Originally published by Air Cargo Magazine

During the last 2 weeks of April the 12th negotiating round of the Regional Comprehensive Economic Partnership (RCEP) were held in Perth. As mentioned before the RCEP is proposed to be a regional FTA between the ASEAN nations and those countries who have FTAs with ASEAN nations, being Australia, China, India, Japan, Korea and New Zealand. The idea is that RCEP will build on Australia's existing FTA with ASEAN and New Zealand and complement the TPP. The 16 RCEP participants represent almost half the world's population, almost 30% of world GDP and over a quarter of world exports.

In the words of fictional newsman Ron Burgundy "It's kind of a big thing".

Australian industry has been eager to be involved in stakeholder events at negotiating rounds of all FTA and DFAT organised a number of such engagement events at the RCEP round in Perth. I was lucky enough to be involved in some of the stakeholder engagement sessions facilitated by DFAT and its RCEP negotiating partners on behalf of the ECA, the FBIA and, of course, Gadens.

The first part of the involvement was as a member of an industry panel alongside the AiG, ACCI and AFGC discussing how non – tariff measures (NTM) have adversely affected the implementation and benefits from FTAs or other trade initiatives. These NTMs include such basic issues as the sheer number and complexity of FTAs (the "noodle bowl" effect), the limits created by detailed "carve outs" and exceptions, practical issues with ROO and COO, inconsistent labelling and standards and non – preferential tariffs.

During the NTM panel I discussed the position of SMEs who are most exposed to NTMs due to their lack of resources and negotiating strength to press their concerns. This certainly represents a barrier to SMEs using FTAs or securing full advantages from those FTAs. For such SMEs, whether in Australia or elsewhere in the world, the options of recourse through official channels or through the traditional avenues in an FTA such as an Investor – State Dispute Settlement (ISDS) arrangement or State – State Dispute Settlement arrangement is not practical. An alternative which I have been working on with the ECA and at the FBIA is to establish a form of Alternative Dispute Resolution (ADR) system which could be available to SMEs.

Having made this rash suggestion I was then invited by DFAT to join a panel taking place on the following day which was considering this very issue. The panel included the Commonwealth Ombudsman and two representatives of the World Bank Group which has developed a "tool kit" for resolving "grievances" before they get to the stage of dispute. The discussion also drew in comments from the Korean delegates whose "Investment Ombudsman" office is seen as having an excellent mechanism for resolving grievances.

All agreed that there was significant merit in developing a system which could best address the types of concerns and grievances which beset private industry when dealing with government and its agencies in FTAs, which system could then be incorporated into an FTA. We also agreed that no one existing model would be preferred over the others but the essential "ingredients" for the system should include the following:

  • It would not operate to exclude ISDS or State – State dispute arrangements
  • It needed to be available to SMEs in a "user – friendly" way. This would cover knowledge of the system and the means to report and lodge the grievance
  • The use of an independent and properly – resourced party body whose responsibilities and powers were clearly set out and accepted by all parties to the FTA and their agencies. There could be one in each country or one central body.
  • A clear procedure for the handling of the grievance including timetables and reporting
  • The ability of the body to make binding determinations which it could enforce if they were not observed by the party the source of the grievance
  • It would not require the parties to have legal representation
  • That parties who used the system would not face any adverse consequences from its use
  • That it would be available for issues relating to the trade in goods and services as well as for issues relating to investment
  • A process of annual reporting of outcomes and a process of continual improvement based on those outcomes.

I think that there is considerable merit in pursuing such a system, whether in an FTA or in some other forum to allow for access by those directly affected by grievances and for whom there are no other means of access to means to efficiently resolve their grievances.