I spoke in parliament last week about the benefits of free trade to Australian consumers and businesses, and the legacy of the great Labor Senator Peter Cook.
23 June 2011
I rise to discuss the benefits of free trade to the Australian economy and the Australian consumer. Estimates from the Department of Foreign Affairs and Trade show that households have benefited by $3,900 per annum as a result of the reductions in tariffs and the elimination of export quotas over recent decades. A large part of that boost has been in the form of prices being lower for consumers than they would otherwise have been in the presence of tariffs. The real prices of heavily protected products have fallen sharply. Boys' footwear has fallen by 50 per cent, prices of major household appliances have fallen by 47 per cent and prices of automobiles have fallen by 37 per cent. One in five Australians is now employed as a result of exports and imports. Australians working in export industries are paid 60 per cent more than other working Australians.
I want to use this opportunity to praise the trade minister, Craig Emerson, for his recent statements in this area. He follows very much in the traditions of the Hawke and Keating governments of trade liberalisation. Trade liberalisation in Australia has been a Labor achievement; whether through Gough Whitlam's 1973 tariff cuts or the Hawke tariff cuts in 1988 and 1991, the tough decisions have been Labor decisions. The Australian economy is better for that—we are a more resilient economy. I think one of the reasons we have weathered these shocks so well in recent years has been because Australian businesses naturally think of themselves as international businesses engaged with the world economy and diversified across international markets.
Lowering Australian trade barriers is worthwhile in its own right, regardless of what other countries do. As the great Cambridge economist Joan Robinson put it, it is worth removing the rocks from your harbours even if other trading partners do not take the rocks out of their harbours.
Thankfully, our other trading partners have also been taking the rocks from their harbours. Among Australia's major trading partners in the Asia-Pacific region, which buys 70 per cent of Australia's exports, average tariffs have been cut over the last quarter century from more than 25 per cent to around five per cent, according to a recent Productivity Commission trade policy statement.
I would like to use this opportunity to pay tribute to the late Senator Peter Cook, who was, for a time, Australia's minister for trade and, when I worked for him in the late 1990s, the shadow minister for trade. Peter died a little under six years ago, having resigned from this place almost exactly six years ago. He was just 62 at the time when he passed away, but he left a great legacy. He held a range of different portfolios, including industry, shipping, resources, industrial relations and trade. He understood intuitively that the benefits of trade liberalisation flow to all Australians.
He understood, as very much a self-taught politician and one of the last who had not finished high school to serve in a cabinet, the benefits of comparative advantage, of doing what Australia does best. When he returned from the 1999 Seattle trade talks, where he and his wife, Barbara, had been caught up in the riots and the tear gas, Peter set about rewriting Labor's trade policy. Its opening paragraph firmly committed our party to free trade.
He was an instinctive internationalist, perhaps because he was engaged in that most global of sports—sailing. When doctors told him he had only a year to live, Peter Cook told them what he thought of their prognosis by buying a 41-foot yacht. He never lost track of what mattered. He cut through the arcane complexity of trade agreements to make simple and straightforward points, and he recognised so well the interconnection between a strong social policy and an internationalist outlook.
On the shores of Lake Geneva, the building that was once the International Labour Organisation is now the World Trade Organisation. Yet it still bears on its walls the original social realist murals, depicting workers battling for their rights. Peter Cook once remarked how fitting he found the building, melding the rights of labour with the principle that trade across national boundaries should be unfettered. It was a great gain to the parliament and public debate that Peter Cook served for 22 years in the national parliament. We owe him much.
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