Speech
at the launch of the 2002 Trade Outcomes and Objectives Statement
National Press Club, Canberra, 10 April 2002
(Check Against Delivery)
2002 Trade Outcomes and Objectives Statement
Ambassadors, Board members of the National Press Club, Members
of my Trade Policy Advisory Council,
Exporters and Potential Exporters,
Ladies and Gentlemen,
During the last 12 months, since I presented the 2001 Trade Outcomes
and Objectives statement, the world has changed dramatically - politically,
strategically and economically.
Economic management and reform - foundations for success
Australians whether on the sporting field or in the international
trade arena are used to winning against the odds and we'll keep
on winning.
Certainly a competitive Australian dollar has helped. And, yes,
strong prices for our commodoties have also helped.
But most importantly, our export success is based on a very strong
domestic economy, which as a result of our reform agenda, is one
of the most competitive economies in the world.
We've completely revamped an outdated and plainly unfair taxation
system. The new tax system removes a burden of $3.5 billion, every
year, off the back of our exporting businesses.
We've reformed the labour market and industrial relations. We
have taken a hide-bound waterfront and through a determined reform
process lifted productivity to international standards.
We are determined to entitle employees to secret ballots, to strengthen
trade practices law against secondary boycotts, and to create fair
dismissal laws.
These are all policies that have directly contributed to our strong
export performance.
We've restrained government spending and retired public sector
debt. In fact we've paid off almost $60 billion worth of Labor's
legacy of debt which sees us with one of the lowest debt to GDP
ratios in the OECD.
Our record is clear:
-
lower interest rates - 6.5% compared to 22% under labor
-
lower inflation - 3% compared to 10% under labor
-
lower unemployment - 6.7% compared to more than 11% under Labor
- by lowering Labor's debt we've created $4b in savings annually
- money that can be invested in the future of our nation, not
spent on interest payments
In short the Liberal-National Government has created more and better
jobs - and as such created a much more competitive economy.
Trade an integral part of economic stability
Our standard of living - the quality of our communities, the prosperity
of our families, the security of our jobs - all depends more than
ever on our ability to compete in the global marketplace.
Our trade performance over the past year has been nothing short
of outstanding - in spite of tough economic conditions in our major
markets. We have built on the great export successes of previous
years.
The Liberal-National Government's record of economic management
and reform has laid a very strong foundation for this.
The best-built house is a house that is built on level, square
and solid foundations. The Australian economy is like a house that
stands straight and square.
We want that house to be well maintaned and to stand the test of
time - we want sustained growth for Australian exports and Australian
exporters.
We have set an ambitious target to double the number of exporters
by 2006 - not as an end in itself, but as a means to ensuring more
and better jobs - and a better future - for working Australians.
Our trade performance
Ladies and gentlemen, 2001 was an outstanding year for Australian
exports, despite the economic downturn in most of the world.
The value of Australia's exports of goods and services increased
by 8 per cent to $154 billion in 2001. This figure represents a
whopping 54 per cent increase on the value of our exports since
1996. Australian exports certainly made their
contribution to our 4.1 percent economic growth in 2001.
Exports to all major trading partners grew strongly; by 26 per
cent to China, by 18 per cent to Europe, and by 8 per cent to the
US
In fact, so strong was our export performance that we achieved
a trade surplus of $2.7 billion last year - our nine consecutive
monthly trade surpluses represented the longest run of trade surpluses
since 1973, and the first calendar year surplus since 1996. Trade
has more than paid its way.
This success shows that the Australian economy and our exporters
are efficient and very competitive. They have responded magnificently
to changes in the international economy.
I want to personally thank each and every Australian involved in
our export success. Without their contribution we would not find
ourselves in the strong position that our economy is in today.
Let's take a couple of examples: small firms like Luv-a-duck and
Hakubaku Australia, whose products are featured on our menu today.
-
Luv-a-duck, a family-managed company, is selling 4,000 marinated,
smoked and gourmet ducks a month to Hong Kong.
-
And Hakubaku Australia, a regional Victorian company less than
three years old and now employing 35 people. Hakubaku exports
traditional noodles made from organic wheat to Japan.
Australia will need to continue this creativity to maintain export
momentum. Due to tough economic conditions overseas in the global
marketplace we will face some unique challenges this coming year
.
In 2001 the US economy grew by just 1.2 per cent, while Germany's
economy grew by just 0.6 per cent. In our region Singapore contracted
by 5 per cent and Japan contracted 0.7 per cent The picture elsewhere
in East Asia is similar. While in Australia we recorded very strong
economic growth of 4.1 per cent.
The forecasts for 2002 are only mildly more promising, with the
US growth at 2.1 per cent, Europe at 1.3 per cent and Japan worsening
to contract by 1.1 per cent.
Australia is projected to lead the developed world in 2002 with
a very strong growth forecast of 3.8 per cent.
So while Australia continues to outperform all other developed
economies in this subdued economic environment demand for our products
overseas will be under pressure.
Finding new markets
We must continue to find new markets for our products.
A classic example is what has been achieved in the Middle East,
which has been an extraordinary success story. Our exports to that
region grew 39 per cent in 2001, and an important part of that growth
for the past five years has been Australian auto exports. In fact
auto exports to the Middle East have grown on average 73 per cent
each year since 1996.
In China our exports have doubled in just less than three years,
from $3.7 billion in 1998 to a little over $7 billion in 2001. Wool and iron ore have been stand out performers. In 1998 wool
exports to China stood at $550m and in 2001 had more than doubled
to $1.2 billion. In three years we have seen iron ore increase
from $850 million to $1.3 billion.
Building an export culture : doubling the number of exporters
Ladies and gentlemen now that we have laid the foundations, our
exporting future lies in building an export culture, and diversifying
Australia's exports is just one of a range of tools for maintaining
our export success story.
Notwithstanding the enormous growth in our exports, less than 4
percent of Australian firms are exporters. This is low by international
standards.
Earlier today I released a research report entitled, Knowing
and Growing the Exporter Community. While the report finds
a very low existing level of exporters, it confirms enormous
untapped export potential - especially amongst smaller firms.
The Knowing and Growing the Exporter Community report predicts
that many new exporters will be smaller companies. They will be
concentrated in knowledge-based service industries, often in regional
Australia.
Here in Canberra a homegrown IT company, Tower Software, is a leading
company in its field of document and records mangement software.
In 1996 Tower employed 18 people and, largely due to export growth,
today employs more than 90 staff and supports more than 900 sites
globally.
Another example is the University of Wollongong, an emerging tertiary
education provider. They have established a campus in Dubai to
tap into the enormous potential to educate a new generation of students
in the Middle East.
Small business is Australia's export future. They will be the
next exporting companies that will produce more and better jobs,
particularly in rural and regional Australia.
- Companies like family-owned Protea Pride, in Busselton WA, which
air freights 125 tonnes of proteas to Japan annually, employs 15
staff and injects $500 000 into the local economy each year.
The success of companies like Tower Software and Protea Pride is
the reason why we have an ambitious goal to double the number
of Australian exporters by 2006.
Indeed today more than 20 per cent of Australia's current gross
domestic product comes direcly from exports. That means one in
five jobs across Australia is reliant on exports. In regional Australia
that figure increases to one in four jobs. And let me share a little
secret with you - I'm certainly looking forward to watching these
figures grow as we getter closer to 2006.
Last week my State and Territory counterparts agreed to work with
the Commonwealth on a national New Exporter Development program - central to achieving our goal.
The Liberal-National Government is committing new funds to create
new exporters. We will spend almost $22 million on TradeStart and
Export Access initiatives over the next four years, and we are doubling
the minimum Export Market Development Grant from $2,500 to $5,000
directly targetting assistance to small businesses to help them
get into exporting.
Austrade will be proactively seeking professional organisations
- such as accountants, lawyers, business advisers - to ensure that
firms with potential are properly advised and equipped to export
their products.
Our government and the private sector can, and will, work towards
our target to double the number of exporters by 2006.
A diverse trade policy
As well as convincing more Australian businesses to export, we
are using our economic standing and global influence to continue
to create new market opportunities.
Our trade policy is delivering results. We are taking every opportunity
to advance our exporters' interests. We are working at the multilateral,
regional and bilateral levels to secure Australia's future trading
interests.
We have established within the Department of Foreign Affairs and
Trade an Office of Trade Negotiations in support of our ambitious
and aggressive trade agenda. The office's sole aim is to open markets
and win trade disputes on behalf of Australian exporters.
The office comprises 72 dedicated trade negotiators, some 60 per
cent more staff than were devoted to trade issues at the end of
the last round of trade negotiations in 1993.
A New WTO Round
Ladies and gentlemen, last November, in Doha, the 144 member nations
of the World Trade Organisation agreed to launch a new round of
trade negotiations.
This outcome enabled the Liberal-National government to deliver
on its highest trade policy priority.
We have established a Trade Negotiations Committee in Geneva to
guide the negotiations and to oversee the work of the eight separate
negotiating groups.
These eight negotiating groups are:
This is a round which must produce real market access gains for
our farmers and food producers, our miners, our manufacturers, and
our service providers.
Most importantly we have a round at last which recognises the need
to:
-
Improve market access for agricultural products
- Substantially reduce domestic support for farmers
-
Reduction of, with a view to phasing out, all forms of agricultural
export subsidies
I've been very encouraged not just by the support we have from
our Cairns Group colleagues for this effort, but for the way in
which many other developing countries - such as Egypt, Pakistan
and India - have responded so well to our core message on agricultural
market liberalisation.
This support reflects the extent to which agricultural markets
of the world are still extremely distorted by subsidies and support,
amounting to about $US327 billion, which is eight times more than
what is spent by the developed countries of the world on aid in
assisting the developing countries of the world
These practises have a drastic effect not just on the Australian
farmer but also on the livelihood of millions of people in the poor
countries of the world. The Doha Round must end discrimination
against efficient, competitive agricultural producers. But it must
also end this discrimination against the developing countries of
the world.
The Doha Development Round won't just address agriculture. We
want significant gains for our vibrant and growing services export
sector. And we want to build on previous gains in manufacturing
and other industrial sectors.
And we will be on guard to make sure that negotiations on trade
and the environment and so-called geographical indications do not
undercut our interests. I have no intention of our producers not
being allowed to call their olives kalamata, or cheese parmesan.
I am also concerned that we firmly rebut the notion that the WTO
is some way anti-environment. This is not the case. We have some
important negotiations underway, on fisheries subsidies and on environmental
goods and services that can reinforce the WTO's very solid record
of support for sustainable development.
As well as market access we will be fighting hard for better WTO
rules. Rules that allow disputes to be settled faster than was
the result in the US lamb case.
Fighting for a Fair Go
Dispute settlement in the WTO is a way for countries - and businesses
- to ensure that their trade rights are not trampled upon.
When we need to, we'll take other countries to the world trade
umpire to defend our interests. That is why we are a strong advocate
of the rules based system.
Last year at the WTO we forced the US to remove unjustified barriers
on our lamb exports - which had cost Australian exporters about
$30 million.
We also forced South Korea to increase the number of butcher shops
selling Australian beef from 5,000 to 45,000, boosting Australia's
beef exports by an estimated $60 million a year.
I want to build on these successes.
I have asked my Department to work closely with business so that
together we can better use the WTO system. That way we can achieve
better trade outcomes.
Beyond the WTO
Ladies and gentleman, since the failure of Seattle we have not
been satisifed marking time waiting for the multilateral agenda
to move forward. Instead we have embarked upon an ambitious regional
and bilateral agenda.
We are commited to meeting the Asia Pacific Economic Cooperation
(APEC) Bogor goals of free trade in the Asia Pacific for developed
countries by 2010 and developing countries by 2020. As such we
are pursuing closer economic integration with our South-East Asian
partners.
Last year at APEC, Australia led the successful campaign to introduce
'pathfinder' initiatives at the Shanghai Leaders Meeting. This
new tool will allow those APEC members that can move faster to lead
the way in removing barriers to business - particularly non-tariff
barriers.
In 2001 Australia, New Zealand and ASEAN countries endorsed a Closer
Economic Partnership - a significant achievement in Australia's
relationship with our region. The AFTA-CER Closer Economic Partnership
demonstrates a remarkable milestone in Australia's engagement with
South-East Asia. It provides a formal and structured approach to
promoting trade, investment and regional economic integration.
And, importantly, we did it despite slowing regional and global
growth. In September I will join my ministerial colleagues in Brunei
for the historic signing of this agreement.
To look for an example of how successful these agreements can be,
we need look no further than across the Tasman.
Our Closer Economic Relationship with New Zealand represents arguably
the worlds best and most comprehensive free trade agreement.
This agreement, signed in 1983, saw merchandise trade between Australia
and New Zealand go from $1.4 billion per annum to almost $12 billion
in 2001, an increase of more than 500 per cent.
The CER gives the Australian business community, in effect, a borderless
trading relationship with one of our nearest neighbours.
Work on our bilateral trade agenda is continuing.
We are pursuing an FTA with the US, and officials from both countries
are working closely to ensure an agreement would be as comprehensive
as possible. I unashamedly tell you today an FTA with the US is
the government's highest bilateral trade priority as it offers the
most potential gain for Australian exporters. An Australia/US FTA
would remove trade barriers, attract new investment, forge commercial
links, and minimise any competitive disadvantage we face as a result
of US agreements with other countries.
Of course, there will be many hurdles along the track to free trade
with the US. President Bush's announcement on 6 March of measures
to protect the steel industry was a substantial blow to the global
steel industry.
But I am very pleased that the Australian Government was able to
secure arrangements that will preserve the bulk of our steel exports
to the US. This is the first time Australia has been able to turn
a US trade decision around without resorting to WTO legal action - a clear demonstration of the close and honest working relationship
between our two governments.
We will continue to examine options to secure access for the remaining
steel exports to the US affected by President Bush's announcment.
We are pursuing bilateral relationships that bring us closer than
ever before to our immediate neighbours
Negotiation of an FTA with Singapore continues and we are pursuing
a possible FTA with Thailand.
I am confident we will conclude a Free Trade Agreement with Singapore
in the next few months. We want a first class agreement - a model
for other possible FTAs in the region, including our prospective
negotiation with Thailand, if that takes more time to achieve then
so be it.
We are strengthening economic relations with Japan, Korea and China,
and we are building on our links with non-traditional markets particularly
in Latin America.
No Australian government has ever pursued a more active and diverse
trade policy than has our government.
Our trading future
Australia has long relied on overseas markets buying our commodities. And we now produce a huge range of world-class goods and services.
If globalisation is about economic integration and our capacity
to invest and trade around the world, then globalisation clearly
augers well for all Australians.
Nonetheless, globalisation does have its detractors. How could
we forget those vivid images on our TV screens and in our newspapers
of protestors taking to the streets in Seattle, Melbourne and most
recently in New York during this year's World Economic Forum. They
will always be there but as more people become better educated about
world trade I envisage their numbers dwindling.
In yesterday's The Australian newspaper, economics editor
Alan Wood shared with readers some important facts about world trade
to counter the myths being spread by the non-believers following
on from last weeks Towards Opportunity and Prosperity conference
on Globalisation.
Let me share with you a couple of key points from that article
.. "Although there is a lot of evidence of the benefits of opening
up an economy to world trade, there is no counter-example of a country
that has benefited from closing its doors to the world." and
"After the horrible events of September 11, one ray of hope that
shone out was the opportunity offered to start a new round of world
trade talks. The logic was simple but compelling. Terrorism is
bred in conditions of poverty and ignorance. Globalisation, particularly
an open world trading system, offers the means to bring billions
out of poverty and improve their health, education and economic
freedom."
Ladies and gentlemen they are not my words, but I would have to
say they are certainly consistent with my views.
Alan Wood's colleague Robert Gottliebsen, News Limited's Terry
McCrann as well as Fairfax's Ross Gittins have also written articles
supporting global trade.
World trade enables Australian business to find new markets, new
sources of capital, and better and cheaper business inputs.
Allow me to share another interesting fact with you - we sell almost
everything - to almost every country - on the planet.
In short, it means we can compete in the global marketplace - consolidating
our place amongst the world's great trading nations.
The Howard/Anderson Government is committed to maximising the benefits
of world trade. In doing so, we are pursuing real economic benefits
for Australian businesses, workers, consumers and communities.
Trade policy is evolving, and we are always looking to improve
our performance.
The Foreign Minister and I have commissioned a second foreign and
trade policy White Paper, to be called Advancing the National
Interest.
The White Paper - to be published toward the end of the year -
will focus on the growing interplay between our trade and foreign
policy interests in an increasingly globalised world. It will give
us new insights and set new directions for our trade and foreign
policies.
Our trade policy has and will continue to deliver for Australians
in the city and in rural and regional Australia.
And I hope Australian businesses, large and small, urban and regional,
will join me in our quest to double the number of exporters by 2006.
The world is a profitable place - never more so than today. Now
is not the time to step back, the time is right for a confident
competitive Australia to push forward. Our government will always
push forward in the interest of current and future generations of
Australians quite unashamedly in the national interest.
Thank you.
Local Date:
Saturday, 22-Nov-2008 08:26:20 EST
