Speech

11 April, 2008, Canberra

International Trade Law Symposium

Salutation

Good morning ladies and gentlemen and thank you for your introduction.

I’d like to congratulate the Law Council of Australia and the Attorney-General’s Department and Foreign Affairs and Trade for jointly hosting this seminar.

Introduction

I am delighted to accept this opportunity to open the symposium

Our Government understands the importance of the partnership between government and business, and this is particularly important on the issue of international trade.

Over the next two days you will be discussing some crucial and complex issues, including: energy security and the WTO; models for transnational legal services and developments in the field of intellectual property in the WTO.

I look forward to hearing how discussions progress and I hope you leave this seminar not only with new ideas and expertise but with a clear sense that the Government welcomes your views on these important issues.

This morning I want to speak briefly about the Government’s trade agenda, including its commitment to the multilateral trading system, before turning to the WTO dispute settlement system and the fundamental role of trade law.

The Government’s Trade Policy

Ladies and gentlemen, despite the greatest global resources boom of the past 30 years, our export growth has been disappointing. Export growth has averaged just 2.6 per cent per annum in the past five years.

To turn this around our Government is taking what we call a “twin-pillars” approach to trade policy.

The first pillar is our focus on behind the border – or domestic – reforms to boost productivity and enhance competitiveness, and to expand exports.

The second pillar, reform at and beyond the border – international trade negotiations in other words – will focus on creating new opportunities for exporters through market liberalisation, improved market access and the reduction of trade distorting subsidies and other export barriers.

With respect to domestic reform, the Government has already moved to tackle inflation through our plan to curb spending, encourage savings and tackle infrastructure bottlenecks and skills shortages.

We have announced increased investment in education – under our Education Revolution initiative we will invest $1 billion over four years to turn every secondary school in Australia into a digital school.

Under our $1.17 billion Skilled Australia package we will fund an additional 450,000 skilled training places over four years –the first 20,000 positions will be available this month.

Our Government has established Infrastructure Australia to coordinate the planning and development of infrastructure.

These programs – and others – will boost Australia’s productivity growth rates.

Review of Export Policies and Programs

Trade Minister Simon Crean has also commissioned a Review of Export Policies and Programs. The review’s mandate is to identify future trade policy priorities and effective trade and investment development strategies.

The Review will analyse the factors that have affected our recent export performance, their relative significance and what action can be taken to remove impediments to exports.

Based on its findings, the review will make recommendations for a comprehensive and forward-looking trade strategy that focuses on enhancing our export capacity, and opening up and exploiting new market access opportunities.

Alongside the review will be some important research on Free Trade Agreements. This study will look at some of our recent FTAs to determine whether they are delivering all that is expected. This will help the Government establish benchmarks and criteria that future FTAs should reach.

I want to emphasise that the Government is not opposed to Free Trade Agreements.

We believe, if there is a commitment by all parties to ‘WTO-plus’ outcomes, regional and bilateral agreements can support the multilateral trading system.

That’s why we continue to negotiate free trade agreements with Japan, China, Chile, Malaysia, the Gulf Cooperation Council countries and jointly with New Zealand with the ASEAN group. Negotiations on the Pacific Area Closer Economic Relations Plus (PACER Plus) are also pending.

FTA feasibility studies are also being conducted with India and Indonesia.

And we have commissioned a non-government FTA feasibility study with the Koreans – the findings of which will be considered by the two governments soon.

With our sights firmly set on ‘WTO-plus’ outcomes, Australians can expect any agreements we strike to set clear liberalising benchmarks.

Update on Doha

Currently, of course, the WTO Doha Round is our top negotiating priority.

The round stands at a critical juncture. No one is pretending it is an easy negotiation and there have certainly been delays and frustrations.

But a successful conclusion of the Doha Round offers large potential trade and economic gains for Australia, our region and the world.

The World Bank estimates that by liberalising merchandise trade and eliminating subsidies we could boost global income levels by up to $US 287 billion by 2015. Nearly half of those gains are expected to flow to developing countries.

The Round is as close as it has been to finalisation and we have seen some encouraging progress in the negotiations, in the core areas of agriculture, industrial products and services.

But we need to keep pushing to achieve the breakthroughs needed if we are to strike a deal.

Our Government is determined to do all it can to take the negotiations forward and maintain the momentum of global trade liberalisation.

WTO Dispute Mechanism and the Role of Trade Law

Dispute settlement is the cornerstone of the multilateral trading system and, of course, trade law is the discipline that underpins the process.

The establishment of an agreed, enforceable, rules-based, dispute settlement system oils the wheels of international commerce by adding greater confidence and certainty.

The ability to take disputes to a neutral umpire at the WTO and have a binding ruling is unique among multilateral institutions.

The WTO’s Dispute Settlement Understanding, or DSU, - a key outcome of the WTO’s Uruguay Round – enables disputes to be decided on their legal merits and not on the basis of political and economic power.

Since the WTO dispute settlement system was established in 1995, the dispute panels and the Appellate Body have made more than 100 rulings on trade disputes, and many more disputes have been settled “out of court”.

As well as contributing to liberalisation in a general sense, the WTO disputes system has delivered direct benefits to Australia’s exports, and to our economy.

For example:

• The United States had to remove prohibitive tariffs (of up to 40 per cent) it had applied to imports of Australian lamb;
• Sales of Australian beef to Korea increased substantially after Korea had to remove many of the barriers it had applied to imports of Australian beef, such as the requirement for separate shops and more onerous labelling and record keeping requirements. After the WTO rulings, the number of sales outlets for Australian beef in Korea increased from 5,000 to 45,000;
• Australian and other sugar producers are now able to get better prices on the world market after the EU had to stop exporting 4 million tonnes of subsidised sugar a year, and reduce the total amount it paid in sugar subsidies;
• India had to remove import quotas on a range of agricultural and industrial products;
• the United States had to repeal its controversial "Byrd Amendment" legislation, under which anti-dumping and countervailing duties on imported products were distributed to US producers of like products;
• the EU had to amend its system of protection of geographical indications, or GIs, to respect the rights of Australian and other trade mark owners.

And, of course, some of our own practices have also come under WTO scrutiny. That’s what happens in a rules-based system.

While there seems to be general agreement that the dispute settlement system is working well, our Government is also interested in ideas to improve the system.

Access to the system, particularly by developing countries, is one issue under consideration. While it is open to any WTO Member to launch a dispute, the resources required to do this successfully are considerable. This can be an impediment to some developing countries.

Australia is always keen to work closely with developing countries in disputes where we have shared interests. For example, Brazil and Thailand were co-complainants with Australia in the challenge to EC sugar subsidies.

Increasing transparency of the system is another area where there have been calls for improvement, and we support this push. Australia’s commitment to transparency is evidenced by our proposal, accepted by the panel, that the hearings concerning New Zealand’s WTO challenge on apples be open to the public.

The Government is fully committed to participating in ongoing negotiations aimed at improving the WTO dispute settlement system and we welcome your input.

Conclusion

Ladies and gentlemen

Our Government is committed to improving Australia’s trade performance.

To do this we will implement the ‘twin pillars’ approach both behind the order, to get the essential underpinnings – the domestic policy settings - right

While beyond the border we will focus on improving market access by reducing barriers in the markets of our global partners, through the multilateral trading system.

The Doha round is at a critical juncture but our Government is committed to do all we can to get a successful outcome.

We are participating in the discussions about possible improvements to the dispute settlement mechanism and the Government very much welcomes your views on this and other international trade law issues.

Finally and perhaps most importantly, our Government is always willing to address concerns about the trading practices of other WTO Members that may be impacting on Australian exporters. While this will rarely involve formal WTO dispute action, I nonetheless encourage you to bring concerns to the attention of the Government.

Thank you.