Feb 10, 2016

Whoo boy, trade agreement to save Australian business a whopping … $150k

The government's "analysis" of the Trans-Pacific Partnership is sloppy and embarrassing -- and actually confirms that there will be little benefit for Australia.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

The lack of credible analysis of the impact on the Trans-Pacific Partnership on the economy was on vivid display yesterday when Trade Minister Andrew Robb tabled the agreement to which the Turnbull government secretly agreed in October. Accompanying the text of the agreement was a "National Interest Analysis" of the TPP written by the Department of Foreign Affairs and Trade. The document wasn't placed online until last night, meaning you had to go and get a copy from the tabling office in Parliament. It was a final grace note for what has been an entirely secret process in which basic accountability has been wholly absent. Perhaps DFAT was ashamed of its document, because there isn't a single sentence of actual analysis in the dozens and dozens of pages of the document or its attachments. The entire "National Interest Analysis" is simply a detailed description of what the TPP contains, the commitments made by countries that are party to the agreement and the size of the various sectors involved. Actual assessment of the economic benefits or costs is wholly absent. The closest the "analysis" comes to actual analysis is vague sentences like:
"The TPP will promote further growth and diversification of Australian outward investment by liberalising investment regimes in key sectors for which the TPP region accounts for a major share of global investment ... The TPP will also promote further growth and diversification of foreign investment in Australia by liberalising the screening threshold ... The TPP includes additional commitments which will lower the costs of doing business... The TPP tackles new trade challenges by promoting innovation, productivity, and competitiveness ..."
In the "Impact Analysis" section of Attachment II, where you'd expect to find the nitty-gritty of how much different sectors would win or lose under each section of the agreement, DFAT simply rehearses the tariff reduction schedules in the TPP and notes how much each sector is worth to Australia. The closest it gets to analysis is rigorous statements like "the TPP has delivered high quality outcomes that will open substantial new trade and investment opportunities for Australia". There are some numbers, but they're right at the end, where DFAT estimates how much Australian business will save from lower Certificate of Origin paperwork -- a grand total of $147,000. So, the only actual hard evidence in the government's entire analysis of the TPP is that businesses will save less than $150,000 on paperwork. That, literally, is it. If a first-year uni student handed in such stuff, they'd be (hopefully) failed. Of course, DFAT is a famously economically illiterate department, but it couldn't even hire a consultant to conjure up some modelling showing massive economic benefits and thousands of new jobs. At the very least, you might have expected an effort to refute the World Bank's forensic dissection of the agreement, which showed that the TPP would grow Australia's GDP by just 0.7% by 2030. The only mention of the World Bank analysis in the NIA notes that its conclusions have been confirmed by other independent analysis, and suggests that the economic growth benefits identified by the Bank "will increase as other significant economies in the region join over time with some, such as Indonesia, Korea and the Philippines, already having indicated a desire to do so." So, remarkably the World Bank's analysis showing trivial benefits for Australia is actually endorsed by DFAT, with the hope that they'll get bigger if other countries join in. Andrew Robb continues to reject calls for a proper cost-benefit analysis of the agreement by a reliable, independent source such as the Productivity Commission. His rationale? He told the ABC last week that those calling for an independent analysis "are all the usual suspects ... most of the people who are driving that campaign have been opponents to free-trade agreements for decades frankly. They are entitled to that point of view but the fact is that nothing that would come out of an inquiry would satisfy them." Among the many bodies that have called for an independent assessment of the impact of the TPP is the Productivity Commission itself. In July last year, its chairman, Peter Harris, outlined a process by which the PC -- or some other body, Harris didn't mind which -- could have undertaken an assessment within four months. Robb is thus suggesting that the Productivity Commission -- the most hard-headed, economically rationalist government body in the country -- opposes free trade and is part of a campaign against it. And in place of a proper, independent and rigorous analysis, he's presented an embarrassing collation of talking points.

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19 thoughts on “Whoo boy, trade agreement to save Australian business a whopping … $150k

  1. Bob's Uncle

    “..they are entitled to that point of view but the fact is that nothing that would come out of an inquiry would satisfy them.”

    Does anyone else read this as an admission that the Productivity Commission would confirm no substantive benefit to Australia from the TPP?

    And this is the party who in opposition demanded CBA’s for pretty much everything Labor did, right?

    This would be laughable if it didn’t involve a significant weakening of our national soverignty.

  2. mike westerman

    Hasn’t it been ever thus…there’s more lies told about the benefits of trade than any other subject in economics IMHO! Interesting tho’ that at present it’s trading nations like Indonesia, Australia and China that are getting slaughtered, the latter being encouraged to develop more domestic consumption, taking away investment from the export sector.

    And all the while the fiercest opposition to the movement of people we’ve seen in recent history – moving speculative currency around, OK, shipping plastic crap around, OK. Letting people relocate out of poverty, NOT OK.

    Confusing fellows, or just confused!

  3. David Hand

    No, Uncle, it means what it says. Which is that lefties will oppose international trade irrespective of the facts and global experience.

    Global experience has overwhelmingly demonstrated that international trade promotes economic growth. Island economies that are closed to international trade do poorly. China is the best demonstration of the huge benefit of international trade. Australia is a trading nation and would be severely hurt by trade restrictions. One of the reasons that the EU is in such strife is its increasingly ridiculous tariff and customs barriers to trade.

    The TPP is a straightforward agreement that lowers trade barriers and will be good for Australian exporters. Of course that hasn’t stopped the left in every country in the TPP including the USA opposing it on the grounds of protecting local jobs. The left can only see evil corporations benefiting.

    Tell me something new.

  4. danger_monkey

    Uh, no David, It means what Uncle was saying.

    Want to prove otherwise? Show me the strongly positive economic analysis.

    Oh wait, there isn’t one.

  5. klewso

    If this band of usual suspects is so inconsequential, what’s wrong with opening his swag to give us all a look at what he’s got inside?

  6. Chris Cathel

    “…China is the best demonstration of the huge benefit of international trade.”

    I think I know where you are going on this. The lack of labour laws, slave labour, vast environmental pollution, suicide rates in factories, massive corruption of local and regional government – these are the other necessary factors before Australia can benefit properly.

    Lucky I am close to retirement.

  7. David Hand

    Actually I was thinking about 500 million people lifted out of poverty but such details are irrelevant to left wing warriors.

  8. AR

    I cringed in embarrassment for poor befuddled Robb last week in PMQ when asked a Dixer about the multiple benefits of the TPP – he stumbled and blundered then began to get his stride and told the Nation of the glorious overfulfilled exports of…”beef tongues’.
    Yesterday the “Treasuer”, in response to yet another Dixer, regaled us with the rivers of gold pouring into the country’s coffers from the beef trade (apparently doing just dunk-hory sans TPP).
    Is this is rilly, trooly the best they can proffer?
    BTW OneHand, your delusion is showing with “the left in every country in the TPP including the USA opposing it on the grounds of protecting local jobs.” – in the Benighted States the nearest to Left is the Teabaggers.
    Working conditions in the West in general have been under concerted threat & erosion since the woeful 80s ThatcheRaygun voodoo economics as each country joins in the race to the bottom.
    Enjoy fighting for crusts & crumbs that fall from the Overlords’ tables.

  9. Paul Kennelly

    Robb’s political career has had one purpose and one purpose only – the destruction of the unions. He has always believed that this was the way to permanently destroy Labor’s capacity to mount political campaigns against the conservatives. If Australia’s industrial capacity has to be destroyed in order to achieve this aim, then so be it. The trade “deals” he has negotiated have had his purpose in mind.

  10. zut alors

    And having done the deal Robb is about to cut & run. Smart move.

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