Speech by the Deputy Prime Minister and Minister for Trade The Hon Tim Fischer, MP at The Centre for Corporate Public Affairs' 1996 Politics and Public Policy Review Canberra, 9 May 1996

TRADE POLICY: OPENING OPPORTUNITIES WITH BUSINESS

It is a great pleasure to talk to members of the Australasian Centre for Corporate Public Affairs so soon after taking over the Trade portfolio.

I say that for three reasons:

One, you are an important channel into the business community.

Two, the Government wants to get moving as early as possible to lift the quality of dialogue with business.

Because - and this is the third reason - Australia's prosperity demands that government and business work closely together. Government can create opportunities through the right policy framework - it is business which seizes those opportunities by developing the products, winning the contracts and targeting the investments.

The Government's Approach to Trade Policy

The fundamental objectives of trade policy are straightforward: to expand market access for Australian business, and to promote Australia's growth through trade and investment. It is about prosperity and jobs. Simple to say, but as hard as any job in government. We are pursuing that objective through five different policy "tracks", which are mutually supportive. The domestic track- boosting competitiveness, productivity and growth - is the foundation for all the rest.

We - that is governments and business together - have to create a more competitive economy if we are to overcome Australia's still severe current account deficit and so reduce our foreign debt. The Government has started by moving quickly to get macroeconomic policy back on a responsible course. We aim to get the Budget back to underlying balance by 1997-98, cutting A$4 billion off the deficit in each of the next two years. We will revitalise and deepen microeconomic reform, which is the key to improving productivity and competitiveness.

Our priority areas include labour market reform, the waterfront, telecommunications, transport and energy. We will be working with the States and Territories to accelerate the momentum of competition reform and to cut duplication of functions. The benefits for business will be lower prices and improved levels of service. And as the reforms kick in, productivity and incomes will rise. Industry, including state enterprises, needs the stimulus of competition and it needs to be relieved of unnecessary regulatory burdens and costs. We will be attacking regulatory red tape, and reducing the costs of compliance with the tax system. In all this, we will be working closely with State Governments and business.

The multilateral track works on global market access issues, focusing on the World Trade Organisation and making sure that the rules of world trade meet our interests and are honored by our trading partners. Global forums and rules provide powerful tools for securing better market access. The Uruguay Round for example is expected to generate export gains for Australia of up to $5 billion when all the gains have flowed through. But we will need to be vigilant to ensure that WTO members deliver on their commitments, particularly in agriculture. And of course many barriers to trade remain to be tackled. So it is vital that we and other free traders keep up the momentum of global trade liberalisation. The WTO's two-yearly Ministerial Conferences will be the key strategic opportunities to do that.

The first WTO Ministerial meeting, hosted by Singapore in December, is a major opportunity to push on with comprehensive trade liberalisation. Australia's goals are to prevent any backsliding on Uruguay Round commitments, to push on with negotiations mandated by the Round, and to create momentum for new multilateral liberalisation across the board. On the need for a comprehensive approach, let me say this: the stand-alone sectoral approach to services negotiations since the Uruguay Round was supposed to be a faster way forward. It has so far yielded nothing more than an interim agreement on financial services and an extension of the negotiations on basic telecommunications. That squibbed result just underscores what value there would be in preparing at Singapore for the launch of another Round - a fully comprehensive Round - before the end of the century.

We will also have to look at resolving the place on the WTO agenda of some of the new trade issues, especially investment and competition policy. The new issues are important, but first and foremost the WTO is about trade liberalisation. So I will want to be convinced that they relate to the WTO's core business, and do not distract from it. And I will want to see a clear demonstration of the trade gains to be got by having the WTO take up issues which are already dealt with by other international forums. On trade and labour standards, it is clear to me that the WTO is not the right forum. Where real human rights concerns arise, these should be addressed in UN bodies and in the ILO.

There are only seven months left before the Singapore meeting - seven hectic and enormously important months. Within the next five weeks I will be holding talks with my counterparts in Tokyo, Jakarta, Washington and a number of Latin American capitals. I will then be chairing a meeting of the Cairns Group in Cartagena, Columbia. Let's use the next weeks and months to incorporate more specific business views into the Australian strategy for the WTO's future direction.

The multilateral track both builds on and is reinforced by what is happening in APEC, that is in the regional track. One of APEC's most important achievements has in fact been to provide leadership and a demonstration effect for the multilateral system. Looking to the future, WTO Director-General Ruggiero has advocated the theme that the WTO needs to become at least as ambitious as the main regional trade agreements if it is to stay relevant to international trade and business. I agree with him.

Within APEC itself, this year will be one of hard, work. At the Subic Bay APEC Leaders Meeting this November, the Government will be working with our regional partners to put flesh on the bones of Bogor and Osaka. The basic tool here is the individual action plan (or IAP) in which every APEC member sets down how it is going to meet its Bogor commitments. Draft IAPs for 1996 will be tabled later this month, considered by APEC Trade Ministers in July, and submitted in final form to the APEC meeting in Manila in November. The IAP process will be a rolling one, with the 1996 plans being improved in 1997 and so on.

The draft Australian plan is now ready to be tabled at Cebu, following preliminary consultations with industry. There will be further consultations next week, and we will keep in touch with industry throughout the year. Our draft plan is a progressive document. It addresses the key trade liberalisation issues of tariff barriers, non-tariff barriers (of which we have very few) and barriers to investment and trade in services. And it incorporates Government election commitments on microeconomic reform. For example, in the telecommunications and energy sectors, the partial privatisation of Telstra, and coastal cabotage.

Our draft IAP also deals with trade facilitation: for example streamlining customs procedures and standards. One initiative we will pursue actively is the introduction of an APEC Business Travel Card to simplify entry procedures for business travellers. Australia has done a lot to liberalise its market, and we expect our APEC partners to match that. My Department is working with the private sector to draw up detailed market access profiles which we will use to benchmark our partners' IAP commitments. The Government will be using the APEC consultations on IAPs to vigorously pursue Australia's market access priorities to increase opportunities for Australian exporters.

I want to stress that, if we are to meet our APEC objectives, it will be vital to have the sustained, active support of Australian business. The Government already has good links with business, including through the APEC Committee of the Trade Policy Advisory Council (or TPAC). But I want to do more.

We will be setting up an Australian APEC Business Advisory Group. This will complement business input into APEC itself through APEC's own Business Advisory Council, and the Government will shortly announce who will represent Australia on that body. I can assure you that we will give priority to the areas that matter most to Australian business on the APEC agenda - for instance, the liberalisation of minerals, agriculture and services trade, the reduction in high tariffs on industrial products, and progress on harmonisation or mutual recognition of standards in goods and services.

The Government is also working to develop two sub-regional sets of linkages between the CER and on the one hand the ASEAN Free Trade Agreement, and on the other MERCOSUR - the Latin American Common Market. Both sets of talks are focused on trade facilitation rather than liberalisation, but they still offer real potential for gains. Their work to make customs processes more transparent, to make it easier to get the facts on standards and qualifications, and to promote trade and investment, will produce direct pay-offs for business.

The new Government's commitment to working more closely with business lies behind our strong emphasis on the bilateral track. The Government will be targeting areas where we can obtain commercial benefits more quickly than we can get them through multilateral or regional forums. For instance, my visit to the Philippines last month achieved a useful breakthrough on quarantine issues for fruit and vegetables.

Our strategy will be to focus on getting better market access and higher market share for key exports in the most dynamic markets. Asia will therefore be our first priority - but not our exclusive focus. For instance the National Trade and Investment Outlook Conference draws participants from all over the world. And my planned visit next month to the United States and Latin America demonstrates that we will be maximising opportunities wherever they occur.

In practical terms, this means Australia - that is, the State and Federal governments in partnership with business - needs to work much more closely together in identifying opportunities, and in active, coordinated pursuit of these opportunities. The fifth and final track is to build on market access work by promoting Australian exports and investment..

The Government will be looking at sharpening the strategic focus of both my Department and Austrade. We will keep a particular focus on Asia, and we will be launching several market-based initiatives designed to lift Australia's profile in Asian markets. They include:

a "Year of South Asia" program, aimed at promoting a stronger image of Australia as a source of advanced manufactures

and a "Supermarket to Asia" program designed to increase exports of processed food and related goods and services into Asia, especially Japan.

At home, I will be looking at ways to make the Australian Export Awards system more relevant to the business environment of today. Later this year, International Business Week will put on seminars and workshops about the ways and means, benefits and pitfalls of the export business.

And Austrade will be developing further its Regional Export Marketing Program aimed at tapping the export potential of businesses in rural areas. Austrade will also get more involved in assisting Australian companies seeking to invest overseas - where the investment can lead to increased exports or foreign earnings for Australia. This will complement what Austrade already does to promote Australia overseas as an investment location for manufacturing, high-technology and services industries. All this is directed at Austrade's fundamental goal of delivering more effective assistance programs to exporters. Achieving that goal requires active collaboration with chambers of commerce and with industry associations. So I look to the business community to participate actively in these programs so as to develop a successful and profitable export culture.

Working with Business

Let me bring what I have been saying back to this one proposition. All of the five tracks - from WTO negotiations in Geneva to fruit and vegetables in Manila - are about one thing. Expanding opportunities for Australian business to trade and invest profitably overseas. That is why the new Government is putting so much emphasis on invigorating the linkages with the business community. On listening to business, and working with business in practical ways.

I want to hear your views today on how to do this better. To help you focus your thoughts, let me refer to three key areas I am working on. I am looking very closely at how we can use the National Trade Strategy Consultative Process (or NTSCP) to better coordinate Federal, State and business efforts.

I want to use the NTSCP and TPAC to set up a two-way process to better inform Australian business on trade opportunities. The Trade Outcomes and Objectives Statement, which I announced before the election, will draw on the consultative links we already have through the NTSCP, and it will act as a launching pad for a more energetic program of bilateral access negotiations. Finally, I will be involving industry in tackling food market barriers as part of the "Supermarket to Asia" initiative. These three areas are just part of a wide array of consultative mechanisms, including the sectoral groups involved in the WTO and APEC, that help keep government responsive to business thinking. And I am glad to say that business people are not shy about speaking up: the many face-to-face meetings I have, and the many letters I get, all help me keep aware of business realities.

The challenge now is to see if we - both government and business - can make all these mechanisms and contacts work better.