Speech

14 April, 2008, Ritz Carlton Hotel, Santiago, Chile

AUSCHAM breakfast seminar

His Excellency Crispin Conroy, Australian Ambassador to Chile; Trade Commissioner Nigel Warren; Alejandro Palma, President of the Australian Chilean Chamber of Commerce; AUSCHAM members; Distinguished guests; Ladies and gentlemen

My thanks to AUSCHAM for organising this breakfast seminar and for so kindly inviting me.

I’d like to say a few words about the commercial relationship between our two countries and spotlight some areas of new investment and further opportunities for us to do business together.

For many reasons Australia has a great interest in expanding our trade relationship

At the multilateral level, trade liberalisation via the WTO Doha Round is the central focus of Australia’s trade liberalisation efforts across all sectors–agriculture, industrial products and services. A successful conclusion to the Doha Round would help to provide a much-needed degree of certainty to business and a confidence boost to the global outlook.

Of course, Chile’s economic success is good news for Australia.

We are both committed to trade and investment liberalisation and deregulation and free trade, and Chile’s long record of economic reform and openness has benefited us both.

Chile’s economic liberalisation has led to increased competitiveness and substantial growth in your traditional export sectors.  Free trade is the engine for Chile’s strong economic growth––and, in turn for Australian investment and exports to your country.

This has been the important backdrop for the negotiation of Australia’s FTA with Chile.  Not only will it enable Australian exporters greater access to the Chilean market, but it will put our exporters on the same footing as those from the other 54 countries with whom Chile has such agreements.

We expect the FTA, when finalised, will expand the scope for Australian commercial links with Chile and more broadly stimulate greater Australian commercial involvement with the region.

I am pleased that negotiators are close to finalising what will be a high quality and comprehensive FTA.

We are both great mining nations, each with its own specialisations in the resources sector, so we have many complementarities, skills and services to exchange in this area. 

EXPOMIN

In fact, this evening I will have the pleasure of attending EXPOMIN in your great city, one of the largest mining trade shows in the world, where Australian equipment, machinery, technologies and other supply capabilities are being showcased to the Chilean and Latin American region’s mining industry.

The Australian Trade Commission––Austrade–– has brought over 60 Australian firms to EXPOMIN. The Australian State Governments of Queensland and New South Wales are supporting 12 firms in the national pavilion. Many other Australian firms are exhibiting quite independently.

Mining Services

EXPOMIN is an eye-opener as to extent to which Chile and Australia can work together on mining.

Did you know that 60 per cent of the world’s mines use Australian designed and produced software?

We excel world-wide not only as a supplier of resources, but can be of even greater use to Chile in terms of ancillary services in this sector––whether in terms of engineering and construction consultancies, industrial safety, drilling and exploration, laboratory work, electrics––the list goes on.

An example of the kind of breakthrough innovation one can expect from Australia in the mining area may be seen in what a Brisbane, Queensland company, GroundProbe, has done:

The company uses radar technology to measure rock wall stability in open cut mines. It detects wall failures early enough to allow evacuation of people and equipment. It also extends mine life by providing information about the best and safest way to redesign mines for further development.

Another example: Russell Mineral Equipment introduced into Chile the world’s first Twin-Machine Mill Relining System.

There are many such successes.

Regional Hub

Ladies and gentlemen,

Like Australia, Chile’s economy is stable and advanced in the Latin American region.

That stability has been a major drawcard for a large number of Australian businesses coming to Santiago. At last count there were well over 50 such companies in this city, and some of Australia’s majors, like BHP Billiton, have held a successful presence here for a generation or more.

I think it’s not an exaggeration to say that this city’s economic dynamism and maturity has led to it being regarded as a regional hub for business expansion into all of South America.

I understand that throughout the country some 120 Australian companies are actively trading with Chile and two-way trade stands at A$429 million.

Trade Relationship

Last year our major exports to Chile included A$95 million in coal; A$21 million in civil engineering equipment; A$7 million in specialised machinery and A$6 million in goods vehicles.

Services exports to Chile totalled A$96 million––mainly in tourism and education-related travel.

We imported from Chile A$96 million in copper; A$56 million in pulp and waste paper; A$43 million worth of non-ferrous base metal waste; A$21 million in pig iron and A$17 million in simply worked wood.

Our services imports from Chile amounted to A$152 million, also mainly in travel, business and personal.

Windows of Opportunity

Although this exchange is pretty healthy, we notice that there are windows of opportunity for many other Australian exports to Chile.

Young middle class

The wide variety of consumer goods and services produced in Australia for a youthful domestic market is ideal for a country like Chile, nearly half of whose population is under 25––niches exist for everything from consumer electronics to leisure, including, of course fashion. For example, the uniquely Australian Billabong brand of surfwear has became a multi-million dollar success story in Chile.

Additionally, a higher disposable income has given rise to a market that is willing to be somewhat more adventurous in its spending than was once the case.

Food

Food is a case in point. Although Chile is a one of the world’s big food exporters, there are a number of products that present opportunities for Australian suppliers. A new middle class of consumers is paying increasing attention to quality and healthier eating habits, while also preferring home-cooked, but easily prepared, consumer-ready meals. Chile’s modern provision distribution systems add value to a variety of Australian exports in this sector.

Franchises

Domestic companies are more concerned in volume sales and reaching the mass markets, rather than niche and more selective segments. This provides an opening for business opportunities for Australian companies that are interested in supplying small, but valuable, market sectors.

This applies to many of Australia’s internationalised franchises cater to both young and old––such as for aged care, child care coffee shops, cafes, juice, salad and noodle bars, home maintenance, beauty outlets and property renovation firms.

Primary products

There are possibilities for ingredients or primary products such as wheat, milk powder, sugar and tropical products, and a number of other differentiated and value-added food products, as well as state-of-the-art processing equipment and other labour-saving devices for the Chilean food and agribusiness industries.

Science and technology

While Australia’s Commonwealth Scientific Research Organisation, the CSIRO, works with mining companies in Chile, it also collaborates with Chilean institutions on numerous projects, including forestry, plant and marine science.

An ongoing regional collaborative study involving the University of Santiago and CSIRO Petroleum was examining the sedimentation off Chile’s west coast, as a key to understanding the movement of the earth’s crust.

And another southern hemisphere connection we share is in the stars. A Memorandum of Understanding with the Universidad de Chile brings collaboration between the astronomers of CSIRO’s Australian Telescope National Facility and the astronomers of the Department of Astronomy at the Universidad de Chile in Santiago.

Wine

Although Chile competes with Australian suppliers of wine in the world market, a growing local interest in wines has opened a curiosity about imported wines––including from Australia.  I know that Chilean wines are popular in Australia.

With wine, as is the case in the resources sector, we compete, yet add technical and services value to each other’s output. Australia offers a wide range of products and services throughout the value chain for the Chilean wine industry

I understand that Charles Sturt University in the Australian State of New South Wales has signed a memorandum of understanding with the Institute of Agricultural Research in Chile to jointly add character to our wines. 

So Chile and Australia are already working together as “los hermanos en el vino” [brothers in wine] from the southern hemisphere to show the northern hemisphere what we can do!

Close

Let’s raise our breakfast glasses and drink––albeit in orange juice––to our wines; our mining; our science and technology, our research and development; our education and our tourism.

Let’s celebrate all the other large-scale areas of greater trade, investment and cultural exchange between our two countries now and into the future.

Thank you