‘Free’ trade agreements will cost Australians a lot more than $39 million

Allen Hicks

It's called 'free trade', but our agreements cost taxpayers heaps: Allen Hicks. 

It cost us $38,984,642.97. And by us, I mean the Australian taxpayer.

That’s nearly $39 million that should have been spent on something meaningful, something that would have benefitted that Australian public. Instead, taxpayers burnt the millions in legal costs fighting for a law in their own country.

This is the legacy of the anti-democratic clauses written into many of Australia’s “free trade” agreements through the investor-state dispute settlements (ISDS). But what exactly about these agreements is “free”?

We can’t really say it’s free when it cost Australians $39 million to fight Big tobacco over our plain packaging laws because of an ISDS clause within our trade agreement with Hong Kong left us vulnerable. Nor was there anything free about how we came to learn the true cost of the fight.

It took the persistent prosecution of Centre Alliance Senator Rex Patrick for the cost of Australia’s legal bill to come to light. To reveal the truth, Senator Patrick went to the Administrative Appeals Tribunal as Philip Morris and the Turnbull Government refused to reveal the costs in 2016 when Australian law prevailed following a tribunal hearing in Singapore.

Still, the Turnbull Government did not want to reveal what it cost taxpayers to fight Philip Morris, a donor to the Liberal-National parties, and appealed the Information Commissioner’s decision to reveal the legal price tag to taxpayers.

“Thankfully Australia won the case because the tribunal found it was not truly a Hong Kong company, but only after four years and $39 million in legal costs," Senator Patrick said.

The Senator added the debacle could have been avoided, “if we hadn’t signed up to the Hong Kong agreement with ISDS provisions”.

“Imagine what health outcomes could have been achieved with that $39 million,” he said.  

It’s a salient point because Australia needs to consider the true costs of these so-called free trade agreements.

We’ve spent $39 million fighting Big Tobacco over a law that was immensely popular with the public and improves the health of the nation. But we only know this because Senator Patrick pursued the matter until it was brought to light.

And this reveals the second misnomer about free trade agreements: everything about them is wrapped in secrecy, negotiated behind closed doors and written by the corporate interests that will directly benefit from these treaties – not the people.

We are seeing this again with Trans-Pacific Partnership, which is still alive despite US President Donald Trump calling it a “potential disaster” and withdrawing from it. But it’s hard to know exactly how disastrous the TPP could be for the people of the 11 remaining countries because their citizens are being denied the right to see the agreement’s text.

But we do know it contains a chapter on ISDS, which means that Australian workers would be subject to the legal whims of foreign companies to pursue governments in international tribunals.

This was the case for the impoverished El Salvador, which spent $12 million fighting an Australian-Canadian mining company to prevent it contaminating its drinking water. And we saw it when the Egyptian government spent six years fighting French multinational Veolia over a minimum-wage rise for garbage collectors. Imagine Australian apprentices being dragged through international tribunals because the Fair Work Commission agreed to lift their wages. This is what rubber-stamping ISDS provisions in trade agreements opens us up to.

Australia’s win against Philip Morris was only technical, because the arbitration court ruled it was not technically a Hong Kong company. But if it was a Japanese company, or Malaysian, Chilean or Canadian, we should assume Australia’s plain packaging laws might not have been so lucky.

In a submission to Parliament on the China Free Trade Agreement, the Electrical Trades Union warned ISDS was “an enormously costly system with no independent judiciary, precedents or appeals, which gives increased legal rights to global corporations which already have enormous market power, based on legal concepts not recognised in national systems and not available to domestic investors”. The cost of fighting Philip Morris proves this.

ISDS provisions are not written with people in mind. They are written to supplant national laws and put profits above people. That’s why the European Court of Justice ruled they were incompatible with the EU’s sovereignty and will no longer be included in trade negotiations. There won’t be an ISDS provision in any future EU agreement with Australia.

This is a start, but Australians are coming to see there is nothing democratic about these deals at all. Not only are voters denied their democratic rights to have a say on these agreements, but elected representatives’ access in Australia and other nations is often restricted, often only being granted a say when it comes time to vote the treaty into law.

Free trade agreements must be subject to the full rigors of parliamentary debate and process. They cannot be rubber-stamped by the government of the day. There must be full and absolute public disclosure because after all if the government gets it wrong Australian taxpayers will foot the bill.

Like with the cost of our fight against Philip Morris, the Turnbull Government is doing all they can to keep the details of these “free” trade agreements secret.

This is not how open democracies are supposed to work. Trade agreements, like the democratic process, must be carried out in full view of the public. But if the Turnbull Government is willing to do the bidding of corporate interests and sign away Australia’s sovereignty in “free” trade agreements, it will cost Australians a lot more than $39 million. 




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