Trans Pacific Partnership to impose new rules on Australia Post, NBN

Trade Minister Andrew Robb: searching for a compromise. Photo: Alex EllinghausenLeaked details of the Trans Pacific Partnership talks under way in Hawaii suggest companies such as Australia Post, the Clean Energy Finance Corporation and the National Broadband Network could be caught up in provisions designed to impose “additional disciplines” on state-owned enterprises.
Shanghai night field

WikiLeaks has published previously secret details of a draft chapter on state-owned enterprises that would require government-owned corporations to act “on the basis of commercial considerations” and to be subject to “impartial regulation”.

The provisions would apply to government-owned energy companies, communications companies and financial institutions such as the Clean Energy Finance Corporation and Renewable Energy Agency.

The Department of Foreign Affairs and Trade broke with its usual practice of not commenting on leaked documents to say that national broadcasters such as the ABS and the SBS will not be affected by the provisions because they are not recognised as state-owned enterprises for the purposes of the TPP.

Trade expert Jane Kelsey, from the University of Auckland, said the proposed rules went beyond anything required by the World Trade Organisation or existing free trade agreements including the one between Australia and the United States.

“The text has been totally US-driven,” she said. “Clearly, some governments were still reluctant at the time of this paper in late 2013, as it states ‘a majority of TPP countries’ support the additional disciplines.”

The revelation came as the US made an initial offer to Australia to provide additional access for Australian sugar under the agreement.

Trade Minister Andrew Robb said both countries had made “suggestions” to each other on extra access. He said they were searching for a compromise.

Another source told the Inside US Trade newsletter that Australia had rejected the initial offer.

Australia wants an increase on the 87,000 tons of sugar it is allotted in the US quota.

Mr Robb said sugar was a “do-or-die” issue for Australia, along with restricting the period of data exclusivity for so-called biologic drugs and securing safeguards to prevent health and environment measures from being caught up in investor-state dispute settlement procedures.

The Philip Morris tobacco company is currently suing Australia in an outside tribunal over its plain packaging legislation using an investor state dispute settlement clause in a Hong Kong-Australia trade agreement.

Observers on the sidelines of the Trans Pacific Partnership talks say Australian officials have been fighting hard to limit the period of special patent protection for biologic drugs to five years rather than the eight or 12 demanded by the US.

An increase above the present five years would need special legislation which might not get through the Senate.

The Trans Pacific Partnership agreement would take in Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, between them accounting for about 40 per cent of world trade.

Sources close to the negotiations put the chances of success at 60 per cent.

The proposed restrictions on state-owned enterprises are designed to prevent countries such as Vietnam with large state-owned sectors from competing unfairly against foreign firms.

Professor Kelsey said the restrictions were intrinsically problematic. State-owned enterprises were almost always state-owned because they had functions that were more than merely commercial, such as guaranteed access to services.

Mr Robb’s office said they would not require government-owned firms to be privatised and would not restrict Australia Post’s universal service obligation.

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