Legislating the Australian trade playbook: What the Trade and Investment Agreements (Consultation) Bill means for your business

On 1 July 2026, the Australian Government introduced the Trade and Investment Agreements (Consultation) Bill 2026 (Bill) to establish a legislative framework governing the negotiation, consultation and review of Australia's free trade agreements (FTAs), with certain requirements also extending to bilateral investment treaties (BITs).

The Bill implements key recommendations from the Joint Standing Committee on Trade and Investment Growth's inquiry into the Australian Government's approach to negotiating trade and investment agreements and has a number of implications for industry.

Key provisions

The Bill's architecture comprises four principal pillars:

• Establishment of a Trade Advisory Group. The Bill creates a new Trade Advisory Group (TAG) who will represent a range of stakeholders from key sectors of the economy and community. The Bill also introduces a requirement for the Government to consult the TAG at key points during negotiations, including to obtain its advice before finalising negotiations. The TAG will have access to more detailed and sensitive negotiating materials to enable it to perform its advisory role.

• Mandatory advocacy requirements. The Bill specifies issues that Australian negotiators must "advocate" for in trade agreement negotiations. These include matters relating to trade in goods and services, government procurement, investment, environmental protection and cultural interests, as well as specific commitments on international labour rights subject to consultation or dispute settlement.

• Prohibited provisions. The Bill prohibits new trade agreements from containing certain outcomes. These include investor-state dispute settlement (ISDS) mechanisms, labour market testing waivers beyond existing GATS commitments, and commitments that would "undermine" Australia's trade remedies regime, "weaken the integrity" of the Pharmaceutical Benefits Scheme (PBS) or prevent certain government procurement preferences from being applied. The Bill further prohibits the signing of agreements unless they include "provisions that preserve Australia's ability to regulate in the public interest." The prohibition on ISDS and the right-to-regulate requirement also apply to investment agreements.

• Transparency and review obligations. The Bill creates new transparency requirements. The Government must announce when negotiations commence and publish its negotiating objectives, obtain independent analysis of proposed trade agreements, and undertake an independent review of trade agreements in accordance with set timeframes.

Scope and transitional arrangements

The Bill defines a "free trade agreement" as a binding international agreement between Australia and one or more other parties that includes commitments directed at eliminating or reducing tariffs on all or substantially all trade in goods, and liberalising trade in services.

Notably:

• the definition excludes agreements negotiated within the WTO or United Nations framework, as well as accession negotiations; and

• trade agreements where negotiations are already underway are only subject to the independent review requirement (at 5 years after entry into force) and not to any requirements around content or consultations. Amendments to all past agreements are entirely excluded from the Bill's content, transparency and consultation requirements.

Ramifications

The TAG

The Bill's most significant governance implications arise from the creation of the TAG and the broadened transparency and consultation requirements. The TAG introduces a formal, legislatively mandated advisory mechanism into the trade negotiation process. The members of the TAG (other than the Chair) must include at least one person representing each of the following:

• academic research relating to trade, economics or public policy;

• the interests of an Australian trade union;

• the interests of a national peak body for Australian trade unions;

• the interests of Australian agriculture (including farming);

• the interests of Australian employers and businesses;

• the interests of Australian small businesses; and

• the interests of Australian non-government organisations.

While the Minister is empowered to give procedural directions regarding the manner in which the TAG will carry out its functions, the TAG looks to present a channel through which industry can be represented in the formulation of trade policy. Companies with significant export or import exposure or those operating in regulated sectors such as pharmaceuticals, energy and government procurement should consider how to contribute to the consultation processes that the TAG will facilitate.

The publication of negotiating objectives and independent analysis of proposed agreements will also give companies and their boards greater visibility over impending regulatory changes that may flow from trade commitments. This will enable earlier identification of commercial risks and opportunities.

General corporate law

The Bill's prohibition on ISDS mechanisms in new FTAs and BITs represents a significant entrenchment of Australia's current policy position. While Australia already maintains ISDS provisions in existing FTAs and numerous bilateral investment treaties, the Bill legislates against the inclusion of such mechanisms in future agreements.

For Australian companies with outbound investment, this is consequential. ISDS mechanisms have historically been regarded as providing a neutral, depoliticised forum for resolving disputes with host states, affording investors protections against expropriation, discriminatory treatment and denial of justice. The absence of ISDS in future agreements means that Australian investors in partner countries will lack recourse to international arbitration for investment disputes under those instruments, increasing reliance on domestic courts and state-to-state dispute resolution mechanisms.

Conversely, the prohibition insulates the Australian Government from foreign investor claims under future treaties, preserving the Commonwealth's regulatory autonomy. This has implications for foreign companies investing in Australia, who will not have ISDS protections under newly negotiated agreements. The right-to-regulate provision reinforces the Government's capacity to enact public interest legislation without exposure to treaty-based claims.

The Bill's requirement that trade agreements not "weaken the integrity" of the PBS, "undermine the effectiveness" of the trade remedies regime, or prevent government procurement preferences has direct implications for companies in the pharmaceutical, manufacturing and services sectors. These provisions entrench domestic policy in areas where trade commitments have historically constrained government action and against the background of the US' Most Favoured Nation Pricing policy for pharmaceuticals, which has led to concerns about the future of drug launch decisions and price negotiation in Australia.

Mergers and acquisitions

The Bill also has implications for deal structuring, risk allocation and valuation in cross-border transactions:

• Regulatory certainty for domestic acquirers abroad. Australian companies pursuing acquisitions in jurisdictions with which Australia negotiates future FTAs or BITs will need to consider the absence of ISDS protections when assessing sovereign risk. Due diligence processes for outbound acquisitions may need to give greater weight to the quality of the host state's domestic judicial system and regulatory environment. From a deal structuring perspective, acquirers should consider whether contractual arbitration clauses or stabilisation provisions in concession agreements can substitute for the treaty-level protections that will no longer be available. The absence of ISDS may also be relevant to the allocation of regulatory change risk in transaction documents, including in respect of material adverse change definitions and indemnity coverage.

• Pharmaceutical and health sector transactions. The Bill's protection of the PBS has direct relevance to pharmaceutical M&A. Acquirers of Australian pharmaceutical assets, or of companies with PBS-listed products, can take comfort that future trade agreements will not be permitted to weaken the PBS framework. This provides greater regulatory predictability for valuations that depend on Australian pharmaceutical pricing and reimbursement structures, and buyers should factor this into long-term revenue modelling. Earn-out and deferred consideration structures that are sensitive to regulatory change may benefit from greater certainty of the pricing environment.

• Government procurement implications. The preservation of Government procurement preferences may affect the competitive dynamics in sectors where government contracts are a material revenue source. Companies engaged in M&A involving government-exposed businesses will need to assess whether future trade agreements might otherwise have opened procurement markets to foreign competition, and factor the Bill's limitations into growth projections and target valuations. Where a target derives a material proportion of revenue from government contracts, the Bill’s entrenchment of procurement preferences may support the durability of that revenue base - but equally limits the upside from anticipated market liberalisation that might have expanded the addressable market.

Stakeholder perspectives

Government position

The Australian Government has presented the Bill as fulfilling its commitment to improve transparency and community input into FTA negotiations. The Department of Foreign Affairs and Trade has noted that the Bill ensures Australia's trade policy "continues to reflect diverse voices from across the Australian community." The Bill largely codifies existing Government policy, including the existing prohibition on ISDS in new agreements, which has been Labor policy since at least 2011.

Community organisations

The Australian Fair Trade and Investment Network (AFTINET), which has campaigned for trade process reform for decades, has welcomed the Bill as "long-awaited" but has indicated that improvements are possible. AFTINET has called for the labour and environment provisions to be strengthened to make commitments enforceable, for draft negotiating texts to be made available to advisers during negotiations, for publication of the final agreed text before agreements are signed, and for reviews of existing agreements.

Business and industry perspectives

The Joint Standing Committee inquiry that preceded the Bill received substantial submissions from industry bodies, including the Australian Chamber of Commerce and Industry (ACCI), the Business Council of Australia, the National Farmers Federation and Medicines Australia.

The ACCI emphasised that "both government and stakeholders benefit from genuine two-way dialogue, which equips Australian negotiators through an informed understanding of stakeholder positions and commercial interests."

However, some stakeholders cautioned that legislating the trade negotiation process could limit flexibility.

The Red Meat Advisory Council emphasised that "all negotiations differ regarding potential issues, strategies to be pursued, complexity and desired outcomes" and that "legislating the process may present challenges - as well as potentially restricting flexibility." Others reflected on the potential to affect the capacity for timely responses to trading partners and to extend overall negotiation timeframes.

The Department of Foreign Affairs and Trade also cautioned during the inquiry about the need to consider whether legislation is the most appropriate means to achieve the stated objectives.

Commentary on scope limitations

The Bill's narrow scope will likely limit its direct impact in the near term. In particular, the exclusion of ongoing negotiations from substantive requirements, the exclusion of amendments to past agreements, and the exclusion of WTO and multilateral agreements significantly restrict the Bill's immediate operational reach.

Some commentators have noted that the timing obligations around announcing commencement of negotiations and publishing objectives lack specificity, with clause 13(2) providing that the Minister "may make the announcement before, on or after the negotiations start day."

The ambiguity of certain prohibited provisions - such as not to "undermine the effectiveness" of the trade remedies regime or "weaken the integrity" of the PBS - has also been noted as creating interpretive uncertainty. The Explanatory Memorandum confirms that terms used in the relevant clause have "generally not been defined within the Bill."