The Hon Anthony Byrne MP, Former Australian Parliamentary Secretary for Trade
Australian Commonwealth Coat of Arms

Speech

October 15 2009, Melbourne

Opening Remarks ASEAN Now! Roadshow

Introduction

Thanks Mike [Moignard, General Manager Exporter and Investment Services] and I'd also like to acknowledge David Twine, Austrade’s regional director for South East Asia, and all those who have travelled to Melbourne this morning to be here.

Indeed, welcome to all of you who have come along today to learn more about how to benefit from Australia's latest Free Trade Agreement, the AANZFTA.

As you know, AANZFTA is expected to link together the economies of Australia, New Zealand and those of the 10 ASEAN nations into a free trade bloc from January 1, 2010.

The opening up through AANZFTA of significant new opportunities for our exporters and investors in South East Asia came at a difficult moment for the global economy.

The past year and a half has been, to say the least, a turbulent time economically and Australia has not remain unscathed.

Although we are now seeing signs the worst might be over, it remains the case that the GFC was the biggest economic crises the world had faced since the Great Depression. 

The GFC has created a recession in most of the world's advanced economies, with the exception of Australia's. 

This global contagion has had a major impact on global trade, particularly on export-oriented economies selling manufactured goods to the United States and Europe.

So it is important to note that AANZFTA was signed in February, back in the darkest days of the GFC, when the world was still coming to grips with the right policy mix to stabilise the global economy.

From Australia's point of view, signing AANZFTA at that time made eminent sense from the point of view of our national interest. 

The Government believes in the power of trade to create growth and jobs, no more so than during a period of global downturn, and we also believe in the power of setting an example to the world at a time of rising protectionist sentiment.

As Australia's sixth Free Trade Agreement, AANZFTA will create a single market of about 600 million people with a combined GDP of A$3.2 trillion. 

AANZFTA represents a milestone for our national economic and trade policy in Asia and another step on the road to greater economic integration with the Asia Pacific.

Today, I'd like to talk a bit about how FTAs like the AANZFTA fit into the broader scheme of Australia's trade and economic policy. 

Later in the seminar, David [Twine] and Mike [Moignard] will talk a bit more in detail about AANZFTA and the opportunities it will create once it's ratified and begins operation.

AANZFTA and Australia's Trade Agenda

Australia's trade policy has a global perspective, with a regional focus on the Asia Pacific.

We believe in open markets for export and investment and in the importance of trade and investment liberalisation as a mechanism for generating growth and jobs. 

Australia is a strong supporter of the multilateral trade system, and of the World Trade Organization's efforts to open markets through lower tariffs and the removal of non-tariff barriers to trade.

During the GFC, through forums such as the G20 group of nations, Australia has lobbied hard for the finalisation of the Doha Round of the WTO and we remain optimistic this will be achieved.

Yet Australia also pursues regional and bilateral free trade agreements, ones which are consistent with WTO rules but at the same time tailored to our specific needs and the longer term.

These FTAs add to the momentum of the bigger and broader multilateral process for Australia by creating a patchwork of agreements which criss-cross the region.

But they also contribute to Australia's other main aim in trade policy, which is to integrate our economy more and more with the growth economies of the Asia Pacific.

In the post-war period, Australia's 1957 Commerce Treaty with Japan represented our first step on the road to greater economic integration with Asia.

But in many ways the real beginning of this strategic push was Australia's critical role in founding APEC under the Hawke and Keating governments.

AANZFTA is significant precisely because it will be a critical component of Australia's long-term aim of integration with the economies of Asia.

Already it is estimated that almost a third of global output is produced in Asia.

Along with Japan and South East Asia, the superpower economies of the future, China and India, offer tremendous openings for our exporters and investors. 

With such a high level of intraregional trade in Asia, the ASEAN’s economies will offer more than just markets for our exports. 

They will also offer useful platforms for Australian firms to gain access to bigger markets through regional supply chains.

The Asian Development Bank has noted that the number of FTAs in Asia has grown from just three in 2000 to 56 by the end of August this year.

The benefits of trade are clearly obvious to our trading partners, as they are to us.
 
Australia has to remain forward-looking to manage the opportunities which these new centres of growth in Asia offer and we are making steady progress.

AANZFTA is Australia's third FTA with an Asian economy, and we have six other FTAs in Asia either under negotiation or consideration, including with China, India, Japan and Malaysia.

Trade and Economic Policy

I mentioned before that the Australian Government believes trade is a stimulus to growth, that it creates jobs and wealth which benefit of our overall national prosperity.

This belief is exemplified by our support for the Doha Round and the recent signing of AANZFTA and our negotiations of other FTAs.

So our trade policy is a natural fit for our broader economic policy agenda of creating growth and jobs through higher productivity gains and a stable economy.

During the GFC, the Government embarked on a major fiscal stimulus program which, in tandem with low interest rates and guarantees to bank deposits, put a floor under the Australian economy at a time of global economic peril.

As a result, Australia is forecast to be the only advanced economy in the world to record positive growth this year.

The IMF estimates that in 2009, Australia will grow by 0.7 per cent, while the rest of the world will contract by 1.1 per cent this year.

Australia has the lowest budget deficit and public debt in the advanced world, as well as the lowest unemployment rate bar one other economy’s.

Moreover, our nation-building programs will add a deep layer of productivity potential for the economy, with major infrastructure projects set to increase our exporting capacity and efficiency.

The Australian Government has also swung its support behind the G20's recommendations for a new era of stable and balanced growth. 

Imbalances in savings between economies can have profound effects on the pattern of global trade, bringing big surpluses to some and big deficits to others.

If adopted by nations which pursue an export-oriented trade agenda, the G20 model for stable and balanced growth could see increased demand for exports from nations which typically run large current account surpluses. 

In Australia's region, including South East Asia, the G20’s model of stable growth could have a big impact on the demand for our exports as our trading partners save less and spend more on imports.

It is clear that Australia's trade and economic policy are intertwined and operate in tandem to create stronger growth and broader prosperity for our community.

Free Trade Agreements like AANZFTA are part of that bigger economic picture, one which we believe sets the right course for the Australian economy. 

Conclusion

I'd like to thank everyone for coming along this morning to take part in this discussion on AANZFTA.

I'd also like to commend Austrade for organising the AANZFTA roadshow seminars, of which this morning's is the inaugural one.

These seminars will give our exporters and investors the opportunity to learn the vital information they'll need to take advantage of improved access to one of our biggest regional markets, South East Asia.

On behalf of the Australian Government I wish you well in your business endeavours and the exciting challenges of participating in the benefits of Australia’s newest Free Trade Agreement.

Thank you.

ENDS