The Hon. John Murphy MP
The Hon John Murphy MP
Former Parliamentary Secretary for Trade

Speech

13 March 2008

European Australian Business Council

INTRODUCTIONS

Mr Jason Collins, Chief Executive Officer, European Australian Business Council
Ms Gillian Brown, Chair of Partners, Minter Ellison
Professor Simon Bronitt, National Europe Centre
Mr Charles Curran AC, Vice President, European Australian Business Council
Ladies and gentlemen

I am very pleased to have been invited to speak at this European Australian Business Council and National Europe Centre cocktail reception this evening as part of the Symposium “The European Union: Australia’s New Business Horizon”.

I have no doubt that the Symposium will be a productive two days promoting common interests, and forging closer links, between Europe and Australia.

It is events such as this that emphasise the importance of this relationship to Australia’s overall trade position.

Indeed, it is events such as this, and the continuing efforts of groups such as the European Australian Business Council and the National Europe Centre, that ensure the broader relationship continues to prosper. 

The EABC’s work with peak business organisations and industry associations, both within Australia and in Europe, is an indispensable adjunct to the activities of government in fostering links between Australian and European businesses.

It may come as some surprise to many that the EABC – through its Charter Members, Corporate Members and Corporate Council - has such a close working relationship with the Australian government. 

Given that so much is made of Australia’s enduring relations with the United States and Asia, the close links between Australia and Europe have often been understated. 

That there isn’t the incessant glare of the public spotlight on the relationship should not be read as ambivalence towards Europe by the Australian people, or the Australian government.

Our relationship is founded on shared interests, shared aspirations, common historical and institutional associations as well as common values – including, but not limited to, democratic freedoms. There are many bonds that unite us – and very few disagreements that divide us - and the bonds that unite us are very difficult to untangle.

They are also bonds that allow us to pursue other interests.

The development of a new Australia-European Union Key Partnership Framework, to replace the existing 1997 Joint Declaration and the 2003-2008 Agenda for Cooperation, will provide a more effective foundation for trade, economic and political dialogue and cooperation between Australia and Europe.

One cannot emphasise enough the importance of arrangements that will provide a coherent and flexible policy approach.

The new Australia-European Union Key Partnership Framework will deliver a more constructive context within which to pursue our shared interests including:

This framework is an important catalyst for even greater engagement and cooperation between Australia and Europe. So, too, is the anticipated visit this year to Australia by the European Commission President – Mr Jose Manuel Barosso.

It will be the first visit by a European Commission President since 1982 and would be the perfect opportunity to launch the new Australia-European Union Key Partnership Framework. 

While Australia – as a result of this framework - is expecting to work more closely with the European Union and its Member States on a wide range of issues and in many new areas, our trade and investment links remain at the heart of the relationship.

Australia’s future is attached to the success of our business community in the global marketplace - and the role of Europe cannot be underestimated or undervalued here.

It is not hard to see why.

Doubtlessly, you would all be aware of the grand scale of the Australian-European Union trade and investment relationship. However, some key facts are worth mentioning again.

As a region, Europe is Australia’s most important trading partner, accounting for 17 percent of Australia’s trade around the world.  

Of particular interest is the fact that the EU is Australia’s largest trading partner in services. This is becoming an increasingly important sector for Australia given that current buoyant commodity prices and export volumes may not last forever and the services sector now makes up 80% of our economy.

Investment is also an important foundation upon which our relationship is built.

The European Union is Australia’s largest source of foreign investment and the second most important destination for Australian investment abroad.

That Australia remains an important base for European companies with an interest in the Asia-Pacific region should come as no surprise. A number of key factors would no doubt have historically contributed to Australia’s attractiveness as a destination for European foreign investment, including well developed infrastructure, familiar legal and accounting systems and a strong skills base.

The Australian government is committed to retaining these advantages and has plans for important reforms that will boost Australia’s attractiveness as a destination for foreign investment.

The government has already taken steps to establish Skills Australia, an independent body that will provide the government with high quality advice to assist it with the investment of public funds.

Skills Australia will analyse current and emerging skills needs in the Australian economy and determine Australia’s workforce development needs – ensuring the government can make informed decisions with respect to addressing the skills shortages.

The government has also given a high priority to addressing a range of infrastructure bottlenecks – including bottlenecks in our ports, railways, roads and information technology. As you would be aware, Infrastructure Australia, a new Commonwealth statutory authority, will coordinate the planning, regulation and development of vital infrastructure around Australia.

The reforms are vital if we are going to see the ongoing international competitiveness of the Australian business environment – particularly given the backdrop of the recent strengthening of the Australian dollar.

The reforms are vital if Australia is to retain its competitiveness within the Asia-Pacific region as a destination for investment, particularly investment from Europe.

It is clear that Australia has considerable economic and strategic interests at stake in its partnership with Europe. The EU’s considerable influence in global trade and investment has an obvious bearing on Australia’s economic interests. I saw this first hand when I met with government officials in Brussels last year.

However, there can be no doubt that Europe can project its influence in other ways that could have a considerable impact on Australia’s broader national interests.

That is why I reaffirm, unequivocally, the value of closer EU engagement with Australia, and the Asia Pacific region more broadly.

It is also why we will all observe, with great interest, the future directions and priorities of the European Union during Slovenia’s presidency and beyond – including the EU’s ongoing commitment to strengthening external relations.

No one should be in any doubt that the Australian government has a strong devotion to ensuring its partnership with Europe is as robust and forward-looking as possible.

On this point, it is worth acknowledging that one of the first actions of our new Minister for Trade, the Honourable Simon Crean, was to meet with EC Trade Commissioner Mandelson and Agriculture Commissioner Fischer Boel in Brussels in January.

The discussions set a positive tone in the relationship and provided a valuable opportunity to convey Australia’s commitment to working together on those issues that may have a bearing on the relationship now and into the future.

I would like to touch on a few of those issues.

Firstly, Australia will continue to work closely with the European Commission on international trade issues in international forums – including the Doha round.

There is an increasing desire to stem the threat to the integrity of the multilateral trading system from the proliferation of bilateral and regional trade agreements.

The new government sees an important role for these agreements – but as mechanisms for supporting and improving multilateral outcomes.

The EU, as one of the world’s leading trading groups, must play an instrumental role if we are to realise ambitious global trade liberalisation.  

The Trade Minister has expressed, on numerous occasions, the view that the Doha Round is Australia’s top trade priority and that he will do everything he can to pursue an ambitious outcome.

The Minister has expressed concerns with all three revised texts, released early last month, but believes that there is still time to work through the issues.

Europe’s leadership and collaboration on this issue will assist in pushing negotiations through this critical phase.

While the agriculture sector is often perceived as being the thorn in the side of a mutual Australia-European interest in trade liberalisation, this does not paint an accurate picture.

Australia and the European Union share many common interests in the advancement of global trade liberalisation, including in services, and the EU has a record of seeking a strengthened multilateral trading system.

Our close collaboration, particularly on services, will be crucial to completing the round this year.

That said, we need to move all areas of the negotiations forward in the next few months and getting clarity on agriculture will be very important if we are to make progress.

The constructive mood of key players - including the European Commission - in discussions under Agriculture Chair, Crawford Falconer, was most welcome.    

It is also important to note that the EU has made real progress in reforming aspects of its Common Agricultural Policy. The EU has risen to the challenge of CAP reform and the current CAP is far more market oriented than it has been in the past - particularly in the wine, dairy, fruit, vegetable and sugar sectors.

The government will encourage greater reform in this area with a view to minimising, even further, trade distorting support for agriculture.

We will be encouraging the same levels of progress in agriculture as we have seen in other important areas.

One of those areas is negotiations for an Australia-EU Passenger Name Record (or PNR) Agreement.

PNR data is used by the Australian Customs Service to identify passengers who may pose a threat to border or national security. In the absence of any bilateral PNR treaty with the EU, the Australian government has been denied access to passenger information from airlines whose data is held within the EU, which will – in time – include QANTAS.

For that reason, an agreement on this issue is a high priority for the government and we welcome the EU Member State initial agreement, reached under the Slovenian Presidency, to commence negotiations.

This issue again demonstrates how our relations with Europe go well beyond the purely economic.

We are hopeful that negotiations will be concluded by mid-2008.

Another area where we hope to make real progress is in a Comprehensive Air Services Agreement with the EU.

In light of the increased competition in the global air services industry, improving access to each other’s markets is important if our carriers are to compete more effectively.

In line with European Commission requirements to request a mandate from EU member states to enter into negotiations, a request was submitted in September 2005.

We have some concerns that this request has not yet been considered by some EU Member States, perhaps for commercial reasons, despite the time that has elapsed.

I understand that a full EU air services agenda means it is now unlikely that consideration of a negotiating mandate for the agreement will be considered in the first half of 2008.

We will therefore be looking for support from France to take the matter forward under the French EU presidency later this year.

One area where we have moved forward is in a new Australia-EU Wine Agreement, which was initialled by Australian and EU negotiators in July 2007.

While the previous 1994 agreement has been a valuable tool in facilitating Australia’s access to the EU wine market, the revised agreement allows for even greater market access - in exchange for the phasing out of European geographic indications that are used to describe Australian wines (such as Champagne).

This provides an extremely exciting opportunity for Australian wine producers who are amongst the very best in the world.

We are looking forward to the adoption of this agreement in the near future.

In concluding, I have not sought to provide an exhaustive account of the government’s partnership with Europe – there would not have been the time given the breadth and depth of many of our mutual interests and concerns.

The intent of my address this evening was to emphasise that Australia and the European Union have many shared global interests, whether they arise from similar traditions, common values or economic benefits.

Irrespective of their origins, these shared interests will ensure that Australia and Europe maintain, and improve, ties with each other well into the future. Our relationship has already come a long way – but there is a long, and promising, journey ahead.

I thank the European Australian Business Council and the National Europe Centre for sharing that journey, as the government works constructively on addressing trade and investment opportunities that arise from our closer partnership with Europe. 

Thank you once again for your invitation.

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