Speech

Australian Minister for Trade, Mark Vaile

5 April 2000

TRADE OUTCOMES AND OBJECTIVES 2000 STATEMENT TO PARLIAMENT

Mr Speaker:

I seek leave of the House to make a statement on trade policy and to table the Government's fourth annual Trade Outcomes and Objectives Statement, or TOOS. TOOS is a practical demonstration of the Coalition Government's determination to lift our trade performance and to keep the Australian people fully informed of trade developments.

This year's Statement paints a promising picture for Australian exporters. Exports recovered through 1999 from the effects of the East Asian economic crisis with total exports rising, in trend terms, in each of the last eight months of the year. The February 2000 trade figures released last Thursday confirmed what is now a ten month trend, with exports 15 per cent above their level of February 1999.

One of the things that helped us through a tough trading environment last year was the diversified base of Australian exports. As the TOOS outlines, Australian exports are now divided fairly equally across agriculture, minerals, manufactures and services. And while low commodity prices and a stronger Australian dollar took the edge off our traditional commodity exports in 1999, exports of services and manufactures were each up by six per cent.

The international economic outlook described in this year's Statement is the best we've seen since the start of the East Asian economic crisis. Forecasters expect a more balanced level of growth among the major economic regions, and a global economic growth rate exceeding 3 per cent. Growth in world trade is forecast to strengthen to around 6 per cent in 2000, up by more than 2 percentage points on the previous two years.

All this is very good news for Australian exporters, particularly the boost from increasing demand in East Asia and recovery in the region's exports. Australia's exports to East Asia are now growing strongly, up 37 per cent on their level of a year ago. But to take advantage of these developments, Australia must maintain its competitive edge.

The very fact that Australia was able to outperform almost every other OECD country during the Asian economic crisis shows just how far the Government has moved our country towards the cutting edge of global competitiveness.

The Government will be looking to make Australia's competitive position even stronger through the introduction of the New Tax System on 1 July. Our total reform package, including the GST and reforms to the business tax system, will stimulate stronger investment and boost growth in key export sectors. The abolition of old wholesale and state taxes, as well as reform of fuel excises, will lift a $3.5 billion burden from the shoulders of Australian exporters.

Our political opponents still have no policy alternative. For example, they have no alternative to offer the owner of Malibu Boats in Albury who told me in February that, with the implementation of the GST on 1 July 2000, he will be able to sell his boats at 1997 prices.

Mr Speaker, TOOS 2000 outlines how the Coalition Government will continue our highly successful, multi-pronged strategy of boosting sales of Australian goods and services on world markets.

The World Trade Organisation remains the primary vehicle for Australia to advance its broadly based and geographically diverse trade interests. The Government remains committed to launching a new market access-focused round of multilateral trade negotiations at the earliest opportunity. In the meantime, we are pushing ahead on the mandated WTO negotiations on services and agriculture, and will be working towards the incorporation of these negotiations in a broader WTO round.

Our WTO agenda also involves improvement of our capacity to utilise the dispute settlement process and our negotiations on bringing new members into the WTO.

Australia continues to actively pursue its rights and defend its interests in WTO dispute settlement. In 1999, complaints were initiated by Australia against US safeguard measures on lamb and Korean restrictions on imported beef. We now have a WTO panel established in the lamb case, and next month we will receive the panel report on the Korea beef case. And we continue to work for mutually satisfactory outcomes on cases relating to automotive leather and salmon.

Australia stands to reap big gains from the expanded membership of the WTO. Late last week, Australia reached an in-principle agreement on market access for Saudi Arabia's joining of the WTO. This deal provides the basis for export growth beyond the $1 billion per year mark achieved for the first time in 1999. It builds on our success in concluding market access negotiations with nine trading partners last year, most importantly China.

Mr Speaker

Regionally, we also have a busy calendar in the coming year. APEC offers opportunities for rebuilding political momentum for a WTO round, and for advancing our business-oriented agenda on such issues as reducing compliance costs, improving the ease of business travel, improving access to information and developing sensible and transparent regulatory environments. Australia will have an important opportunity to advance our Asia-Pacific trade agenda this year when I host the APEC Trade Ministers' Meeting in Darwin in June.

The proposal for a free trade area by 2010 between the ASEAN countries and the Closer Economic Relations (CER) partners Australian and New Zealand is a key priority this year. My predecessor, Tim Fischer, is doing an excellent job as Australia's representative on the AFTA-CER task force which will report its recommendations in October this year. I also welcome the enthusiastic endorsement this proposal has received from Australian business groups.

This year we will continue the bilateral strategies to increase Australian exports that have been the hallmark of our Government's trade policies. I've already led a successful visit by an Australian trade delegation to Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates in the Middle East, and visits to other key markets are planned for later this year.

The Market Development Task Force will continue to coordinate a whole-of-Government approach to areas of significant export potential for Australia. And market access teams in the automotive, textile, clothing and footwear, information industries, processed foods and agriculture sectors will pursue new opportunities in 2000.

Austrade continues to play a major role in promoting Australian products abroad, and in helping Australian companies identify and take advantage of international opportunities. In particular, Austrade has broadened its operations into rural and regional Australia through the innovative TradeStart and Export Access programmes, giving those outside metropolitan areas the chance to move their business into international markets. Austrade is also helping Australian firms position themselves for the growth of e-commerce.

The Export Finance and Insurance Corporation (EFIC) will continue to complement activities of the commercial market by providing exporters with a range of internationally competitive insurance and finance products.

Mr Speaker

The importance of international trade to regional Australia, and of exporters in regional Australia to our national trade effort, are key messages from this year's TOOS. Regional Australia has around one-third of Australia's workforce, and generates more than half of our exports. One in four jobs in regional Australia depends on exports, compared to a figure of around one in five jobs nationally.

To make this important information more widely known in our community, my Department will be issuing a series of brochures for individual regions across Australia this year, which will highlight a number of successful exporters in each region. They illustrate the importance of exporters in local economies, as well as how the Government's efforts to open up overseas markets can benefit individual regions.

Mr Speaker, the 2000 Trade Outcomes and Objectives Statement strongly reaffirms the Government's commitment to an outward looking and internationally competitive trading position for Australia. The effort put in by our exporters, in the cities and in the bush, demands the recognition and enthusiastic support of all Australians.

TOOS 2000 shows how our Government aims to boost export opportunities for Australia, and to win greater market access at every level multilaterally, regionally and bilaterally. The Statement is an indispensable tool for anyone who wants to learn more about Australia's present and future trade environment.

I commend it to the House, and I table the document and my statement.