Annual Report 2007-2008

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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


APEC Economic Leaders’ Week 2007 was one of the most significant international gatherings in Australia in recent years. The department used the meeting to strengthen APEC and advance a broad range of Australia’s foreign, economic and trade interests in the Asia-Pacific region. Our effective coordination of whole-of-government policy initiatives ensured the realisation of all of Australia’s major objectives and priorities for APEC 2007. As host and chair of the Senior Officials’ Meeting, we also played a leading role in shaping a substantial and ambitious forward agenda for APEC. Leaders’ decisions formed a road map for future economic growth and integration in the region.


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The APEC Economic Leaders’ Meeting Retreat on 8 September 2007 at the Sydney Opera House.
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Australia hosted a series of APEC ministerial, officials-level and business-group meetings across the country in the second half of 2007—beginning with Trade and Finance Ministers’ meetings in July and culminating with the APEC Economic Leaders’ Meeting on 8–9 September in Sydney. The department, with the support of our overseas missions, some 15 task forces and other government departments and agencies, contributed importantly to the delivery of substantive policy outcomes for APEC. We advanced Australia’s interests and injected ambition into APEC’s work agenda at all levels.

APEC Economic Leaders’ Meeting

The department led the development of three declarations adopted by APEC Leaders on: climate change, energy security and clean development; the World Trade Organization Doha Round negotiations; and a general Leaders’ statement on APEC. Our work ensured solid outcomes at the APEC Economic Leaders’ Meeting on regional economic integration, structural reform, human security and APEC’s institutional reform.

Key outcomes from the 2007 APEC Economic Leaders’ Meeting

At the APEC Economic Leaders’ Meeting in Sydney, the Leaders:

Regional economic integration

The department drove APEC’s work on regional economic integration. We played a central role in preparing a report endorsed by Leaders in Sydney on strengthening regional economic integration in the Asia-Pacific. The report sets out APEC’s work program on trade and investment facilitation and liberalisation, as well as economic and structural reform, for the years ahead. Australia’s efforts led to APEC giving, for the first time, serious consideration to the possibility of a free trade area spanning the Asia-Pacific.

Structural reform

The department advocated successfully that APEC increase its focus on behind-the-border barriers, which have the potential to undermine economic growth in the region and trade and investment flows. In partnership with the Treasury and in consultation with the APEC Business Advisory Council (ABAC), we developed and secured agreement to the first APEC ministerial meeting on structural reform, which the Australian Treasurer, Mr Wayne Swan, hosted in Melbourne on 3–5 August 2008.

Trade and investment facilitation

The department contributed to the development of APEC’s second Trade Facilitation Action Plan (TFAP II) endorsed at the July 2007 meeting of APEC trade ministers, which provided a framework and timetable to reduce trade transaction costs in the region by a further 5 per cent by 2010. We led consultations on APEC’s first Investment Facilitation Action Plan (IFAP), which was endorsed by APEC Trade Ministers in Arequipa, Peru on 1 June 2008.

Human security

The department made a substantial contribution to APEC’s human security agenda, including strengthening counter-terrorism financing capabilities. Our stocktake of APEC’s human security activities and recommendations provide a blueprint for APEC’s future work program in this area. The department also supported actively APEC’s work in disaster preparation and resilience, as co-chair of the APEC Task Force on Emergency Preparedness, including on the prevention and control of pandemic and communicable diseases and preparations for the first APEC meeting of emergency management CEOs.

APEC institutional reform

The department has consistently advocated the importance of strong and effective institutional reforms in APEC. We secured ministerial agreement in November 2007 to a 30 per cent increase in membership contributions, the establishment of a Policy Support Unit to boost the analytical capacity of the APEC Secretariat, and consideration of appointing a fixed-term Executive Director to provide greater continuity and leadership. Australia indicated that it would contribute over $10 million in funding for the Unit between 2007–08 and 2010–11. The department also initiated budget savings and project management reform as the 2008 Chair of the APEC Budget Management Committee.

Trade finance

The department worked to advance disciplines on export credit agencies in the OECD, including the agreement in January 2008 of the new Principles and Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export Credits to Low-Income Countries. The Principles aim to ensure lending by the export credit agencies (ECAs) of OECD countries supports a borrowing country’s economic and social progress without endangering its financial future and long-term development prospects. The application of the Principles will see OECD ECAs obtain reasonable assurances from low-income borrower countries that the commercial lending decisions of ECAs are not likely to contribute to debt distress in the future in relation to any official export credit with a repayment term of one year or more.

The department also continued to represent Australia in the Paris Club group of creditor nations, which coordinates the response of official creditors to requests from countries seeking debt relief. We finalised debt relief arrangements with the Solomon Islands Government based on an assessment of its progress with a reform agenda agreed at the October 2005 ‘Honiara Club’ meeting. As a result, in October 2007, the Solomon Islands Government repaid $2.4 million after accepting Australia’s offer to forgive 70 per cent of its debt.

The department worked closely with the Export Finance and Insurance corporation (EFIC), a statutory corporation that provides finance and insurance services to support Australian exporters and overseas investors. EFIC operates in that segment of the market where private sector financiers or insurers lack the capacity or willingness to assist Australian companies.

Trade policy coordination and business liaison

Ministerial Council on International Trade

In March 2008, the Council of Australian Governments (COAG) established the Ministerial Council on International Trade to replace the National Trade Consultations as the primary ministerial-level mechanism for consultation between the Australian Government and states and territory governments on international trade issues. The role of the Council will be to facilitate cooperation among governments on measures to enhance Australia’s international competitiveness and export performance, and to consult on major issues such as: international trade negotiations at the multilateral, regional and bilateral level; trade development and trade promotion activities; investment promotion and international business activities; and domestic competitiveness issues related to export performance and productivity.

The Council Secretariat, located in the department, is working in close consultation with the states and territories and with Austrade to define the Council’s agenda and forward work program for consideration at the Council’s inaugural meeting in Melbourne in August 2008. The Council’s work is supplemented at officials’ level by a Standing Committee of Officials, comprising representatives from each state and territory and Austrade. The department-chaired Standing Committee met for the first time in April 2008.

Review of Export Policies and Programs

In February 2008, the Minister for Trade, Mr Crean, announced that a comprehensive Review of Export Policies and Programs would be conducted by Mr David Mortimer AO and Dr John Edwards. The Mortimer Review was to report to Government by 31 August 2008. The department provided staff for the Review’s secretariat and was among the more than 160 entities to provide a written submission to the Review. Following a whole-of-government input, the Minister for Trade will respond to the Review.

Trade Advisory Council

The department coordinated the final meeting of the Trade Advisory Council in August 2007. The Mortimer review of export policies and programs is expected to propose strategies for government consultation with business into the future.

Submissions to policy reviews

The department prepared detailed submissions to the Government’s Review of the National Innovation System, the Review of Australia’s Automotive Industry and the Review of the Australian Textiles, Clothing and Footwear (TCF) Industry. In each case, the department’s submissions highlighted the significance of trade policies for the sectors under review and possible implications for Australia’s international competitiveness and trade performance. The submissions also outlined Australia’s obligations under its international trade agreements.

Group of Eight (G8)

The department worked with other agencies to advance Australia’s interests though the Group of Eight (G8) economies. During the year, the Prime Minister, Mr Rudd was invited for the first time to attend the G8 Leaders’ Summit as an outreach partner. The department worked with the Department of the Prime Minister and Cabinet and the Department of Climate Change to prepare for the Prime Minister’s attendance at a G8 session on 9 July 2008 in Hokkaido, Japan, focusing on climate change.

Conflict diamonds

The department coordinated, with the Department of Resources, Energy and Tourism and the Australian Customs Service, Australia’s participation in the UN-sanctioned Kimberley Process Certification Scheme for rough diamonds. The scheme aims to ensure that so-called ‘conflict diamonds’ (rough diamonds that are mined and sold by non-government groups to finance wars and civil conflict) can not be traded internationally. As a result, Australian exports of rough diamonds benefit from a secure trade regime which involves more than 70 countries, including the world’s major producers, traders and polishers of rough diamonds.

The scheme continued to evolve in 2007–08, with the department leading Australia’s delegation to meetings of the scheme’s participants in Brussels and New Delhi, where further refinements to the scheme were adopted. The department also worked with the Department of Resources, Energy and Tourism and the Australian Customs Service in responding to a report by Canadian and Indian officials on Australia’s implementation of the scheme which concluded that Australia met fully its requirements.

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 July 2007, an MOU on trade in live animals was concluded with Qatar. This adds to MOUs already signed with Libya, Egypt, United Arab Emirates, Eritrea, Kuwait, Saudi Arabia and Jordan. In the case of Egypt, trade was suspended in February 2006, and following the development of an MOU, was reopened by the Minister for Agriculture, Fisheries and Forestry, Mr Tony Burke, with specific conditions attached in May 2008.

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Minister for Trade, Mr Simon Crean (seated fifth from right), at the Meeting of APEC Ministers Responsible for Trade, Arequipa, Peru, 1 June 2008. Photo: CEAN APEC PERU 2008
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In the year ahead, the department will work to further strengthen APEC. This will include advancing APEC’s regional economic integration and structural reform agendas, strengthening APEC’s work on emergency preparedness and counter-terrorism, and pressing for continued institutional reform. We will also work with the 2008 APEC host—Peru—and the incoming APEC hosts—Singapore, Japan and the United States—to ensure APEC remains ambitious and able to deliver on the immediate and longer-term priorities set by leaders, ministers and business.

The department will organise and service regular meetings of the Standing Committee of Officials to support the work of the Ministerial Council on International Trade and ensure its work program is fully implemented. The department will continue to engage actively in whole-of-government review processes on issues with significant trade implications. A targeted, comprehensive trade outreach program remains a priority for the department as a vehicle to enhance understanding of the Government’s trade policy agenda in the wider community.

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Parliamentary Secretary to the Minister for Trade, Mr John Murphy (second from left), opening ExpoMin on 21 April 2008 in Santiago de Chile, with the Chilean Minister for Mining, Mr Santiago González Larraín (third from left).
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