantive debate about what constitutes our national interest, and how negotiations can best achieve this. It is taken by many to be article of blind faith that trade deals are fundamentally good.

The deal is then signed by the trade minister with great pomp. A glossy pack of facts and figures is produced with superficial modelling of the supposed benefits and MPs are sent out with their talking points to sell the deal. Then the text is released for public scrutiny, at last.

At this point, the deal is presented as take it or leave it.

The government doesn’t want you to know that there have been long-standing criticisms made of their trade agenda from some of the biggest policy heavyweights in the country. For instance, in 2010 the incoming government brief prepared by Treasury said that the “potential benefits of the free trade agreements currently under negotiation have been oversold and the negatives largely ignored”, which is exactly what we are seeing now.

The Productivity Commission has repeatedly argued against the supposed economic benefits of the government’s bilateral trade agreement agenda. Other concerns were recently raised by the government’s handpicked reviewer of competition policy in Australia, Professor Ian Harper.

There are also serious democratic concerns around special rights granted to corporations to sue sovereign governments, called investor-state dispute-settlement provisions (ISDS).

The chief justice of the high court, Robert French recently made a speech highlighting the risks posed by ISDS and called upon the judiciary to play a larger role in the public debate on the issue. One ISDS claim by tobacco company Philip Morris has cost us $50 million simply to defend ourselves, but unfortunately for the chief justice (and the rest of us), there just isn’t the space in the treaty process for us to debate and reconsider these factors.

There are so many unsubstantiated claims made on the economic benefits of these deals, you would think the roads of this nation’s will be paved with gold. Yet I asked Treasury and the Department of Foreign Affairs and Trade in recent Senate Estimates if they incorporated the supposed benefits of these trade agreements into our nation’s forward projections of GDP.

They replied the impact was not substantive enough to make a difference. Our own treasury and chief trade negotiator doesn’t think the benefits of trade deals are worth factoring into economic growth forecasts.

The Australian treaty-making process, which underpins our trade and partnership negotiations, is in a large way responsible for allowing this spin, politicisation and ultimately an erosion of democracy. Negotiations are by a select cabal and are kept secret behind closed doors. There is little to no transparency regarding the detail of agreements provided, and Cabinet gets to sign off on any final text of a deal before it is even seen by parliament.

A senate inquiry into the treaty-making process was established because as it stands, it can’t keep pace with the complexity of issues under negotiation. Trade deals aren’t what they used to be. They are now evolving partnerships that affect significant areas of public interest, law and regulation.

Chafta is a case in point of the flaws around the treaty-making process. Negotiations begun in 2005. It wasn’t until November 2014 that the public gained some idea of what was in the agreement. When the government concluded the negotiations the media ran with massively outdated modelling figures about the supposed benefits of the deal.

In June this year, when the agreement was signed, the public finally got to see what was in the text of the agreement. No specific modelling about the China agreement was released; instead the government released some limited modelling about all three North Asia FTAs combined.

The over $4bn hit to the budget from cutting tariffs was hidden in the fine print but become more widely known when I commissioned the Parliamentary Budget Office to look at the costs. The labour entry issues have been widely canvassed and might be addressed in the enabling legislation. However, the open-ended ISDS chapter in Chafta cannot be amended in the enabling legislation.

The Greens and the overwhelming majority of the Australian public oppose ISDS provisions yet there is no scope to amend one word of the agreement to remove this section. We might be able to tinker with the enabling legislation to clarify part of the agreement text but we can’t use the enabling legislation to change the agreement.

As parliamentarians, we can vote for ISDS and the entire agreement, or we can vote against ISDS and the entire agreement.



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The government could have avoided the public concern over Chafta if they had listened to their critics earlier. There was no reason not to run a more consultative process, to seek genuine independent assessment regarding the costs and benefits of these deals, and to allow proper debate.

The public will always lack trust in a process that locks out scrutiny. Trade deals should be considered in a measured way, and while the process is a proverbial speeding train, this will never be the case.