Labor and trade unions remain concerned about aspects of the Indonesia-Australia free trade deal, which the government is trying to ratify

This article is more than 1 year old

This article is more than 1 year old

The Labor leader, Anthony Albanese, has reassured the Indonesian government that he supports deeper trade ties with Jakarta, as the party comes under growing union pressure to oppose a new free-trade agreement that the government wants passed through parliament this year.

A parliamentary committee is scrutinising the Indonesia-Australia Comprehensive Partnership, which has been in negotiation between the two countries for more than six years, and which the government wants ratified by the end of the year.

But Labor and the unions remain concerned about several aspects of the deal, including provisions that allow the use of temporary foreign labour without domestic market testing and dispute-settlement provisions for foreign investors.

Unions gave evidence to the joint standing committee on treaties (JSCOT) this week, saying they opposed key elements of the deal, and warning that temporary labour provisions could undermine Australian working conditions.

“Free trade agreements that deal with the movement of temporary overseas workers into Australia are critical issues for Australian unions and members,” the Australian Council of Trade Union’s Damian Kyloh said.

Australia should delay free trade deal with Hong Kong, ACTU says Read more

“Quite simply, this is because the fundamental issues at stake are about support for Australian jobs, support for Australian training opportunities and support for fair treatment and decent wages and conditions for all workers.”

The trade minister, Simon Birmingham, called on Labor to stare down the unions, saying their opposition to the new economic partnership was a “baseless scare campaign”.

“The unions have shown that once again they have blinkered opposition to trade agreements and ignore both the reality that Australian exports and jobs have grown since we expanded our network of trade agreements in recent years, and ignore the text and details within the draft agreement which has been struck,” Birmingham said.

“I would urge the Labor party to listen to the farmers and businesses who want to sell more goods in a market like Indonesia and not stand in the way.”

Birmingham said he hoped the Coalition would not be forced to negotiate with the Senate crossbench to pass the legislation to ratify the agreement, which could be introduced as early as October following the JSCOT inquiry.

“The significance of the Australia Indonesia relationship is meant to be bipartisan, it was meant to be underscored by Anthony Albanese’s visit to Indonesia this week and it would be a betrayal of the bipartisan commitment to the relationship were Labor not to support this agreement.”

Labor had pledged to renegotiate the agreement had it won government, and is holding out supporting the deal until after the agreement has gone through parliament’s JSCOT.

Labor’s position on the deal was raised in Jakarta this week, where Albanese and the shadow foreign minister, Penny Wong, met with Indonesia’s foreign minister, Retno Marsudi, and trade officials.

Following the meeting, Albanese said the economic relationship between Australia and Indonesia was “vital”.

“At a time whereby we’re seeing the implications of trade conflict on the global stage, it’s important that we have a rules-based order, it’s important that we have agreements between countries in our region that promote trade.

“Australia is a trading nation. This isn’t just about trade of course, it’s an economic partnership and there are already agreements in place between Australia and Indonesia that this will replace.”

However, Albanese is declining to endorse the agreement, telling Guardian Australia that the party is still consulting externally and he does not want to preempt the decision of caucus.

“The Indonesia free trade agreement is going through a parliamentary process, including hearings by Parliament’s treaties committee.

“We are consulting with many stakeholders and Federal Labor Caucus members, and we’ll listen to any concerns.”

The Labor MP Josh Wilson, who sits on the JSCOT committee, said he was concerned about proposed investor state settlement clauses and the ability for temporary foreign workers to be accessed without proper labour market testing.

“If that’s the case it goes against a fundamental principle of our system, and will further weaken wages and job opportunities in this country,” Wilson said.

“It is sneaky and wrong to pursue the unraveling of core workforce protections through trade arrangements.”

Wilson also said that it would be “bananas” if proposed new investor-state dispute settlement (ISDS) clauses did not replace old clauses, warning they would “remain active and available to multinational companies that might want to sue Australia over health or environmental or workplace regulations that don’t suit their interests”.

Labor’s position on free trade agreements has hardened after it supported the so-called TPP-11, which was signed after the collapse of negotiations for the US-backed Trans Pacific Partnership, with the party adopting a more hardline position at its national conference requiring independent assessment of the benefits of trade deals and the outlawing of ISDS clauses.

Last week, Labor’s shadow trade minister, Madeleine King, appeared to back the deal, using a conference in her home state of Western Australia to argue the benefits of new free-trade deals as demand from China waned.

“Balancing trade relationships and diversifying trading partnerships will be integral to this, as such supporting upcoming Free Trade Agreements and regional economic partnerships – such as the Indonesia-Australia Comprehensive Partnership – will be of paramount importance to the state.”

Advocates of the deal, including business and agricultural groups, say the trade deal will be worth about $35bn to the two countries’ economies and have urged it to be ratified.