Free trade treaty ratification rests squarely on Executive

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The Age | 10 September 2015

Free trade treaty ratification rests squarely on Executive

Don Rothwell

As debate continues to swirl over the China Australia Free Trade Agreement some of the fundamentals of the way in which Australia engages in treaty-making have been forgotten. A closer assessment of the processes applied within the Australian government to treaty-making, including the role of the Parliament, suggests that the Abbott government has in fact a number of options available to it to ratify the agreement and see it successfully enter into force before year’s end.

The negotiation of treaties in Australia rests exclusively with the Executive under the constitution. There is no formal role for the Parliament in this process, nor is there a formal role for the states or other interest groups such as industry bodies or the unions. In the case of some particular treaties, it may well be prudent for the government to undertake wide-ranging consultations, and Trade Minister Andrew Robb frequently notes that such discussions did take place between the Abbott government, the ACTU and other peak unions during the free trade agreement negotiations.

Once a treaty has been drafted, in most cases the government first signs and then ratifies the agreement. The China-Australia Free Trade Agreement was signed in Canberra by both Australia and China on June 15, 2015, but it will only enter into force and become legally binding once both countries have ratified the treaty, which is a separate process. Treaty ratification is also an act of the Executive in the Australian system. Importantly, there is no requirement that the Parliament (including the Senate) ratify the treaty. Therefore any suggestion that the Senate needs to ratify the treaty, as is the practice in United States, is not accurate.

Nevertheless, in 1996 the Howard government introduced reforms to Australia’s treaty-making processes which remain in place today. The Joint Standing Committee on Treaties, a parliamentary committee, conducts inquiries into treaties that Australia has under review and receives submissions on whether the government should move to formal ratification. The practice of the committee has been to issue reports into treaties under consideration and make recommendations as to treaty action. Only very occasionally has a treaty not been recommended for ratification.

The China-Australia Free Trade Agreement was tabled by the committee on June 17, public hearings were held in August and September and the committee is scheduled to report on October 19. However, and most importantly, the Abbott government is not bound by what the committee says in its report. The committee’s finding and recommendations can be ignored, which has occurred in the past, or they can be taken into account by the government as it moves towards ratification.

A limiting factor for a government may be that the treaty requires legislation to enable certain provisions to be given effect under Australian law, and this is the case with the China-Australia Free Trade Agreement. Accordingly, the Abbott government is mindful that it needs to ensure passage of legislation through the Parliament to give effect to the treaty. This is where the concerns raised over the treaty by Labor become an issue as Senate endorsement of the implementing legislation could be blocked.

Traditionally the practice in Australia has been to await passage of the implementing legislation before ratifying the treaty, but this could be dispensed with, as formally it is not required for the purposes of ratification. Nevertheless, it does pose a risk for a government that may subsequently find itself unable to meet its treaty obligations if the relevant laws are blocked in the parliament.

What options then does the Abbott government have then with respect to the free trade agreement? First, following the committee report it could move towards ratification without waiting for legislation to be passed by parliament. This strategy runs the risk that aspects of the treaty may not be given effect to under Australian law, which China would rightly object to. Second, following the committee report the government could press ahead with the passage of legislation, but given some of Labor’s objections this may be difficult to achieve without cross-bench and Greens Senate support. Nevertheless Labor’s Treasury spokesperson, Chris Bowen, has hinted that Labor may be open to negotiating on the terms of the legislation, presumably to provide better safeguards for Australian workers.

If that is the case, this hurdle could be cleared. After the committee reports the government could also seek to renegotiate aspects of the free trade agreement. While this is certainly possible from a treaty law perspective, and the government may be able to justify this approach based on committee recommendations, this depends upon China being agreeable to a renegotiation, which may be doubtful. An alternative may be to seek to reach certain agreed understandings with China on some of the contentious aspects of the free trade agreement by way of side letters or accompanying memorandums of understanding.

These additional instruments could be negotiated relatively informally and would play an important role in how Australia and China go about interpreting critical aspects of the agreement, thereby providing more certainty over some contentious aspects of the trade deal. Bearing in mind that the free trade agreement will more than likely outlive the Abbott government, this may not only be the best option available to ensure ratification but to also avoid any future disagreements over the treaty’s interpretation

source: The Age