Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, at the APEC Business Forum, Sydney, 30 April 1997

Introduction

I welcome the opportunity to open this discussion.

As you know, the Government established this Forum last year to give business the opportunity to help shape our APEC policies.

I am pleased that so many distinguished business representatives have been able to attend. I thank, in particular, Bruce Vaughan and his steering committee for their work in organising this meeting.

Special thanks are also due to our three representatives on the APEC Business Advisory Council, or ABAC - Imelda Roche, Michael Crouch and Malcolm Kinnaird. As you know, ABAC has played an important role in communicating the views of business to APEC leaders.

The APEC "Report Card" that you have in your papers provides a summary of last year's achievements, and outlines our APEC priorities for 1997.

I encourage you to be as free and frank as possible today as it is ultimately for the benefit of Australian business that we are devoting such effort to APEC.

APEC and Australia's Integrated Trade Policy

As you are aware, the international trading environment is changing at an unprecedented pace.

In the Asia-Pacific, the second half of this century has seen one of the most extraordinary industrial transformations in economic history.

And it is proceeding in the context of rapid technological change, particularly in information technology.

Huge opportunities continue to open up for us as a result. At the same time, competition is intensifying as other economies increase their productivity and cast aside the shackles of high tariffs, protected state enterprises and restrictive domestic regulations.

The Government has adopted a deliberately pragmatic and flexible approach to trade policy. Our trade strategy is aimed at creating jobs and lifting the sustainable rate of growth in Australia. And we will do this by securing the best possible opportunities for Australian business trading and investing overseas.

We have therefore created an integrated trade policy which sees bilateral, regional and multilateral approaches as complementary, and which is flexible enough to make the most of opportunities as they arise.

We continue to accord high priority to multilateral trade policy through the World Trade Organisation, and to our regional policy through APEC.

But we have also been addressing previously neglected areas by pursuing bilateral market access issues vigorously and addressing key domestic impediments to trade such as the labour market.

The Trade Outcomes and Objectives Statement, which I tabled in Parliament in February, set out clear benchmarks against which our trade performance in particular markets can be assessed.

It will report, on an annual basis, our progress in achieving greater market access and development.

We have also set up a Market Development Task Force to coordinate our bilateral activities and to target realistic priorities in market access and trade promotion.

Let me give you two examples of our trade policy working in practice.

The Information Technology Agreement, supported by APEC, and negotiated at the WTO Ministerial last December, will lead to reductions in tariffs by more than 40 economies, including our key regional trading partners. It will help underpin jobs for the 30,000 workers employed in this industry and create new export and employment opportunities.

And my recent working visit to the Middle East illustrates the gains which can be won on a bilateral basis. For instance, I was able to get a solid commitment from Jordan to liberalise rice and sugar imports, plus improved access for live sheep.

APEC: the 1996 Outcomes

APEC is the key to our regional trade policy - and it is supplemented by the developing AFTA-CER linkages, and the dialogue between CER and Mercosur.

APEC's biggest achievement for 1996 was to begin implementing the goals of free and open trade and investment by 2010 and 2020. All economies produced an Individual Action Plan (or IAP) setting out their initial steps towards their Bogor commitments.

The 1996 IAPs vary a good deal in terms of quality and are essentially a modest start. They reflected the existing momentum of trade liberalisation in the region, but also included some new positive commitments.

Among the major highlights, China will reduce its simple average tariff from 23 per cent to 15 per cent by 2000, and Hong Kong and Singapore will progressively bind their tariffs to zero.

There are some highly specific gains as well. The Philippines will lift import restrictions on coal. Japan will introduce new quarantine measures expected to expedite Australian exports of fruit and flowers. Singapore will remove commercial presence restrictions on engineers and architects.

APEC also made significant gains in trade facilitation, by tackling key administrative impediments to trade and investment.

Facilitating business travel, which is a priority for this Government, is a good example.

In Manila last November, Australia, Korea and the Philippines announced a trial of an APEC Business Travel Card, simplifying visa and entry arrangements. The trial is set to start and we expect it will be progressively extended to other APEC economies. APEC has also produced a Business Travel Handbook.

APEC has taken other important steps forward: tariff data is being made available on the Internet free of charge; tariff classifications have been harmonised; and a further edition of the Guide to Investment Regimes of APEC Member Economies has been released. Progress was also made towards a paper-less customs regime in the APEC region.

Members have agreed to align APEC standards with agreed international standards in sectors ranging from food labelling to refrigerators. They have agreed on an umbrella mutual recognition arrangement on food.

In APEC's third major arm of economic and technical cooperation, APEC's achievements range quite widely. An APEC Energy Research Centre was established in Tokyo to promote research on the energy outlook and a detailed study on impediments to tourism has been released.

Addressing the region's major infrastructure development needs is another key area and one that we will be discussing today.

Links with the WTO

We do not pursue our regional policies in APEC in isolation. They form part of our integrated trade strategy, interacting with bilateral and multilateral objectives.

In this light, one of APEC's most significant achievements for 1996 was to provide further impetus to the inaugural Ministerial Meeting of the World Trade Organisation, held in Singapore in December.

The most specific contribution which APEC made was to facilitate the Information Technology Agreement which I have already mentioned.

But it also contributed to outcomes in Singapore paving the way for wide-ranging trade negotiations by the end of the decade. APEC Trade MInisters will continue to discuss how APEC can add value to the WTO.

APEC Priorities for 1997

Our priorities for this year in APEC will benefit from business feedback on where we should target and fine-tune our efforts.

Our key priority for 1997 is to maintain the momentum of liberalisation, especially by securing further improvement in members' IAPs. This is important given the increasing signs of "trade liberalisation fatigue".

For a start, many APEC economies should be able to improve in the areas of telecoms and information technology following the WTO agreements in these sectors. Depending on the outcome of the current WTO negotiations on financial services, they may also be able to make changes there.

But overall, progress will be challenging with every yard we make a hard yard - but an important one.

The Government will do its utmost to gain improved access in areas of key interest to us.

We will, for example, use the IAP process to argue that barriers which our industry faces in markets like Malaysia, Thailand, Indonesia and Korea need to be addressed.

We already have a substantial list of market access barriers as a result of our work on the APEC Market Access Profiles and other initiatives such as the Market Development Task Force. Again, in these cases and others like them, we would welcome feedback from industry on what your key market access priorities are.

The Government believes it is essential that APEC Trade Ministers, in their meeting in Montreal next week, commit unequivocally to reinvigorating the IAP process. It is vital that, by the time APEC Leaders meet in Vancouver in November, they are able to point to significant improvements in IAPs. We have to maintain the momentum of regional trade liberalisation and the Government is committed to doing just that.

We also aim to give a hearty push to the work initiated by Leaders at their Subic Bay meeting when they instructed Ministers to identify sectors for early regional liberalisation.

Many of you will be aware that we have been conducting industry consultations on the concept of liberalisation on a sectoral basis. Energy is a top priority. It was proposed for early voluntary liberalisation by the Prime Minister, Mr Howard, in August last year. And we also see prospects for sectoral liberalisation in other areas, such as processed food.

Sectoral liberalisation is likely to be a challenging process, but one from which we should not shrink. The differences in the export mix of APEC economies means that it will be difficult to secure agreement on specific sectors, except as part of an overall package.

Nevertheless, some economies, like the United States are strongly committed to a sectoral approach, building on the success of the ITA.

On the trade facilitation front, our immediate priority this year is to put the APEC Business Travel Card arrangements in place and extend it to other countries.

We are also working on new deliverables for business. Some of the ideas emerging offer exciting possibilities.

For example, the United States has proposed a "Trade Mark Mailbox" which would simplify procedures for businesses filing trade mark applications in more than one APEC economy.

In standards, we are looking to develop new mutual recognition arrangements for conformity assessment in a number of areas, following the umbrella arrangement on food. Safety and environmental protection standards for road vehicles and parts, and standards for telecommunications equipment are among the areas we are targeting.

In APEC's third arm of economic and technical cooperation, I believe that priorities need to be much more clearly defined. We are participating actively in this work, and will ensure that business goals and objectives in this area are reflected.

Australia is also giving greater priority to APEC-wide discussion and research on the gains from trade and investment liberalisation. There are some salutory lessons here, both for ourselves and for other economies.

We have proposed, with good support, that work on the impact of trade liberalisation be a focus of discussion at the Trade Ministers Meeting in May. And we have begun some detailed research of our own looking at the impact of trade liberalisation on our economy.

Conclusion

Although we should not expect miracles from APEC in the short term, Australia will be in there pushing for outcomes which will not only be in our national interest, but the region's interests as well. APEC is an important force in maintaining regional trade liberalisation and it also feeds usefully into the bilateral and multilateral parts of our trade policy.

We attach the highest priority to business involvement in APEC and I see this Forum today as an important part of that involvement.

For you, as business representatives, the discussion which follows is an opportunity to tell us whether we are on the right track. I look forward to hearing your contributions.