Trading our way to greater prosperity and security
Albanese Government Trade and Investment Agenda
I begin today by acknowledging the Traditional Custodians of the land on which we gather today, and pay my respects to their Elders past, present and emerging.
I extend that respect to Aboriginal and Torres Strait Islander peoples here today.
Thank you to everyone for joining us here today – I am honoured to be speaking to some of the best minds in Australian trade policy.
I would particularly like to thank RMIT and the Australian APEC Study Centre for organising today’s event.
As we approach the APEC Leaders’ Summit in Bangkok on the 18th and 19th November, it’s a timely reminder of the crucial role APEC has played in fostering economic integration and practical collaboration across our region for more than three decades.
The Australian APEC Study Centre has made a significant contribution to this effort, particularly through its capacity building initiatives and expert analysis and advice.
Ladies and gentlemen, we are meeting here today at a challenging time for international trade and for the Australian economy.
High inflation, rising interest rates, falling real wages and a legacy record debt are making life harder and less affordable for many Australians.
Chronic skills shortages are making it difficult for businesses to operate and compete to full capacity and profitability.
Global supply chains continue to experience major disruption, initially caused by COVID containment policies but exacerbated by Russia’s illegal invasion of Ukraine.
The effects of climate change are being felt around the world, but particularly in our region – and that is why we are bidding, jointly with our Pacific partners, to host a UN climate change Conference of the Parties in 2026.
The vast investment needed to fund the transition to low-carbon, low-cost and reliable energy generation, storage and transmission is a significant challenge; but also creates real employment, commercial and partnership opportunities in Australia and in our region.
After decades of progress building a multilateral trading system underpinned by common rules of the road, a turn away from trade liberalisation has emerged in some parts of the world in recent years.
And great power rivalry is undermining many elements of the international rules-based order upon which all nations, whatever their size, depend on for peace, stability and prosperity.
It is no longer possible – if it ever was – to insulate our trade policy from geo-politics. Attempts to apply economic pressure including targeting of Australian goods in recent years has demonstrated the risks to our economy when the rules of the road are ignored.
Australia’s future prosperity will in part depend on how well we can adapt to the challenging strategic circumstances we face.
And likewise, our ability to navigate those strategic challenges will in part be shaped by the extent of our economic power and influence.
Increasingly, economic policy and national security policy are intertwined – a resilient Australian economy underpins national security.
Australia is economically stronger when global trade flows freely.
More trade, not less, is a key part of how we build the economic future we want in Australia, with secure, high-paying jobs and an open, internationally competitive economy powered by clean energy.
But how we trade, who we trade with, and what we trade needs to reflect our current strategic moment and the challenges we face.
Today I will outline the Government’s vision for trade and make the case for why trade is a force for good in addressing our current and future challenges.
There are four principles underlying our approach.
The first principle is that to meet the challenges of our time, we need to deepen and more importantly diversify our trading relationships, particularly in our own region.
As we have discovered, overreliance on any single trading partner comes with significant risks.
That’s why trade diversification is the central plank of the Government’s trade policy strategy.
That’s not to say that Australia can neglect our economic and trade relations with China.
China remains our largest trading partner, accounting for more of our exports than Japan, the United States and the Republic of Korea combined.
But trade blockages imposed by China have reinforced the importance of businesses taking a considered approach to minimising risk exposure.
We want to see China’s trade measures impeding a wide range of Australian exports removed, including the duties on barley and wine that Australia is challenging through the World Trade Organization dispute settlement system.
As with any WTO dispute, we are open to discussing possible off-ramps that result in a mutually agreed solution that is in Australia’s interests.
As we seek to stabilise the relationship with China, Australia will continue to work with our partners to build a region that is stable, prosperous and where national sovereignty is respected.
Australia has long been a driver of regional economic integration and a champion of regional institutions.
It was a recognition in the Hawke-Keating era that Australia’s security and economic future resided in Asia that led us to establish APEC.
And it is the same recognition driving us now to deepen our economic ties across the Indo-Pacific.
Joining the US-led Indo-Pacific Economic Framework was one of the first acts of the Albanese Government.
IPEF is focused on delivering concrete solutions that address contemporary challenges like decarbonisation, digital trade and supply chain resilience.
It seeks to lower the types of trade barriers you won’t find in a tariff line and to elevate labour and environmental standards across the region, ensuring that trade is both free and fair.
Last month, I signed the landmark Australia-Singapore Green Economy Agreement, which establishes a new framework for strengthening economic collaboration in green growth sectors and harnessing the opportunities of the global energy transition.
And over the weekend, we substantively concluded negotiations to upgrade the ASEAN-Australia-New Zealand Free Trade Agreement, which will open new opportunities for Australian services exporters and investors and bind us closer to the region.
Our Southeast Asia Economic Strategy to 2040 – led by Special Envoy for Southeast Asia, Nicholas Moore – will map out further export and investment opportunities matching Australian capabilities across key sectors in the region.
Deepening our trade with India, the world’s fastest growing large economy, is a high priority including through the India Economic Strategy.
We hope to ratify the India Economic Cooperation and Trade Agreement this year and are powering ahead on negotiating an ambitious Comprehensive Economic Cooperation Agreement.
We are also working to implement our trade agreement with the United Kingdom. In addition to removing tariffs and facilitating services trade and investment, the agreement includes innovative elements such as commitments to implement reciprocal arrangements to provide for royalties to be paid to Australian artists, including Indigenous artists, where their artworks are resold in the UK.
Looking further afield, the Australia-European Union Free Trade Agreement will potentially be a game changer, providing enhanced access to a high-income market of almost 450 million people, with a combined GDP of 23 trillion Australian dollars.
The geostrategic and economic case for concluding a trade agreement with the European Union has strengthened.
A trade deal can build on our mutually beneficial economic ties.
For example, in renewable energy and critical minerals, where Australia can be a safe, reliable supplier.
But there are other important commercial interests at stake, and any deal we strike will put these interests front and centre, including delivering substantial new market access for our key agricultural products.
We are also partnering with other countries to combat non-tariff barriers that make it harder for our exporters to trade.
I have tasked my Department to lead and coordinate efforts with Australian stakeholders to address existing and emerging non-tariff barriers to trade.
A Ministerial-level Technical Barriers to Trade Working Group will have oversight of this important work.
We are also making it easier for our businesses to trade globally by streamlining trade processes through the Simplified Trade System. These reforms will enhance the international competitiveness of the Australian economy.
All of these elements combined will help us diversify our network of trading partners and create new opportunities for Australia exporters and investors.
It’s work we need to undertake to protect Australia’s economic future and support an Indo-Pacific region that is peaceful, stable and prosperous.
While we are investing heavily in our region, we continue to invest in the multilateral trading system.
Representing Australia at the successful Twelfth World Trade Organization Ministerial Conference was one of the first things I did as Trade Minister.
The WTO system is fundamental to Australia’s prosperity and security and has underpinned economic progress and stability across the Indo-Pacific.
That’s why our second principle is that we must work to not just defend the multilateral system, but to reform it so that it delivers for Australia, for the region, and for the broader world.
Of course, four decades of increasing openness to international trade and investment in Australia – underpinned by WTO rules – have materially increased Australian living standards.
But reform is needed to reinvigorate the negotiating function of the WTO and update the rules of the road to better respond to contemporary challenges.
The package of outcomes at the Twelfth Ministerial Conference – including an agreement to end harmful fisheries subsidies achieved by working closely with our Pacific Island partners and agreed steps toward WTO reform – showed that progress is still possible.
Australia is not an 800-pound gorilla, which means we cannot risk a return to the “law of the jungle” should the WTO be allowed to wither.
So, we are investing in reform of the multilateral trading system including its dispute settlement system and we are investing in the region.
But we also need to invest in ourselves.
That means diversifying not just who we trade with, but what we trade and how we trade.
That means using effective industry policy to ensure our services and product offering to the world is more diverse, of higher value and more sophisticated.
That also means using all possible trade channels for our exporters to grow and diversify, including digital channels. The digital economy is expected to continue growing at an accelerated rate.
This is our third principle.
At the macro level, trade creates jobs and jobs in export industries tend to pay higher wages.
Recent analysis shows that 1 in 4 Australian jobs is related to trade.
And jobs in export industries pay 5 per cent above the national average income.
Trade also plays a significant role in delivering cheaper goods and services, and more competition, easing cost of living pressures for Australian families while reducing input and running costs for businesses, making them more competitive further down the supply value chain.
For example, a trade deal with the European Union that eliminates the 5 per cent import tariff on motor vehicles could result in savings of up to $2,000 for an Australian family purchasing a VW Golf. A plumber could save up to $2,600 on a VW Transporter Van.
Open trade is a net positive for our society.
But there are winners and losers in international trade. Australia’s manufacturing sector has declined rapidly – now accounting for less than 7 per cent of GDP.
That’s bad for jobs in our regions and suburbs. It is also bad for national resilience, for our capacity to solve national problems and engage in global supply chains.
That’s why open trade must also be paired with good economic, industry and social policy.
We need to be a nation that innovates and creates new employment opportunities delivering economic growth across Australia, including our outer suburbs and regions.
We know that when given the chance to compete on a level playing field, Australian businesses thrive.
That’s why we are investing in Australian manufacturing, Australian innovation and Australian skills.
Building industry capability in the complex modern world of global trade is about much more than just relying on our natural endowments.
It’s something that must be built deliberately and strategically as a genuine partnership between industry, government, investors and our scientists, engineers and research institutions.
The National Reconstruction Fund will help expand Australia’s industrial base, diversify the economy, and create sustainable, high-paying jobs.
It will help drive investment in clean energy manufacturing, medical manufacturing, new technologies, agriculture and critical minerals.
The Fund will give us a competitive edge in global trade, propelling us further up the value chain, while continuing to meet our international obligations.
Foreign investment will also play a crucial role in lifting us up, bringing in new capital, capability and resources.
Companies across the globe are leading investment in Australia’s solar, wind, hydrogen and critical minerals industries.
The World Expo 2025 in Osaka will provide an opportunity to showcase our clean energy and low-emissions technologies on a global stage and entice even greater investment in Australia’s renewable energy sector.
All of these measures will help us create a future made in Australia and position us globally to seize the substantial opportunities of the transition to net zero.
This brings me to the fourth and final principle of our approach.
We believe strongly that the benefits of trade must be shared among the community.
Trade must be a driver of inclusive economic growth and greater economic wellbeing for all Australians.
It must deliver for the Australian people.
At the heart of the Government’s economic policy is a fundamental belief that fairness and equality should be our guiding stars.
Trade is no different.
Sharing the benefits starts with how we involve the community in the trade policy process, and a recognition that a diversity of voices is needed.
The Trade 2040 Taskforce will bring together government, industry, unions and community representatives and serve as the main consultation forum to progress the Government’s trade policy agenda.
The Taskforce will ensure that traditionally marginalised voices are amplified, including those of First Nations Australians and women.
The Government will soon announce the appointment of an Ambassador for First Nations People, who will have responsibility for ensuring Indigenous perspectives, experiences and interests are reflected in the Government’s foreign and trade policy positions.
Ensuring the benefits of trade flow to the Australian community also means we maintain Australia’s right to regulate key social policy areas like health, the environment and issues affecting First Nations Australians in all our trade agreements.
It means giving a fair go to Australian workers by including rules in trade agreements that commit to maintaining high labour standards.
It means investing in the skills, training and development of Australian workers in our regions and suburbs.
It means helping small and medium businesses take advantage of the opportunities that come with open trade.
And it means preserving the Government’s ability to govern in the national interest.
To that end, we will not include investor-state dispute settlement in any new trade agreements.
And when opportunities arise, we will actively engage in processes to reform existing ISDS mechanisms to enhance transparency, consistency and ensure adequate scope to allow the Government to regulate in the public interest.
Ladies and gentlemen, we are the Government of free, fair and open trade.
We believe deepening and diversifying our trading relationships will make us more resilient.
We believe defending and reforming the rules-based multilateral trading system is vital for Australia’s security and prosperity, and that of our region.
We believe a diversified economy that harnesses Australian ingenuity will make us stronger.
And we believe that the enormous benefits of open trade should accrue ultimately to the Australian community.
We look forward to partnering with you all in this whole-of-nation effort.
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