I want to congratulate the member for Forde for moving this motion which follows the table government’s leading role in bringing the Trans Pacific Partnership to fruition. Free trade agreements such as this are of seminal importance for Australia, which is why the coalition government has made trade such a successful priority.
Our efforts have seen high-quality free trade agreements concluded with Korea, Japan, China and Peru, and TPP 11 is an important addition to the expanding opportunities for our exporting businesses.
At a time when we’ve seen populist and protectionist movements around the world question the value of free trade and indeed the openness of the global economy itself, I want to reaffirm my own strong belief that the case for free trade remains overwhelming.
Free trade makes sense. It makes sense economically, it makes sense socially, it makes sense in alleviating poverty and it makes sense in bringing nations closer together. And it also makes sense for an economy like our own, which has always been strongest when our export sector is doing well.
Australia currently has 10 free trade agreements in place and it is no accident that the countries involved in these agreements account for 67 per cent of our total trade. Our major free trade agreements with China and the United States of America, the world’s two largest economies, demonstrates those economic benefits.
Since the agreement with the United States came into force over a decade ago, the amount of two-way investment has almost tripled, and the free trade agreement with China has also delivered clear benefits. Australian exports to China grew by 25 percent last year alone to reach $110 billion, with Australian service exports, which are particularly relevant to my own electorate, hitting a record $14.7 billion.
Our free trade agreements help Australian workers and businesses. They are creating more jobs for Australians.
Free trade and a more open global economy are also providing benefits beyond our shores. No action by national governments has had a more profound effect on reducing global poverty than free trade. A combined study by the World Trade Organization and the World Bank in 2015 showed that, as developing countries engaged in more trade, the number of their citizens living in extreme poverty declined dramatically.
In 2015 fewer than one billion people in the developing world lived in absolute poverty. That’s around 15 per cent of the world population—still way too high—yet in 1981 that number was 1.9 billion people nearly half of the world’s population at the time. The greatest fall in this number has been in the last 15 years, coinciding not accidentally with the increase in the developing world’s engagement in trade.
In 2000 the developing world’s share of world trade was 33 per cent. In 2015 it stood at 48 per cent. This has mirrored the growth in trade since the end of World War II globally. In 1950 the export of goods accounted for just eight per cent of global GDP, and today that figure stands at somewhere around 20 per cent.
The benefits of free trade are global but provide particular opportunities for Australia. The Trans-Pacific Partnership will be no exception. TPP-11 will create new jobs as it improves trade opportunities across a free trade zone that stretches from Malaysia to Chile.
The agreement will eliminate more than 98 per cent of tariffs among nations which have a combined GDP of something like $13.7 trillion. For Australia the TPP creates our first free trade agreements with Canada and Mexico and continues our efforts to strengthen trading relations with Latin America.
Much has been said about the benefits of TPP-11 for our agriculture sector, be it the new opportunities for beef and dairy products in Japan or farming sectors like rice, sugar, seafood, wine and lamb. In my electorate, where it’s fair to say beef production is not one of our major industries, the TPP will deliver considerable benefits to those export firms working in the service sectors. Accounting, management, consulting, architecture, education, health and ICT will all benefit through better access to government procurement service contracts in TPP nations.
Many doubted whether the TPP could be achieved following the withdrawal of the United States. Indeed, those in the Labor Party who sit opposite almost gleefully gave the TPP its last rites, and I remember the Leader of the Opposition describing it as a dead agreement. Yet through the leadership of the Prime Minister and the Minister for Trade, Tourism and Investment Australia will now be the beneficiary of this landmark agreement.
I commend them for their success and I commend this motion to the House.