Annual Report 2006-2007
 

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Your location: Performance > Outcome 1 > Output 1.1 > 1.1.8 Trade development/policy coordination and Asia-Pacific Economic Cooperation

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

1.1.8 Trade development/policy coordination and Asia-Pacific Economic Cooperation

On this page: Overview :: APEC :: Trade finance :: Trade policy coordination and business liaison :: outlook

Overview

The department laid the groundwork for the hosting by Australia of the Asia-Pacific Economic Cooperation (APEC) forum in 2007. We worked towards substantial policy outcomes in APEC’s trade, economic and human security agendas and commenced negotiations for a major declaration by APEC Leaders on climate change, supporting global efforts to address this challenge. We pursued policy outcomes that reinforced APEC’s role as the pre-eminent regional forum.

The department provided assistance to the 2006 review of the Export Finance and Insurance Corporation (EFIC), a statutory corporation that provides financial and insurance services to Australian exporters where they cannot be sourced through commercial channels. We also facilitated an expansion of support from EFIC to small to medium-sized exporters. We encouraged input from the states and territories to Government trade policy development, particularly on free trade agreements (FTAs), and ensured better understanding of Government policy through consultation forums such as the National Trade Consultations and Senior Trade Officials’ Group. We managed the formation of the Trade Minister’s new Trade Advisory Council (TAC). We produced Trade 2007, the first trade statement to be launched by Mr Truss as Minister for Trade.

APEC

Photo - See caption below for description
APEC Senior Officials’ Meeting in the R G Casey Building, Canberra, 15 January 2007.
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Australia’s hosting of the APEC forum in 2007 will be its first since APEC’s inception in Canberra in 1989. This involves some 30 APEC meetings in all states and territories involving leaders, ministers and official, business and academic delegates over the course of 2007.

The department managed an effective whole of government process to coordinate the development of APEC policy outcomes and provided advice to a wide range of Government agencies hosting APEC sectoral ministerial and officials’ meetings. Specifically, we provided support for the Prime Minister’s Special Envoys on APEC, and for Australia’s Ambassador for APEC and Chair of the APEC Senior Officials’ Meeting process. In addition, the department coordinated preparations for the APEC Ministerial Meeting (of foreign and trade ministers), the Meeting of APEC Ministers Responsible for Trade, four APEC Senior Officials’ Meetings and, with the Department of the Prime Minister and Cabinet, the APEC Economic Leaders’ Meeting.

Building on our work in previous years, we laid the groundwork for major outcomes in 2007 in eight key policy areas.

1. Climate change, energy security and clean development

The department played a central role in developing a major declaration by APEC Leaders articulating a regional view on the challenge of climate change, building on a call by APEC Leaders in 2006 for further activity on clean development and energy security.

2. World Trade Organization

The department led the Government’s efforts in APEC to reinvigorate the momentum of the Doha Round of World Trade Organization trade negotiations. We played a key role in negotiating ministers’ statements in 2006 and 2007 and the leaders’ statement in 2006, and laid the basis for a similar statement in 2007, emphasising that an open, rules-based and non-discriminatory multilateral trading system is a prerequisite for maintaining the region’s growth and prosperity.

3. Regional economic integration

The department helped secure agreement by leaders in 2006 to examine ways to strengthen regional economic integration, including the possibility of a Free Trade Area of the Asia-Pacific (FTAAP) as a long-term prospect. We coordinated work in APEC in 2007 to develop a comprehensive range of recommendations covering trade and investment liberalisation, structural reform, strengthening financial markets and strategic capacity-building, as well as further work on the implications and prospects for an FTAAP.

The department coordinated APEC’s work on model measures for regional trade agreements and/or free trade agreements that led to the completion of six chapters for the 2006 Leaders’ Meeting and the development of further work in 2007–the chapters cover trade in goods, government procurement, standards, transparency, dispute settlement and cooperation. These model measures will promote consistency and coherence in free trade agreements negotiated by APEC members. The department also conducted trade policy training for APEC economies in Jakarta from 5 to 7 December 2006.

4. Trade facilitation

The department helped draft APEC’s second Trade Facilitation Action Plan (TFAPII), designed to reduce trade facilitation costs by another 5 per cent over 2007–2010. This was endorsed by ministers responsible for trade in Cairns in early July 2007. The department focused on trade facilitation measures that would deliver practical benefits to business. These included:

5. Structural reform

The department helped obtain recognition by leaders in 2006 of the importance of structural reform within APEC economies. In partnership with the Treasury and in consultation with the APEC Business Advisory Council (ABAC), we provided further impetus to APEC’s work on structural reform in 2007 by elevating it on the Senior Officials’ agenda, promoting new analysis of the issues and driving the APEC Economic Committee’s work program. This responds to business concerns about the impact of behind-the-border impediments to their activities such as inadequate or overly burdensome regulatory systems, lack of transparency, measures that inhibit competition and poor governance. This work highlighted the useful role APEC plays in helping economies tackle common challenges through analytical work, policy dialogue and targeted capacity building for developing economies.

6. Secure trade and human security

The department made a substantial contribution to APEC’s secure trade and human security agenda. We hosted and managed the APEC Secure Trade in the APEC Region (STAR V) Conference in June 2007, which brought together business and government representatives to explore cost-effective solutions to enhance the safe and secure movement of people and trade in Australia’s region. The conference highlighted the need for greater harmonisation of security measures, which will be developed further through APEC.

In collaboration with Singapore, the department contributed to the development of voluntary principles on cooperative activities that economies can undertake to ensure the swift recovery of trade in the aftermath of a terrorist attack. We worked closely with the United States to develop voluntary principles on protecting food supply against terrorist attack. Together with AUSTRAC, we supported the implementation of two APEC workshops on countering terrorist financing. Separately, following agreement by APEC Health Ministers, the department supported the development of practical measures to guide APEC economies on regional response procedures in the event of a pandemic or vector-borne disease. We contributed to APEC’s work on emergency preparedness, including by designing and facilitating a successful regional communications simulation exercise on avian influenza.

7. APEC institutional reform

The department successfully instituted a program of further institutional reform of APEC to give it greater capacity to respond to the needs of its members. We achieved agreement in 2006 to a comprehensive review and rationalisation of APEC forums and working groups. We worked towards the establishment of a new APEC Policy Support Unit to strengthen APEC’s research and analytical capacity on trade and structural reform issues. We pursued other reforms to APEC, including fixed terms for its Executive Director and an increase in membership contributions. These initiatives will be put to APEC ministers when they meet in September 2007.

8. Public diplomacy, business and youth outreach

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Launch of the APEC 2007 curriculum resource—APEC: Strengthening our Community, Building a Sustainable Future, at the State Library of NSW, 18 April 2007. Left to right: Ms Sandra Henderson (DFAT); Mr Robert Baker (Consultant); Ms Kathy Kirby (Asia Education Foundation); Minister for Foreign Affairs Mr Alexander Downer; Ms Gabrielle England (Curriculum Corporation); Ms Jane Weston (Consultant); and Ms Thuy Van Nguyen (NSW Ambassador to the National Youth Roundtable).
Enlarge image :: Photo gallery

The department managed a significant public diplomacy campaign on Australia’s hosting of APEC to meet widespread media and public interest. We conducted numerous media briefings throughout the year. Working closely with the APEC Business Advisory Council, we sought to engage business in APEC’s agenda through briefings and consultations. This included hosting the APEC Australia Business Forum in November 2006 in Parliament House, attended by over 150 senior business representatives. The Prime Minister delivered the keynote address and launched Australia’s APEC year. The department also supported the Prime Minister’s high-level Business Consultation Group and in August 2006 hosted an informal symposium on APEC 2007 to engage business and academia in Australia’s developing policy agenda.

The department delivered a youth outreach program based on the development of a comprehensive APEC education resource that was distributed to 3000 secondary schools in Australia. This program also included a national essay competition in association with National Youth Week, State Youth Parliaments debating APEC issues, and youth involvement during APEC Leaders Week.

Trade finance

During the second half of 2006, the department completed its Government-mandated review of the Export Finance and Insurance Corporation (EFIC). EFIC is a statutory corporation that provides finance and insurance services to support Australian exporters and overseas investors where private sector financiers or insurers lack the capacity or willingness to do so. In this way, EFIC fills a market gap.

EFIC is periodically reviewed to ensure its operations remain relevant and competitive in a changing global financial and trading environment. A review conducted in 2006 found that EFIC was servicing the market gap appropriately and recommended that the Corporation continue to operate in its current form. In May 2007, in a separate initiative the Government granted EFIC an expansion of its powers to enable it to support small to medium-size exporters seeking to establish global supply and distribution chains.

Trade policy coordination and business liaison

Trade 2007 statement

The department produced the Minister for Trade’s annual trade statement, Trade 2007, which was launched in June 2007, and used it to build community understanding of Australia’s trade environment. The statement reviewed Australia’s trade performance for 2006 and outlined future priorities and strategies. The Minister’s address at the launch was televised nationally and the statement was distributed widely, along with a pocket booklet Trade at a Glance and fact sheets on key trade issues. The statement and audio of the Minister’s address were made available online.

National trade consultations

The department worked actively to ensure that business and state and territory governments were informed of and provided with opportunities to contribute to the development of the Government’s trade policy and trade negotiating positions. We organised the June 2007 National Trade Consultations, a ministerial-level meeting between the Government and state and territory governments, which discussed progress in the Government’s trade agenda and strategies for cooperation on trade issues. The ministerial consultations were supplemented during the year by a number of meetings of the Senior Trade Officials’ Group, comprising representatives from each state and territory and chaired by the department. Close consultation with the states and territories was particularly important in developing negotiating positions both for the WTO Doha Round and for FTA negotiations.

Trade Advisory Council

The department facilitated the formation of the Trade Minister’s new Trade Advisory Council (TAC), and organised its inaugural meeting in June 2007. The TAC will be the Trade Minister’s key source of advice from the business sector on trade and investment issues. The new Council replaces three existing advisory groups—the Trade Policy Advisory Council, the WTO Advisory Group and the FTA Advisory Panel. Membership of the TAC has been drawn from across Australia and includes private sector representatives from the agriculture, resources, food, financial services, manufacturing, education, defence and other industries. The minister will look to the TAC to provide business feedback on the Government’s trade negotiations and trade promotion activities.

State and territory ministers meet to discuss trade

The department manages the National Trade Consultations (NTC), the consultative forum for the Government and state and territory governments on trade issues. The Minister for Trade, Mr Truss, met with his ministerial counterparts from the states and territories on 15 June 2007. Ministers discussed a broad range of trade-related issues, including progress in the WTO Doha Round of negotiations and Australia’s FTA negotiating agenda. Ministers also discussed opportunities for further cooperation between the Government and state and territory governments to build on Australia’s recent record trade performance and assist Australian businesses expand their operations internationally.

Live animal exports

The department continued to work actively with the Department of Agriculture, Fisheries and Forestry to secure memorandums of understanding (MOUs) on the live animal trade with trading partners in the Middle East, specifying the animal health and welfare conditions under which trade can be undertaken. In October 2006, MOUs were successfully concluded with Egypt on trade in live animals and on the slaughtering and handling of live animals. MOUs on trade in live animals were concluded with Libya (in May 2007) and negotiated with Qatar (signed in July 2007). These will add to agreements currently in place with the United Arab Emirates, Eritrea, Kuwait, Saudi Arabia and Jordan.

Conflict diamonds

The department coordinated Australia’s involvement in the UN-sanctioned Kimberley Process Certification Scheme for rough or conflict diamonds, introduced on 1 January 2003. The scheme aims to ensure that the rough diamond trade is free from conflict diamonds, which have been used to finance wars and civil conflict in Africa. As a result, Australia’s diamond export trade of around $630 million benefits from a secure trading regime, which involves over 70 countries including the world’s major producers, traders and polishers of rough diamonds. With the Department of Industry, Tourism and Resources and the Australian Customs Service, the department facilitated a peer review visit, comprising Canadian and Indian officials, in May 2007, to assess Australia’s diamond import and export processes. This report is expected to be finalised in early 2007–08.

Outlook

Australia’s year as host of APEC will culminate in the annual APEC Economic Leaders’ Meeting in early September 2007. Our expectation is that leaders and ministers will endorse a substantial work program and outcomes across APEC’s diverse agenda. We expect that these decisions will leave APEC a stronger forum and set the course of APEC’s policy agenda for the medium term.

The department aims to organise regular meetings of the Trade Advisory Council so that the Trade Minister can use it effectively to seek members’ views on opportunities and challenges for Australian business in the current trade environment. We will continue to work with the Department of Agriculture, Fisheries and Forestry to negotiate agreements on trade in live animals with trading partners in the Middle East region.

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