The Economist Global Trade Week
Australia is a trading nation.
Our 28 years of uninterrupted economic growth pre-pandemic was driven by our embrace of free trade, open markets and liberalisation.
Right now, action is required from those of us who champion the benefits of free and open trade.
In the face of the challenges caused by the COVID-19 pandemic, there has never been a more important time to reform, bolster and support our global, rules-based trading system.
The World Trade Organisation is the only global institution that develops, monitors and enforces global trade rules.
Which is why it is so concerning to Australia, and to many of our international partners, that this system is facing significant challenges.
The first of these challenges is to openness.
While we have made remarkable progress towards liberalisation, we've seen in the last few years worrying trends towards insularity and protectionism.
The 25th Global Trade Alert Report, for example, found a sharp acceleration in protectionism between 2017 and 2019 – with 625 trade distorting measures introduced by governments in 2017, rising to almost 1,050 in 2019.1
The second challenge we face is to the authority of the rules of the global trading system.
Specifically, the ability within the WTO system to enforce agreed rules.
The best way that we can protect our interests is through having a proper functioning dispute settlement mechanism because that means when the economic heavyweights are in dispute, there is an independent umpire, and there is a body which sets the rules that they have to adhere to. Otherwise, smaller economies will get caught in the wash of big economic disputes.
That is why Australia remains deeply concerned that the Appellate Body remains unable to operate.
Australia shares many of the concerns raised by the US and other members around the operation of the Appellate Body.
But a binding, two-tiered dispute settlement system is crucial to enforcing the rules and upholding the authority of international trade law.
An effective and functioning dispute settlement system matters to every WTO member.
Members need to be certain that breaches of trade rules can be effectively and conclusively arbitrated.
It also matters to our businesses – the engine room of our economies – who rely on the predictable enforcement of global trade rules.
While it won't be easy, Australia remains committed to finding a way through the current impasse by looking for reforms to bring the Appellate Body back to life.
In the meantime, Australia and 24 WTO members have agreed an interim appeals arrangement – the MIPA – to finalise disputes between participating countries.
Australia's participation in this arrangement allows us to protect our commercial interests in disputes while the Appellate Body is not functional.
It also reflects our interest in ensuring the broadest enforceability of WTO rules until the dispute settlement system is once again fully functional.
Challenges to economic openness, liberalisation and the rules-based trading system have implications beyond the WTO.
The rules-based system allows countries to pursue and defend their economic interests, no matter their relative size or power.
We want to see multilateralism delivering for all members, not only in achieving a stronger recovery from the pandemic, but as we enter into a new and more complex era of geostrategic competition.
That's why strengthening the WTO is one of Australia's top priorities.
We're also investing in efforts to update the WTO's rulebook to ensure it reflects modern trade and business priorities and is effective in addressing unfair trade practices.
We need to restore confidence in the rule-making pillar of the WTO.
We're jointly leading, with Japan and Singapore, e-commerce negotiations to develop the first global set of digital trade rules.
These rules will promote a safe and open online environment, and deliver tangible benefits to business and consumers at a time when the world has become increasingly reliant on digital technology for economic activity.
The pandemic has been one of the greatest accelerators of the digital transformation, so this is particularly timely.
With the EU, Australia is driving work to develop new rules to help services exporters navigate qualifications, standards and licensing requirements in global markets.
We're actively engaged in efforts in Geneva to improve compliance with members' transparency and notification obligations which is critical to ensure rules are complied with and they are effective and enforceable
And, as Chair of the Cairns Group, we're fighting for reform of global rules on agricultural trade, which remains the most protected and distorted of all sectors.
Just last week, I hosted a meeting of my fellow Cairns Group ministers to advance our efforts to deliver a meaningful and ambitious outcome on agriculture at MC12.
Our focus is on capping and reducing growing levels of trade and production distorting agricultural subsidy entitlements to create a more level playing field for efficient and competitive farmers in Australia and around the world.
This is good policy that will help tackle inefficient overproduction that depresses global prices and exacerbates global food insecurity.
It's also an investment in the credibility of the WTO system, particularly in the eyes of developing countries and least developed countries that rely on agricultural trade, and are impacted most by the imposition of subsidies elsewhere in the world.
Achieving meaningful outcomes at MC12 will send a necessary and timely signal of our collective support for the WTO.
MC12 is our opportunity to show the world that the WTO can continue to deliver, and that WTO members are ready to defend and advocate for openness, liberalisation, and the rules-based system.
First, we must show the WTO can contribute to the health and economic recovery of its members in the wake of COVID-19.
Australia is supporting a range of proposals on this, including the Ottawa Group's proposed “Trade and Health Initiative”, which aims to keep critical supply chains open and trade in health-related products flowing.
We're also supporting equitable, widespread vaccine access, and we look forward to progressing discussions in the lead-up to MC12 about how IP rules can contribute to this objective.
Second, Australia wants to see tangible progress at MC12 on a range of negotiations.
I've already discussed Australia's work to galvanise support on ambitious initiatives on services domestic regulation, e-commerce and agriculture.
The WTO also has an opportunity to demonstrate how trade rules can contribute on issues of global concern like the environment…
…by concluding new rules to discipline harmful fisheries subsidies – an outcome on this is long overdue.
…and by launching negotiations to remove barriers to trade in environmental technologies, goods and services.
Reaching agreement on some or all of these initiatives will not only have practical benefits for our economies, businesses and for jobs…
…it will also be a vote of confidence in the convening power of the WTO in developing rules that facilitate more trade and greater prosperity.
To conclude, we need a multilateral trading system that facilitates cooperation between countries to address global challenges, underpinned by international rules, norms and principles.
We need a system that ensures every country is playing by the same legally binding rules, regardless of how big or small they are.
The WTO matters, and that's why its reform – to ensure the multilateral trading system continues to serve all our interests – matters too.
Australia stands ready to work with all partners to identify feasible options.
We know that outcomes will only be possible if all major economies have confidence the WTO can effectively address their interests.
As we look to the challenges that lie ahead of us – whether in recovery from COVID-19, or transitioning to a zero emissions future, or combatting new threats…
…it is increasingly clear that reforming the WTO, and strengthening our multilateral trading system now, is one of the most important investments we can make to deliver a more stable and prosperous future for all.
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