Free Trade Agreements with Indonesia & Hong Kong

16 Oct 2019 speech

As a member of the Joint Standing Committee on Treatiesand a proud supporter of Australian businesses, I rise to support the findings as outlined in the report, specifically the establishment of comprehensive trade agreements between the government of Australia and the government of Indonesia; and between the government of Australia and the government of the Hong KongSpecial Administrative Region. I'd like to take this opportunity to recognise the Minister for Trade, Tourism and Investment, Senator the Hon. Simon Birmingham, for his work on these agreements, and I'd also like toacknowledge and recognise the Chair of the Joint Standing Committee on Treaties, the member for Wentworth.

As we know, free trade agreements provide enormous benefits to Australian businesses and to each and every Australian, and the benefits of the free trade agreements with Indonesia and Hong Kong are clear. They include the reduction of tariffs on a range of things. In relation to the Indonesian free trade agreement, we will see a reduction of tariffs on Australian agricultural and industrial goods going to Indonesia, including frozen beef, sheepmeat, feed grains, sugar, dairy, citrus and vegetables, and also hot and cold rolled steel coil and copper cathodes. This free trade agreement is particularly important for our agricultural sector. In fact, the CEO of the National Farmers Federation told the Treaties Committee:

Indonesia is a critically important neighbour and, with a population of over 250 million people, a growing market for Australian exporters … The parliament must act to ensure farmers could benefit as soon as possible. The CEO of the NFF, Mr Mahar, further highlighted that the agreement would:
Create new opportunities for Australian exporters to partner with Indonesian businesses both to supply Indonesian customers with even more quality Australian agricultural produce and export more broadly with the region.

These sentiments were echoed by Don Mackay, chair of the Red Meat Advisory Council, who said:

The benefits of ratifying IA-CEPA and securing more trade certainty with a key export market are unsurpassed– particularly at a time of global trade disruption.

But the agricultural industry is not the only industry that will benefit from the free trade agreement with Indonesia. The agreement also provides certainty for Australian investors and service industry suppliers by guaranteeing levels of Australian ownership, with the strongest services commitments Indonesia has made in a trade agreement. I note that in the services space the free trade agreement covers work training, university education, mining, hospitals, in-hospital services, tourism and transport. Just to give you a few examples of what it will deliver, Mr Deputy Speaker, majority Australian owned suppliers of technical and vocational education and training can provide services in Indonesia, and majority Australian owned businesses can operate railway
and road transport infrastructure. In the tourism sector, wholly Australian owned three-star to five-star hotels and resorts can be established anywhere in Indonesia.

Similarly, the Australia-Hong Kong Free Trade Agreement ensures that Australia's existing duty free access is locked in. Australian goods exporters will continue to have tariff-free entry into the future, despite Hong Kong's legal right, under the World Trade Organization, to introduce tariffs on a range of products. Australia's exports to Hong Kong are dominated by gold, with gold exports worth $7 billion in 2018, accounting for nearly 70 per cent of Australia's total exports to Hong Kong. The FTA with Hong Kong locks in duty-free access for gold and other resources, including iron ore, coal and petroleum. The wine annex, something of great interest to my home state of South Australia, provides new commitments to improve transparency of regulations and labelling
requirements for wine, which will reduce uncertainty and lower the costs of doing business. This is great news for Australian wine producers, including in my fine home state of South Australia. The food products annex aims to facilitate trade in all food products, including by promoting the use of international standards, and providing a mechanism to enhance collaboration between regulators. It will also facilitate speedy resolution if consignments of perishables are delayed at the border. The agreement also binds Hong Kong to maintain its open market settings for Australian services suppliers.

I could go into a range of other amazing benefits that this will provide to Australian businesses and service providers, whether through education in our universities or vocational education and training, but I'll just finish by noting the great benefits that free trade agreements provide to businesses. We know that more Australian businesses are exporting now, with over 53,000 businesses, including 46,000 small and medium-sized businesses, exporting in 2017-18. That is up 18½ per cent on 2013-14 figures. We know that one in five Australians are employed in trade related jobs, with more than 240,000 of those jobs created in the last five years. We are working to ensure that around 90 per cent of Australia's trade is covered by FTAs by 2022 because there are such
significant benefits to our economy by increasing the trade we can do with other nations.