Andrew Leigh

Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015

House of Representatives

22 October 2015

I sometimes wonder how Australia's founding fathers would regard debates in this place were they to know that we would be sitting here with both sides of the parliament supporting trade liberalisation and supporting better engagement with China. Indeed, at the very moment this debate is taking place, the Queen of England is hosting Xi Jinping for a state dinner in London.

Federation was founded around a protectionist settlement. That protectionist settlement was one with which the Country Party and the Labor Party were agreed. As late as 1948 Labor Prime Minister Ben Chifley told parliament: 'If the matter had been left to us, we should not have initiated a conference to discuss the lowering of world tariff barriers.'

That philosophy of protection-all-round McEwenism, supported by the Menzies government and its successors, was supported, too, by my side of politics. It was not broken until the 1973 tariff cut under Gough Whitlam. The 1973 cut is a great reminder of the power of ideas in shaping the world. Indeed, as Keynes once said: 'The world is ruled by little else.' Works from people such as Max Corden and Alf Rattigan were vital in providing the intellectual underpinnings for the tariff cut. It was a close-run thing. Whitlam's cabinet approved the 1973 tariff cut by a margin of only 16 votes to 11. History would have been quite different had the forces of closed economy seen the day at that time.

Since then it has been Labor governments that have helped to bring down Australia's tariff barriers. The 1988 and 1991 tariff cuts were bold economic reforms which recognised the principles that, as Joan Robinson once put it: 'We should take the rocks out of our own harbours even if our trading partners do not take them out of theirs.' Over the trade office in Washington DC is the line, 'No nation was ever ruined by trade.' That great principle is no more true than Australia's trade with China.

Since Deng Xiaoping first allowed private property experiments in the late 1970s, the Chinese economy has massively opened up and its living standards have exploded, increasing more than tenfold. To visit Beijing or Shanghai or many of the other large cities in China is to meet people of my age who remember going to bed as a child every night hungry, but who now enjoy a comfortable standard of living.

This will be an agreement which will benefit Australia's goods exporters. But the goods exports are just a part of the consumer benefits that flow from this trade agreement. As my colleagues, Clare O'Neil and Jim Chalmers, have articulately pointed out, services exports are a vital part of the benefits to be gained from this trade agreement.

As my colleague, Tim Watts, pointed out in an excellent speech in this place last night, the gains from imports will be higher than the gains from exports. Productivity Commission modelling suggests that the free trade agreements undertaken by this government will boost Australian exports by 0.5 per cent and Australian imports by 2.5 per cent. It is ironic, given that, that the government has been referring to this as an export agreement rather than an import-export agreement.

Labor has ensured that there are a range of safeguards put in place around labour market testing, around protecting Australian wages and conditions and around protecting workplace skills and safety standards. They are issues that are important to many Australians and to those who represent workers. They are issues that have been raised with me at community group meetings right across my electorate.

Labor's commitment to free trade runs deep, deeper than that of any other party in this parliament. Our commitment to China could not be stronger, going back to Gough Whitlam's brave decision—which was ridiculed by the conservatives of the day—to engage with mainland China and the growth opportunities that it represented. We support this agreement and we commend to the House the additional safeguards that have been put in place to not just ensure that we just get more goods exports, more services exports and cheaper imports but that we also safeguard Australian jobs in the process.