The Hon. Tim Fischer MP to the Annual Conference Dinner of the Australian Electrical and Electronic Manufacturer's Association Limited

Introduction

It gives me great pleasure to be here tonight for the presentation of AEEMA's Annual Export Awards for the Telecommunications & Energy Exporters of the Year.

I want to commend the winners of this evening's export awards for their energy and success in meeting the export challenge.

Because as most of you well appreciate, exports constitute a vital part of Australia's economic growth.

Ten years ago, exports of goods and services amounted to 15 per cent of GDP. Now it's around 20 per cent.

Manufactures constitute an increasingly important part of those exports. Manufactures today account for over 30 per cent of Australia's exports and they are growing at 14 per cent a year.

And exports of elaborately transformed manufactures have been the fastest growing component of Australia's exports - they now account for 24 per cent of total exports.

Meeting the Export Challenge

AEEMA members are already seizing export opportunities and making a very significant contribution to our export effort:

. JNA, for example, recently secured a $5 million contract to supply access equipment to the Telephone Organisation of Thailand.

. And a consortium of 23 Australian companies has been formed to present capabilities for an Indonesian eastern islands telecommunications project.

. Keycorp, which has experienced rapid growth over the last 5 years, has recently signed an MOU in China. Already $500,000 in sales have resulted this financial year.

. TechComm, which turned loss into profit through exports, has been awarded a $4 million contract by Siemens to supply two power-station simulators for Latin America.

. ERG Telecommunications in Perth manufactures Nokia GSM base stations for sale by Nokia to Optus and customers overseas. And by the end of 1997 it is estimated that ERG will be producing around 15% of Nokia's worldwide base station output.

These are all commendable achievements, but much more is required across the Australian economy if we are maintain our standards of living.

The challenge is one that business and Government must share, so let me outline some of the Government's trade priorities and initiatives .

The Domestic Reform Challenge

First and foremost, we must acknowledge that meeting the export challenge begins at home. What we do at home in terms of economic management has a significant impact on Australia's trade performance.

The Government's goal is to boost Australia's productivity to make our exports more competitive.

To achieve that goal, we will return to responsible macroeconomic policies and reinvigorate microeconomic reform.

On the macroeconomic side, there is no alternative to getting the budget back into surplus by cutting expenditure. If we don't get the fiscal framework right, interest rates and the cost of capital will stay higher than most of our competitors'.

While cutbacks may affect some programs of interest to the business community, we intend to return to you a much longer term gain: the capacity to achieve dynamic growth, improve exports, expand investment, and create jobs.

The microeconomic side, too, is about productivity growth over the long term. The Government is committed to establishing a more flexible labour market. We will also improve efficiency in infrastructure services like the waterfront, aviation, communications and energy.

The Government's Trade Policy Agenda

Turning to the trade policy agenda, in the next few months the Government will be particularly focused on working to ensure the best possible outcomes at the November APEC Leader's meeting in Subic Bay and the Singapore WTO Ministerial meeting in December.

Australia's overall goals in Singapore are to prevent any backsliding on Uruguay Round commitments; to push on with further negotiations mandated by the Round; and to create momentum for new multilateral liberalisation across the board.

We would like to see further comprehensive trade negotiations by 2000. New trade negotiations on services and agricultural products are already mandated under the Uruguay Round agreements.

We support adding a commitment to further tariff negotiations on industrial products. The latter will enable us to work with the world's major economies to secure improved market access into key regional markets, particularly in South East Asia.

The APEC Challenge

The APEC Ministerial and Leaders' meetings in November will also focus on a range of broader trade and investment liberalisation issues.

APEC is now in a new phase of its development, putting its agenda into effect, rather than defining its role and setting goals.

APEC members will table their 1996 Individual Action Plans in November. This will be the first of many steps in moving toward achieving the Bogor free trade goal.

While I would not want you to become overly excited about the prospects for significant early market access liberalisation, our assessment is that there are likely to be some clear gains.

But the APEC liberalisation process is new and APEC economies are still feeling their way. Some of them, like the United States and Japan, face elections this year or next.

The effort to improve the Plans that members put forward will need to be an ongoing one. We are encouraging our APEC partners to address market access issues of interest to Australia.

And we will be seeking a commitment by APEC Leaders in November that all economies work to further improve their Plans by the Vancouver Leaders' Meeting in late 1997.

Elsewhere, APEC is working to reduce the delays and costs of customs procedures and to streamline and harmonise product standards. Australia is also leading work to streamline visa arrangements for business travellers with the proposal for an APEC Business Travel Card.

I know that reducing standards barriers is a concern for AEEMA. Earlier this month I met with my ASEAN and New Zealand counterparts in Jakarta, where we concluded an MOU for CER and the ASEAN Free Trade Area (or AFTA).

This MOU will help us in our work to align our respective standards and conformance arrangements, and will help boost Australian exports to ASEAN markets.

Information Technology Agreement

A proposal of even more immediate interest to AEEMA is the so-called ITA - Information Technology Agreement - which has emerged in the WTO and APEC.

Developed by industry coalitions in the US, Japan, EU and Canada, the ITA would see the elimination of tariffs on information technology and telecommunications equipment by the year 2000.

I welcome the ITA proposal in-principle, as a trade liberalising initiative. Australia's approach to the development of the proposal will be influenced by several important issues.

First, participation in the ITA by key regional trading partners will be an important consideration for Australia.

For this reason I joined with other APEC Trade Ministers in July in agreeing to consider the ITA proposal further in the lead-up to the Singapore WTO Ministerial Conference in December.

At this stage the United States, Japan, Canada, Hong Kong, Singapore and Korea seem positively disposed. And there are signs that Malaysia and Thailand are also warming to the ITA.

Secondly, we are considering the products to be covered by the ITA. I invite AEEMA to provide us with advice on this.

Thirdly, we also need to consider the benefits which might flow to Australian industry generally from the ITA. Access to competitively priced information technology and telecommunications equipment will be important to Australia's future competitiveness.

Strengthening Links with the Business Community

In conclusion, let me emphasise the importance of our trade strategy reflecting industry's priorities. That is why the Government puts such weight on its commitment to work with and to consult fully with business.

I am keen to strengthen my own dialogue with business people.

When I last spoke to you in May, it was at the release of AEEMA's report "Fulfilling the Export Potential of the Australian Electrical and Electronic Industries".

I congratulate AEEMA on the decision by your Board today to recruit a dedicated export officer to handle your various export groups. This is a positive example of AEEMA's commitment to export, and I can assure you that my Department and Austrade will work closely with this officer.

Thank you for the opportunity to speak to you this evening. I look forward to building on the co-operative work we have begun, and to seeing Australia secure its place among the dynamic economies of its region.