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Australia's New Trade Policies and Priorities - January 2008
Australia faced some challenges on the global trading scene, according to new trade Minister, Mr. Simon Crean, but he also said that the new Government also recognized that productivity growth was central to lifting Australia’s international competitiveness and it was implementing a framework for boosting export growth.
Outlining the new Government’s trade policies and priorities, Mr. Crean, said that the Asian region was of critical importance to Australia - as was Australia to the region.
Commenting on Australia’s October 2007, $3 billion monthly trade deficit he said that these figures called for a change in the direction of the country’s trade policy approach.
He said that Australia paid a price for the under-performance of its exports sector through lower economic growth and lost job opportunities. Most directly, it contributed to a higher current account deficit and has delivered a record foreign debt.
“I believe that with energy and good ideas we can lift Australia’s international competitiveness and reinvigorate our export growth,” Mr. Crean said.
“Today, the Government recognises that productivity growth was central to lifting Australia international competitiveness and export growth.”
Australia’s new trade policy to lift international competitiveness would be boosted by:
• Establishing Infrastructure Australia – a Commonwealth Statutory Authority to coordinate the planning, regulation and development of infrastructure – and to overcome the infrastructure bottlenecks confronting so many of our export industries.
• A new National Broadband Network to bring fast broadband to 98 per cent of Australia’s homes and businesses and improved services for the remaining 2 per cent. This will ensure that Australian exporters have world class broadband linkages to customers around the world.
• An Education Revolution, including investing $1 billion over four years to turn every secondary school in Australia into a digital school.
• A commitment to Skilling Australia – A scheme to fund an additional 450,000 skilled training places over the next four years for people outside the workforce -thus stimulating participation in the workforce.
• Addressing the growth of red tape and regulation – including trade facilitation or the ‘behind the border’ issues.
• Building a truly national innovation and research system including a $200 million Enterprise Connect initiative aimed at connecting businesses to new ideas and new technologies.
Outlining elements of the Government’s new trade policy in broad terms, Mr. Crean said that achieving multilateral world trade reform through the Doha Round was the number one priority.
Mr. Crean also took advantage of last year’s APEC Forum in Sydney to discuss the Doha Trade Round with WTO Director General, Pascal Lamy, and United States Special Trade Representative, Susan Schwab. The Climate Change meeting in Bali in December also provided the opportunity for him to meet several trade ministers and representatives.
Ratifying the Kyoto Protocol in Bali by the new Australian Government also presented significant economic, trade and employment opportunities arising from the global response to climate change.
“Any measures to address climate change must be consistent with open trade policies,” Mr. Crean said.
“I believe that a positive outcome from Doha [Trade Round] remains an achievable possibility and, in any case, the potential benefits for us all mean that we must continue to work to overcome remaining obstacles to a resolution.”
Mr. Crean said that while Australia’s main focus would be on the multilateral Doha round, there was also a role for regional and bilateral agreements, provided they were consistent with Australia’s multilateral trade objectives.
“I see an important role for APEC, but reforms are needed,” he added.
“I am keen to work with the next chairs of APEC: Peru, Singapore and Japan, to further the reform process. “The reforms I have in mind included expanding APEC’s membership to bring in India and some other economies, and using the opportunity to make improvements to APEC’s governance structures.
Focusing on bilateral agreements, Mr. Crean said that there was a role for bilateral trade agreements, but they had to be consistent with Australia’s multilateral aims.
“For example, they ought to embody the most-favoured nation principle,” he stressed.
“I believe there are opportunities to drive this approach through the negotiations with Chile, Indonesia, and others. “This is a more strategic approach and will ensure FTAs strengthen Australia’s commitment to multilateralism and not weaken it.”
In any trade negotiations, the Australian government would give much greater emphasis to addressing the “behind the border” issues in international trade, especially issues involving the services sector.
Mr. Crean said that the Government recognised the critical role which the services sector played in Australia’s export performance - services represented 71 per cent of Australia’s economy, but only 21 per cent of its exports - which offered potential for further development.
Two important reviews would be undertaken in the trade area – including a comprehensive review of trade policy and programs. A review would also be conducted of Free Trade Agreements to determine their performances against expectations, and to set benchmarks for future FTAs which could enhance their performance, deliver positive results and which were consistent with Australia’s multilateral positions. The Government would not await results of these reviews before making a start on the reform process.
Mr. Crean said that important changes to Australia’s key export facilitation program – the Export Market Development Grants scheme had been initiated including more funds to foster more exporting businesses. The program’s criteria will also be broadened to allow greater range of businesses and, for the first time, approved regional development bodies through Australia to access the scheme.
Australia would also set up an expert group to advise on the future operations of the country’s $4.3 billion wheat industry and the transition of the industry’s functions under planned reforms to the industry’s marketing arrangements.
In conclusion, the Minister said that international trade was crucial to Australia’s economic future and there was work ahead for the Government to develop new ideas and to start implementing them.