Surprise wins in TPP deal: Robb

28 Jul, 2015 02:00 AM
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Trade Minister Andrew Robb.
This will be the biggest agreement since the Uraguay round, anywhere, by a long way
Trade Minister Andrew Robb.

SERVICES firms in the mining and energy sectors are set to be the biggest winners from the Trans Pacific Partnership, which enters its make-or-break week when a final round of talks start on Tuesday.

As trade representatives gather in Maui, Hawaii, an upbeat Trade Minister Andrew Robb told The Australian Financial Review that gains from the TPP would trump expectations if a deal can be sealed this week, which he says is looking increasingly likely.

"This will be the biggest agreement since the Uraguay round, anywhere, by a long way," said Mr Robb, referring to the 1994 WTO talks that delivered the General Agreement on Tariffs and Trade.

"We are moving into areas that haven't been dealt with before," he said.

The trade minister said the farm opportunities looked to be "outstanding", reflecting soaring protein demand across Asia.

But he added that the most profound potential gains for Australia from the proposed deal would be areas that have not traditionally featured in trade agreements.

In addition to gains for lawyers and education providers, Mr Robb holds special hopes for Australian mining-related services firms which enjoy comparative advantage over their global rivals but face difficulties in several of the 12 Pacific Rim nations that make up the TPP.

He is looking for new mining and exploration opportunities from Malaysia to Vietnam and Mexico along with a slew of related environmental, research, training, safety and engineering services.

Talks for a TPP have been in train for five years and have reached a climax in recent weeks. Negotiators from 12 Pacific Rim nations are working 14-hour days to generate a coherent agreement out of the web of bilateral horse-trading ahead of four crucial days of ministerial meetings beginning in Hawaii on Tuesday.

The mining equipment technology and services sector [METS] which Mr Robb is targeting is worth $90 billion turnover with $15 billion in annual exports, according to Elizabeth Lewis-Gray, who heads the industry bod Austmine.

"The TPP is absolutely critical for METS," said Ms Lews-Gray, referring to tariff barriers and complex regulatory barriers.

Negotiators report that counterparts from all nations have arrived with the intention of clinching a deal in the narrow window between US President Barack Obama receiving fast-track negotiating authority and the US election cycle moving into its usual policy-paralysis stage.

They are confident of overcoming gamesmanship from individual countries and simmering concerns about US intellectual property demands which reach deep into areas of public health policy.

Some negotiators believe it should be sealed this week or risk not being done at all.

Opportunities for farmers

Beef, dairy and possibly sugar stand to win as Japan opens up hugely-protected markets for the first time.

"I think beef's run of luck will continue," said Mr Robb, which he said reflected huge growth in protein demand in the Asian region.

"We've been fighting hard for dairy," he said. "We're down to the really difficult ones - like sugar."

Japan has already made unprecedented agricultural concessions in preliminary talks with the US, driving up share prices last week for Japanese food makers in anticipation of cheaper farm inputs.

Mr Rob's challenge will be to secure a proportionate share of Japanese import quotas in competition with American producers.

Other novel aspects of the draft text include a pioneering chapter aimed at levelling the playing field with state-owned firms which receive subsidised finance, including Chinese firms operating in TPP countries.

Negotiators believe these could greatly assist Australian firms competing in the region.

The draft TPP text also contains enforceable anti-corruption provisions, with dispute resolution procedures, again for the first time in an agreement of its kind.

Ms Lews-Gray said the company she runs, Gekko Systems, which designs minerals processing plants for the gold industry, has to compete with Canadian firms in Mexico who enjoy a 10-15 per cent price advantage because they operate tariff-free under the North American Free Trade Agreement.

"From my own company's point of view if we're trying to import into places like Peru and Mexico it's expensive because we're paying tariffs," she said.

"It's absolutely that significant."

Industry sources say listed mining industry services firms like Orica, Ausdrill, Monadelphous, Ausenco and Worleyparsons also stand to gain from the TPP.

Mr Robb said he'd learned how hard it was for cutting edge mining services firms to enter developing markets - from Malaysia, Brunei and Vietnam to Peru and Mexico - when he was a director of Australia's largest consulting engineering company, Sinclair Knight Merz.

"Many of these countries have had significant restrictions on investment and exploration," he said.

But he is convinced that these innovative firms can pave the way for other sectors in distant markets once they gain a foothold.

"I always believe you lead with your strengths," he said. "This sector will be very materially advantaged and it will shine a light for everyone else," he said.

"In South America the only real weight of business is METS," said Mr Robb. "Of 110 Australian companies in Chilli, 95 of them are METS," he said. "They are leading us into so many markets including into Africa."

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READER COMMENTS

SILVERFOX
28/07/2015 7:12:40 AM

I'm not convinced,, anything shrouded in this much secrecy inevitably holds surprises...The corporatisation of the globe will be one step closer with this deal
AZ
28/07/2015 8:20:57 AM

Signing deal like TPP,which include ISDS,whithout ANY consultation with public, is unbelievable! Deal is done in total secrecy. When the Corporations sue our Government for loss of icame,and future loss of income, the damage's(which will be in hundreds of millions of dollars) will be payed from Australian tax payers money!
Mark2
28/07/2015 9:23:38 AM

Gains for lawyers? Didn't know there was an export trade in lawyers.... Sounds like a good idea though... As long as we're only exporting them!
angry australian
28/07/2015 10:22:05 AM

If the rest of the world were poker players I reckon they would line up to play mugs like Australia.Show me one of these treaties where Australia has been the winner. Where are the jobs, tax revenues, profits/productivity increases? How will our farmers win? There is an airy fairy comment on sugar,beef,dairy possibly into Japan but I'm not holding my breath.As for the METS it wouldn't surprise me if the big yankee companies like Haliburton do better in Australia than ours do in N. America.Before pollies go tripping off to places like Maui, perhaps they should explain where the benefits are.
Simon
28/07/2015 11:22:06 AM

Gains for lawyers! Absolutely....Defending Australian taxpayers against foreign corporations' law suits!
Roger Crook
28/07/2015 11:27:31 AM

AZ is right. The deal of all deals being done on our behalf and in total secrecy, why are we treated like this. Many if not all of the countries involved, except Australia, pay massive agricultural, subsidies which immediately puts us at a disadvantage. Our food imports are going up and our productivity is decreasing nobody mentions how heavily reliant we already are on others for food. Just today, Tuesday the media announces China invoking some clause in the FTA to re-impose tariffs. I wonder sometimes just where we are being taken?
mad4music
29/07/2015 8:14:46 AM

The TPP may well be shrouded in secrecy because the powers it gives to giant multi-national corporations allows them to dictate how, when, and most important, who will benefit from this "partnership." If history is our guide, it will be the corporations themselves with perhaps a few crumbs tossed our way here in Australia. In my opinion, this deal should be halted until it can be further investigated and the public consulted.
newbroom
29/07/2015 11:53:25 AM

I keep flogging this but all treaties must be examined by a joint committee of the Parliament which hold open hearings and takes submissions. It is happening now on China FTA. Then it goes to Parliament for debate. Where is all this conspiracy theory tin foil hat wearing nonsense come from? A fair bit online from groups that are in favour of anarchy and a range of dubious minority groups with zero credibility. Try reviewing what is actually happening but it takes research which is probably beyond commentators who like to spout ignorant opinions.
wtf
29/07/2015 12:43:04 PM

Newbroom u obviously missed my point. Govt should not be negotiating our sovereignty period. U say we are uninformed, how do we get informed when the text is secret? It is amazing that it has got to this stage, it does not matter if its China, US, etc that they are negotiating with, taxpayers should not be liable for decisions made in courts outside Aust and our legal system. We have not done our own economic assessment of this or prior FTAs, do u take us for mugs? How is more regulation and rules, in alignment with the free market mantra?
angry australian
30/07/2015 9:09:59 AM

Newbroom,really that's the best you've got "trust me"! If parliament were so notorious for getting it right we wouldn't have to keep amending laws all the time,would we.The big worry here is,it's far easier to amend an Australian law than an international treaty so if it's flawed in any way we may suffer the consequences.As for your all party committee on treaties, except for Broad,Sterle and O'Dowd I personally wouldn't pin much faith on the rest.If it's all ok why are the Nats threatening to revolt over sugar?

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