It’s a pleasure to be with you all today and, can I say, a pleasure to be able to launch, or help launch, this very important report that ACCI has put together as we come out of the coronavirus pandemic—and having this material, and the recommendations that go with it, really help Government be able to set its priorities. And I'm pleased to say that the recommendations broadly align with the direction that we're trying to head in. When I became Trade Minister just before Christmas there was—my approach that I spelled out very clearly—was that I would take a proactive approach, that I would take a principled approach and, where necessary, a very patient approach. Now, being proactive meant, first of all, trying to make sure that we increase the number of FTAs that we have. Since we've come to government- when we came to government, 23 per cent of our trade was covered by free trade agreements; that has now increased to up to 70 per cent of our trade. And at the moment, we're trying to broaden that even further with negotiations with the United Kingdom, and I'll touch on those in a minute, and a free trade agreement with the European Union. We're also looking at exploring other opportunities that we've got in the Indo-Pacific and also with more countries in Europe and Israel—and we've got some scoping studies being undertaken there at the moment.
But that proactive approach when it comes to trade diversification is not the only area we're really looking to move on—and Shane touched on another area which is incredibly important, and that's how we can simplify our trading systems. And in the Budget, there was an incredibly important announcement of over $38 million for us to be able to progress simplifying our trading system—and that work is about to commence at speed. I'll be announcing an appointment of someone to lead that work in the coming weeks and, also, Paul Little has agreed to chair an advisory group of business to make sure that Government is getting the advice that it needs, as it simplifies its trading systems, to ensure that what we're doing will actually help on the ground in a very practical way businesses to be able to export in a seamless manner—export and import in a seamless manner. And Shane, what we're trying to do is very much make sure that we do have that digital approach, whereby we can move- so, the majority or if not all trade, can take place via digital means, rather than a paper-based system. Now, often programs like this can be timely and expensive, but we think we've got the right people in the right place and the right advisory group for us to really start to make significant progress in this regard and we'll have more to say on that over the coming weeks.
So we're looking to diversify our trade. We want to simplify our trading systems and, also, continue on the work that we've been doing with regards to non-tariff barriers—so those things behind the border, which also impact on our ability, especially for us to be able to export seamlessly. And we're going to continue on with that work. We’ve identified what those barriers are in a lot of our main trading partners and we want to work now to see what we can do to address that directly, to address those NTBs. So, we will be continuing to work very hard in that direction, and that is just part of a very, very proactive approach we're taking at the moment.
We also want to take a principled approach. So in everything that we're doing, we want to make sure that free trade in goods, in services and investment is at the heart of what we're doing.
And I want to touch briefly on investment, because it's really important at the moment. Throughout the pandemic, global investment flows halved. In Australia, we dropped by nearly 40 per cent, and one of the things we're going to have to do as we come out of the pandemic is make sure that we can increase those investment flows again. So sending that message that Australia is open for foreign investment—we want foreign investment, we encourage foreign investment, and we understand the importance of foreign investment for innovation and job creation—is going to be an incredibly important message that we all continue to give as we come out of this pandemic. And it’s one of the things that I'm really hoping we’ll be able to achieve in the UK free trade agreement—the UK is our second largest investor here in Australia—is that we'll be able to once again strip back, simplify and make it easier for UK investment here in Australia, likewise for Australian investment in the UK because ensuring that we can continue to grow those investment flows is going to be really, really important.
The report also touches on a couple of other key things. One is that there is very good knowledge of our free trade agreement with China, but when it comes to our other free trade agreements, there doesn't seem to be the awareness of it. So, I think one of the tasks we now have as part of our trade diversification is to make sure that exporters understand the opportunities that are out there. And Shane touched on ASEAN, and the extraordinary growth we're seeing right at our doorstep in ASEAN, and making sure there is true recognition and understanding of the free trade agreement we have with ASEAN and the benefits that continue to flow from that agreement—plus all the other agreements that we have—is something that we're also going to have to redouble our efforts on. As I mentioned earlier, we've grown the percentage of trade covered by free trade agreements from roughly about 23 per cent to over 70 per cent. But making sure that exporters understand those agreements, the benefits that flow from them, and the opportunities that flow from them, is going to remain an incredibly important part.
Also, there is still a very strong recognition coming through on the survey of the importance of our trading relationship with China. Now, once again, would like to reiterate that we do see our trading relationship with China as an incredibly important one and one which has been of mutual benefit to both nations, especially when you see the growth that has occurred under ChAFTA. It really shows that our exports have helped lift millions of Chinese out of poverty. Likewise, Chinese imports and the export dollars that we've got from our relationship, trade relationship, with China has helped us maintain our standard of living. And we want to continue that constructive economic engagement with China. Now, obviously, at the moment, that is difficult. But one of the things we're very committed to is to be patient in trying to make sure that we can do everything we can to get that constructive engagement happening again. But, in the meantime, we’ll, as I've said, we'll be exploring free trade agreements with the United Kingdom, and I'll be talking to my counterpart Liz Truss again tonight on that free trade agreement. We've got our Prime Minister heading to the UK late next week, so the clock is ticking. We've got about seven or eight days to try and get an agreement in principle on that FTA. We’re getting to the pointy end of discussions. We’re meeting regularly, almost daily, with Liz Truss as we try to finalise an agreement in principle on that.
We've also got the eleventh round of negotiations being undertaken at the moment with the European Union. Those discussions started on Monday and continue, and our hope is, if we can build on the success of the 10th round when we made the most substantial progress that we had to date, that by the time we get to the end of the 12th round, which we're looking at some time end of August, beginning of September, we might be in a place to really move towards the final stages of finalising that agreement with the European Union. So, that's the real focus at the moment. But it's not only in the bilateral area, there's also work going on in APEC and, in particular, we'll be looking to make more progress on the New Zealand stewardship on reducing tariffs on environmental goods and freeing up further environmental service flows under APEC.
An incredibly important time for the World Trade Organization. What we've seen is, for the first time, I think post-Second World War, we're seeing challenges to the rules-based order, especially when it comes to trade. And we need a properly functioning World Trade Organization to be setting the rules that we need, but also acting as that independent umpire when countries feel like those rules are not being adhered to. And, obviously, you've seen from us, we want- we've taken our dispute with China with regards to barley to the World Trade Organization, we're looking at what we’ll do with regards to wine, and we'll have a decision on that in the coming weeks. So, we see the World Trade Organization as the setter of rules, but also the independent umpire of making sure countries adhere to those rules. It’s critically, important at the moment, as we deal with this very complex geostrategic environment in the Indo-Pacific.
So I will leave it there. Happy to go to the Q&As and address any questions, suggestions, thoughts that people might have after we’ve heard from the rest of our speakers. But, once again, can I just commend ACCI for this international trade survey 2021. It helps inform policy at a national level and the document that does that is a document that is incredibly worthwhile, and I thank everyone who has participated and contributed to it.
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