Speech
Australian Minister for Trade, Mark Vaile
14 July 2000
Speech to the Darwin Press Club
Darwin and the Northern Territory - The Exports Gateway to Asia
(Check Against Delivery)
Introduction
Thank you, Lorelia Fong Lim, for the introduction.
I'm very pleased to be here today. It's great to be in Darwin again to experience the tremendous spirit and vitality of this city and the Northern Territory as a whole.
Through its geographical proximity and historical connections, the Northern Territory has a valuable role to play, and many rewards to reap, in leading Australia's economic integration in the Asia Pacific. And, of course, Darwin has an important part to play in that process as a gateway to Asia.
Darwin's role as a gateway to Asia is well understood by the NT Government of Mr Burke and his colleagues, particularly his Minister for Asian Relations and Trade, Mr Manzie. Their regular high level visits to countries in the region and showcase events like the NT Expo are excellent ways to capitalise on the economic recovery of our Asian neighbours.
Regional and multilateral developments - APEC, AFTA-CER, WTO
And while talking about showcasing the Northern Territory, I must at this point reiterate my appreciation for the terrific job that the NT did in assisting me to host the APEC meeting for Ministers Responsible for Trade last month. It was a large and demanding task, drawing on the best Darwin suppliers had to offer.
They met the challenge admirably, creating a favourable impression on the 400-odd delegates to the meeting. The meeting itself was held in a relaxed and friendly atmosphere, both inside the remarkably refurbished Chan Building and in the broader community in Darwin.
The decisions coming out of the APEC Trade Ministers meeting represent further progress in achieving APEC's objectives including, most importantly, making a call for the early launch of a new round of WTO trade negotiations.
As you know, the 21 APEC economies accounted for 73 per cent of Australia's merchandise exports in 1999. They also accounted for over 78 per cent of Northern Territory's exports last year. I would encourage Northern Territory businesses, already well positioned to take best advantage of our trade links, to access the BizAPEC site.
Another exciting prospect that holds great potential for increased trade with our near neighbours is a free trade area between ASEAN and Australia and New Zealand, the two members of CER - standing for Closer Economic Relations. Last October, I agreed with my ASEAN and New Zealand colleagues to establish a high-level task force to study the feasibility of establishing an AFTA-CER free trade area (FTA) by 2010.
This initiative is a key priority for the Government this year. My hope and expectation are that the task force is likely to recommend that an AFTA-CER FTA would be feasible and that it would benefit all parties. A recently completed study by the Centre for International Economics supports this conclusion.
The attraction of the AFTA-CER FTA proposal is that it offers an additional avenue for pursuing economic integration with our region, and fostering trade liberalisation.
Australia is committed to an early launch of a new round of world trade negotiations, but prospects for a launch this year are uncertain.
The US and EU both remain publicly committed to working towards a new round launch. But it is not yet clear whether either of these two major players is prepared to make the compromises necessary for success, including to persuade developing countries that their concerns are being addressed.
The benefits of world trade liberalisation
As a major trading and exporting region, the NT has as much, and possibly more, to gain from substantial liberalisation of world trade than other states and territories.
On a per capita basis, the Territory exports around four times the national average. A number of its principal industries - such as minerals and energy, live cattle, tourism and tropical fruit - are highly export-oriented. Trade is a major contributor to the impressive growth rate of the Northern Territory economy.
The Northern Territory shares with most of regional Australia a disproportionate reliance on international trade for promoting prosperity and job creation. The importance of trade to regional Australia is something I have stressed on many occasions. This is not a new idea, but it seems to be forgotten or ignored in some quarters where protectionist sentiment has taken hold. If such thinking were to be followed through, that would only be regional Australia's loss in the long run.
I understand how such thinking has its roots in the changes wrought by globalisation of the international economy in recent years, which has placed some industries under considerable pressure.
But it is vital to recognise that the march of globalisation cannot be readily stopped by erecting protectionist walls. We will not only be worse off - as the world found during the last major bout of global protectionism in the Great Depression. We will also fail to reap the benefits that engagement with the global economy offers us, as many businesses across all sectors across Australia have managed to do in winning new export markets.
To put some figures on the importance of trade to regional Australia: as many as one in four jobs in regional Australia depends on exports, compared to one in five in the capital cities. And the picture for wages and incomes is even more striking: a comparison of wages and salaries paid by exporters and non-exporters in manufacturing enterprises, shows that exporters pay on average 25% more than non-exporters, and that the figure is nearly 50% in regional areas.
Moreover, regional Australia derives around a third of its income from exports. For the Northern Territory, my Department estimates that 45% of all income accruing from labour and capital comes from exports.
In this context, I have asked the Department of Foreign Affairs and Trade to give priority to enhancing public awareness of the benefits of trade for the Australian community, and for regional areas in particular.
Part of this effort involves the publications of brochures on the role and benefits of trade for individual regions across Australia. I am pleased to announce the launch today of a new brochure on the Northern Territory as the latest in this series of "Exporting to the World" brochures.
The brochures underline the contribution of trade to regional Australia, and highlight recent market access gains that can benefit industries in each region.
They also showcase a number of successful local exporters representing a variety of sectors and export markets. The aim is to help foster an export culture as well as to rekindle the pride that people in regional Australia, and the rest of the country, take in their export industries.
Trade successes in the Northern Territory
The Northern Territory brochure points to the success of companies like NT Pre-Stressing, which is undertaking projects worth around $2 1/2 million in the Middle East this year, with prospects for expansion in 2001.
Powercorp is another Darwin company forging an international reputation: its automation and control systems are helping power stations in South East Asia, Japan and the Pacific maximise efficiency and reliability
Such companies are just two of a new wave of Territory firms winning export sales in non-traditional sectors. The Information Technology and Telecommunications industry has been prominent in this regard - companies like Octa4, Electronis Services, CSM and North Australian Radio and Electronic Services. They are also part of Australia's burgeoning service export sector, which has more than doubled in value over the last decade. Services exports have grown at an average rate of 10 per cent a year since 1989 and now account for close to one quarter of Australia's total export income.
Services have likewise been an important contributor to the Northern Territory's export growth. Tourism has, not surprisingly, been at the forefront, given the wonderful natural attractions you have to offer.
Tourism forms the bulk of Territory's travel services exports which have expanded at over 14% annually since 1992-93.
Travel North in Katherine, mentioned in the brochure, is just one of a number of enterprising operators in the Territory who have been generating significant export earnings from services to overseas visitors.
Another Katherine company, IA and MJ Golding, represents another growth sector in the Territory, packaging and exporting mangoes to Asia, the Middle East and Europe.
Australia had a good market access win for mangoes last December, when Japan approved access for four additional varieties of mangoes from Australia. This decision has the potential to boost mango exports to Japan five times over the next couple of years, returning around $10 million to Australian growers.
As well as the live cattle trade, which firms like Wallco and others have developed into a $100 million export industry, a variety of local businesses are part of the nationwide trend of developing niche rural products for overseas markets. Such products include camels, dates and hydroponic lettuce from Alice Springs, or bush-tucker exported by Australian Food Merchants.
Conclusion
All in all, the outlook for Northern Territory appears very healthy, both in terms of the spectrum of firms growing through exports, and the prospects for traditional sectors like live cattle and minerals and energy.
The Territory is well positioned to take advantage of the economic recovery in the East Asian region, which has surprised many observers by its strength and speed over the last 12 months. In the longer term, the Darwin's role as a transport hub, through expansion of the Port and the Darwin to Adelaide rail link, can only strengthen the Territory's position as a gateway for Australian trade to East Asia.