Trans-Pacific Partnership: Trade agreement will not be modelled by the Productivity Commission

After years of advocating for smaller, more efficient, government the Productivity Commission itself appears to have been outsourced.

Government officials have testified at a public hearing in Canberra that there was no need for the Productivity Commission to scrutinise Australia's biggest ever trade deal - despite it being the kind of job the commission was created to do.

Elizabeth Ward, a first assistant secretary for the Department of Foreign Affairs and Trade, told members of Parliament on Monday that there was no point asking the Commission to model the Trans-Pacific Partnership.

The TPP is a huge trade deal involving 12 countries in the Pacific region, including Australia.

Andrew Robb signs the TPP in New Zealand.

Ms Ward said the agreement had already been modelled by the World Bank and the Washington DC-based Peterson Institute for International Economics, and they use very similar models to the Productivity Commission.

"We have been monitoring very closely the modelling efforts of a number of highly reputed institutes around the world for a number of years now on the TPP," Ms Ward told the joint standing committee on treaties.

"We've looked in some detail at these models ... and our conclusion is that both the Peterson Institute and the World Bank have undertaken a model that we know is very similar to the Productivity Commission's model."

The World Bank's model found Australia's GDP will increase by 0.7 per cent by 2030, with a boost in exports of 5 per cent, as a consequence of the deal, she said.

TPP protest in New Zealand earlier this month. Credit: Phil Walter

The Peterson Institute's model found the TPP will see a US$15 billion permanent increase in Australia's real GDP, she said.

The TPP is a the biggest trade agreement of the last twenty years, comprising 40 per cent of the world's economic activity.

The Productivity Commission has offered to scrutinise the agreement, but it has been repeatedly rebuffed by the government.

The Commission has been critical of the way trade agreements are not analysed properly before they are signed in Australia, saying current processes "fail to adequately assess the impacts of prospective agreements".

When former Trade Minister Andrew Robb tabled the TPP in parliament earlier this month, he said the agreement did not need to be modelled independently.

Instead, and following protocol, he tabled a National Interest Analysis of the trade agreement which explained why the deal was in Australia's interest.

The analysis was written by the Department of Foreign Affairs and Trade.

It did not provide its own estimate of the likely boost to Australia's GDP that may come from signing the TPP.

It pointed to modelling by the World Bank, the Peterson Institute, and the Research Institute of Economy Trade and Industry, that suggested Australia's GDP may increase by 0.7 per cent, 0.6 per cent, and 1.9 per cent respectively by 2030 as a consequence of the deal.