The Chile/Australia Free Trade Agreement was signed by both countries on July 30 2008 and is expected to come into force on January 1st 2009. Australia's Trade Minister Simon Crean has trumpeted the agreement as Australia's "most comprehensive" ever as it would see the removal of tariffs on almost all merchandise godds trade between Chile and Australia.
This Agreement, the first concluded under the Labor Government, still fails to factor in the social, regional, labour, and environmental impacts of such an agreement. This comes despite the election platform that the Government ran on claiming that they would do so.
IMPACTS
The big winners of this agreement for Australia will be the mineral companies. Under the agreement they are not longer subject to the 6% tax on mineral imports as well as gaining greater access to the exploitation of Chilean resources. This will see a greater trade in minerals, in particular coal, without any impact assessment on what such trade will have on climate change.
INVESTMENT
Included in this agreement is the controversial Investor-State Disputes Mechanism. This mechanism allows for private companies to challenge governmental regulation on the grounds that it may breech commitments under the FTA. This has been used extensively under other FTAs (most notably the North American Free Trade Agreement) to challenge a range of environmental and public health regulations.
Under the agreement the regulation of standards will also be open to challenge. The agreement stipulates that regulations must be "unnecessary barriers to trade", some they become by being "more burdensome than necessary to ensure the quality of the service". These terms are undefined and mean that standards set by governments could be challenged by private companies. The QLD Premier, Anna Bligh, in her submission to the review of the agreement expressed concern about the ability Chilean companies to challenge the QLD government's decisions relating to sustainable water and land use and environmental protection.
SERVICES
The trade in services between the two countries is also concerning. Under the agreement public services have not be specifically excluded. The agreement adopts the GATS definition of public services, that is, services provided on a non-commercial and non-competitive way. There definition excludes such public services like water, health and education.
Services have also been included in a "negative-list" approach. This means that any service not speficially exempted is included in the agreement, including future services that don't exist yet.
The inclusion of "most favoured nation" and "national treatment" in the services and investment chapters also restrict the ability of government to ensure that they are addressing the needs of the community. The two clauses restrict governments from ensuring minimum standards for local content, be that in the form of locals employed, domestic ownership or use of local products. This undermines the ability of governments to ensure that investment will address public needs.
For more information see AFTINET's submissions.
SCRUTINY
The Joint Standing Committee on Treaties (JSCOT) recieved 11 public submissions, mostly expressing concerns about the agreement, prior to the consideration of the text. On the day it came to review Australia's "most comprehensive" only 45 minutes was allocated to it due to discussion of other treaties.
AGREEMENT TEXT
See the full text of the agreement.
