EDGE Magazine | Q3 2011
Of these, the issue which has created the most surprise is the abandonment of the position reporting the inclusion of "Investor State" agreements.
resolution provisions in trade In my view, the suggestion that those
trading need to undertake their own assessment as to the sovereign risk and other risks associated with trading in another economy overlooks the practical problems of imperfect knowledge and is inconsistent with the aims to encourage trading. All traders will experience difficulties in assessing risks in trading in other economies and no amount of due diligence will assist if a party to a trade agreement suddenly refuses to observe the terms of such an agreement. Such traders will then need to rely upon the "State/State" dispute resolution provisions and hope that the Federal Government will consider the issue of significant importance to support the position of the traders.
The Government's Trade Negotiating Agenda
To quote from the Statement, the Government's trade strategy appears to be as follows:
"Applying the principles and disciplines of the Gillard Government's trade strategy – and consistent with the Productivity Commission's 2010 report on trade agreements – the Government's negotiating agenda will steer a middle course of championing and protecting the multilateral system while seeking to negotiate high-quality, truly liberalising sectoral, bilateral and regional trade deals that do not detract from but support the multilateral system".
Based on this philosophy, the Statement refers to the following negotiating agenda. • The primary aim being the pursuit of a successful completion to the Doha Round of negotiations for the WTO. • Continued work within the APEC region including the long-term aim of a free trade area spanning all APEC economies.
• Continued negotiations on the Trans-Pacific Partnership. • Completion of negotiations on a Korea-Australia Free Trade Agreement in 2011. • Possible completion of the Japan-Australia Free Trade Agreement in 2011. • Further efforts to re-invigorate the negotiations for the China-Australia Free Trade Agreement. • Possible completion of negotiations of the Malaysia- Australia Free Trade Agreement by March 2012. • Negotiations to advance a comprehensive Economic Partnership Agreement with Indonesia. At the same time, the Government has advised that negotiations with the Gulf Co-Operation Council ("GCC") have paused while the GCC undertakes its own review of its trade agreement policy.
Conclusions
In one sense, the abandonment of efforts to include an "Investor State" dispute resolution process could facilitate the negotiation of further bilateral or regional trade agreements as no Government would be subject to disputes with individual investors of the other countries. Further, while the Government continues to support the notion of multilateral agreements, it seems to recognise that the current Doha Round of negotiations are unlikely to be completed. At the same time, the Government has also adopted an ambitious program for potential completion of other free trade agreements and we will closely monitor negotiations and developments with those free trade agreements.
As always, we will keep you informed of developments.
Andrew Hudson Australia
Hunt & Hunt
ahudson@hunthunt.com.au
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