Trade treaty stance the same, despite promise
The previous government declared point-blank that Australia would never again sign an agreement that included the provisions. One of the few trade agreements Australia has signed with such a clause allowed a Hong Kong-based subsidiary of tobacco giant Philip Morris to take Australia to an international tribunal over its plain-packaging laws, despite having lost its case in the High Court.
It is believed the United States was close to accommodating Australia's insistence by carving out an exemption for Australia while the other 10 signatories were bound by the provisions. Australia is the only country to have successfully concluded a trade deal with the US without such a clause, the US-Australia free trade agreement.
The Trans Pacific Partnership trade agreement will be the world's biggest.
US companies are enthusiastic users of the provisions. The United Nations Conference on Trade and Development says a record 58 cases were under way last year. In one, a US resource company is suing Canadian province of Quebec for imposing a moratorium on coal seam gas extraction while it examines claims of environmental damage.
Opening Australian governments to lawsuits over resource extraction, foreign land purchases, pharmaceutical benefits and health measures is a potential minefield for the new government.
Its policy is to remain "open to utilising investor-state dispute settlement clauses as part of Australia's negotiating position".
In a written statement to Fairfax Media, Mr Robb said it would be "premature to discuss positions we may wish to pursue on this or any issue under discussion in the Trans Pacific Partnership agreement negotiations".
"In opposition the Coalition stated that it would consider the inclusion of ISDS provisions in free trade agreements on a case-by-case basis. It would be wrong, however, to assume this changes Australia's current position on ISDS in the context of the Trans Pacific Partnership negotiations."
Mr Robb will attend trade ministers' talks on the Trans Pacific Partnership on the sidelines of the APEC meeting in Bali next month. Prime Minister Abbott will discuss the partnership at a meeting of leaders including US President Obama in Bali.
Frequently Asked Questions about this Article…
The Trans Pacific Partnership (TPP) is a major multinational trade agreement that the article describes as set to be the world’s biggest. For everyday investors, the TPP matters because its rules — including potential investor protections — can affect sectors like resources, pharmaceuticals and agriculture, and influence how foreign companies operate and invest in member countries.
Investor-state dispute settlement (ISDS) provisions allow foreign companies to bring international tribunal claims against governments over laws or policies they say harm their investments. The article explains these clauses have been used by companies to challenge government actions on things like resource restrictions and health measures.
According to the article, the previous Australian government declared it would never again sign an agreement that included ISDS provisions. Australia is noted as the only country to have successfully concluded a trade deal with the US without such a clause (the US–Australia free trade agreement).
The article cites a Hong Kong-based subsidiary of tobacco giant Philip Morris that used ISDS to take Australia to an international tribunal over plain-packaging laws — even after losing in the Australian High Court. That case highlights how ISDS can allow companies to pursue claims beyond domestic courts, a point of concern for investors watching TPP outcomes.
No. The article reports Trade Minister Andrew Robb saying Australia’s negotiating position on the TPP remains the same. While the government is open to ‘utilising investor-state dispute settlement clauses as part of Australia’s negotiating position,’ Mr Robb said it would be premature to discuss specific positions on ISDS in the TPP talks.
The article warns that opening Australian governments to ISDS claims could be a potential minefield, exposing them to lawsuits over resource extraction, foreign land purchases, pharmaceutical benefits and health measures. It also notes that US companies are active users of ISDS provisions.
The article cites the United Nations Conference on Trade and Development (UNCTAD) saying a record 58 ISDS cases were under way in the prior year, illustrating that these types of investor claims are relatively common and on the rise globally.
The article states that Trade Minister Andrew Robb will attend TPP trade ministers’ talks on the sidelines of the upcoming APEC meeting in Bali, and Prime Minister Tony Abbott will raise the partnership at a leaders’ meeting that will include US President Obama.
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