Annual Report 2008-2009
 

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Your location: Performance > Outcome 1 > Output 1.1 > 1.1.7 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

1.1.7 Bilateral, regional and multilateral trade negotiations

On this page: Overview :: WTO Doha Round negotiations :: WTO Compliance and dispute settlement :: WTO accessions :: Trade and the environment ::
Supporting trade liberalisation in other international trade bodies
:: Free trade agreement negotiations :: Implementation of existing free trade agreements :: Outlook

Overview

Our highest trade priority in 2008–09 remained working towards a successful conclusion to the World Trade Organization (WTO) Doha Round of multilateral trade negotiations that would involve improvements in market access for Australian exporters of agricultural and industrial products and services. We supported the efforts of the Minister for Trade, Mr Crean, to work with other WTO trade ministers to build the necessary political will and flexibility to conclude the Round. This included major advances in narrowing differences at the WTO Ministerial meeting in July 2008, even though there was not agreement on a final package. The global economic crisis underlined the importance of concluding the Doha Round to safeguard against protectionism and rekindle economic growth through open markets, particularly for those developing countries most affected by the economic downturn.

The G20 Leaders’ London Summit in April 2009 provided new political momentum to the Doha Round negotiations. We organised the Cairns Group Ministerial Meeting in Bali and an informal gathering of trade ministers in Paris in June 2009, both chaired by Mr Crean. These meetings led to important commitments from key WTO Members, including the recently elected governments of the United States and India, to re-engage in the Round and intensify technical work in Geneva.

Among the department’s significant achievements in 2008–09 were the successful conclusion of free trade agreements (FTA) with ASEAN–New Zealand, and with Chile. The signing of the ASEAN–Australia–New Zealand FTA (AANZFTA) was an historic step in strengthening Australia’s economic ties with the South-East Asian region and provided an important signal of the region’s commitment to open markets in the face of the global economic crisis. The department also managed an active agenda of regional and bilateral FTA negotiations with a number of major trading partners. In particular, we began FTA negotiations with the Republic of Korea.

WTO Doha Round negotiations

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Australia’s whole-of-government delegation at the World Trade Organization (WTO) headquarters in Geneva September 2008. The delegation comprised officers from DFAT, the Attorney-General’s Department, the Australian Government Solicitor, the Department of Agriculture, Fisheries and Forestry, Biosecurity Australia and the Australian Quarantine and Inspection Service.
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Australia again led efforts to reach a successful conclusion to the Doha Round. The July 2008 Ministerial meeting made significant progress in reducing the number of outstanding issues despite its eventual breakdown. The department participated in subsequent meetings to capture this progress. This resulted in revised texts on agriculture and industrial products being released in December 2008 as part of preparations for a possible Ministerial meeting. To our disappointment, the WTO Director-General, Mr Pascal Lamy, recommended that a ministerial meeting should not be convened after assessing there was not enough convergence on key issues to reach a deal on a framework package (‘modalities’). The key outstanding issues included further industrial tariff cuts at a sectoral level, the agriculture Special Safeguard Mechanism and cotton subsidies. Agreement on these issues was further complicated by national elections in key WTO Member countries.

The Cairns Group Ministerial Meeting in Bali in June 2009 provided the first real political engagement since the July 2008 breakdown and since the G20 Leaders’ London Summit in April. Cairns Group ministers, and guests, including the US Trade Representative, Mr Ron Kirk, and Indian Commerce Minister, Mr Anand Sharma, agreed to re-engage intensively to try to find a solution to the Doha Round. To build on this new momentum the department coordinated an informal meeting of trade ministers hosted by Mr Crean in the margins of the OECD Ministerial Council Meeting (MCM) in Paris in June 2009. Ministers restated their commitment to conclude the Doha Round and directed their respective senior officials to intensify negotiations in Geneva to secure progress before the next G20 Leaders’ Summit in September 2009.

FIGURE 13. Direction of Australia’s Exports 2008

FIGURE 13. Direction of Australia’s Exports 2008

Agriculture

The department played a central role in the agriculture negotiations convened at regular intervals in Geneva in the second half of 2008, beginning with the WTO Ministerial Meeting in July. We participated in key small group meetings, such as the G7 (the European Communities, United States, Japan, Brazil, India, China and Australia), which helped consolidate the draft text of a new WTO agreement in sensitive areas such as the Special Safeguard Mechanism for developing countries and Sensitive Products for developed countries. The latter will govern the market access outcomes for Australian agricultural exports such as sheepmeat, beef, sugar and dairy into important markets such as the European Union, United States and Japan. The G7 was also instrumental in reaching agreement on the level of cuts to trade-distorting agricultural support in the EC, United States, Japan and others.

Through Australia’s leadership of the Cairns Group of 19 agricultural exporting countries, we maintained significant influence in the agriculture negotiations, as well as the negotiations more broadly. In addition to the Bali ministerial meeting, the department used the Cairns Group in Geneva to argue effectively for substantial reductions in trade-distorting subsidies and for real improvements in market access for Australian agricultural producers.

The department coordinated the Government’s strong opposition, including through the Cairns Group, to the reintroduction of export subsidies for dairy products by the European Union and the United States. Export subsidies are the most distorting of all trade support mechanisms and have a detrimental impact on Australian dairy producers. We supported ministers in their discussions with the European Union and the United States about the impact of the export subsidies and, in the context of the global economic crisis, the poor signal such protectionist measures send to the rest of the world.

Industrials (non-agricultural market access or NAMA)

The department continued to work actively in the Doha Round negotiations for commercially meaningful improvements in market access for industrial products (NAMA), covering minerals, energy, manufactured products, forestry and fisheries. We remained in close contact with industry to ensure our focus remained on products of most interest to Australian exporters. We ensured our defensive interests were safeguarded while working closely with key countries on possible solutions to the major sectoral obstacles.

Progress on NAMA in 2008–09 was complicated by the breakdown of ministerial talks in Geneva in July 2008. Following extensive consultations in November, a fourth revised negotiating text was proposed in December 2008. The text reflected both areas of convergence and those areas of outstanding difference among members. The department intensified efforts on technical issues in the first half of 2009, in particular on sectoral initiatives for tariff liberalisation and on non-tariff barrier (NTB) proposals.

Services

A successful Doha Round must include significant and commercially meaningful liberalisation of international trade in services. To realise this outcome, the department pushed for a ministerial signalling conference on services which was held in July 2008. The ministerial meeting met its primary objective of building support for renewed momentum in WTO services negotiations. The signals provided by ministers, including from countries in our region, provided important markers for the content for future services offers, and, in a number of instances, specifically addressed Australian requests for improved market openness.

Prospects for substantial progress on opening markets for services depend on progress in other aspects of the Doha negotiations, particularly in agricultural and industrial market access. We pressed Australia’s interests and priorities in the services negotiations. Among these interests are lower foreign equity caps on investment, greater regulatory transparency, and improved business mobility, including for fly-in fly-out services contractors and professionals. Our priority sectors for market opening include financial services, telecommunications, professional services, education, mining-related and environmental services.

We provided leadership across other areas of services negotiations. We hosted small group meetings in Geneva to explore avenues to break the stalemate among the WTO Membership on developing disciplines on domestic regulation. Australia has strong interests at stake to ensure that new market openness for our services contractors is not undermined by protectionism disguised as regulation.

Intellectual Property

The department pursued Australia’s interests in relation to trade-related intellectual property (IP) and the development of the international IP system more generally.

In the WTO, the department defended Australia’s interests in the Doha negotiations on commercially sensitive IP issues, including geographical indications (GIs). GIs are terms such as ‘Champagne’ used on products to convey the qualities or reputation of those products resulting from their geographical origin. The manner in which GIs are protected has significant implications for Australia’s food and wine industries.

We led whole-of-government participation in Anti-Counterfeiting Trade Agreement (ACTA) negotiations. Australia is seeking a practical agreement on IP enforcement that complements the existing international IP architecture and is likely to gain broad support. Talks were put in abeyance in December 2008 while the US administration reviewed its approach to the ACTA but in June 2009 proponents unveiled an ambitious negotiating schedule for 2009–10.

The department worked successfully to secure the election of Dr Francis Gurry as Director General of the World Intellectual Property Organisation (WIPO). Dr Gurry is only the third Australian to lead a UN organisation. Following his election we worked with others to engage constructively in the organisation in support of Dr Gurry’s reform agenda.

WTO rules, including trade facilitation

The department led Australia’s close engagement in the WTO Rules negotiations. In conjunction with other agencies, we worked to ensure that negotiations on trade remedies would deliver positive outcomes for Australian exporters and preserve the rights of Australian industry to trade remedies.

Australia was a leading voice as a member of the Friends of Fish informal group on the need for ambitious and sustainable outcomes on fisheries subsidies, including the broadest possible prohibition on fisheries subsidies.

Negotiations aimed at strengthening and clarifying the WTO disciplines on FTAs remained a priority for the department. While there was little progress on this issue during the year, we will work with other WTO members to ensure that consideration of this issue remains under discussion, possibly through agreement on a built-in agenda. The provisionally adopted transparency mechanism has made a positive contribution to the debate surrounding the proliferation of FTAs.

The Negotiating Group on Trade Facilitation continued its steady progress throughout the year. We contributed to continuing discussions on textual issues which should eventually form the basis of a new WTO Trade Facilitation Agreement. The aim of such an agreement is to expedite the movement, clearance and release of goods. Good progress has been made on such issues as proposals on border agency cooperation, the use of international standards and the use of customs brokers.

WTO development agenda

The department advocated a successful conclusion of the Doha Round as a key measure to support developing countries’ sustainable development by helping them better reap the benefits of international trade. We continued to advocate the need for trade reform in core negotiating areas of the Doha Round, particularly the highly distorted agricultural sector, to deliver on the Doha Round’s development mandate. We encouraged other countries to follow Australia’s lead by providing tariff-free, quota-free access for all products from least-developed countries.

The department supported trade-related technical assistance to help developing countries participate in and reap the full benefits of the multilateral trading system, including the Doha Round. The Government almost doubled Australia’s annual contribution to the WTO’s ‘Aid for Trade’ trust funds. A contribution of $1.75 million was made to the Doha Development Agenda Global Trust Fund, up from $1 million in 2007–08, and for the first time, the Government contributed $750 000 to the WTO’s Standards and Trade Development Facility. This facility helps boost international trade by assisting developing countries to analyse and implement international standards on food safety and animal and plant health. The Government also sponsored the participation of trade officials from the Asia-Pacific and Africa in the department’s Trade Policy Course in Canberra in May 2009. The course aims to increase participants’ understanding of the WTO system and better equip officials to formulate trade policy and report on the trade policies of other countries.

We worked with AusAID to ensure the UN system, particularly the United Nations Conference on Trade and Development (UNCTAD), sent strong messages in support of concluding the Doha Round and highlighted the benefits that would accrue to developing countries. The department encouraged UNCTAD to use other international organisations as required, such as the WTO as well as its own expertise, to support its developing country programs.

WTO compliance and dispute settlement

The department actively pursued a range of WTO trade law issues, including disputes, in cooperation with other government departments, to ensure Australia’s compliance with WTO obligations. We led the whole-of-government taskforce to defend Australia’s position in the dispute brought by New Zealand against Australia’s quarantine measures regarding New Zealand apple imports.

The department remained closely engaged in WTO dispute resolution, managing Australia’s participation as a third party in ten disputes in total. Such close involvement in the disputes system not only protects Australia’s trade interests but also enables Australia to help shape the international trade law system. Significant cases which moved forward during the year included those brought by the United States against China on certain Chinese ‘Famous Brands’ grants, loans and other incentives, China’s treatment of intellectual property rights and China’s case against the United States on anti-dumping and countervailing duties. This marked the first time China has proceeded to the panel stage with a complaint against another WTO Member.

Other important disputes in which we participated as a third party included a case brought by the United States, Japan and Chinese Taipei against the EC on its tariff treatment of certain information technology products and the Philippines case against Thailand on customs duties imposed on cigarette imports. The department continued to monitor implementation by the EC of the WTO ruling on EU sugar export subsidies, following the successful challenge by Australia, Brazil and Thailand in 2005. (This landmark case led to the removal of some four million tonnes of subsidised sugar from the global market.)

Personal Profile:

Elisabeth Bowes

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Elisabeth Bowes
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Elisabeth Bowes is Australia’s Geneva-based representative in the WTO Dispute Settlement Body. Drawing on nine years of experience as a legal officer in United Nations dispute settlement institutions in Geneva and Hamburg prior to joining the department, Elisabeth presents Australia’s submissions to dispute panels and the WTO Appellate Body.

As Counsellor at the Australian Permanent Mission to the WTO, Elisabeth is also responsible for WTO negotiations on often contentious issues concerning the intersection between trade and environment—a subject with increasing resonance as climate change continues to gain prominence on the international agenda. These include negotiations on the liberalisation of environmental goods and services and other areas under the Doha mandate. Elisabeth works with like-minded counterparts in identifying strategies and solutions to encourage greater engagement in the negotiations.

‘The WTO dispute settlement body is one of the most active dispute settlement bodies in the international system, and Australia is a very active participant in the WTO system, either as party or third party. Representing Australia at the dispute hearings is both challenging and interesting.’

We supported greater transparency in WTO dispute settlement proceedings. In the apples dispute we agreed to open hearings. More generally, we pressed for greater transparency measures in the ongoing negotiations on reform of the WTO Dispute Settlement Body. The department also ensured all Australian documents submitted to the WTO in dispute settlement proceedings were made available on the departmental website.

In conjunction with the Attorney-General’s Department, we provided trade law advice to other departments to ensure the Government’s broader policy settings were consistent with WTO obligations. One example of this is our ongoing contribution to the implementation of the Beale Review of Australia’s quarantine measures. Our advisory work covered climate change, air transport, services, immigration, environmental goods and services, intellectual property protection and television standards. The department supported the commercial interests of a range of Australian industries in accessing international markets. For example, we worked to ensure the new 2009 EC beef quota would be applied consistent with the EC’s WTO commitments and without discrimination towards Australian exporters.

We maintained efforts to raise awareness of international trade law. Departmental staff delivered lectures, seminars and presentations to universities, national and international organisations and industry groups. The department, in conjunction with Attorney-General’s Department, again organised the highly successful International Trade Law Symposium in Canberra in April 2009.

WTO accessions

The department participated in WTO accession negotiations to help facilitate the accession of prospective members in line with WTO rules and obligations. We participated in bilateral negotiations with acceding members to protect the commercial interests of Australian exporters. One accession was completed—Cape Verde in July 2008. The department finalised bilateral negotiations with Kazakhstan and Samoa, where we achieved positive outcomes by securing improved market access for a range of merchandise exports. These agreements will take effect when Kazakhstan and Samoa complete the remaining elements of their accessions. We also took part in a range of other accession negotiations, including with Lebanon, Russia, Vanuatu and Yemen.

Trade and the environment

The department worked to highlight the positive contribution of trade to addressing climate change, including through efforts in the WTO and APEC to promote trade in environmental goods and services. Australia co-hosted with Indonesia an APEC workshop on trade and environment issues aimed at confidence building and raising awareness of trade issues associated with environmental policy developments in the region. The department also engaged in bilateral discussions with key trading partners, including the United States and the European Union, on the importance of developing mutually supportive trade and environment policies.

Behind the border, we worked closely with other government agencies in policy areas such as climate change, the restriction of illegal logging and the fostering of alternative fuels, to ensure that trade obligations and opportunities inform the way environmental outcomes are pursued. In November–December 2008 we conducted a second round of inter-agency and stakeholder consultations to seek views on Australia’s positioning in the WTO negotiations on environmental goods and services.

Supporting trade liberalisation in other international trade bodies

The department used its participation in APEC and the Organisation for Economic Co-operation and Development (OECD) to strengthen international support for the WTO and a successful conclusion to the Doha Round.

APEC Ministers re-affirmed their support for conclusion of the Doha Round when they met in November 2008 in Lima for the 20th APEC Ministerial Meeting. APEC Ministers urged all other WTO Members, including through their informal groups, to show flexibility and make contributions towards an ambitious and balanced outcome to bolster a deteriorating global economy (see sub-output 1.1.8 for more information on APEC).

At the OECD Ministerial Council Meeting (MCM) in Paris on 24–25 June 2009, Mr Crean participated in discussions on strategies for combating the global economic crisis and developing ways in which the OECD could help implement the decisions taken by G20 Leaders at their London Summit.

The department encouraged the OECD to provide economic and policy advice to support efforts of member-countries to improve their trade policies. We congratulated the OECD in making progress on accession talks with Chile, Estonia, Israel, Russia and Slovenia. The department supported enhanced engagement undertaken with the major emerging non-member economies of Brazil, China, India, Indonesia and South Africa.

We encouraged the OECD to undertake work in response to the global economic crisis. Australia’s permanent delegation to the OECD in Paris at regular meetings of the OECD Trade Committee and its working party worked towards the development of a Services Trade Restrictiveness Index (STRI) which could measure the degree to which existing regulations restrict the international exchange of services.

To complement the WTO’s monitoring of trade and trade-related measures taken since the global economic crisis, the department encouraged the OECD Trade Committee to undertake a wider analysis of policy responses, including labour market measures, and their impact on trade. The OECD agreed to do so, and its preliminary report was presented at the OECD MCM in June 2009. The Committee also increased its focus on public advocacy efforts to educate governments, industries and consumers on the benefits of trade liberalisation and risks of protectionism.

Free trade agreement negotiations

Australia seeks to further our trade interests through a strategic network of free trade agreements (FTAs). The department is responsible for advancing Australia’s FTA agenda, including leading whole-of-government negotiations.

Australia has FTAs with New Zealand, the United States, Singapore, Thailand and Chile. We, together with New Zealand, concluded an agreement with ASEAN. We are negotiating a further six FTAs—with China, Japan, Korea, Malaysia, the Gulf Cooperation Council and the Trans-Pacific Partnership. Pacific Islands Forum Trade Ministers recommended the commencement of a new Pacific trade and economic agreement, known as PACER Plus. We are examining the merits of entering into FTA negotiations with India and Indonesia. Almost 70 per cent of Australia’s trade would be covered by FTAs if all these negotiations were concluded successfully.

ASEAN–Australia–New Zealand free trade agreement

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The Minister for Trade, Mr Crean, with his ASEAN and New Zealand counterparts, signing AANZFTA on 27 February 2009 in Hua Hin (Cha-am) Thailand.
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The signing of the Agreement Establishing the Association of Southeast Asian Nations (ASEAN)–Australia–New Zealand Free Trade Area (AANZFTA) was an historic step in strengthening Australia’s economic ties with the South-East Asian region and provided an important signal of the region’s commitment to open markets in the face of the global economic crisis. We supported the Minister for Trade, Mr Crean, in finalising the AANZFTA and preparing for its entry into force. Following the conclusion of negotiations at the ASEAN Economic Ministers–Closer Economic Relations meeting in August 2008, Mr Crean signed the treaty with his ministerial counterparts from all ten ASEAN member countries and New Zealand in Thailand in February 2009. Industry reactions were overwhelmingly positive, although some groups expressed disappointment with aspects of the sectoral tariff outcomes for the automotive, sugar, wine and horticulture sectors.

Key outcomes for Australia from AANZFTA

The department was involved in finalising and verifying the treaty text and schedules of commitments of the 12 parties to the agreement on tariffs, services and movement of natural persons. The department prepared the National Interest Analysis for AANZFTA, tabled in Parliament on 16 March 2009, and provided evidence to the Joint Standing Committee on Treaties, which tabled its report on AANZFTA on 24 June 2009. We provided evidence on issues relating to the AANZFTA negotiations to the Joint Standing Committee on Foreign Affairs, Defence and Trade for its inquiry into Australia’s relationship with ASEAN, which reported to Parliament also on 24 June 2009.

Publicising the benefits of AANZFTA

We took a new approach to highlighting the opportunities and benefits of AANZFTA after its signing, consistent with the multi-party, regional focus of the agreement. Mr Crean’s statement about the benefits of the agreement for Australia, ASEAN and New Zealand was broadcast 370 times on Australia Network from the date of signing to 17 March (the video statement was accessible on the DFAT website for two months). Australia Network is Australia’s international television service in the Asia-Pacific region.

Selected statements by the Minister for Trade, Mr Crean, about AANZFTA

‘In the midst of the global downturn, Australia and New Zealand and ten nations from South-East Asia have sent a powerful message to the rest of the world. That message is this: the ASEAN region remains committed to pursuing free trade; we are determined to pursue trade liberalisation as a way to boost exports and job opportunities; we acknowledge that keeping trade flows open represents the best chance of a quick exit from this global economic storm’ (statement to Parliament, 16 March 2009).

‘Reduction and elimination of tariffs, plus the guarantee of market access into South-East Asia, are the two big benefits to Australian exporters from this agreement’ (statement to Parliament, 16 March 2009).

‘… at times it was like playing a game of 10-dimensional chess dealing with countries at their different stages of development and trying to find the basis on which we could secure our collective agreement’ (statement to Parliament, 16 March 2009).

‘This is a treaty that furthers our integration with the Asia-Pacific, a region with which our nation’s economic future and our security are closely tied up. As such AANZFTA represents a tangible and highly practical demonstration of this government’s commitment to deepen Australia’s engagement with the Asia-Pacific region’ (statement to Parliament, 16 March 2009).

‘So I congratulate all of those who have been involved in the detailed negotiations. You could see the weight of the document, the size of it, as to how detailed and complex it is. This has been a massive effort and I’m delighted with the result and it demonstrates that with the right political will even the most complex of agreements can be struck’ (transcript of doorstop interview, Hua Hin, Thailand, 27 February 2009).

Korea Free Trade Agreement

Following the release of the joint non-government FTA feasibility study in April 2008, the Prime Minister visited the Republic of Korea in August 2008, where he and the Korean President, Mr Lee Myung-bak, discussed the possibility of a bilateral FTA. We then led two rounds of FTA preparatory talks in October and December 2008. Further high-level discussions were held in April 2009 which led to agreement on the chapter structures and working groups.

On 5 March 2009, the Prime Minister and President Lee announced that they had agreed to launch bilateral FTA negotiations. Mr Crean opened the first round of negotiations in Melbourne on 18 May 2009 during the visit of the Korean Trade Minister, Mr Kim Jong-hoon. The three rounds of preparatory discussions provided a solid basis for a constructive start to the negotiations which covered a full range of sectors. It is expected that two more rounds of negotiations will be held before the end of 2009.

China Free Trade Agreement

The Prime Minister and his Chinese counterpart agreed in April 2008 to unfreeze negotiations and pursue early outcomes. Mr Crean and China’s Commerce Minister also agreed on a work program that meant we could then lead Australia’s involvement in two further rounds of negotiations in the second half of 2008.

At the twelfth negotiating round in September 2008, held in Canberra, discussion of sensitive products began, as agreed following China’s revised tariff offer made at the eleventh round in June 2008. This entailed a detailed exploration of China’s sensitivity to reducing barriers to agriculture trade and Australia’s concerns regarding further tariff reductions on certain manufactured goods. This discussion was continued at the thirteenth round held in December 2008 in Beijing. While some progress was made during these negotiating rounds, Australia and China’s positions on market access for goods remained a substantial distance apart.

We continued, at the twelfth and thirteenth rounds, to push a range of commercially focused services and investment outcomes that would not require major regulatory change, as agreed by Chinese and Australian Ministers. The list of requests was developed in close consultation with Australian industry, and covered a broad range of services sectors. We also discussed with China ways to improve conditions for Australian investors. Our requests in these areas formed the basis for Mr Crean’s proposal to China in March 2009 to create an investment framework to underpin the growing investment relationship.

In support of these requests and to maintain the momentum of the negotiations we worked, in conjunction with other agencies, to support the efforts of Australian ministers with their Chinese counterparts in late 2008 and in 2009. Mr Crean visited Beijing twice to meet relevant ministerial counterparts, in December 2008—with the Treasurer, Mr Swan—and March 2009. The department will continue to support Mr Crean in taking forward the negotiations.

Consultation with industry continued through 2008–09. We have conducted over 700 meetings with industry organisations, individual companies and state governments since negotiations began in 2005, including 114 in the past year.

Japan Free Trade Agreement

The department led Australia’s participation in three negotiating rounds (July 2008, October 2008 and March 2009). We continued to make progress on many areas of the draft chapters of the FTA, which will cover bilateral trade in goods, services and investment.

Market access negotiations for goods have been difficult, reflecting Japan’s sensitivities on agriculture. We have used the three negotiating rounds held during 2008–09 to focus on key products of interest, including sugar, wheat, seafood and horticultural products, seeking to demonstrate that it would be possible for Japan to offer improved market access to Australian agricultural exports without causing major disturbances to Japan’s system of protection.

Following the exchange of initial offers on services and investment at the fifth round in April 2008 and subsequent discussions, Australia and Japan exchanged market access requests at the March 2009 round. Key services and investment sectors of interest for Australia include education and training, financial services, legal and other professional services, and telecommunications. The negotiations on services and investment have made steady progress. The department will continue to work to resolve remaining issues and maintain close consultations with stakeholders.

Malaysia Free Trade Agreement

Mr Crean and the then Malaysian Minister for International Trade and Industry, Mr Tan Sri Muhyiddin Yassin, agreed in October 2008 to resume the bilateral negotiations, which had been on hold since early 2007 while both countries focused on negotiating AANZFTA. In preparing for the formal resumption of negotiations on the Malaysia–Australia Free Trade Agreement (MAFTA), the department participated in preparatory talks with Malaysian officials in Canberra in November 2008 and in subsequent consultations both at lead negotiator level and through the Australian High Commission in Kuala Lumpur in the first half of 2009.

It is expected that negotiating rounds under MAFTA will recommence from August 2009. Momentum towards formal resumption of negotiations has increased steadily, but was constrained by a number of factors, including the preoccupation of both sides with finalising and signing AANZFTA in February 2009; ministerial changes in Malaysia in April 2009 and Malaysia’s commitment to concluding separate bilateral FTA negotiations with New Zealand in May 2009. Both Australia and Malaysia have agreed that MAFTA should build on the trade commitments made to each other under AANZFTA and should thereby add value to the regional FTA.

Personal Profile:

Jan Adams

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Jan Adams
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Free trade agreement (FTA) negotiations are very complex and wide-ranging undertakings. Final agreements are substantial treaties covering many subjects, and can number over 20 chapters and hundreds of pages.

As Head of the FTA Task Forces for China, Japan and Korea since March 2009, Jan Adams oversees the development of policy advice to ministers on positions Australia should take in negotiations. She and her team lead the FTA negotiating sessions in cooperation with around 15 other Australian Government agencies. The whole-of-government nature of the work is a defining feature, as is the need for extensive consultations with industry, state and territory governments and other stakeholders.

‘The opportunity to work with people from so many organisations on the breadth of issues in our relationships with several of Australia’s major trading partners makes my job highly varied and interesting.’

Gulf Cooperation Council Free Trade Agreement

The department continued to push for progress on FTA negotiations with the Gulf Cooperation Council (GCC)—a customs union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). These negotiations began in mid–2007. Four negotiating rounds had been held by June 2009. The GCC is an important market for a range of Australian goods and services exports, particularly for Australia’s automotive sector, taking some 55 percent of total exports of Australian-made passenger motor vehicles.

There was an extended pause in negotiations between November 2007 and February 2009. The primary reason for this delay was a review which the GCC undertook into its broader FTA policy. Further delaying the resumption of negotiations with Australia was the absence of a comprehensive goods market access offer from the GCC. Negotiations resumed and two rounds were held in the first half of 2009: in February in Canberra, and in May–June in Muscat, Oman. Without a goods offer from the GCC it was agreed that the fourth round of negotiations would focus on services and investment, rules of origin, as well as a range of other non-goods related issues. While solid progress was made in some of these areas, considerable work remains. Prospects for progress during 2009–10 will depend on the GCC’s willingness to present Australia with a comprehensive goods offer.

Trans-Pacific Partnership Agreement

On 20 November 2008, Mr Crean announced that Australia would participate in negotiations towards a Trans-Pacific Partnership Agreement (TPP). The TPP will broadly expand the existing Trans-Pacific Strategic Economic Partnership Agreement (known as the P4) between New Zealand, Singapore, Chile and Brunei. Initial TPP parties are likely to be the P4, Australia, the US, Peru and Vietnam. The TPP is an important strategic opportunity to develop a comprehensive and high-quality agreement that will strengthen economic integration and liberalisation in the Asia-Pacific region. The department held public consultations in October 2008, which revealed broad support for Australia’s participation in TPP negotiations. It is expected that negotiations will commence in the second half of 2009.

Implementation of existing free trade agreements

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Minister for Foreign Affairs, Mr Smith, and the then Minister for Foreign Affairs of the Republic of Chile, Mr Alejandro Foxley, sign the Australia–Chile Free Trade Agreement at Parliament House, Canberra, on 30 July 2008.
Photo: Norman Plant
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Through the Australia–United States Free Trade Agreement (AUSFTA), we worked towards improving access to the US market for Australian professional services providers, particularly for the legal, engineering and accounting professions. Discussions have been initiated with the US Council of Chief Justices on a draft discipline protocol allowing the exchange of disciplinary information relating to Australian and US legal practitioners, which could provide a basis to pursue greater access for Australia lawyers to the US market. Working in conjunction with the Department of Agriculture, Fisheries and Forestry, the department advanced the technical dialogue with the United States on specific agricultural market access issues under the AUSFTA.

We worked extensively to ensure entry into force on 6 March 2009 of the Australia–Chile FTA (ACl–FTA), following its signing in Canberra on 30 July 2008. The agreement strengthened Australia’s trade and investment relationship with Chile and created immediate market access opportunities for many sectors of the Australian economy.

Following consultations with industry and state and territory governments, the department substantively concluded negotiations with Singapore on most issues under the second review of the Singapore–Australia Free Trade Agreement (SAFTA), including reaching in-principle agreement on enhanced text in relation to investment and intellectual property.

The Thailand–Australia Free Trade Agreement (TAFTA) contains provisions for further negotiations on services, investment, business mobility, government procurement and competition. Further consultations on enhanced goods market access have also been agreed. The department is discussing with Thailand the commencement of these negotiations.

The Australia–New Zealand Closer Economic Relations Agreement (ANZCERTA) has been at the centre of the Australia and New Zealand economic relationship for 25 years. Negotiations towards an ANZCERTA Investment Protocol aimed at promoting further cross-Tasman investment are well advanced, and Prime Ministers have committed to concluding the Protocol by the end of 2009. The department has also liaised closely with responsible agencies in relation to the 2009 Review of the ANZCERTA Rules of Origin.

Outlook

The department will continue to advocate the Government’s stance against protectionism. We will press the urgent need for a successful conclusion to the Doha Round to provide an important stimulus to economic activity and a development boost for those most affected by the global economic crisis. Australia has vital interests in ensuring that the multilateral trading system administered by the WTO remains healthy, open and transparent. Australia will assist developing countries to benefit from the international trading system, including through trade-related development assistance.

Concluding the Doha Round remains the department’s highest trade priority. We will strive for commercially meaningful results on agriculture, industrial products and services, while defending our positions on industrial products and geographical indicators. We will intensify negotiations among senior officials, working together as part of a multilateral process and in various formats, to begin to close remaining gaps. This technical work must be accompanied and driven by continuing political-level engagement. To maintain Australia’s influence in the Round, we will support engagement by Australian ministers at all available opportunities including key international meetings, bilateral and plurilateral discussions. We will also continue to support Mr Crean’s leadership of the Cairns Group. The department will also advance Australia’s trade policy agenda through the OECD’s trade work program and participation in the APEC forum. We will advance our intellectual property objectives in WIPO.

We will use the WTO dispute settlement system to advance Australia’s trade objectives as well as to defend Australia’s interests including in the New Zealand apples dispute.

A program of intensive negotiations across the FTA agenda is expected for 2009–10. The department is working towards a target date that has been agreed with other AANZFTA Parties of 1 January 2010 for entry into force of AANZFTA. This involves liaising with relevant agencies on amendments to Customs legislation; ensuring accurate and timely transposition of ASEAN country tariff commitments from the Harmonized System (HS) 2002 tariff classification format to the HS2007 format; and working with ASEAN and New Zealand to implement the economic cooperation work program, agreed as part of the AANZFTA package. The department will also seek to move forward with negotiations with China and Japan for high quality agreements.

Photo - See caption below for description
The Minister for Trade, Mr Simon Crean, meets the US Secretary of Agriculture, Mr Tom Vilsack, Washington, 26 March 2009.
Back (L–R): Mr David Garner, Chief of Staff, Office of the Minister for Trade; Mr Bruce Gosper, Deputy Secretary, Department of Foreign Affairs and Trade; Mr Dean Merrillees, Minister Counsellor Agriculture, Australian Embassy; Mr David Stuart DCM, Deputy Head of Mission, Australian Embassy, Washington.
Front (L-R): Mr George Mina, Adviser, Office of the Minister for Trade; Mr Tom Vilsack; Mr Crean; and Ms Elizabeth Ward, Minister Counsellor, Trade, Australian Embassy, Washington
Enlarge image :: Photo gallery

The department will engage very closely with Korea on FTA negotiations in the coming year. Negotiating rounds are expected to be held every few months, with the second round scheduled for Seoul in early September. The market access aspects of the negotiations covering both goods and services will be undertaken early, with a strong focus on Australia’s priority export interests. The department will carry out detailed intersessional work and support ministers’ engagement with Korean ministers to encourage expeditious progress and high quality outcomes.

The resumed bilateral FTA negotiations with Malaysia will intensify during 2009–10. Negotiating rounds have been scheduled for August and December and stakeholders will be consulted to refine negotiating objectives and interests in specific areas. The department will also support ministers’ engagement with their counterparts in Malaysia to promote expeditious conclusion of the negotiations and advance Australia’s interests in an agreement that builds on the achievements of AANZFTA.

The department expects negotiations on a Trans-Pacific Partnership Agreement (TPP) will commence in late 2009 and be taken forward through negotiating rounds in 2010. Further consultations with stakeholders are planned after the first substantive round of TPP negotiations. We will also look for appropriate opportunities to advance FTA negotiations with the GCC.

The department remains closely engaged in the initial phases of negotiation for a PACER Plus agreement. The department will continue to consult stakeholders and support Ministerial involvement in PACER Plus negotiations. Having finalised the FTA feasibility study with Indonesia, we will now take forward the Government’s consideration of launching bilateral FTA negotiations. We will also remain engaged on finalising a feasibility study into a possible bilateral FTA with India.

 

 

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