Speech by the
Minister for Trade
Senator Bob McMullan
at the
Asia Pacific Institute of Advertising Conference
on
Marketing Opportunities in the
Asia Pacific Region
Sydney, 2 June 1995
Introduction
- It's a pleasure to be here to address this Conference on Marketing Opportunities in the Asia Pacific Region.
- The international trading environment in which Australia operates has undergone much change in recent years and will continue to change
- the Government and industry have responded to these changes to secure maximum advantage for Australia and Australian business.
- In this context, the advertising and marketing interests that you represent are also now operating in a new environment
- and these sectors, probably more than any others, need to respond to the challenges of the 1990s - such as the so-called information super highway and freer trading arrangements - to maximise the opportunities.
- There is evidence this is already happening.
- For instance, Australia's export revenue from the advertising sector doubled over the last 5 years to around $A750 million in 1994
- with the deficit being turned around to a surplus of nearly $300 million
- meaning the Australian advertising sector is now a net exporter
- and the best way to continue this trend is for us to get into other markets, not close our own market.
- The advertising industry is just one service industry with a major stake in what the Government achieves in international trading forums.
Australian Culture
- -The opening up of our economy also exposes us to new ideas and culture
- it is important, however, not to erode our own distinctly Australian culture.
- While exposure to new ideas enhances our domestic culture, it can lead to problems if our domestic culture industry is overrun by foreign product
- a strong viable and vibrant domestic culture industry is a goal that Australia - and indeed all countries - regards as important to national well-being.
- The Australian advertising industry plays an important part in our domestic culture industry
- the strong domestic film industry utilises the skills developed in the advertising industry, and vice versa.
- The strength of our domestic cultural industry, including the talent of our film production industry, means we are increasingly becoming an exporter of films and advertising product
- and this is a trend which I hope will continue
- and, as it does, I expect that this industry - as is now happening in many other industries - will be talking to me more about gaining greater access to overseas markets than increasing the levels of protection in Australia.
- APEC and the World Trade Organisation provide the framework for us to seek greater overseas access for our products.
- While we will not be unilaterally granting greater access to the Australian market in this area
- I have a predisposition to argue that in the future we will not be increasing protection in this area but, more likely, we will be operating in freer regional and global markets.
- So, in short, the overall trend in world trade is to open markets
- which will generate lots of opportunities for exporting nations such as Australia.
- I want to focus now on some of the opportunities for your industries which are opening up in our region as a consequence of Australia's involvement in international and regional trading forums.
- I will also touch on another part of our strategy to win markets for Australian business
- the Market Australia communications campaign.
The Emerging Global Framework
- The environment for business in the next decade will continue to be profoundly shaped by the global trading environment.
- The mid-1990s are likely to be seen in future as something of a watershed
- marking the transition to a new and more complex form of global and regional interdependence.
- On current trends, Australian industry faces a much more open global and regional economy over the next decade
- one which will move much closer to the idea of a borderless world
: an idea developed by Kenichi Ohmae, the leading Japanese business strategist
- a much greater range of goods and services will then be involved in global and regional trade and investment
- continuing further the globalisation of industry which has been occurring over the past few decades
- and making a much wider range of policies - including those previously thought of as domestic - subject to regional and international trade rules.
- These trends are bringing a great many challenges with them
- but I believe Australia has been at the forefront of those nations which are adapting successfully to the new international environment, and shaping it.
- We've done that with a thorough-going program of economic reforms, including most recently the reforms to competition policy announced by the Council of Australian Governments last April
- reforms which will contribute further to the competitiveness of our industries.
- This has left us well-placed to seize the opportunities in our own region flowing from unilateral liberalisation in the region
- and from the successful conclusion of the Uruguay Round of trade negotiations last year
: which led to the creation of the World Trade Organisation - the WTO - at the beginning of this year.
- The WTO needs to be talked up by Government and business, not down
- its achievements will have a major impact on the prospects of Australian exporters.
- The WTO Secretariat has estimated that the results of the Round, in the area of goods alone, could boost the volume of world trade by around 24 per cent
- or almost US$670 billion in 1992 dollars
- and much of this growth is likely to occur in the Asia Pacific region.
- But the impact of the Round extends well beyond this.
- It has brought a vast range of new issues within the framework of global trade rules, with one of the most important outcomes the conclusion of the General Agreement on Trade in Services.
- The GATS, as it's called, represents a sound start for freer global trade in services
- as a general rule, GATS requires that there be no discrimination between service exporters seeking market access - countries must extend to all other members the most favourable trading terms given to any other country
: that is, Most Favoured Nation treatment
- the transparency of existing market access barriers and domestic regulations has improved significantly
- and national treatment is now extended for many services exports including, for example, advertising.
- But more needs to be done if the effects of persistent trade impediments and onerous access conditions are to be reduced or removed
- most of the commitments made in the Uruguay Round on services are undertakings not to introduce new barriers
: we want to see action to have existing barriers removed.
- Investment is also emerging as a central issue internationally and it's likely to be the focus of a good deal of work over the next few years.
Regional Approaches
- Many of the trading and investment opportunities which will open up over the next decade will be in the Asia Pacific
- the region already represents over half of world GDP
- Asia Pacific economies already provide some of the world's fastest growing markets
: in services, for example, some of them are reaching annual growth rates of 30 per cent
- as incomes in regional economies rise, demand is likely to increase rapidly, including in areas which Australia is well placed to supply.
- While enormous progress has been made in regional economies in bringing down barriers, much remains to be done.
- Opportunities in trade and investment should be greatly increased by the work of the APEC group over the coming years.
- At their historic meeting in Bogor in November last year, APEC Leaders committed themselves to achieving nothing less than free and open trade and investment
- industrialised economies among the APEC group are to achieve the goal of open trade and investment by 2010
- while developing countries are to reach this point by 2020.
- At Bogor, Leaders have also committed APEC to a number of other objectives. They include, for example:
- expanding APEC's efforts to facilitate trade and investment by harmonising and simplifying standards, customs procedures and regulations
- a standstill on new barriers to trade in the region
- and intensifying economic cooperation in areas like human resources development, telecommunications and transport.
- We in the government were very satisfied with these decisions, having worked hard to lend substance to APEC's agenda since the group first met in Canberra in 1989
- Prime Minister Keating's role has been particularly important over the last two years, and he was instrumental, along with President Soeharto, in securing broad support among APEC Leaders for the Bogor decision.
- But, I say again, a great deal of work remains to be done.
- The immediate challenge this year is to put in place an action agenda for APEC which can translate the promise of the Bogor decisions into tangible outcomes.
- We have already made an encouraging start with this work and APEC Leaders, Ministers and officials are working to develop the ingredients of what we hope will prove to be an ambitious, but realistic, plan to achieve the Bogor goal
- only last week, APEC was a central focus of Prime Minister Keating's discussions in Japan with Prime Minister Murayama.
Market Australia
- I've been concentrating so far on the opportunities opening up as a result of our efforts to develop an improved environment for global and regional trade.
- But an effective trade policy has to work at less rarefied levels as well
- often getting down into the thick of things to make sure Australian business is able to penetrate individual markets and operate effectively and profitably.
- And I want to focus on one area - the marketing of Australia- which is of particular interest to the advertising industry.
- It's a response to a major challenge we face in exploiting opportunities to export sophisticated manufactures and services
- the ignorance and the misconceptions that still exist about Australia, in even our most important regional markets.
- These are unseen hurdles, but they're just as much a barrier for Australian exporters as any quota, any tariff or any piece of protectionist red tape.
- Australian governments and business have been acutely aware of the problem for many years
- at first through mainly anecdotal evidence, but now with the benefit of some very solid research.
- One of the more recent studies was carried out by the Australian Manufacturing Council and McKinsey in 1993, in looking at the prospects for Australia's emerging exporters.
- They concluded that Australia was well known as a supplier of primary sector exports and as a tourist destination - but for not much more than that.
- Of course these attributes do partially define us
- and quite rightly so, given the vital importance agricultural and mineral exports have always had for the economy and will always have in future
: together with the huge role tourism is now playing
- but they paint an incomplete portrait of our capabilities.
- It was for that reason the report went on to recommend a high profile "sell Australia" campaign
- which we are doing through the Market Australia initiative we established in 1993.
- Last December we contracted Batey Kazoo to work with the Market Australia Unit in the Department of Foreign Affairs and Trade in developing a promotional campaign, costed at $10 million over 2 years
- to demonstrate Australia's high-tech inventiveness to government and business leaders in key markets.
- On the basis of further research, we focussed on four key markets where we could concentrate our efforts most effectively
- South Korea, Shanghai, Thailand and Indonesia.
- And we selected the ten most promising Australian industry sectors to pursue there
- telecommunications; aerospace; environment; marine; medical; education; food technology; energy; information technology, and financial services.
- The promotion, which I launched in Australia in April (and in Indonesia and South Korea in May) is called "Inventive Australia"
- taking the form of a series of ads in the Asia-wide media as well as in the local media in target markets
- highlighting specific case studies of innovative Australian technology that wouldn't normally be recognised as products of Australia
- together with public relations and direct marketing activities
: including bringing key individuals from the target markets to Australia to see at first hand what Australia has to offer.
- It is still early days for the campaign
- but it has been noticed and contributed to debate at home
- and it has been noticed and is drawing a positive response in the target markets.
- Steve Grey, from Batey Kazoo, will talk to you shortly in more detail about the Market Australia campaign, probably in terms more familiar to your industry.
Conclusion
- I think my optimism about the trade and investment outlook for Australian business is clear and obvious
- but I'd like to leave you with an observation.
- When we look back to the decades leading up to the 1970s, our manufacturers were hiding behind protectionism
- and were becoming more and more non-competitive as they resisted liberalisation.
- But they changed tack and, over time, embraced liberalisation and their competitiveness returned.
- The car industry is a prime example.
- The car industry was grappling with a major turnabout in Government trade policy
- from a protectionist policy to one centred on major tariff reductions and cutbacks in Government support
: the car industry rose to the challenge, changed to cope with the new trading environment, and is today internationally competitive.
- The fact that we are caught in a dispute between two giants of the auto and auto parts industry - Japan and the United States - underlines the international significance of our car industry.
- Turning to the 1990s and the information and services sectors - including advertising, we are seeing a similar scenario to the car industry of the 1970s.
- The new global trading environment and our engagement with the Asia-Pacific region is throwing up new opportunities and challenges for the industries you represent and their advertising and marketing needs.
- The time is right to take advantage of a more open Australian market to boost competitiveness
- and take advantage of the opportunities the Government is committed to create for Australian industry internationally and regionally
: don't leave it to the big overseas juggernauts of your industry to take all the business on offer in Australia and the region which is flowing from a more liberal trading environment.
Thank you.