Speech
to the 7th Joint Business Conference Of
the MABC and AMBC
Kuala Lumpur, 29 July 2002
Australia and Malaysia: Trading Together
Introduction
Thank you Ted Sharp [National President of the Australia Malaysia
Business Council] . Thank you also Tunku for your kind words of welcome.
Distinguished guests, ladies and gentlemen.
It's good to be here. I am very happy to be sharing the floor with
our good friend the Hon Effendi Norwawi.
I'm delighted to be addressing the 7th Joint Business Conference
of our business councils. I congratulate the councils on their great
contribution to the bilateral trade and economic relationship between
our two countries.
In particular, I'm delighted on this occasion to acknowledge the
Australia Malaysia Business Council for its continued support in forging
business linkages through the Partnership in Food business mission
which I am leading as part of this visit.
May I also say to Tunku Shahabuddin how delighted we were to bestow
on you the award of the Order of Australia. It is a fitting recognition
of the contribution you and the MABC has made to our bilateral relationship.
The bilateral relationship
Ladies and gentlemen.
The Australia-Malaysia bilateral relationship is in very good shape. It is underpinned significantly by the commercial and people-to-people
links in which our business councils are so often involved. The links
are diverse and regionaly significant.
Australia and Malaysia cooperate well on issues of importance to
the region, including efforts to combat the transnational crimes of
people smuggling and narcotics trade. Our defence relations are in
good shape and we have an important regional alliance through the
Five Power Defence Arrangements, along with the UK, Singapore and
New Zealand.
Our people-to-people links are solid - with over 210,000 Malaysian
alumni from Australian educational institutions. Last year we celebrated
the 50th Anniversary of the Colombo Plan which was an important
foundation for so many of our current links.
My partner on the podium here today, His Excellency Datuk Effendi
Norwawi, Minister for Agriculture, is a University of Tasmania graduate. We were delighted you were able to attend the Colombo Plan anniversary
celebrations last year, Datuk.
Today, there are some 25,000 Malaysian students studying Australian
courses: 14,000 in Australia and 11,000 through branch campuses and
twinning programs here in Malaysia. And Australia is now the top
destination for Malaysian students. Australian education services
providers are leaders in the Malaysian market place with programs
that provide cost-effective quality courses across a broad range of
disciplines.
Two-way trade in goods and services was worth some A$8.1 billion
in 2001, having recovered from the Asian economic crisis lows. Malaysia's
exports to Australia have recovered rapidly in recent years. Malaysia
is 12th largest destination for Australia's merchandise exports and
the 10th largest source for Australia's imports, and there
is great potential for further growth in our trade.
Of course, governments look to business and, in particular, the people-to-people
links fostered through the business councils, to drive the trade and
investment agenda. We look to you to identify opportunities and sectors
with good prospects.
Of course, there is a lot governments can do to support trade and
business through cooperation and dialogue. For instance, Minister
Effendi Norwawi and I agreed about 18 months ago to establish a working
group comprised of Ministry of Agriculture officials and representatives
from the Australian High Commission in Kuala Lumpur to advance cooperation
in the agriculture sector.
They have already achieved some very good results
Ministry of Agriculture officials have visited Australia to study
our rice growing techniques. We have jointly conducted seminars to
increase knowledge of the very important issue of quality assurance.
The Working Group has led to enhanced information and training exchanges
between Australian quarantine and agriculture agencies and Malaysia's
Department of Veterinary Services.
As I said, I am leading a Partnership in Food Mission to Malaysia
as part of this visit. The objective of this mission is to build
linkages between the Australian and Malaysian food processing sectors,
especially in areas such as food technology, manufacturing and health
related systems, training, logistics and supply chain management. I am delighted that such a broad range of companies with established
business interests from fresh produce, to research and development,
to food storage and processing, are involved. I know many of the
mission participants are here today and I wish you very well in your
endeavours and look forward to hearing about your successes later
today.
The bilateral trade and economic cooperation and dialogue has formed
a major part of my visit to Malaysia over this past weekend for the
10th session of the Australia Malaysia Joint Trade Committee
with my counterpart Dato' Seri Rafidah Aziz. The JTC, as we call it,
is the peak bilateral forum for the discussion of trade issues. This
was the fourth time I have co-chaired the meeting with Minister Rafidah. I should like to take this opportunity to brief you on the excellent
meeting and its outcomes.
Yesterday, Minister Rafidah and I signed an amending protocol to
our Double Taxation Agreement on behalf of our governments. Through
the protocol, we are maximising the effectiveness of our bilateral
tax treaty arrangements and further assisting the trade and investment
flows between our two countries.
Minister Rafidah and I yesterday also announced a forward program
for cooperation in halal food marketing in third countries - a topic
which will be of particular interest to this audience, I am sure. Our project aims to combine the internationally certified safe and
fresh quality inputs from Australia with the Islamic and halal credentials
of Malaysia to export products to third country markets. This will
benefit both countries as global trade in halal food products is worth
around US$50 billion annually.
Minister Rafidah and I also discussed measures to increase our cooperation
in the information industries sector and we have decided to pursue
a bilateral MOU. In 2000-2001, almost a quarter of total two-way
trade was comprised of information and communication technology goods. We want further to enhance this trade and our cooperation on policy
and regulatory issues in this vital sector.
Minister Rafidah and I also discussed ways of enhancing dialogue
on legal services issues of mutual interest and hope shortly to see
reciprocal visits by officials. The opening up of legal services
was also discussed during the recent visit to Australia by the Malaysian
Minister for legal Affairs.
The range of topics covered is typical of our vibrant and diversified
trade and investment relations with Malaysia.
Austrade in Kuala Lumpur has seen continued steady interest from
Australian firms in the Malaysian market, including from many companies
that have not yet exported or have not looked at Malaysia before.
A number of small and medium enterprises have achieved good success
in this market over the past 12 months. Importantly, these successes
have occurred across a wide range of industry sectors including agribusiness,
information and communications technology, infrastructure and education.
In the last year, Austrade assisted over 50 companies carry out business
transactions in Malaysia. Briefings were provided to a further 130
existing exporters looking at the Malaysian market for the first time,
and another 110 potential exporters considering Malaysia as part of
their export entry strategy.
Indeed, later today I will have the pleasure to attend the launch
of an Australia-Malaysia joint venture partnership in health care
services provision between Blue Care Australia and the Sunway Medical
Centre. The joint venture will specialise in post acute care, and
the service will start with eight mobile nursing staff.
We know that Malaysian companies have investment interests in Australia. But much more could be achieved by our two countries on the investment
front. Australian investment in Malaysia, despite the very real achievements
I've mentioned, is still only a fraction of what we have in some other
economies of East Asia. I want to encourage you to continue to pursue
more investment opportunities here in Malaysia, it will be to the
advantage of both countries.
The Australian economy
Why is Australia such a good trade and economic partner for Malaysia?
Australia is the fourth largest economy in the greater Asian region,
with a GDP roughly comparable to all of Malaysia's ASEAN partners. Australia is also a rapidly growing economy by the standards of the
developed world. In 2001, the Australian economy grew 4.1 percent
in seasonally adjusted terms, comparing with an average 0.9 per cent
growth in OECD countries.
With strong growth, high productivity, low interest rates, and low
inflation, Australia offers much as a sound partner in trade and investment. Indeed, it is true to say that Australia's economy is forging ahead,
having weathered both the Asian economic crisis and the global turndown
last year.
Australia is a great trading nation, and is becoming an even greater
one as time marches on. Trade has always been good for Australia.
It is a prime source of our high standard of living. We have
long relied on overseas markets buying our commodities. And
we now produce a huge range of world-class goods and services.
In 2001, the value of Australia's exports of goods and services increased
by 8 per cent to $154 billion. This was a massive 54 per cent
increase on the value of our exports in 1996 ($99 billion). Exports
to all our major trading partners grew strongly.
With a growing import market as well, Australia offers good exporting
opportunities for other countries, including Malaysia. Australia's
imports of goods and services were over US$78 billion in 2001. Reflecting
Australia's rapid growth, imports have increased by almost 50 per
cent since 1996. Merchandise imports from Malaysia have increased
at over two and a half times this rate. Equally, we have increased
the value of our exports to Malaysia by about 20 per cent over the
same period - and we have increased from the lows experienced in 1998,
by over 40 per cent.
A strong and competitive economy has been an important factor in
Australia's trading success. As a Government, we've tackled some
hard issues on domestic economic reform which have brought considerable
rewards in this regard. We've reformed an outdated and unfair tax
system. Major reforms on our waterfront have made Australian
ports among the most efficient in the region. We have improved productivity
and, as a result, boosted our international competitiveness. We've also developed our services and high technology industry sectors,
and you'll find that Australian governments are now 100% on line. We have restrained government spending. And we've paid off almost
A$60 billion of public sector debt, so that we now have one of the
lowest debt to GDP ratios in the OECD.
Australia is now ranked 5th in the World Economic Forum
Growth Competitiveness index. Trade accounts for some 44 percent
of our economy, up from 34 percent a decade ago. 1 in 5 Australian
jobs are linked directly to exports. In regional Australia, the ratio
is even higher, at 1 in 4. There is no doubt that our economic growth
is increasingly linked to our trading efforts.
Trade Policy Challenges
Australia and Malaysia are both keenly aware of the trade policy
challenges that open trading nations like ours must face.
If Australia is to continue to prosper through trade, we need to
move forward on all fronts and in a way that meets the new challenges
facing the trading system. On the trade and economic policy front,
Australia and Malaysia have a good working relationship, whether in
the WTO, APEC, and the Cairns Group. We have significant shared interests
in ensuring a fair deal on agriculture in the next multilateral trade
round. I look also to my colleagues Ministers Rafidah and Effendi
to rally the support of like-minded economies in defending such interests
and I value Malaysia's support for the Cairns Group's agenda.
In the context of the AFTA-CER Closer Economic Partnership, I am
very pleased that the proposal agreed between myself and Minister
Rafidah a year ago to develop an AFTA-CER-CEP Business Council has
become a reality. I would like again to congratulate Malaysia on
its successful hosting of the inaugural AFTA-CER Business Council
- the ACBC - meeting in Kuala Lumpur on 8 July. We look forward to
hearing the views and proposals on enhanced trade from the business
council when it reports to AFTA-CER ministers in Brunei in September.
Our trade policy supports our efforts to maximise export growth opportunities
for Australian businesses and the Australian investment dollar. We
are pleased to consider bilateral and regional opportunities to support
trade and our reliance on the WTO to oversee an orderly multilateral
environment.
For Australia, the multilateral trading system remains our number
one priority. However, comprehensive free trade agreements can complement
multilateral liberalisation by moving further and faster than can
be achieved under the WTO, because of the large membership and diversity
of views and interests in that forum. Free trade agreements can also
show the way forward on new issues that the WTO is beginning to consider.
As you would be aware, we are currently negotiating an FTA with Singapore. The negotiations are making good progress and they promise to deliver
a truly liberalising agreement that will provide for free trade in
goods and services across all sectors. I am pleased that we have
also now commenced talks with Thailand toward a Closer Economic Relations
Trade Agreement. Australia and Thailand seek to liberalise trade
comprehensively and extend cooperation in a broad range of areas vital
to integrate our two economies better. We are also examining our
FTA options with the United States and we would hope to commence negotiations
in the not too distant future, subject to US congressional requirements.
Conclusion
I am honoured to be Australia's Trade Minister at a time when we
have an opportunity to achieve a great deal in our relationship with
Malaysia. And I know that both Governments are genuinely committed
to developing the bilateral relationship further.
I know too that the Business Councils are also deeply committed to
the bilateral relationship. More broadly, your continuing efforts
will be important in building up the trade and economic relationship
further. There is much that can be done, by both Governments and
industry, to explore the potential that lies there waiting to be exploited.
Good luck with the conference 7th Conference MABC/AMBC.
Local Date:
Saturday, 22-Nov-2008 07:40:13 EST
