Nick Xenophon has slammed Australia’s record in establishing bilateral free trade agreements – a cornerstone of foreign policy for successive Australian governments in the past decade.

Writing in his blog this week, the Independent senator said there was little evidence Australia was benefiting from deals.
“FTAs are negotiated in secret between governments, signed and then presented to parliament for its rubber stamp. They have been beset by rosy predictions of a series of trade ministers – from both sides of politics – and their bureaucratic minders.

“As the Productivity Commission concluded in 2010, in a detailed but widely overlooked report, multilateral and unilateral free trade measures are much more effective at delivering significant benefits to Australia.”

Senator Xenophon added that he was concerned the Abbott government had stepped up involvement in such agreements, “pursuing deals with China and Pacific-rim countries in secret negotiations with no independent analysis of the trade-offs and costs involved”.

The senator said there was little evidence the latest deals signed with South Korea and Japan would improve Australia’s terms of trade, economy or the nation’s overall well being.

“Cheaper consumer goods for households eventually emerge, but at a huge cost to our manufacturing base, our natural trading strengths in agriculture and services, and our overall trade performance.”

Last month the senator released an analysis of ABS trade figures that showed for each of the trade deals with Singapore, US, Thailand and Chile signed since 2003, Australia’s trade performance with those countries was worsening, not improving.

Senator Xenophon said that since Australia signed an FTA with Thailand in 2005, annual imports have outpaced exports by an average of 14 per cent – or $7.8 billion last financial year.

“South Korea and Japan are global car-making giants and the deals with [them] will bring more of their cars here, but risk hastening the demise of Australia’s auto sector and the 33,000 jobs in the car components sector.

“Japan and Korea demanded and got lengthy lead-in times for lowering barriers to Australian agricultural products such as beef and just refused any progress on a raft of other farm products.”

He added that Australia was “laughed at internationally as the ‘free trade Taliban’ because of our purist and fundamentalist approach to these issues, compromising our national interest for a free trade mantra. We get taken for mugs and this has to stop.”

In July, ANU’s Associate Professor Matthew Rimmer told parliament’s Joint Standing Committee on Treaties (the only parliamentary process that examines the texts of FTAs after they are agreed by the government and made public), that Australia should become more “hard headed” about the agreements.

“DFAT have been engaging in booster-ism about trade and sometimes are very reluctant to reveal some of the costs or trade-offs involved in certain agreements.

“These deals produce big-bang headlines for governments but deliver damp squibs for Australia.”

Senator Xenophon has vowed to introduce legislation in the spring sitting of parliament that would transform the way FTAs are negotiated and adopted.

“These FTAs must be open to scrutiny and verification, rather than secrecy and exaggeration.

“Our national interest demands that it’s time we all wised up.”