Former Minister for Trade
Australian Commonwealth Coat of Arms

21 February 2008

Government Review of Export Policies and Programs

I have today announced a comprehensive review of Australia's export policies and programs.

Despite rapid economic growth in our region driving high demand for energy and mineral resources, Australian exports have underperformed in recent years.

Across all major export categories, growth of export volumes in the past six years has been below the historical average since the floating of the Australian dollar in 1983.

Under the previous Government, net exports made a positive contribution to growth in just 2 out of 11½ years. Under the last Labor Government, net exports made a positive contribution to growth in 10 out of 13 years.

Against that backdrop, the review will examine Australia’s trade performance over the past two decades and identify factors that impact on export growth.

It represents the Government's determination to develop an integrated approach to trade policy and ensure it is part of the broader economic policy settings. All arms of policy must work together to drive productivity growth, enhance our level of international competitiveness and improve our export performance.

This is vital to ensure our trade performance once again becomes a strong contributor to Australia’s economic performance to sustain us beyond the resources boom.

The Government wants to assess the challenges and develop a strategic, whole-of-government approach to advancing Australia’s international economic and commercial interests.

The review will be chaired by Mr David Mortimer AO, Chair of Leighton Holdings and Australia Post. Mr Mortimer has a strong record of achievement in business and is ideally suited to lead this review. Mr Mortimer will be supported by Dr John Edwards, Chief Economist of HSBC Australia. Biographical details of Mr Mortimer and Mr Edwards are attached.

Under legislation, the Government is required to initiate a review of the Export Market Development Grants (EMDG) scheme by 2010. Given the integral role of EMDG in the current mix of export policies and programs the EMDG review will be brought forward and undertaken as part of this review.

The review will consult widely with stakeholders and will be calling for public submissions. The review will be completed by 31 August 2008. Terms of Reference for the review are attached.

A separate research project on Australia’s approach to free trade agreements will be undertaken in parallel with the export policies and programs review, and its results will be incorporated in the review’s final report.

This research will analyse Australia’s most recent free trade agreements (FTAs) – with the United States, Singapore and Thailand – to assess their net benefits and include a comparative analysis of Australia’s FTAs with those concluded by other countries. It will examine options for ensuring that FTAs strengthen the WTO multilateral trade system, including benchmarks for any future agreements Australia may negotiate.

The research on FTAs will be conducted under the leadership of a reference group of experts; specifically:

Biographical Details

Review of export policies and programs panel

Mr David Mortimer AO is Chairman of Leighton Holdings Ltd, Australia Post, Crescent Capital Partners and the Defence Procurement Advisory Board. He is a Director of Macquarie Infrastructure Investment Management Limited and Petsec Energy Limited and a Governor of the Australia Israel Chamber of Commerce. In 1996-1997, Mr Mortimer led a major review for the Federal Government of Business Programs that resulted in “The Mortimer Report”. He was previously Managing Director of TNT Limited. Following the merger of TNT Ltd with the KPN Group in 1996 he remained as Chairman and CEO of the Asian Pacific Region until 1997. From 1992-1996 he was Deputy Chairman of Ansett Australia Holdings Limited. He was also a Director of Ascham from 1989 to 1997 and of Adsteam Marine Limited from 1997 to 2007. He was Chairman of Sydney Airports Corporation from 1998 until 2002 and a Director of the Australian Tourist Commission from 1997 to 2004. He was formerly a director of the Australian Graduate School of Management and is presently on the AGSM Advisory Council. He is also a member of the Board of Governors of the Committee for Economic Development of Australia (CEDA). He was appointed as an Officer of the Order of Australia in 2005.

Dr John Edwards has been chief economist for HSBC in Australia since 1997. Between 1991 and 1994 he was Senior Adviser (Economic) to Treasurer and then Prime Minister Paul Keating. He has worked in other banking roles, first as an adviser at Macquarie Bank and then as chief economist for Societe Generale. Dr Edwards was Washington correspondent for the Sydney Morning Herald. Mr Edwards’ role at HSBC includes the provision of economic views and advice to the commercial bank and the treasury and capital markets group.

FTA reference panel

Professor Kym Anderson is the George Gollin Professor of Economics and formerly foundation Executive Director of the Centre for International Economic Studies at the University of Adelaide, where he has been affiliated since 1984. Previously he was a Research Fellow in Economics at ANU's Research School of Pacific and Asian Studies (1977-83), following undergraduate studies at the University of New England in Armidale (1967-70). He has worked at the GATT Secretariat and has been a regular participant in WTO dispute settlement cases as an expert panellist. He has been Lead Economist (Trade Policy) in the Research Group of the World Bank in Washington DC for the past several years.

Mr Andrew Stoler is the Executive Director of the University of Adelaide-based Institute for International Trade. He served as Deputy Director-General of the World Trade Organization (WTO) from November 1999 to October 2002. Prior to this, he spent slightly more than ten years as the Deputy Permanent Representative of the United States to the WTO and its predecessor, the GATT.

Peter Gallagher is Managing Director of Inquit. He was formerly the CEO of the Australian Dairy Industry Council and was a senior officer for 20 years in the Department of Foreign Affairs and Trade. In 1996, he was appointed to the faculty of the Business School of the University of Melbourne - where he helped establish a program on international trade for MBA students.

Dr Nicholas Gruen is CEO of Lateral Economics. He is an economist with an impressive record of achievement and experience in the public sector, business groups and academia. He was previously an economic policy adviser to two Federal Government Ministers, Director of the Business Council of Australia's innovative New Directions economic reform project and influential participant in economic and industry policy formulation, notably in the automotive sector.

Terms of Reference for the Review of Export Policies and Programs

1. Despite the rapid economic growth of China and India generating unprecedented global demands for energy and mineral resources, Australian exports have underperformed in recent years. Across all major export categories, the growth of export volumes in the past six years has been below the historical average since the floating of the Australian dollar in 1983. While export revenues for resources have grown in the past six years, there has been a slowdown in resource export volumes over that period.

2. In the last Labor Government, net exports made a positive contribution to economic growth in 10 of 13 years. Under the previous Government, net exports made a positive contribution to growth in just 2 out of 11½ years. The export slowdown over the past decade reflected a failure to develop an integrated approach to trade policy and a failure to achieve the necessary productivity gains to drive Australia’s international competitiveness.

3. In this context, the Australian Government has commissioned Mr David Mortimer AO and Dr John Edwards to conduct a comprehensive review of export policies and programs, in consultation with a broad range of industry stakeholders. The review will examine export policy and programs across all Government portfolios and agencies and their linkages to State/Territory programs. It will cover goods, services and investment. This review is to take place in parallel with an analysis of Australia’s recent bilateral free trade agreements to assess their net benefits and to develop new benchmarks for Australia’s future bilateral and regional trade agreements.4. The review will examine Australia’s trade performance over the past two decades including factors impacting on export growth. It will identify measures to maximise Australia’s export competitiveness potential. The review will contribute to the formulation of a more strategic whole-of-government approach to advancing Australia’s international economic and commercial interests.

5. The review will bear in mind the Government’s desire to optimise the overall economic performance of the Australian economy through productivity gains and deeper integration of the Australian economy and business with the global economy. It will also take into account the Government’s commitment to the rules-based multilateral trading system and in particular the World Trade Organisation (WTO) Doha negotiations.

6. The review will make an assessment of the challenges and opportunities currently facing Australian exporters and international business. In making this assessment, the review should examine:

a) Australia’s export performance over the past two decades, identifying factors that are inhibiting export performance, domestic productivity, productive investment flows and international competitiveness;

b) the extent to which Australia’s trade policies adequately reflect Australia’s interests in the contemporary global economy; and

c) the coverage, coherence and effectiveness of current trade development services and programs, and the extent to which they adequately address the needs of exporters, importers and investors.

7. The review will make recommendations on any of the issues identified, including:

a) measures required to improve export performance, including the relationship with domestic policy settings and productivity-enhancing policies;

b) measures which will improve the capacity of new and existing exporters to expand their export base and take optimal advantage of the expansion and evolution in international trade and investment;

c) measures to encourage more small businesses to begin exporting or to expand their export operations;

d) measures to promote an improved services export performance, including financial services;

e) policies and programs that will promote high value added exports, enhanced levels of productivity and improved international competitiveness;

f) measures to expand market access opportunities for Australian exporters of goods and services; and

g) measures to promote a more concerted and coordinated national approach to lifting export performance.

8. In its recommendations, the review will be mindful of the Government’s overall approach to budget policy, Australia’s international commitments, the Government’s support for the multilateral trade system and the initiatives the Government is in the process of implementing.

9. The review will include specific recommendations about the continuation of the Export Market Development Grants scheme (EMDG), pursuant to section 106A of the EMDG Act 1997.

10. The review is to release a scoping paper for stakeholder consultations by April. The final report will be provided to the Minister for Trade by 31 August 2008.

More information

 

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