Deputy Prime Minister
Leader of the National Party
Minister for Trade

The Hon. Tim Fischer MP
to the
Annual Presentation of Australian Export Awards

AUSSIE RULES: THE GOVERNMENT'S TRADE POLICY AGENDA



Parliament House
Canberra, 19 November 1996

Ladies and gentlemen

It gives me particular pleasure to be here tonight, for two reasons.

First, because the diversity, calibre and successes of the nominees for the awards demonstrates to me and the international trading community the competitiveness and strengths of Australia's exporters. But more about them later.

And second, because I welcome this opportunity - eight months after coming into office - to outline to the business community this Government's trade policy agenda and framework.

A Coalition of One

This Government came into office with a clear vision of the trade policy environment we want to create and the challenges we must meet. I want to make some observations about that, before getting into the detail of the trade policy agenda.

Australia is on its own in the world economy. We are unique in being a well-off country with a strong comparative advantage in rural and extractive industries, but one where manufactures and services are also steadily becoming more competitive. We are unique, too, in the degree of our integration with the economies of East Asia, access to which is crucial to Australia's future prosperity.

That unique position means Australia has unique interests. It also demands unique responses. Though we may act through coalitions like the Cairns Group on particular issues, the fact is that in relation to the trade agenda as a whole, we are in a coalition of one.

The Government recognises that Australians live in a world of unceasing change. Australian industry is facing increasing competitive pressure through the rapid pace of globalisation and the increasing contestability of markets.

The converse of this is also true: Australian companies which can win against competition from the world's best here at home have the potential to succeed globally, and should be looking to exploit their potential.

So there's a two-edged sword here: globalisation and contestability mean greater opportunities overseas as well as new competitors at home. But whichever way you look at it, the heat is really on Australia to achieve ever-higher levels of productivity.

To put all this in a nutshell, we have to "go global". If you want to compete at home, you increasingly need to compete with international players. If you want tosurvive in the Australian market, you need to look beyond this market.

Recognising these realities, the Government has developed a trade policy framework which builds and sustains pragmatism in the way we operate in the global trading system and achieves real results for Australian business.

What we have done is to integrate the various elements - bilateral, regional and multilateral - into a flexible package.

In turn these elements are complemented by our market development and promotion activities, and reinforced by the Government's commitment to reform of domestic economic policies.

But the mix of these activities and the approach is not copied from one country or another. It has been put together from a hard, self-interested look at Australia's unique circumstances. This is Aussie Rules for trade - it is our own unique brand of game.

Looking back over our agenda, I have to say that I am encouraged by the achievements we have chalked up in the last eight months, benchmarked against the policy tracks announced at the start of 1996.

Trade Policy

Ladies and gentlemen, I believe the Government has made a good start on the domestic part of the trade policy task - getting the economy fit to compete in world markets. But tonight is not the time to dwell on that, other than to emphasise that we have now had two official cuts in interest rates and the sooner that flows on to small business, the better.

The second part of our task is external trade policy - getting better access to markets for Australian exporters, and fairer international rules - and this is what I want to focus on.

The Government came into office in March with a clear mission: we wanted to make external trade policy more flexible and focused, we wanted to involve the business sector more closely, and we wanted to make the whole process more accountable.

Australia, as I said, is in a coalition of one. To succeed overseas, we have to be hungry and we have to be organised. Being organised includes getting the right balance between the bilateral, regional and multilateral strands of market access work.

This Government said we would focus more on bilateral efforts. Building strong bilateral relationships underpins efforts on a regional and multilateral basis. They are the key foundations on which we can build in political and in trade terms.

The bilateral level is the hard grind of negotiating better access for Australian goods, services and investment - country by country, market by market. Bilateral efforts involve market access, market development and promotion.

You can't, as a trading middleweight, batter down all the doors on your own. But if you pick your markets and your issues, if you're tough-minded about national self-interest and your negotiating assets, you can in particular areas achieve faster results.

Targeted, integrated approaches which are concentrated on particular sectors in a single or regional market, can establish and strengthen Australia's commercial presence and improve exports.

In eight months of government, we've already proved that bilateral efforts are valuable. We've got better access for milk into Hong Kong, fruit into the Philippines and kangaroo meat into France. We've expanded air services with Indonesia, Argentina and South Africa. We've opened the Taiwan market to industries previously excluded, including fully-assembled motor vehicles and other manufactures.

Bilateral efforts will be a key part of an important initiative - the Supermarket to Asia program.

Supermarket to Asia brings together business and public sector people involved in the food industry chain from paddock to plate.

It will allow Australia for the first time to mobilise its full resources as a high-quality food producer. I will be taking a strong role in respect of the Council's work on market access and promotion in particular.

Bilateral and multilateral efforts are mutually supportive. At the multilateral level, the Government's goals have been to prevent any backsliding on Uruguay Round commitments, to secure better results for services trade, and new negotiations for goods, and to lay the foundation for a major new push on multilateral trade reform.

The Uruguay Round resulted in a big package of benefits for Australia. The Industry Commission has estimated that the new market access from the Uruguay Round for Australia will be worth about $5 billion a year when fully implemented.

This was much more than just win-win for Australia. The cuts we made were reciprocated many times over by those made by others.

About 43 per cent of Australia's industrial exports will now face zero tariffs, and tariffs on more than 1300 lines were cut by our trading partners at our request. And our own domestic reform program meant that out of a total of 4000 tariff lines, in only 20 tariff lines did reductions go beyond microeconomic reform tariff cuts already committed to in Australia's domestic reform agenda.

In addition, and importantly for our exporters, rules and disciplines were extended to non-tariff measures in agriculture, and to trade in services and intellectual property.

The World Trade Organization's inaugural Ministerial meeting in Singapore next month is a key strategic opportunity to point the WTO towards further across-the-board trade liberalisation, not only for goods but services and investment as well.

That is why the Government is taking advantage now of the Singapore WTO meeting to set the foundations for another round of multilateral trade negotiations. Our aim is once again to win more reciprocal benefits from the rest of the world just as we did in the Uruguay Round.

The Government, including with my Cairns Group colleagues, has worked very hard to ensure that Australia's interests are at the forefront of the agenda at Singapore. The WTO decision two weeks ago, to get on with the renewed agriculture talks in 1999 which were mandated by the Uruguay Round, was a major result.

It was a major result because the challenges to free trade are still significant and will remain so - there is resistance to liberalisation on many fronts. That is why the Government is working to help Singapore in setting the WTO firmly on the road to holding another comprehensive global trade round before the end of the century.

Complementary to both bilateral and multilateral efforts are efforts at the regional level. The focus of the Government's attention is, of course, APEC - acknowledged as the principal forum for advancing a wide range of regional economic and trade co-operation issues.

Not surprisingly the trade liberalisation element of APEC's agenda has drawn the most public and media attention.

There will be great interest in what sort of start APEC can make this year in turning the ambitious rhetoric of Bogor in 1994 and Osaka in 1995 into practical implementation in 1996.

With only a few days to go before the annual Ministerial and Leaders meetings in the Philippines I would like to make a couple of points about expectations.

We need to be realistic about what APEC can do in its first implementation year, and looking ahead, what we can expect over the next two or three years.

We are encouraged by how far APEC economies have come in addressing the very complex task of recording their APEC liberalisation targets in Individual Action Plans (IAPs).

The IAPs themselves will become valuable documents in enhancing the transparency of the APEC economies. And I would encourage you all to ensure that your market access concerns are well understood by my department. It will be continuing to build up our market access profiles which establish our priorities with our APEC partners.

But it is the content of the IAPs, of course, which will be the subject of intense analysis. I would have to say to you that they are a mixed bag. Some are very good but some are not.

As you may be aware I tabled our IAP today in Parliament. I believe it demonstrates Australia's commitment to the APEC process. But equally we want to see others fully engaged.

So the overall message I would like to leave you with today, and which we will be pressing in Manila and Subic, is that APEC has made a good - if modest - start to the process of liberalisation, but we must do better by this time next year. And we need to put in place mechanisms to ensure that we can secure that outcome.

Our ongoing consultations with the business community, and particularly with our key exporters, will be a critical input into ensuring that we have our priorities right.

At the same time I think that APEC will be well placed to issue a strong call to the WTO, when it meets at ministerial level in Singapore in a few weeks time, to lift its own level of ambition and to try to match that of APEC.

Market Development and Export Promotion

The last key part of the trade policy task is market development and promotion - which is principally the field of Austrade. By the end of this year the Government will have carried out its election commitment of giving Austrade a sharper strategic focus.

The Government's new mandate for Austrade will deliver

. a greater emphasis on small and medium enterprises, including greater access to a redesigned Export Market Development Grants Scheme

. a greater emphasis on regional Australia, including an enhanced presence in Cairns, Darwin, Newcastle and Wollongong, plus a new presence in Rockhampton

. more effort on developing an export culture

. stronger alliances with service providers in the private sector, industry associations, and State and Territory governments

. and a strengthened role in inwards and outwards investment.

By mid-December Austrade will have completed a major restructuring to carry out that mandate. Its core services won't change - what will change is Austrade will be delivering its services in a sharper and more focused way to provide assistance to our exporters.

Policy Integration

Ladies and gentlemen, the lesson we've been able to confirm since coming to office is that you have to use the policy tools I have just referred to - bilateral, regional, multilateral, and market development - in an integrated way, targeted according to the particular circumstance.

Taiwan is the classic example of integrating the multilateral and bilateral tools. We achieved a 30 million dollar-a-year trade package in bilateral negotiations with Taiwan, in the course of negotiations for its membership of the WTO. The package remedies long-standing discrimination against Australian agricultural produce, and opens access to Australian cars and other manufactures.

I would like to highlight three steps we have taken towards building a better system - towards getting the various arms of government to act together in a way it never has before.

First, I have set up the bilateral Market Development Task Force. Its job is to drive better coordination and prioritisation of efforts by all government agencies in bilateral market access, market development and trade promotion. By mid-December it will have considered 25 key markets and it will have developed 6-month rolling action plans for each of them.

It will focus on delivering practical outcomes for Australian exporters, many of whom raise concerns with me, or with officials here and overseas.

Second, I am injecting more public accountability into the Government's trade effort by presenting the first annual Trade Outcomes and Objectives Statement to Parliament early next year. The Statement will allow Australians to see what results we have achieved for business, and it will set down benchmarks against which we can be measured the following year.

Third, the Government has decided to better link domestic and external policy by requiring a Trade Impact Assessment to be included in Cabinet Submissions which have a direct bearing on export performance. This last decision is a milestone - it recognises that in a globalising world there are no clear boundaries between the domestic economy and the world economy.

The Business Perspective

That brings me to the point that it is business people who know what is really happening in their markets.

That is why the Government has moved quickly to put into practice its election commitment to work more closely with business, through revamping our various consultative mechanisms.

We have done that because we believe it is export champions like the candidates for tonight's awards who have the best insights into how Australia can achieve export success over the long term. As export champions they are creative, they thrive on competition, and above all they know they have to export to survive in a world of change.

Of course, the Australian Export Awards have been recognising Australia's best exporters since 1963. Over 33 years the awards have recognised more than 1,000 companies which are the pick of the export crop.

Previous export winners have ranged from the very large, like BHP, to the very small. And the products recognised by the awards have been equally wide in their range - from the traditional, like minerals and beef, to the unusual, like a key safe made in Canberra now being used in the Pentagon and World Bank.

These awards create export role models for the rest of the business community. Role models that show how good planning, good products and plenty of determination and tenacity can beat the best in the world.

In 1996, the 39 finalists in the awards represent everything from high tech electronic products to the clever use of natural resources. Among the finalists are those dealing with camels and coal, stainless steel and seagoing ferries. The finalists have made mirrors for cars, hops for beer and asparagus for the Japanese.

Conclusion

Ladies and gentlemen, as we further develop our export culture let us salute our export heros here tonight. Congratulations to them and good hunting in the export area.

(ends)

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