Senator XENOPHON (South Australia) (19:16): Mr Acting Deputy President, I seek leave to have my speech on the second reading incorporated in Hansard. Leave granted. The speech read as follows— The Korean-Australian Free Trade Agreement is the latest in a series of bilateral free trade agreements signed in the past decade that have shown Australia up as soft touches in trade negotiations. We have earned the label of the 'Free Trade Taliban' internationally because we think it's virtuous to pursue a free trade agenda—even to our own detriment. After a decade of signing FTAs in secret and spruiking the dubious benefits to Australians, it's clear we require root-and-branch reform. That's why I will be introducing legislation that re-writes the way these FTAs are negotiated and adopted by Australia. We must require draft agreements to be brought to Parliament before our government signs-off. These FTAs must be open to scrutiny and independent verification, rather than secrecy and exaggeration. Our national interest demands that it's time we all wised up, as first suggested by the Productivity Commission in a report in 2010. KAFTA is possibly the worst of a bad bunch of FTAs signed with countries including Malaysia, Thailand, Singapore, the US, Chile, New Zealand and others. Most alarmingly, KAFTA will be the first FTA committing Australia to Investor-State Dispute Settlement clauses (ISDSs). As Patricia Ranald of the Australian Fair Trade and Investment Network has pointed out well in advance of this Bill, these disputes are heard in international tribunals without the protections of national legal systems. There is no independent judiciary, no precedents or appeals. More broadly, as the ANU's Associate Professor Matthew Rimmer said to the Treaties Committee, we must all become more "hard headed" about bilateral FTAs, starting with questioning the glowing predictions from Government: "DFAT have been engaging in booster-ism about trade and sometimes are very reluctant to reveal some of the costs or trade-offs involved in certain agreements." Was one such "trade-off" in securing KAFTA the wholesale selling-out of Australia's car and ship building sectors? There's evidence to support this. Will KAFTA's rapid reductions in import tariffs for South Korean cars risk the early closure of Toyota and Holden as well components suppliers which employ 33,000 Australians, as asserted by the AMWU to the Joint Standing Committee on Treaties? I note that the Government in June—less than two months after agreeing to KAFTA—announced it would limit a $2 billion navy ship building tender to companies from South Korea and Spain, excluding Australian ship builders. It's not a stretch to infer that this Government has offered up our manufacturing industry as a sacrificial Iamb to secure this long-sought-after free trade deal with South Korea, our fourth-largest trading partner with two way trade of $33billion in 2012. We seem to be exporting car and ship building jobs in the thousands, and what are we getting in return? Bigger TVs and smaller cars? In conclusion I'd like to raise the troubling issue of human rights standards for North Korean workers under this agreement. I was shocked to learn that goods emerging from Kaesong industrial zone in North Korea, in which South Korean firms utilise labour from the North, will be deemed exports from South Korea under this deal. Workers at the Kaesong Industrial Complex in North Korea are reportedly paid just a few dollars a day, and their wages go directly to the government of North Korea. Quite frankly I'm at a loss as to how this Government and the Labor Opposition could live with this. South Korea was forced into much tighter conditions in relation to these so-called "outward processing zones" in free trade agreements with the United States, Japan and the EU. The United States will only accept goods from Kaesong in the future if North Korea improves its record on denuclearisation, labour and environmental standards, among other factors. Not so for KAFTA. We may even be in breach of TWO rules by discriminating in favour of North Korea — not a WTO-member. Ironically the Government is only too well aware of the morally bankrupt, hermit kingdom of North Korea. In his press conference announcing the KAFTA deal, Prime Minister Tony Abbott said: "Plainly, North Korea is an outlaw state. It's a threat to world peace. It's a deadly danger to the citizens of South Korea and until such time as North Korea gives up its nuclear ambitions, until such time as North Korea permanently ends its aggression towards the South, it must be treated as a rogue and outlaw state." KAFTA does not reflect that strong statement by the Prime Minister — in fact, it makes a mockery of the PM's words. For this and the reasons mentioned earlier, I will not be supporting this bill.