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Your location: Performance > Outcome 1 > Output 1.1 > 1.1.5 Bilateral, regional and multilateral trade negotiations

OUTPUT 1.1: Protection and advocacy of Australia’s international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.5 Bilateral, regional and multilateral trade negotiations

On this page: Overview :: WTO Doha negotiations—key issues :: Free trade agreements :: Australia–Japan Trade and Economic Framework :: WTO Doha Round negotiating issues :: Food safety :: Supporting the WTO and trade liberalisation in other international trade bodies :: WTO compliance and dispute settlement :: WTO accessions

Overview

The department advanced Australia's trade interests through the World Trade Organization (WTO) Doha Round negotiations. The successful conclusion of the Doha Round would result in wide-ranging trade liberalisation of global markets to the advantage of Australian farmers, manufacturers, miners and service providers. In the past year, a number of key interim deadlines were missed in the negotiations, reflecting the wide divergence of views among the 146 WTO members on a range of issues. Nevertheless, some progress was made. The department provided close support for the work of Mr Vaile in promoting Australia's interests, particularly his hosting of the first Doha Round informal meeting of WTO trade ministers in Sydney in November 2002.

Australia's continued chairing of the Cairns Group of agricultural fair traders, and the support the department provided to Mr Vaile, were instrumental in advancing Australia's trade interests in the Doha Round. The Cairns Group developed key coordinated negotiating proposals for the crucial issue of agricultural reform—on market access, domestic support and export competition. We managed the group's activities, including by helping organise a major Cairns Group ministerial meeting in Bolivia in October 2002.

We used the WTO dispute settlement system to pursue Australia's trade interests. Australia initiated disputes against the European Union's sugar regime and its legislation for geographical indications. In a joint complaint with ten other WTO members, we successfully challenged the US Continued Dumping and Subsidy Offset Act of 2000. We are working with other Australian Government agencies to respond to disputes initiated by the European Union and the Philippines about aspects of Australia's quarantine regime.

The department did much work to advocate a free trade agreement (FTA) with the United States. We led and coordinated Australia's participation in two rounds of negotiations during 2002–03, with more planned for later in 2003. We also led Australia's participation in successful FTA negotiations with Singapore. The agreement was signed in February 2003 by Mr Vaile and his Singaporean counterpart. It will deliver significant trade liberalisation and a more predictable business environment for bilateral trade and investment.

We made strong progress in negotiating a comprehensive FTA with Thailand. Both sides agreed to make every effort to conclude the negotiations by October 2003. We also played a major role in strengthening our key trade and economic relationship with Japan by leading consultations on a new bilateral trade and economic framework. The framework was signed by the Prime Minister and Japan's Prime Minister Koizumi in July 2003.

WTO Doha negotiations—key issues

In the past year, a number of key interim deadlines were missed in the Doha negotiations, reflecting the wide divergence of views among the 146 WTO members on a key range of issues, including in agriculture, industrials and on developing country issues. The department played a constructive role in seeking to bridge these differences, particularly through our support for Mr Vaile's hosting of the first Doha Round informal meeting of WTO trade ministers in Sydney in November 2002.

The Sydney meeting included ministers from 25 countries representing 85 per cent of world trade. It advanced discussion on the timetable for the negotiations and the difficult issue of access to medicines for developing countries. The meeting provided some needed political momentum to the negotiations, with ministers agreeing on areas where they needed to cooperate. Further informal ministerial meetings were held in Japan, Egypt and Canada in the lead up to the biennial WTO Ministerial Conference in Cancun, Mexico in September 2003.

With more than 100 developing countries participating in the WTO Doha Round, outreach work with developing countries has been an important part of Australia's efforts to advance the negotiations. In addition to our work with the many developing country members of the Cairns Group, we ran trade policy training courses and seminars in developing countries in Africa and Asia, covering a range of issues including agriculture, geographical indications and environment.

The department coordinated preparation of Australia's offer in the General Agreement on Trade in Services (GATS) negotiations, which was submitted by the Government at the end of March 2003. Australia was one of five WTO members to release publicly its offer, indicating our transparent approach. The release has been well received and has stimulated better community understanding of Australia's approach to the negotiations.

The department supported Mr Vaile's extensive program of domestic consultations and outreach activities on WTO issues. These activities provided interested parties with information on WTO negotiation processes, helped formulate Australia's negotiating priorities, and built understanding on the potential benefits of global trade negotiations. The department organised formal meetings and contacts; called for public submissions; and facilitated extensive use of our website as a channel for disseminating information. We also held trade policy training courses and seminars for officials and non-government representatives.

For more detail on specific negotiating issues in the WTO Doha Round see page 65.

Free trade agreements

The department was responsible for taking forward the Government's initiative for an Australia–United States Free Trade Agreement (AUSFTA), Australia's major bilateral trade policy priority. We continued to support the Government's efforts to ensure that an FTA with Australia was a negotiating priority for the United States. This helped prepare the ground for the joint announcement by the Prime Minister, Mr Howard, Mr Vaile and US Trade Representative Robert Zoellick on 14 November 2002 that Australia and the United States had agreed to start negotiations.

Photo - See caption below for description
The 2nd round of the Australia–United States Free Trade Agreement negotiations was held in Honolulu, Hawaii in May 2003. Pictured are the leader of the Australian delegation, Special Negotiator (FTAs and Processed Foods) Stephen Deady (left), and his US counterpart, Ralph Ives (right).
Enlarge image :: Photo gallery

The department is working to meet the Government's priority of reducing the most significant market access barriers facing Australian exports in the United States, particularly in the agriculture sector. We do not underestimate the challenge, given the resistance to liberalisation of some key products by the strong agriculture lobby in the United States and the detailed work required on many complex issues in these negotiations. As part of our efforts to overcome these obstacles, we helped build support in the United States for the AUSFTA, including in Congress and the business sector.

Before the first round of AUSFTA negotiations in March 2003, the department coordinated consultations with industry, state and territory governments and other stakeholders, and among Australian Government agencies. These consultations were vital to informing the Government's approach to the negotiations and its public statement of objectives for the FTA, announced by Mr Vaile on 3 March 2003. We engaged the community on the negotiations with a public invitation for comment that attracted nearly 200 submissions from a wide range of industry and other organisations and individuals. We also directly consulted more than 180 industry bodies, companies and non-government organisations in the first half of 2003. We initiated a regular newsletter, AUSFTA briefing, circulated to more than 1000 stakeholders and interested parties and published on the department's website.

The first two rounds of negotiations, in March and May 2003, made good progress in laying the foundations for a framework text and for detailed negotiations on market access that began in July. Twenty working groups, each led by a departmental negotiator, covered the range of likely chapters in the FTA, with 14 Australian Government agencies involved. Agreement was reached on a broad framework for the FTA and there was early progress in developing text in a number of areas.

We successfully led negotiations for an FTA with Singapore. The Singapore–Australia Free Trade Agreement (SAFTA) was signed by Mr Vaile, and his Singaporean counterpart, Brigadier-General George Yeo, on 17 February 2003. SAFTA entered into force in July 2003.

SAFTA eliminates all tariffs that apply to trade in goods produced in the other country. It also reduces barriers to trade in services and investment and establishes a more open and predictable business environment, including through rules on telecommunications regulation, competition policy, government procurement, technical standards, intellectual property, electronic commerce, customs procedures and business travel.

The department led the Australian delegation in ongoing negotiations on an FTA with Thailand. Both sides have tabled detailed initial offers on eliminating tariffs. Progress was also made in developing a legal framework for negotiations to improve market access in the services and investment areas, and in developing rules on issues such as customs procedures, transparency, sanitary and phytosanitary measures and dispute settlement. We took the views of industry and other interested parties into account in formulating our negotiating strategy.

We played an active role in ensuring that ministerial-level contacts advanced Australia's overall objectives in the negotiations. Mr Vaile and his Thai counterpart reviewed progress in the talks in November 2002 and agreed on a range of measures to address Thailand's regulatory capacities, including in the areas of competition policy and customs. Following Mr Vaile's meeting with Thailand's Prime Minister Thaksin Shinawatra in June 2003, both sides agreed to aim to complete the negotiations by October 2003.

Australia–Japan Trade and Economic Framework

The department contributed to strengthening the Australia–Japan relationship through leading the Government's participation in trade and economic consultations with Japan. The consultations led to agreement on a new Australia–Japan Trade and Economic Framework, signed by the Prime Minister and Japan's Prime Minister, Junichiro Koizumi, in July 2003.

The framework charts a course for the long-term development of this critically important trade and investment relationship. It incorporates an undertaking to complete a joint study by mid-2005 on the benefits of and means to achieve trade and investment liberalisation between Australia and Japan.

The framework also contains a package of eleven measures that will enter into force immediately. These are aimed at facilitating trade and investment and improving policy and regulatory links. This package contains initiatives in the established sectors of food and energy, emerging areas such as information and communications technology and e-commerce and paperless trading, and on other issues such as the mutual recognition of professional qualifications, securities markets regulation, investment promotion and competition policy.

WTO Doha Round negotiating issues

Agricultural trade negotiations

Australia led efforts by the Cairns Group of agricultural fair traders to develop and table in the WTO Doha Round three detailed negotiating proposals for agricultural reform—on market access, domestic support and export competition. The department promoted these negotiating positions at a number of special agriculture negotiating sessions in the WTO throughout 2002–03 and through visits to a number of Cairns Group capitals, including Bangkok and Brasilia.

We supported Mr Vaile's role as Chair of the Cairns Group, including by helping organise the Cairns Group Ministerial Meeting in Santa Cruz, Bolivia, in October 2002. Special guests, including US Trade Representative, Mr Zoellick, and Ugandan Minister for Trade, Mr Rugumayo, enhanced the Cairns Group's links with key developed and developing country WTO members.

The department also contributed to the Cairns Group's extensive program of advocacy and outreach. Australian officials visited Gaberone, Cairo, Kampala, Dar es Salaam and Nairobi to deepen the Group's dialogue with key members of the African Group, and delivered training sessions to African trade officials in conjunction with the WTO Training Institute. In Europe, we placed opinion pieces in the press, extended our dialogue with reform-oriented non-government organisations, and used our missions and visits to key capitals to press Australia's interests, including on the reform of the European Union's Common Agricultural Policy.

Industry consultation was a high priority. Mr Vaile and the department continued to consult closely with Australian rural industry representatives before formulating negotiating positions. We provided feedback on the progress of the negotiations, including on the implications for Australian industry of the Chair's draft reform proposal for agriculture. Mr Vaile addressed peak agricultural bodies on these issues at the Agricultural Trade Consultative Group meeting in May 2003.

Services negotiations

The department coordinated preparation of Australia's offer in the General Agreement on Trade in Services (GATS) negotiations, which was submitted by the Government at the end of March 2003. Australia was one of five WTO members to release publicly its offer. The decision to do so has been well received and has facilitated better community understanding of Australia's approach to the negotiations. Australia's offer covered elements of financial services, telecommunications, computer services, legal services, mining services, environmental services, landscape architectural services, maritime transport services and air transport (ground handling) services. These are all priority sectors for Australian exporters in the negotiations.

We kept in touch with industry about the progress of the services negotiations and held discussions with non-government organisations. We corrected misinformation about the GATS, including its implications for the ability of government to regulate the services sector and to administer and fund public services.

Industrial products negotiations

The department worked closely in industrial product negotiations with other WTO members to promote a framework for negotiations that, as agreed in Doha, would result in the reduction or elimination of tariff peaks, high tariffs and tariff escalation with no exclusions from product coverage, and deal with non-tariff barriers. We pressed for outcomes that would deliver real market access gains for Australian exporters of industrial products. To this end we kept in close contact with industry stakeholders on identifying Australia's market access priorities and analysing the impact of possible negotiating frameworks. We submitted an initial list of non-tariff barriers facing Australian exporters to the negotiating group in January 2003.

Intellectual property negotiations

The department continued its lead role in resisting the push by European and other WTO members to extend a higher level of protection to geographical indications for food and other products (for example, parmesan and mozzarella). On this key Doha Round issue, we initiated and conducted workshops in the Asia-Pacific region to increase the technical understanding of trade officials and intellectual property administrators. We maintained a high level of outreach in Asia, Central America and Africa, as well as lobbying in the WTO in Geneva.

We played a facilitating role on the issue of access to affordable medicines for developing countries, especially through advice to Mr Vaile for his discussions at the informal meeting of WTO trade ministers in Sydney. We initiated the Asia-Pacific Economic Cooperation (APEC) Intellectual Property Toolkit to reduce commercial piracy in member economies through better enforcement of intellectual property rights.

The department maintained its commitment to consult on a wide-ranging and regular basis across all interested sectors. This has been conducted through presentations, seminars and an electronic newsletter. These built on the increased public awareness of the balance needed in the international intellectual property system that was generated by the Sydney meeting.

Food safety

The department continued to work closely with the Department of Agriculture, Fisheries and Forestry to promote the role of science in international quarantine decision-making, in line with WTO rights and obligations. In relation to imports, we were active in WTO meetings, FTA negotiations and bilateral discussions, in explaining Australia's conservative, science-based approach to quarantine, and the WTO consistency of our regime. On the export side, we worked with Biosafety Australia and the Australian Quarantine and Inspection Service (AQIS) to increase market access for our agricultural products by ensuring other countries based their own quarantine measures on science and did not unfairly restrict trade. Recent wins include the signing in June 2003 of new market access protocols with China for the export of Australian beef, sheep and goat meat.

In September 2002, we had a significant role in the national foot-and-mouth disease outbreak simulation—codenamed Exercise Minotaur—including through briefing foreign media and all posts to ensure that trading partners did not mistake the simulation for a real disease outbreak and close markets to Australian agricultural produce. The simulation also tested the procedures we have in place with other domestic agencies, industry and state governments, to protect the $9 billion worth of Australian agricultural exports that would be under threat from a real foot-and-mouth outbreak.

Supporting the WTO and trade liberalisation in other international trade bodies

The department helped the Prime Minister obtain a commitment from APEC Leaders in Los Cabos, Mexico, in October 2002 to make every effort to meet the 2003 deadlines of the WTO Doha Round. We also continued to build coalitions of support within APEC for positions on specific WTO issues being considered in the new round, such as trade and environment and geographical indications (see sub-output 1.1.6 at page 70 for further detail on the department's work with respect to APEC).

We supported the Treasurer, Mr Costello, in advancing Australian interests, including trade liberalisation, at the annual Ministerial Council Meeting of the Organisation for Economic Co-operation and Development (OECD) in April 2003. We promoted analytical work on WTO and multilateral trade issues in the OECD Trade Committee, particularly work in support of the Doha Round in areas such as intellectual property, tariffs, services trade, trade facilitation, developing country participation and non-tariff barriers. We advanced OECD work in support of trade liberalisation in a range of other OECD committees, particularly the OECD Agriculture Committee.

WTO compliance and dispute settlement

The department continued to use the WTO dispute settlement system to promote and defend Australia's trade interests.

We initiated disputes against the European Union's sugar regime and its legislation for geographical indications for foodstuffs and other agricultural products (but not wines and spirits). In a joint complaint with ten other WTO Members, we successfully challenged the US Continued Dumping and Subsidy Offset Act of 2000, which offers a 'double remedy' against dumped or subsidised goods entering the United States and unfairly disadvantages Australian exports in the United States and third country markets.

We worked closely with other Australian Government agencies to respond to separate disputes initiated by the European Union and the Philippines about aspects of our quarantine regime and specific import conditions for certain products.

As a third party in nine other disputes during 2002–03, we put Australia's views on issues raised before the various dispute panels and the Appellate Body. These covered a range of issues of importance to Australia, including matters relating to state trading enterprises, telecommunications services, subsidies and agricultural tariffs.

We participated actively in negotiations on improvements and clarifications of the dispute settlement rules being held as part of the Doha agenda. We are seeking to ensure that the rules provide procedural fairness for both complaining and responding parties to a dispute. We are also seeking accelerated timeframes for disputes relating to safeguard measures.

Responding to requests from industry and academic groups, we conducted seminars on the WTO dispute settlement system during the year. We also continued to distribute a monthly newsletter alerting industry stakeholders to disputes of potential interest and increasing their awareness of Australia's WTO rights.

The department continued to work with Australian stakeholders to resolve disputes outside the formal WTO dispute settlement process with the aim of ensuring that trade problems that may be resolved amicably at an early stage do not worsen and become formal trade disputes.

In related activities, we assisted Australian companies facing anti-dumping action in other countries, lobbied another country in relation to new safeguard legislation and provided advice about the WTO consistency of proposed amendments to Australian trade remedy legislation. In addition, we provided advice to other government agencies, including at state and territory level, and domestic industry on WTO compliance issues raised by investment incentive and industry assistance program proposals.

WTO accessions

The terms under which new members join the WTO continued to be a priority interest for the department. We aim to ensure that new members enter the WTO on a basis of improved market access for goods and services, appropriate commitments on agricultural subsidies, and full implementation of WTO rules. Armenia and the Former Yugoslav Republic of Macedonia both joined the WTO during the year, implementing improved market access arrangements including those negotiated by Australia. The department also concluded bilateral market access negotiations with Nepal and Cambodia. Negotiations with Algeria, Kazakhstan, Russia, Samoa, Tonga, Ukraine and Vietnam continue and will be the focus of the coming year.

 

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Department of Foreign Affairs and Trade Annual Report 2002–2003
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