Speech - Trade 2020 Conference Melbourne
26 August 2009
Towards 2020 - the Next Decade of Trade
Distinguished guests, ladies and gentlemen,
Fifteen years ago Paul Keating stood alongside the other APEC leaders at the Indonesian resort of Bogor and declared that by 2020 there would be “free and open trade and investment” in the Asia Pacific region.
It was a visionary statement in 1994, and today it stands as a goal that still remains within our reach.
Today’s conference is about capturing and building on that Bogor spirit of ambition.
We need the vision and energy to look beyond the horizon and ensure Australia is strategically positioned for the world of 2020.
The Governments of Paul Keating and Bob Hawke had a vision for Australia’s place in the world - and within the Asian region. And they didn’t hesitate to confront the tough decisions needed to realise that vision. Labor floated the dollar, reduced tariffs, opened up the financial sector and drove the structural changes needed to modernise the Australia economy.
But there is unfinished business. More must be done to secure Australia’s trade and investment future for the decade of trade which lies ahead.
Branding Australia
In that spirit, I am announcing today that the Government will invest $20 million in Building Brand Australia.
We Australians take quiet pride in our creativity, our ingenuity, our innovation, our spirit of social inclusion and the quality of our products and services.
We know these things to be true. But others don’t - and that is why we need a powerful national brand that captures our strengths and projects them to the rest of the world.
We need a better statement to the rest of the world about the breadth of our comparative advantage – a better way to define our unique brand.
In the next two weeks, I will be announcing a public tender process which will engage the best and brightest creative minds to deliver a makeover of Australia’s international image.
Building Brand Australia is about branding the Australian identity and selling Australia to the world.
The creative work will be completed by the end of the year, and assuming all goes well, Brand Australia will be launched domestically by February next year and internationally at next year’s World Expo in Shanghai in May.
Building Brand Australia has an unashamedly commercial focus which will help promote Australia as a great place to live, a great country in which to do business and a great place to invest. And not only will it be good for our economy, it will be good for the national spirit because it will reflect the values we all hold dear – integrity, tolerance, inclusion, and a fair go for all.
Building Brand Australia is also about Australia reaching out to the world. It is another sign that we are not turning inwards and going down the path of a mandatory Buy Australia campaign. Instead, we are engaging with the world through a new brand that will help sell Australian goods and services to the world.
Mortimer
The genesis of Building Brand Australia can be traced directly to the Mortimer Review of Australia’s export policies and programs. We are acting on Mortimer’s recommendation that Australia adopt a national brand to promote Australia’s trade and investment profile.
Alongside the $50 million we have already injected into the Export Market Development Grant scheme, the $20 million investment in a national brand represents the second of two very significant responses to the Mortimer Review.
Both measures are central to the Government’s efforts to position Australian business for the trade and investment challenges which lie ahead.
Upskilling Australia – Changes Behind the Border
The global economy is shifting and changing more quickly than most of us could have imagined. But I have every confidence that we Australians are possessed of the nous, the agility and the creativity needed to ensure our place in the lead pack of global economies.
Our investments in EMDG and Building Brand Australia will help business grapple with future challenges. So too will this Government’s ongoing investment in the critical skills needed for the future – education, innovation, skills and infrastructure. These are the drivers of economic growth and the key determinants of improved productivity.
This Government is building on the legacy of the Hawke/Keating years. We are committed to the economic investment that will make a very real difference in the years ahead.
This is investment for the future - and like this conference - this government is looking beyond the three-year electoral cycle and putting in place the building blocks for future prosperity. Building Brand Australia is one good example. Another is our investment of $62.4 million for Asian languages to ensure we have the tools to engage more deeply with the region.
The recent announcement of the $50 billion sale of Gorgon LNG to China is the latest in a growing list of LNG and Coal Seam Methane gas developments extending from the northwest of Western Australia, to Darwin and across to Gladstone in central Queensland. These are important projects which will help underpin Australia’s prosperity for years to come.
These projects are a window into the future direction of the Australia economy. We are blessed with vast reserves of LNG gas which position Australia as a potential energy superpower. LNG is a low emission fuel. Part of Australia’s future brand will be built on our credentials as a premium supplier of the clean energy needed in the global fight against climate change.
Gorgon involves much more than just extracting the gas and shipping it to export markets. It’s about Australia selling a low emission fuel to energy-hungry markets which are eager to embrace cleaner sources of energy. It’s about the cutting edge science and technology needed to pioneer Carbon Capture and Sequestration on a massive scale. And it’s about the engineers and tradesmen needed to build and operate complex industrial infrastructure.
We’re not just exporting gas. We’re exporting the innovation,ingenuity and creativity that is positioning Australia as a global leader in mining and technology services. We are positioning ourselves as a world superpower supplier of clean energy.
Our food industry also has great potential. We produce the clean and nutrional food needed to provide our trading partners with the food security they so desperately need. But our brand must go beyond Australia’s strengths as a mere agricultural producer. We also want to reap the value added benefits of our strengths in areas such as food science, biotechnology and productive and sustainable agricultural practices.
The Future Face of Trade - A Borderless Economy
I have talked many times about the twin pillars of Australia’s trade policy and today I want to inject some new language into the national dialogue on trade.
In addition to tackling trade barriers at the border and building a competitive economy behind the border, we need to respond to the increasing challenges of trade across borders. Australia must increasingly be able to succeed in a global economy without borders.
This is trade in the digital age – an age in which medical and other services are delivered online and in which music, films and books are available at the push of a button. It’s sometimes difficult to grasp the speed with which the digital age has emerged.
But it is here and it can’t be ignored. E-commerce has little respect for conventional trade across borders and so our challenge is to move quickly to take advantage of the opportunities on offer.
We must also continue to invest in the transport, transfer and communication systems needed for doing business in the digital age. That is why I fully support the host of this year’s APEC forum, Singapore, putting logistics front and centre of the APEC agenda.
Here again we see links to the Government’s investment in skills and infrastructure. Australia’s ability to compete in the digital age is inextricably linked to our $43 billion investment in a National Broadband Network. NBN shapes as a powerful enabler to secure Australia’s position at the forefront of technical innovation and service delivery through to 2020 and beyond.
The flow of capital across borders is a critical factor in this equation. Investment is a crucial new form of trade. Australia’s two way investment flow will only increase and we need to facilitate the movement of capital.
That’s why we need to drive an improved regulatory environment and a better approach to tackling behind the border issues. These are key determinants which will allow capital to flow more freely. And in turn, this will help Australian companies to enter global supply chains and secure market share.
Global Economic Snapshot
There are clear signs that we are beginning to emerge from the worst global recession in living memory. Few but the most carping critics could argue that the Government’s stimulus packages have not been effective in helping to shield Australia from the worst of the economic fallout from the global recession.
Of course we have also enjoyed the benefits of a well-regulated banking system; and a level of economic integration with Asia that has cushioned Australia through the global downturn.
In other words, our engagement with Asia and the pain of structural reform have paid dividends for the nation. We have built a competitive economy which now finds itself extraordinarily well-placed to secure market share as the world economy begins to recover.
The future certainly looks more promising than the immediate past. China is headed towards 8% growth, Japan has surprised on the upside and the so-called green shoots continue to show promise among our other major trading partners.
As global growth rebounds, Australia must continue to prepare and position for the challenges and opportunities along the road towards 2020.
We are putting some key markers in place and earlier this month, I was in Singapore meeting with trade ministers from the Asian region. In Singapore, we committed to redouble our efforts to ensure that the ASEAN-Australia-New Zealand Free Trade Agreement comes into force on January 1, 2010. This is a region that is home to 600 million people and with a GDP of more than A$3 trillion.
In Singapore, we also resolved to work towards further regional economic integration with senior officials examining a Free Trade Area spanning the ASEAN region - plus six other countries. That is the ten nations of ASEAN plus China, Korea, Japan, India, Australia and New Zealand. This would create a trade region with a combined GDP of A$16.5 trillion.
Trade Liberalisation Triumphs Over Protectionism
It is one of the reasons I have been resolute in pursuing an aggressive trade liberalisation strategy and speaking out against any hints of a retreat to protectionism.
As the world economy slumped into recession, we quickly heard the siren call of the protectionists and their push for the imposition of new trade barriers. We have stared them down at every turn – in the US, in Europe and in China.
On balance we can declare that the protectionist push has been contained.
The world has rejected protectionism and there has been no repeat of the mistakes made in response to the Great Depression. Policy makers now recognise the central importance of trade within the global economy.
As a lead player in the G20 and APEC, Australia has helped to shape international initiatives to improve the availability of trade finance in order to ensure that trade remains an economic stimulus.
That’s why the G20 has put conclusion of the Doha Development Round at the centre of its action plan for recovery. Doha is critical to sustained economic growth and will have real consequences for jobs, for incomes and for families.
Trade is an economic stimulus and each trade round has increased the multiplier effect of trade. Doha will inject new stimulus and it’s the best insurance against any further protectionist tendencies.
The benefits of concluding Doha, are highlighted in a report released earlier this month by the Peterson Institute for International Economics. The report estimated the increase in global exports from concluding the Round would range from US$180 to $520 billion and potential world GDP gains would be between US$300 and $700 billion annually. More specifically, on the services side, the report found a 10% reduction by major economies to services barriers would increase exports by US$56 billion annually and global GDP by US$100 billion annually.
The push to liberalise global trade is no easy task but we will not give up the struggle. There is no alternative.
China
Australia’s proximity to the centres of global growth presents us with tremendous opportunities. To realise these opportunities, we must continue to strive for broader and deeper engagement with our region.
As Trade Minister I am determined to strengthen and deepen our trading relationship within Asia. And in Asia there is no bigger market than China.
The scale and the pace of China’s economic development are well known to everyone in this room. The good news for Australia is that China’s growth is set to continue.
China is one of our top two trading partners and certain to be the world's fastest growing economy this year, next year and probably the year after.
China’s demand for Australian resources has increased because so much of China’s stimulus spending is focused on the infrastructure and steel making which fuels demand for our coal and iron ore.
There are obviously tensions in the relationship with China at present. But these will pass. Whatever the political stresses and tensions which surface from time to time, China and Australia have shared commercial interests - and these interests will endure.
We are not standing still in our commercial relationship with China. Following my most recent meeting with China’s Commerce Minister, Chen Deming, we agreed that our senior trade officials should meet in Beijing in early September to progress the FTA negotiations. These plans are proceeding well.
And I continue to press ahead on a second track of commercial engagement with China. We are working with provincial governments in China to create the government to government frameworks through which Australian companies will be better placed to secure business opportunities.
Conclusion – Call to Action
As the dust begins to settle in the wake of the global financial crisis, there are signs of clear air ahead.
The decade ahead holds great promise and great opportunity. We are a country of just 22 million people. Our landmass may be positioned on the periphery of Asia, but Asia is absolutely central to Australia’s trade and investment future.
Our domestic economy alone cannot sustain Australia’s national prosperity. We must trade with the world and to do so effectively, we must continue to invest in the social and industrial infrastructure which will underpin future growth and prosperity. And we must engage with both Asia and the global community.
Let me close by making the point that in charting the course of Australia’s trade and investment future, no government can lay claim to a monopoly on wisdom and insight. We don’t have a magical crystal ball.
At the government-to-government level, we will continue to build the facilitative frameworks needed by business. But the commercial reality remains – commerce takes place at the business-to-business level. It is business which takes the hard investment decisions. I always encourage business to connect the dots better and to take advantage of the frameworks put in place by Government.
That is why I welcome the Trade 2020 Summit and applaud Austrade and CEDA for their initiative in organising today’s event and those that will follow.
Trade 2020 is about engaging the broader community in the great trade and investment debate of the next decade. We need the injection of new ideas and we need forums such as this to shape the public debate of issues that will have a powerful impact on this and future generations.
I welcome and encourage your participation in Trade 2020. I urge your constructive contribution to realising the decade of trade potential ahead of us.
Thank you.
ENDS