The Hon. Mark Vaile, MP
The Hon. Mark Vaile, MP
FORMER MINISTER FOR TRADE

Speech

31 March 2004, National Press Club, Canberra

‘Trade 2004 – Pursuing Every Opportunity’

Introduction

Thank you Excellencies, board members of the National Press Club, Members of my Trade Policy Advisory Council, distinguished guests, ladies and gentlemen.

I am delighted to be here today to launch Trade 2004 my 5th annual statement as Trade Minister.

The Government’s ambitious trade agenda and our determination to assist Australian exporters are well reflected in the theme of this year’s trade statement – Pursuing Every Opportunity.

Ladies and gentlemen,

It is easy to regard trade as a complicated, jargon-filled business. I like to think of it in much simpler terms.

Trade means more and better jobs for Australians.

Trade is a great creator of wealth.

Trade builds better relations between nations.

Since the Coalition Government came to office we have created

1.2 million jobs.  Some 240,000 of these jobs have been created by trade. Let me remind you that we were starting off a very low base after 13 years of Labor economic mismanagement.

In 1996 Australia’s exports were worth $99 billion.  In 2003 they were worth $141 billion. 

Trade creates new opportunities for Australian businesses.  It expands the range and quality of goods and services available to Australian consumers and lowers their prices. 

Australian jobs, growth and living standards have always been closely linked to trade.  We have long relied on overseas markets buying our commodities, and our standard of living today remains to a large degree reliant on international sales of goods and services produced here. 

All Australians benefit from our trade with the rest of the world. 

At least one in five Australian jobs is now generated by exports.  This equates to over 1.7 million Australian jobs.  For regional and rural Australia, that figure rises to one in four jobs.

Less than 5 per cent of Australian businesses export, but those businesses provide almost 20 per cent of all Australian jobs.  These companies are also among Australia’s fastest growing and most competitive.

By exporting, Australia’s businesses access a global marketplace of more than six billion consumers.  They compete with the best in the world, so they have to be innovative and use the latest technology. 

International trade is critical to economic growth in Australia. 

Exports are a major factor in Australia continuing to achieve better than OECD-average economic growth in 7 out of the last 8 years.  This has not come about by good luck, it has come about because of good economic management.

But our trade does not just benefit Australians. Our trading partners too are better off as a result of their commerce with Australia. Nowhere is this clearer than in the Middle East.

I am proud of the work I have done in Libya – where our trade engagement was an early and important step in bringing that country back to an active role in the international community – and in Iraq, where our trade and investment links are an important part of our broader effort to help that country recover from decades of decline under Saddam Hussein’s regime.

For all these reasons, the Government pursues every opportunity to increase and improve conditions for Australian trade in international markets. 

Less than two months ago, we concluded negotiations on a Free Trade Agreement with the United States.

As we will see, the FTA with the US is far from the only initiative this government has pursued – but it is a major achievement.

Once in force, 97 per cent of our merchandise trade with the world’s largest economy will be duty-free.

Investment will flow more freely between our nations, and the growth in trade will see more Australian jobs, more Australian wealth.

And yet, faced with this prospect, our political opponents only see problems.

One month ago, the full text of this far-reaching agreement became public.

Its 1000 pages are available for all Australians to see.

The Government has also published a more concise guide to the agreement.

The agreement has been widely discussed in the media and was concluded after a comprehensive and unprecedented consultative process with Australian industry.

Despite this, our political opponents still can’t make up their minds.

On the day we announced the agreement, Mark Latham couldn’t wait to

“bag it”.

He didn’t take time to study it, consult with his colleagues or the community.

He just organised a media doorstop, and told Australia: “If we were asked to vote on it today, or in the parliament tomorrow, we would be opposing it.”

Nothing he has said since then has indicated he understands, or has attempted to understand, the impact of this historic accord.

It seems the only way that Mark Latham will abandon his opposition to the deal is if computer models and opinion polls tell him to do so.

That is not the behaviour of a leader. Australia needs more than that from an alternative government.

I challenge Mark Latham to coherently argue that this deal does not advance Australia’s long-term national interest. And if he can’t do that, I urge Labor to support it.

This agreement is about the next generation of Australians, not just the next election.

Trade – where we are…

It has been an important year for Australia on the trade front.

Our efforts to promote greater trade liberalisation internationally have delivered significant outcomes.

At the multilateral level, we have been working hard to get the Doha Round of trade negotiations to focus on real reform in international agricultural trade and get itself back on track – this is not an easy task, but it is one we are committed to. 

In the past 12 months Australia’s attractiveness as a trade and economic partner has contributed to enormous achievements in key bilateral trade relationships.

Foremost among these is, of course, the historic free trade agreement with the United States.

In July last year our FTA with Singapore entered into force. 

In October, we agreed to the terms of an FTA with Thailand. 

And in the 2nd half of 2003, we agreed to new Trade and Economic Frameworks with China and Japan - charting courses for expanding trade and economic links with two of our most important regional trading partners. 

And all this over what has been a year of significant challenge - with sluggish global growth, drought, SARS and a rising Australian dollar. 

Our aggressive strategy to pursue every opportunity has required a remarkable effort by the trade divisions of the Department of Foreign Affairs and Trade. The gruelling 3-week final negotiating session on the US FTA in Washington two months ago merely reflected the hard-work being done by Australia's trade negotiators around the world -- and I thank them.

A competitive Australia means international success

Ladies and gentlemen

We are able to successfully pursue such a wide-ranging and ambitious trade agenda because the Australian economy and our business environment are up to the challenge. 

This is no accident.

The Government’s sound economic management and program of structural reform have made this a reality.

Australia is enjoying the longest unbroken period of economic growth since the 1960s:

The Government’s fiscal management has consistently produced budget surpluses, enabling us to retire public sector debt - the Government inherited a $96 billion public debt and we have reduced that by $60 billion. These efforts will continue.

Reform of business taxes and indirect taxes have given Australia a modern, internationally competitive taxation system.

These reforms have been accompanied by significant improvement to the labour market and in industrial relations.

Our economic and reform credentials have not gone unnoticed internationally.

Over the past year the IMF, the World Bank, the World Economic Forum and the OECD, have paid tribute to the Government’s sound economic management and reform programs

With a strong efficient economy Australia has been well-placed to embrace the opportunities and address the challenges of globalisation.

In 2003, that challenge was significant.

The lingering effects of drought, a rising Australian dollar, the impact of SARS, a sluggish world economy and geo-political uncertainty, made exporting tough in 2003.

But exports volumes held up well – non-rural exports including services rose and exports to key markets like China, New Zealand, India and the EU, performed particularly well.

WTO remains the priority

Ladies and gentlemen

There is no doubt multilateral liberalisation - through the WTO - offers the best chance for the largest gains for our exporters.

For these reasons, progress at the multilateral level remains Australia’s top trade policy priority.

Unfortunately, our hopes for progress in the Doha Round over the past year have been hampered by the less ambitious approaches of some WTO members. 

But I think we are starting to see signs of the Doha process moving in the right direction 

Australia is in Geneva and in key capitals working to ensure that the level of ambition for the Doha round is kept high – working with developed economies and developing economies alike, including the G20 group of developing countries. 

With our partners in the Cairns Group of agricultural fair trading nations, we are keeping pressure on the major agricultural subsidisers - EU, US, Japan – to live up to the Doha mandate.

Only last month I chaired a meeting of the Cairns Group in Costa Rica.

I am pleased that there is now a growing acceptance within the WTO membership that the Doha round needs to deliver on agriculture.

But action remains the key.

The renewed commitment of WTO members to the Round must now be translated into greater negotiating flexibility over the coming months.

Delivering for Australian business

Ladies and gentlemen.

The international environment for trade liberalisation is tough, and negotiating improvements is a hard grind.

This is why we must be persistent in our approach and must actively pursue all opportunities for trade reform. As a market of only 20 million people we have no choice but to continue to seek markets offshore.

Free trade agreements are an important feature of the Government’s efforts to pursue every opportunity to make trade gains for Australia. 

FTAs can and do deliver significant economic gains ahead of the timeframe possible in multilateral negotiations.

In this context, the Free Trade Agreement with the United States is truly a landmark deal.

It will provide enhanced access for Australian exporters to the world’s largest importer – a market of around 300 million people.

This Agreement, only the third between developed countries, highlights Australia’s leading role in advancing the international trade agenda.

When the Agreement comes into force, hopefully early next year, it will create significant new benefits and opportunities for Australian exporters.

Almost all United States tariff lines on Australia’s non-agricultural exports will be duty free from day one – sectors that will benefit particularly from these changes will be autos, metals, minerals, seafood, paper and chemicals.

Two thirds of all agricultural tariffs will be eliminated immediately, and a further 9 per cent cut to zero within four years.

And Australia’s beef and dairy producers will also gain improved access.

Australia will gain immediate access to the $200 billion US federal government procurement market.

Over time the dynamic gains from the Agreement promise to deliver even larger benefits to Australia.

Our investment relationship with the US – already enormously important to us – will be further strengthened by the Agreement.

The agreement is not perfect but the advances it makes are very substantial and important for the future prosperity of Australians.

This is why the importance of this deal has been well recognised by the majority of our peak business bodies and range of sectoral associations, including

I have also been encouraged by feedback from a number of Australian businesses who have indicated the high profile nature of this agreement in the United States is already having a positive effect. One such company, chocolate exporter Kangaroogold, wrote to me and said “the value to our company is not the reduction in tariff – it is the change in attitude.”

Engagement with our region

Ladies and gentlemen

Thanks to the Coalition Government’s sound fiscal management, the Australian economy is one of the fastest growing economies in the OECD.

The economies of our region are also growing strongly and this government has ensured we are strategically well placed to benefit

The Coalition has continued to open up new markets in the region for our exporters, creating opportunities for jobs growth.

In July 2003, Australia’s FTA with Singapore came into force, the second FTA in Australia’s history - that economy is forecast to grow by 5.3% in 2004.

In July 2003 we concluded a Trade and Economic Framework with Japan, our largest export market – that economy is forecast to grow by 2.8% in 2004.

In October 2003 we announced a study with China on the benefits of an FTA – that economy is forecast to grow by 8.3% in 2004.

In October last year, we announced the conclusion of negotiations for a free trade agreement with Thailand, scheduled to enter into force in early 2005 – that economy is forecast to grow by 7% in 2004.

In December 2003 the Government committed $35 million towards  Australia’s participation at the Aichi Expo in Japan and is developing a comprehensive business promotion program for the Australian pavilion.

In short, the Coalition Government is positioning the Nation to benefit from the growing strength of our region and creating jobs for the future.

Assisting exporters – a Government priority

Everyday commerce is the backbone of Australia’s trade performance.

That is why the Government is committed to doing all it can to assist Australian business to export.

It consults extensively with the Australian community and works closely with Australian businesses in markets throughout the world to obtain new market access and defend current access conditions.

This close cooperation has paid dividends in markets such as Iraq and Libya where:

The Government provides a range of trade-related services to assist exporters break into overseas markets.

As lead agency in our drive to double the number of exporters by 2006, Austrade is providing assistance to an unprecedented number of Australian companies – over 8000 have used Austrade’s services so far this financial year.

I am pleased to have some of these companies here today. Regional exporters such as Casella Wines of Griffith, whose Yellowtail brand has become the number one selling imported wine in the US and Green Grove Organics of Junee, whose organic liquorice was the toast of the recent Australia Week Festival in Los Angeles.

The highly successful New Exporter Development Program (NEDP) is providing small businesses like these, one-on-one coaching to assist in expanding their business offshore. 

This and other Austrade initiatives are delivered by an ever-expanding network of specialist export advisers, including 51 TradeStart offices right across rural, regional and metropolitan Australia. 

The Government’s on-the-ground commitment to exporters is backed by funding of $150 million per annum through the Export Market Development Grants (EMDG) scheme. A scheme that we continue to improve to make it more accessible for small business.

Looking forward/looking back

It has been a truly momentous year for Australian trade.

The high-quality free trade agreements reached with Thailand and the United States, once in force, will provide huge opportunities for Australian business.

And they have enhanced our leadership credentials as a liberalising force in world trade.

But there is still much to do.

We need to continue to press in the WTO to keep up the level of ambition and momentum in the Doha round.

The world simply can’t afford to let this opportunity to reform the global trading system – particularly in agriculture – slip by.

We need to ensure that the benefits contained in the US FTA flow as quickly as possible to Australian business.

This means pushing for the earliest possible implementation of the Agreement, both here and in the US.

We need to power ahead with the joint study into a possible bilateral FTA with China.

And we need to continue to explore options to expand our bilateral trade and commercial linkages with a range of countries, where it makes sense to do so.

Ladies and gentlemen

Combining the gains our FTAs offer, with expected higher global growth and Australia’s strong economic credentials, gives you a recipe for export success and the promise of an exciting period ahead for the Australian economy and for Australian business.

Trade is vital business for Australia.

…vital for economic growth…..

….vital for jobs.

That is why this Government has a clear trade policy agenda and clear outcomes in mind.

Good government is about good policy but it is also about real outcomes.

2003 was a big year in trade terms and I’m very much looking forward to the Coalition Government continuing to deliver for the Australian economy, for Australian businesses and for Australian families into our fourth term.

Thank you

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