1.6 Trade Strategy Development and Business Liaison

Table 15: Resources Summary for Sub-program 1.6

Figure 28: Trade Strategy Development and Business Liaison Program and Organisational Structure as at 30 June 1998

Sub-program Objectives

In 1997-98, the objectives of sub-program 1.6 were to:

• strengthen APEC as the pre-eminent forum for economic cooperation and trade liberalisation in the Asia Pacific region, including through the development of cooperative working relationships with other key APEC members
• broaden and deepen APEC’s economic cooperation agenda, particularly in the area of trade and investment, enhance the operational efficiency of the organisation, and foster an environment conducive to regional business activity
• promote government economic policy settings and reforms aimed at improving Australia’s international competitiveness
• provide analysis and advice to the Government on international and domestic impediments to growth in trade
• provide advice to Ministers and the Department on developments in the global, regional and domestic economies
• heighten coordination and cooperation between governments and industry through the development of the National Trade Consultations process
• work cooperatively with business, building strategic commercial linkages to improve Australia’s trade and investment performance
• build more effective policy links with business
• maintain access of the business community to commercially useful information and statistics through country economic briefs, statistical services and other publications.

Description

The Market Development Division administers the sub-program. MDD comprises three branches: Trade and Economic Analysis Branch, Trade Development Branch, and APEC and Regional Trade Policy Branch. In the review period, MDD established the Market Access Facilitation Unit. The Unit consists of four small teams focusing on market access issues in the processed food, automotive, information industries and textiles, clothing and footwear sectors. MDD’s area of responsibility includes the Department’s state and territory offices; these are important in enhancing relations with Australian business and the wider community. Although MDD is not directly responsible for coordinating or supporting the work of Australian overseas posts, they contribute significantly to MDD’s work, particularly through economic reporting and in support of the work of the APEC Branch. In January, MDD assumed responsibility for multilateral procurement, formerly administered by the International Legal Division under sub-program 1.8, International Legal Issues.

The sub-program comprises strategies designed to help achieve five of the Department’s corporate goals: to promote Australia’s economic growth, jobs and standard of living; to enhance Australia’s security; to strengthen global cooperation in ways which advance Australia’s interests; to promote public understanding of Australia’s foreign and trade policy; and to provide clients with highly professional, efficient and effective services. Strategies include enhancing Australia’s trade performance through contributing to an integrated and coordinated trade strategy, managing market access strategies at the regional level through APEC and AFTA-CER dialogue and coordinating other bilateral and sectoral market access work, and supporting the activities of portfolio ministers, other areas of the Department and business by providing economic and trade analysis and statistics, including through the Trade Outcomes and Objectives Statement.

Performance Information

In 1997-98, the Department indicated that it would evaluate its performance using:

• maintenance of momentum and support in APEC for further regional trade liberalisation, including improved Individual Action Plans, and progress on measures to enhance regional business activity in business mobility, customs, standards and investment
• extent of APEC’s leadership and contribution to the WTO’s emerging trade agenda
• increased frequency and range of interaction with national trade consultation partners, leading to practical outcomes from the annual ministerial meeting and more effective coordination of trade and investment activity between commonwealth and state governments and industry
• contribution to government discussion and policy development on microeconomic reform issues from the particular perspective of impact on Australia’s international competitiveness, including servicing the role of the Minister for Trade in the Employment Committee of Cabinet
• relevance to policy formulation of research and analysis on emerging issues (for example, trade and investment links, implications of electronic commerce) confronting Australia in an increasingly open and competitive global trading environment
• relevance of analysis and advice to the Government on environmental issues as they affect economic and trade performance, including feeding continued research into the Government’s negotiating position for key international meetings on climate change such as the Kyoto Conference (COP3) in December, and producing a report on the implications of potential bans on trade in hazardous chemicals, to further discussion of these issues
• relevance and timeliness of analytical briefings and statistics for ministers and departmental clients, and business clients’ satisfaction with access to, and quality of, briefings, publications and other business services, including statistical products
• effective cooperation with the private sector to successfully design, manage and stage, on a commercial basis, a new international business forum
• effectiveness of consultations with industry and business on domestic and international issues affecting trade competitiveness, including through the Trade Policy Advisory Council
• successful coordination of the Market Development Task Force, leading to trade outcomes in selected priority markets.

Performance Outcomes

1.6.1 Trade and Economic Analysis

The regional economic crisis had significant consequences for Australian trade and economic interests, thereby providing the major policy challenge for the Department during the review period. As a result of the crisis, there was considerable uncertainty, a slower regional growth outlook, and a decline in Australian exports to East Asia in the first half of 1998. Significant growth in exports to the rest of the world, notably to the United States and European Union, more than compensated for this decline. Nevertheless, some areas of commercial activity were hard hit, causing an increased call on the Department’s analysis and advice on these issues.

Figure 29: Regional Composition of Merchandise Exports

The Department provided analysis and policy advice to the Government on the region’s economic crisis and its impact on Australia’s trade, as well as advice on country risk assessments relating to government decisions on export credit insurance. The establishment of an East Asia Economic Unit, with a primary policy coordination role within the Department, helped to ensure a high standard of analysis and policy advice. The Department’s advice was reflected in the conclusions the Minister for Trade presented in the Trade Outcomes and Objectives Statement and the Government’s broader policy approach to the crisis. The Department also contributed to parliamentary hearings and business forums examining East Asian economic developments and their implications for Australian business, and provided advice and information to other government agencies and the private sector.

In September, the Minister for Trade launched the departmental report Putting Australia on the New Silk Road: the Role of Trade Policy in Advancing Electronic Commerce. The report analysed the implications of electronic commerce and was cited in key reference works both in Australia and overseas on this important issue. Overseas governments also referred to it in their statements on online policy. The Department also began developing an online trade strategy to identify practical ways trade policy and trade promotion could assist Australia’s online companies to operate successfully in export and international business. The results of this work will be released next year.

Photo: Deputy Prime Minister and Minister for Trade, Tim Fischer, launches the New Silk Road online consultation with Australian business on the Internet in Canberra in September. Mr Fischer is watched by (from left to right) the owner of Mick's Whips, Mick Denigan, the Managing Director of TOWER Software, Brand Hoff, and the then Secretary of DFAT, Philip Flood. (photo: Tim Acker Photography)

As part of its efforts to improve business community access to commercially useful information, the Department produced and distributed 13 Country Economic Briefs to the private sector. It also developed several new products in response to specific business needs. One, the new Hot Issues site (http://www.dfat.gov.au/hot/index.html) on the DFAT Internet website, provides up-to-date data on Australia’s trade with the East Asian region. Another site, the New Silk Road (http://www.dfat.gov.au/nsr), was launched by the Minister for Trade in February in conjunction with Multimedia Victoria’s virtual-reality site. It represents the first national electronic dialogue between government, business and the wider community on the Internet as a trading medium and approaches to developing an online trade strategy. The Department also produced a new product called Country Fact Sheets, a service valued by private sector companies and other purchasers of trade and investment statistics and information.

Photo: Director, Northern Territory Office, Keith Gardner, provides Consultant, Leesa Nicholls, of Dunhill Management, with a copy of Economies at a Glance, one of the Department's many publications designed to assist Australian businesses. (photo: Northern Territory Government)

The Department provided relevant analysis and advice to the Climate Change Task Force on environmental issues as they affect economic and trade performance, thereby contributing to the strong outcome for Australia at the Kyoto Conference on Climate Change in December. (See also sub-program 1.7, Global Issues.) It also released a report on the implications of potential bans on trade in hazardous chemicals, which is used as a reference in developing Australia’s approach to international negotiations on chemical management.

1.6.2 Trade Competitiveness

The Department contributed to the examination of a number of domestic policy and reform issues affecting trade competitiveness and assisted in drafting a range of trade impact assessments for domestic policy proposals put before Cabinet.

The Department contributed effectively to the Government’s industry policy statement Investing for Growth, the National Tourism Action Plan, and the Industry Commission’s assessments on microeconomic reform and competition issues (including international air services and building and construction services exports). It also helped develop trade strategies accompanying the Government's industry packages on post-2000 industry assistance for the passenger motor vehicles and textiles, clothing and footwear sectors and provided input to the Simons Review on Australia’s aid program.

In November, the Department published and distributed widely the report Trade Liberalisation: Opportunities for Australia, highlighting the importance of trade and open markets for the Australian economy. The relevance and timeliness of departmental publications on business matters was underlined by the strong demand from members of parliament, industry bodies and the community for the brochure Trade Liberalisation: How Australia Gains, published at the end of the previous review period. The Department also contributed to a series of regional roundtables chaired by the Deputy Prime Minister and Minister for Trade, Tim Fischer, and the Parliamentary Secretary for Trade, David Brownhill, to help ensure the effectiveness of the communication strategy.

1.6.3 Trade Strategy Coordination and Liaison with Business

The Department completed the 1998 Trade Outcomes and Objectives Statement, which was tabled in Parliament by the Minister for Trade on 4 March. The report is a valuable resource document and planning tool, welcomed by business and state and territory governments.

The Department, through the Market Development Task Force, worked to heighten coordination and cooperation on trade issues within government. At the end of the review period, the Department had pursued 120 priority trade and investment objectives, achieved success or substantial progress on 68, and made some progress on a further 30. Through this work, the Department helped secure increased access to overseas markets for Australian exporters in areas such as agrifood products, sugar and insurance services, while its promotional efforts facilitated a boost in export sales, including in information technology, food and building and construction products.

Photo: Director, Trade Policy Coordination Section, Andrea Spear, presents a copy of the 1998 Trade Outcomes and Objectives Statement to the Director of the Australian Industry Group, Leigh Purnell. (photo: Michael Jensen)

The Department established a Market Access Facilitation Unit to strengthen Australia’s efforts to reduce or eliminate barriers in overseas markets to Australian exports by focusing on four industrial sectors: processed food and beverages, information industries, motor vehicles, and textiles, clothing and footwear. The unit, through four specially appointed market access facilitators, sharpened departmental support for the Government’s efforts to open markets and ensure Australian industry is prepared for export opportunities. Already in the processed foods and beverages industry, the Department has developed comprehensive links with industry sectors, including the Supermarket to Asia Working Group, and contributed to several commercially valuable successes, notably for dairy products. The Department also facilitated a Memorandum of Understanding on cooperation in information technology with Hong Kong, thereby providing Australian companies with opportunities for increased market access, and developed a comprehensive work plan on automotive market access issues.

The Department made concerted efforts to promote Australian company awareness of opportunities in international procurement, co-sponsoring and participating in a successful UN and multilateral development bank procurement seminar in November in Sydney involving the Parliamentary Secretary for Trade, representatives of the United Nations, World Bank and Asian Development Bank, as well as major Australian companies. This, like other departmental activities, increased the number of Australian firms registering with UN agencies and multilateral development banks to be eligible for multilateral procurement opportunities. The Department ensured that Melbourne would be the venue for the UN Inter-Agency Procurement Working Group meeting in April 1999, thus providing a window for Australian companies to showcase products and expertise.

The Department continued to work closely with Austrade through its overseas network, identifying and targeting multilateral procurement contract opportunities for Australian business. The Department also published and distributed to business a new, comprehensive Guide to Winning Contracts with Multilateral Banks and the United Nations. The guide is also available on the Department’s website (http://www.dfat. gov.au/business_ services/mp.html).

With other agencies, the Department prepared and developed documentation and responses to the WTO Trade Policy Review of Australia. The Department organised roundtable briefing sessions for the WTO delegation when it visited Australia, together with presentations by Australian officials in Geneva; these resulted in a broadly positive endorsement of Australia’s economic and trade policy framework.

The Department also cooperated effectively with the private sector to successfully design, manage and stage, primarily on a commercial basis, a new international business forum, the Australia Summit. The summit was held in Melbourne in June. A private sector company, International Herald Tribune, administered the conference, while the Department arranged high-level foreign and domestic speakers.

An important outcome for the Department was the achievement of closer coordination with National Trade Consultation partners (state governments and industry bodies) on trade policy and promotion activities. Among the specific consequences of this were significant contributions to the Trade Outcomes and Objectives Statement, the establishment of an Asian dialogue group to exchange information on developments in Asia and their effects on Australia’s regional trade and investment, and the endorsement in principle by ministers of a Memorandum of Understanding on closer coordination of participation in international trade exhibitions (expected to be finalised by October 1998). The Department also examined the scope for closer cooperation in overseas representation, including possible collocation of federal and state offices and the sharing of resources to increase awareness, particularly among secondary students, of the importance of international trade and investment for the Australian economy.

The Department contributed to the effectiveness of the Trade Policy Advisory Council by encouraging the council to provide more detailed advice to Mr Fischer and the Department on key trade policy issues, such as the reaction of Australian exporters to the East Asian economic crisis.

1.6.4 Regional Trade and Asia Pacific Economic Cooperation

Despite a challenging economic environment for trade and investment liberalisation, the Department contributed significantly to keeping APEC’s liberalisation agenda on track. Australia remains influential in agenda-setting in APEC, with a number of high-profile outcomes from the leaders’ and ministerial meetings being either Australian initiatives or closely associated with Australia, for example APEC’s initiatives on Early Voluntary Sectoral Liberalisation, electronic commerce and communicating the impact of liberalisation.

The Department supported Australia’s participation in the 1997 Leaders’ Meeting where Australia played a lead role in achieving consensus on a balanced and mutually beneficial package of sectors for Early Voluntary Sectoral Liberalisation. This package included Australian priorities such as food, chemicals, energy, fish products, forestry, and gems and jewellery. The Department also worked to ensure Australia remained at the forefront of efforts to maintain Individual Action Plans as central to APEC’s liberalisation and facilitation agenda, and to extend their coverage of financial sector reforms. In general, action plans submitted in November demonstrated modest progress towards the Bogor goals, although some important new commitments also directly benefited Australian business. One was contained in China’s action plan, announcing the reduction of China’s simple average tariff rate from 23 per cent to 17 per cent.

The Department provided policy advice to ministers that assisted in elevating the issue of electronic commerce to the APEC economic leaders level in Vancouver in November and a senior departmental official subsequently co-chaired an APEC task force on the issue. The task force was established to improve understanding of the implications of electronic commerce for government and business, and identify areas for technical cooperation to promote its use in the region. The Department also developed a website to facilitate the work of the task force and to make available information to the community.

The Department facilitated Australia’s leadership in implementing an APECwide initiative to assist APEC economies promote understanding of, and support for, APEC’s liberalisation objectives in their domestic constituencies. The Department also advanced the facilitation of business travel in the region by advocating an expansion of the trial of the APEC Business Travel Card and securing a collective commitment from APEC economies to grant multiple entry visas through unilateral or bilateral means.

The Department engaged in effective business consultations, both at a detailed issue-specific level and more generally through its high-level participation in the APEC Business Forum. It also effectively supported Australia’s APEC Business Advisory Council representatives at ABAC meetings and intersessionally, and facilitated the successful Sydney ABAC meeting in May.

Departmental officials provided leadership in the APEC trade facilitation agenda, ensuring outcomes of direct interest to business and positively influencing APEC’s dialogue with the WTO in support of the multilateral trading system. The Department also supported a constructive debate on reforming APEC to enhance its focus and organisational effectiveness. (More information on APEC is on the Department’s Internet website at http://www.dfat.gov.au/apec.)

In the review period, the Department achieved good progress in advancing the ASEAN Free Trade Area and the Australia-New Zealand Closer Economic Relations Trade Agreement (AFTACER) facilitation agenda. Major outcomes of these efforts included endorsement by trade ministers at their meeting of action plans on cooperative activities to further the objective of the AFTACER Standards and Conformance Memorandum of Understanding, the establishment of a dialogue between transport officials and the publication of a compendium of AFTA-CER customs procedures for business.

Photo: Deputy Secretary, Joanna Hewitt, and Assistant Secretary, APEC and Regional Trade Policy Branch, Philip Sparkes, consult in preparation for the APEC Business Advisory Council meeting in May in Sydney. (photo: Michael Jensen)

Table 16: Australian Exports

Table 17: Australian Imports

Return to Table of Contents