Free trade or a free kick for ideologues?

Although he cops criticism for being a paranoid extremist, Bob Katter makes a fair point regarding the lack of transparency of Australia’s trade negotiations.

Bob Katter spends a fair amount of time being contradicted, brow-beaten and hectored in Canberra -- by major party MPs, public servants, economists and upstart metropolitan journalists -- on why his broadly protectionist view of the economy is misguided.

Whether he’s ranting about the closure of sugar mills, the decline of auto manufacturing, falling coal volumes or the death of the aluminium industry, the big-hatted Queenslander thinks we’re kidding ourselves with our dedication to 'free' trade.

Katter was as pains to explain to me yesterday why in just a few years we’ll be net importers of just about everything, with no export growth stories to help us pay for our fancy imported goods.

Economists sneer, but Katter sees an economy around him that has taken the law of comparative advantage too far. While the dollar continues to ride high on still-booming iron-ore volumes (and a global appetite for the relative safety of AUD-denominated assets), he complains of shrinking dairy, beef and sheep herds, collapsing manufacturing and a gradual shift towards imported fruit and vegetables.

And he lines up our sugar producers against subsidised farmers abroad, claiming that while our sugar is sold for $330/tonne, US farmers produce the same tonne for $660, Brazil $450 and the EU for $1200.

Take those numbers with a pinch of sugar, but he’s broadly right that Australian farmers face the winds of international trade virtually naked, while others enjoy the warm cloak of protectionism.

The Australia-Japan free trade deal has done nothing to change his views. While Japan lists rice, wheat, beef and pork and dairy products as "sacred", Katter thinks we should develop a new reverence for them at home.

He sees the hand of "crazy ideologues" in some of the government’s decisions, while at the same time copping his share of "crazy" taunts for wanting new tariff protections for rural industries, and even a return to the state marketing of dairy goods "to protect farmers from Coles and Woolies".

There’s a large streak of paranoia running through Katter’s views. In essence, he argues that Australia is being sold from underneath the feet of Australians in secretive deals driven by those "ideologues", whom he sees in both the public service and government.

Well, if he’s paranoid, he’s also getting some high-level support from Labor and the Greens -- at least on the secretiveness of negotiations.

Senator Penny Wong, assisted by the Greens Senator Peter Whish-Wilson, tried in February to get more details on how the Japan and Korean FTAs were negotiated.

Their long grilling of DFAT staff in the recent Senate estimates sittings were driven by their concern that the balance between the interests of foreign parties and the Australian public interest may be getting lost -- and, moreover, that the negotiation process is too secret for the parliament to keep tabs on it either way.

For instance, Fairfax Media has reported in recent days that the Japan FTA will not contain a controversial provision known as an "investor-state dispute settlement" (ISDS).

As reported previously, these provisions are used in trade deals to provide for foreign companies to sue governments when they make laws/regulations that adversely affect the company’s interests in a discriminatory way.

The Howard government refused to allow the US to insert such provisions into the Australia-US FTA, signed in 2004.

But then the Abbott government, finishing the work of the Rudd/Gillard governments, allowed an ISDS to be included in the Korean FTA.

And now, it appears, there won’t be one in the Japan FTA.

So why not? Certainly not because they didn’t ask for one.

In the recent Senate estimates session, Penny Wong said to DFAT deputy secretary Jan Adams: "I cannot recall the Japanese government's publicly stated position in relation to ISDS. I know the Koreans had previously publicly stated, but I do not know what the Japanese position is."

Adams replied: "Japan has a preference for including investor-state dispute settlement in its agreements and it has requested that."

So why has Australia apparently resisted this time, but not in the case of the Korean FTA negotiations?

In the last sitting week of parliament, Wong moved a motion in the Senate "to refer KAFTA to the Senate Foreign Affairs, Defence and Trade References Committee for inquiry and report ... to consider whether the proposed agreement is in Australia’s national interest".

Whish-Wilson pointed out during Senate estimates that in other nations and trade blocs, this kind of treaty is subjected to wide media attention and debate – but not here, until it is a fait accompli.

During the February session, Whish-Wilson quoted the European Uunion trade commissioner’s promise to open up US investors’ right to sue EU governments to public scrutiny -- specifically  "… to consult the public on the investment provisions of a future EU-US trade deal, known as the Transatlantic Trade and Investment Partnership. The decision follows unprecedented public interest in the talks. It also reflects the Commissioner's determination to secure the right balance between protecting European investment interests and upholding governments’ right to regulate in the public interest."

Europeans are able to have a transparent, public consultation process to examine whether the ISDS provisions are fair to both the US and EU. But that is not the situation in Australia.

Here, the convention is to conclude the talks, draft the agreement, refer it to the Joint Standing Committee on Treaties, give it to Cabinet to sign off on the deal... and then announce it to sometimes bemused/uncritical journalists.

Deal done! And no ‘unprecedented public interest’ to get in the way!

Most worryingly of all, the Korean trade deal signed on Tuesday didn’t even make it to the JSCOT committee ­-- hence the Wong/Whish-Wilson push for an inquiry.

If Bob Katter is the paranoid extremist his political foes make him out to be, one way to defuse some of his criticisms would be to make Australia’s bilateral and multinational trade negotiations more transparent -- including the economic modelling on which it’s based.

To find out, too late, that the opaque negotiating process was driven more by the political need for "announceables" to fit in with Prime Minister Abbott’s whistle-stop tour of Asia than with the Australian public interest would be more than disturbing.

The point is not that this government has done anything wrong, but that the parliament of Australia has no way of knowing, until the last minute of "ratification", what’s being going on.

Katter thinks he knows. It’s time the rest of us really did.