Australian Department of Foreign Affairs and Trade

Speech by the Australian Deputy Prime Minister and Minister for Trade, The Hon Tim Fischer at the launch of the book, Australian Trade Policy 1965-1997, State Library of NSW

Sydney, 15 June 1998

Thank you, John Iremonger. And thanks also to Professor Richard Snape, Lisa Gropp and Tas Luttrell for inviting me to speak at the launch of your book.

It's a pleasure to have the opportunity to talk today about an aspect of my work which I find requires much practice but, I'm glad to say, is ultimately satisfying - and that is, trade policy. It takes patience because issues can take many years to yield results. The satisfaction comes from making a difference, from creating the best possible environment in which Australians can prosper.

While trade policy may seem rather dull to outsiders, those involved know it is a challenging and exciting profession. I say 'challenging'' because, in an unlikely worst case scenario, the mistakes of trade policy makers can result in devastating wars! At a less extreme level, there is always the potential for trade wars - and as one commentator has warned: 'a trade war is only a shade more rational than a nuclear war, harder to launch, and nearly as unpalatable'.

It is the lack of widespread public understanding about trade policy matters that leads me particularly to welcome this documentary history on Australian Trade Policy from 1965 to 1997, which is being launched today. The decision by the Department of Foreign Affairs and Trade to help underwrite publication costs through the purchase of several hundred copies is a clear indication of regard for the book.

The authors - Richard, Lisa and Tas - should be commended for putting their considerable efforts into creating this useful reference tool. Indeed, I understand that Tas Luttrell stored reference documents in his garage for some years while his car languished outside in the elements - I ask, what greater commitment can be shown by an Australian male?

Trade policy since 1965 - growth and change

This book documents dramatic changes in Australia's approach to trade and industry policy, as well as its exchange rate and foreign investment policies. Through public documents, it charts the country's shift to an increasingly open economy.

We have come a long way since the mid-1960s. A few statistics illustrate just how far we've come (for the academically minded among you, I'm using constant 1989-90 prices here).

In 1966/67 Australian imports and exports totaled $42 billion. At that time exports contributed around 11% to our gross domestic product. But by 1996-97 imports and exports totaled $212 billion, with exports comprising nearly one quarter of gross domestic product! Its not hard to see that a lot of Australian jobs come from our overseas trade.

This economic evolution has not been easy. It is not surprising, then, that one of the themes to emerge from this collection of documents is the sense of struggle surrounding trade reform. Part of this process is informing the public about what is happening and why. For this reason I have launched the annual Trade Outcomes and Objectives Statement and promoted other initiatives which explain the benefits of trade liberalisation. The Market Development Taskforce is another initiative established to create better linkages between government and the people we serve.

Communicating the benefits of trade is not always an easy task and the recent rise in simplistic protectionist rhetoric only underscores the difficult job ahead. But I want to place firmly on the record here that this Government recognises the vital importance to the Australian economy of ongoing trade liberalisation and building our export base. The Government is committed to this process which it sees as one of the pillars of economic growth and job creation for all Australians.

International Trade Reform - the fight goes on

In the international arena, Australia's commitment to the multilateral trading system has paralleled changes in its domestic policies. We've come a long way from the prevailing view in the 1960s and 1970s, when success in international trade negotiations tended to be measured by how little protection Australia `gave up'.

A bolder approach emerged in the early 1980s in response to failed multilateral negotiations. Trade Minister Doug Anthony challenged GATT Ministers when he said that all countries had contributed to 'this sorry state of affairs' and all were responsible for fixing it. Australia's efforts led to the formation of the Cairns Group and Australia also played a leading role in the Uruguay Round.

The results speak for themselves. The Uruguay Round outcome for industrial and agricultural products has been estimated by the Industry Commission to add about $3.7 billion a year to Australia's income - and $5 billion a year when commitments are fully implemented. It has also estimated that liberalisation of services trade will deliver $5 billion a year to Australia's exports.

I welcome the emphasis the authors have put on bilateral and regional arrangements. It is useful to remember that APEC was created as a bulwark to a then-failing Uruguay Round. APEC provides a vital forum for discussing regional economic problems and adding momentum to regional trade liberalisation. In many areas there is also a close linkage with WTO work.

Our trading future - more change, more challenges

This book on the history of Australian trade policy will be of particular use to new generations of trade warriors, who should understand where we have come from as they develop strategies for our future.

We are entering another exciting period for trade policy. At the recent WTO Ministerial Conference I attended in Geneva, Trade Ministers were able to set the basis for future negotiations with a preparatory timetable starting as soon as September. This process will lay the foundation for a WTO decision, hopefully in late 1999, on the content of a future negotiating round. And negotiations should begin within 18 months.

We should see negotiations in all trade sectors - ranging from unprocessed agricultural products and minerals through to high-technology manufactures and all services. It is also possible that there will be agreement to negotiate competition and investment rules. Options for work on electronic commerce are now being considered.

The figures at stake are huge. Global merchandise trade in 1996 was valued at US$ 5,100 billion and services trade at $1,260 billion - and, of course, these are constantly increasing. Global trade in agricultural products in 1996 amounted to almost US$ 600 billion - that is a big market in an area where we are highly competitive. Better access will deliver massive benefits to the Australian economy.

Regional Developments

We cannot talk about trade policy, however, without touching on regional circumstances. The Asia Pacific region has been tested thoroughly by the economic instablity in East Asia but the fundamental economic and security architecture of the region is in good shape. Stronger bilateral relationships, effective regional cooperation through APEC, and the implementation of IMF assistance packages are all laying the groundwork for recovery over the longer term. And these efforts are also being supported through work in the WTO.

Australia, I am happy to say, has weathered this regional economic instability relatively well. Next year, we will still be one of the fastest growing economies in the industrialised world. But our high level of regional integration means our export growth has been, and will continue to be, affected.

To minimise any negative impact on our exporters, the Government - in close consultation with the private sector - is refining and diversifying our trade strategies in Asia and beyond.

We are ensuring the availability of appropriate levels of trade credit and insurance, through short-term National Interest insurance cover for exports to Korea and Indonesia. We are also providing information and identifying opportunities through Austrade's Asia Crisis Centre and Internet site, with alerts and advice updated weekly. We are holding 'exporter summits' where industry representatives can discuss with Ministers the impacts on Australian firms and how Government can assist.

Growing demand from the large US and EU markets, and markets in the Middle East, South Africa and South Asia, should help offset the impact of slower exports to East Asia. And the Government is posting wins in continuing bilateral negotiations on reducing trade barriers.

Conclusion

I want to conclude by reminding you of the old Chinese curse: "May you live in interesting times." For most of us, especially in our own region, things have been a little too interesting recently! But, as this book clearly shows, change is a constant factor and we must react to it and help shape it. There has never been an option for Australia to stop the world so it could get off. When the next documentary history of Australian Trade Policy is pulled together 20 or 30 years from now, it will no doubt reflect the next chapters of change and struggle in international trade reform that inevitably lie ahead.