Department Foreign Affairs & Trade  
Annual Report - Contents
 
DFAT Annual Report 1998-99






Multilateral Trade Policy and Negotiations : Sub-program 1.5

Description

The Trade Negotiations Division administers this sub-program. The division comprises four branches: the Agriculture Branch, the Services and Intellectual Property Branch, the Trade Policy Issues and Industrials Branch, and the World Trade Organization Branch. The division’s area of responsibility also includes two Australian overseas posts: Geneva WTO and Paris OECD.

Table 20 Multilateral Trade Policy and Negotiations (1.5) Resources Summary

 

1997-98 Actual ($’000)

1998-99 Budget ($’000)

1998-99 Budget and Additional Estimates ($’000)

1998-99 Actual ($’000)

Appropriations

       

Running costs

11 055

11 619

12 317

15 408

Other program costs

6 808

8 323

8 323

7 306

Total appropriations

17 864

19 942

20 640

22 714

Less adjustments

2 085

2 302

7 993

6 084

Total outlays

15 779

17 640

12 647

16630

Staff years

86

n.a.

n.a.

105

n.a. : Not applicable.

Objectives, Performance Indicators and Results

Objective



To advance Australia’s economic interests through trade negotiations and other consultations in the WTO, OECD and APEC as well as other multilateral and regional forums, and at multilateral, regional and bilateral levels

Indicator



The extent of support for Australian policy objectives for multilateral trade, particularly with respect to the launch of a new round of multilateral trade negotiations by 2000, both multilaterally in the WTO, OECD and APEC, and bilaterally with major trading partners.

Through its advocacy in the World Trade Organization and in bilateral and other forums, the department helped to enlist support, including from many developing countries, for a new round of WTO multilateral trade negotiations. Our leading role in the influential Friends of a New Round grouping helped bring this about. In addition, industry groups both in Australia and in some WTO member countries have indicated their support for our position that market access should be the key focus of a new round.

Through systematic input into WTO, OECD, FAO and APEC processes, the department maintained multilateral support for further substantial agricultural liberalisation and reform. We rebutted arguments antithetical to agricultural reform, including ‘multi-functionality’ (which would allow wealthy countries to protect and subsidise production indefinitely on the grounds that their agriculture maintains rural culture, rural landscapes and food security). In the WTO, we provided input to the Committee on Agriculture and to the Analysis and Information Exchange process. In the Cairns Group, through ministerial statements, we lobbied on issues such as export subsidies and Common Agricultural Policy reform, and initiated and advanced a policy exchange and outreach program with developing countries. We also helped to maintain the group’s cohesion and influence, and to establish a dialogue with the United States. In APEC, we supported further agricultural liberalisation through our input into APEC’s Food Task Force and its Business Advisory Council on food system issues.

We presented formal proposals on key issues in services, agriculture and industrial products as part of the preparatory process in Geneva for the launch of a new round of WTO trade negotiations. We also helped initiate the formation of the New World Wine Group to pursue improved market access and trade facilitation initiatives. In consultation with domestic industry and government agencies, and by engaging other interested national governments, we influenced multilateral work in Australia’s interests relating to intellectual property rights for biotechnology products and the protection of geographic terms applied to wine, spirits and other agricultural and food products. Working closely with New Zealand and Chile, we established a Services Consultative Group, to enhance the prospect of successful outcomes in mandated negotiations on services. We consulted bilaterally on a range of issues, including with Thailand on skim milk powder and pork access, and with Colombia, the United States and the European Union on export subsidies. Some of these resulted in countries honouring their WTO commitments, while others are ongoing. We also conveyed our misgivings to Japan over the methodology used to establish a new tariff applied to out-of-quota rice imports, and signalled our intention to pursue reductions to this tariff in future WTO negotiations.

Our monograph Global Trade Reform: Maintaining Momentum, launched by Mr Fischer at the OECD Ministerial Council Meeting in May 1999, received positive comment from other WTO members. The monograph presents the case for further global trade liberalisation.

Indicator



Progress in the preparatory processes for the mandated WTO agriculture and services negotiations, in particular the achievement of mandates and negotiating frameworks that allow an early and substantive commencement of negotiations in areas of interest to Australia.

We submitted eight Australian proposals on agriculture to the preparatory process and kept agriculture high on the agenda of WTO work in the lead-up to the Seattle WTO ministerial meeting in November 1999. We also helped develop a framework for services trade negotiations through active lobbying in Geneva and presentation of our proposals on negotiating objectives on domestic regulations, and on professional and environmental services. We achieved an initial negotiating mandate on services through comprehensive consultations with services industries.

Figure 27 Multilateral Trade Policy and Negotiations (1.5) Organisational Chart

Figure 27

Indicator



The conclusion of negotiations on accountancy services and the securing of Australia’s acceptance of the Fifth Protocol to the General Agreement on Trade in Services (financial services).

Many of Australia’s objectives were reflected in the final negotiations on accountancy services; implementation will follow the conclusion of the services negotiations. We also ensured that the accountancy guidelines will be expanded and refined in application to other professional services. Australia accepted the Fifth Protocol to the General Agreement on Trade in Services (financial services) on 3 May 1999.

Indicator



The promotion of Trade-Related Aspects of Intellectual Property Rights standards in countries that are our major trading partners, through multilateral and regional forums, particularly the Asia-Pacific Economic Cooperation forum.

The department was instrumental in the successful development of a mechanism to facilitate technical cooperation in the APEC Intellectual Property Rights Experts Group. Additionally, the bilateral technical assistance we have directed at Indonesia, Thailand, Vietnam, China and others has improved the capacity of these countries to meet fully their obligations under these standards.

Indicator



The extent to which Australia’s positions are advanced, understood and reflected in WTO dispute settlement procedures.

The department supported Australia’s participation as a third party in intellectual property disputes in two areas that are important to the wider interpretation of Trade-Related Aspects of Intellectual Property Rights standards: on how patent laws apply to the pharmaceutical industry (‘springboarding’) and on the basis for royalties paid to musicians and songwriters (‘homestyle exception’).

We appealed against certain findings of the WTO panel examining Canada’s complaint against Australia’s quarantine restrictions on salmon. Although the Appellate Body supported the panel’s fundamental findings against Australia, it modified the findings on several points, most notably ruling that the measure was not more trade-restrictive than necessary.

As a third party, we influenced outcomes on shrimps (United States), beef hormones (European Commission) and dairy (Canada) in ways that benefit Australian industry and trade policy interests. We also initiated a WTO dispute settlement action against the Republic of Korea’s beef import and distribution system, which discriminates against our exports.

The outcome of Australia’s dispute on automotive leather with the United States was mixed. The department has worked closely with the company involved—Howe Leather—throughout the dispute and, in close consultation with the company, we expect to be able to implement the findings of the dispute panel.

We also participated actively in the review of the Dispute Settlement Understanding and ensured that Australia’s priorities were reflected in the detailed negotiating processes carried out as part of that review.

Indicator



Progress in negotiations on WTO accession, Balance of Payments and Article XXVIII, with a view to achieving improved market access—interim and longer term—for Australian exporters. Australia’s accession negotiation priorities will be China, Taiwan, Russia, Saudi Arabia and Vietnam, with India and Pakistan being priorities for elimination of balance of payments restrictions.

The department participated in lengthy and complex negotiations, after which the Government reached in-principle agreement with China on market access issues related to China’s accession to the WTO. This result provides secure foundations for the growth and security of Australia’s trade with China in all key areas of Australian commercial interest, including sugar, wool, wheat, barley, cotton, oilseeds, horticulture, dairy, seafood, meat, processed food, sheepskins, minerals, manufactures and services.

We also made significant progress in negotiations with Taiwan. We obtained increased market access for animal offal in the period prior to Taiwan’s WTO accession, and improvements in other earlier accession market access offers made to Australia.

Market access packages were concluded with Albania, Estonia and Georgia; these will provide secure access for Australian exporters. WTO accession negotiations to secure better market access in the priority markets of Russia, Saudi Arabia and Vietnam are proceeding slowly, in part due to reluctance by these countries to commit to more liberalised trade regimes.

We ensured that the balance of Australia’s market access opportunities in Bangladesh, India and Sri Lanka was maintained following negotiations with these countries under Article XXVIII of the General Agreement on Tariffs and Trade 1994. Immediate improvements in access opportunities were obtained in India for a range of horticultural products.

Our representations to Egypt resulted in tariffs on wheat being maintained at a reduced level, helping to preserve market access for Australian exporters.

Mr Fischer (centre) at a media conference during his visit to China.

  • One of the most significant achievements of the year was the in-principle bilateral agreement on market access issues relating to China’s accession to the World Trade Organization, reached during Mr Fischer’s three-day visit to China in May 1999. This agreement followed several years of complex negotiations and involves increased tonnages and reductions of tariffs for Australian exports when China joins the WTO. China is one of the world’s largest economies and the overall deal will be worth hundreds of millions of dollars for Australian exporters, especially from rural and regional Australia. The photo shows Mr Fischer (centre) at a media conference during his visit. Also pictured are the Australian Ambassador to China, Mr Ric Smith (right), and interpreter, Mr Peter Barker. photo:Public Affairs Section, Australian Embassy Beijing

Objective



To ensure that Australia’s strategic trade policy framework is developed as an effective, coherent, coordinated and well-focused policy vehicle domestically and for securing Australia’s interests in pursuing the post-Uruguay Round trade and investment agenda.

Indicator



The impact of ministerial submissions and consultations, both within Government and with other clients, on the development of economic, industry and trade policy in Australia and on the consistency of that policy with Australia’s WTO obligations.

The department’s continued public consultation has heightened awareness of, and built public and industry support for, new negotiations in the World Trade Organization. In addition, these consultations brought useful input from business and other interests, and provided a sound basis for forthcoming decisions on Australia’s stance on a new round of multilateral trade negotiations. Our consultations within Government have also ensured that industry policy takes WTO obligations into account.

Our input was important in establishing a regime of protection for new agricultural and veterinary chemicals and in the interpretation of the EU–Australia Wine Agreement. It was also important in the development of legislation on the parallel importation of sound recordings and on copyright protection for software, and in the implementation of the World Intellectual Property Organization copyright treaties. We made significant contributions on a range of other issues as well, such as international air services, telecommunications, broadcasting, textiles, clothing and footwear, and the maritime sector, and in the development of trade rules for design protection.

Input from the department ensured that the Government response to the Productivity Commission report on the pig meat industry was consistent with WTO obligations and agricultural trade policy goals, and our advice on trade/biotechnology was accepted by regulatory agencies. Similarly, our advice on Australia’s WTO obligations was reflected in the new industry assistance programs for the passenger motor vehicles and the textiles, clothing and footwear industries, as was our advice on WTO rules and international obligations in relation to proposals under the Invest Australia program.

Indicator



The development of an Australian national position for WTO negotiations on government procurement in consultation with State and Territory governments and with other Commonwealth agencies.

We maintained cohesive and cooperative relations with Commonwealth, State and Territory agencies on government procurement, including progress on consultations for a proposed WTO agreement on transparency in government procurement.

Indicator



The extent to which there is improved dialogue and policy coordination on trade and environment issues at the national and international levels.

As part of our program of public consultation and information dissemination, we consulted with a diverse range of non-government organisations, consumer organisations, trade unions and industry, in such areas as environment and development. This engagement led to practical initiatives such as the participation of two Australian non-government organisations in the WTO High-Level Symposium on Trade and Environment in March 1999.

Through greater dialogue with environment, trade and industries ministries in other countries, we enhanced policy coordination on trade and environment issues at the international level. This contributed to more informed participation by a range of countries in international negotiations, notably on the Biosafety Protocol.

Objective



To develop initiatives that will support and strengthen the effectiveness of the multilateral trading system and its capacity to advance our trade and economic interests.

Indicator



The work of the WTO, the OECD and the World Intellectual Property Organization supported in ways that advance Australia’s broad trade objectives.

The department contributed to the preparation of an OECD ministerial communiqué in May 1999. The final communiqué reflected Australia’s support for a new round of multilateral trade negotiations and its stance on agriculture and investment.

We also made successful efforts to ensure the completion of the three-year program of budget reduction and reform for the OECD initiated by Australia.

In close cooperation with ministers, our advocacy ensured that the WTO preparatory process for the Seattle ministerial conference was consistent with Australian objectives of building support for renewed comprehensive multilateral trade negotiations. In particular, we supported the continued effectiveness of the WTO as an institution by working closely with Mr Fischer to promote a consecutive term arrangement as a circuit breaker to the impasse in the selection process for the position of the WTO Director-General. This involved the former New Zealand Prime Minister, Mr Mike Moore, and the Deputy Prime Minister and Commerce Minister of Thailand, Dr Supachai Panitchpakdi, taking up the position of Director-General of the WTO for consecutive three-year terms. Its acceptance by WTO members was a very positive outcome for Australia as both candidates are from the Asia-Pacific region and from countries that are active participants in the Cairns Group of agricultural fair traders.

In addition, the department advanced Australia’s trade objectives through the World Intellectual Property Organization in the fields of Indigenous intellectual property, the protection of copyright in the digital environment, and the regulation of electronic commerce.

Indicator



The degree to which results of key WTO reviews and negotiations are consistent with Australian positions and policies, and facilitate, where relevant, increased access for Australian exports.

Our engagement in the electronic commerce work program has helped promote Australian interests by ensuring that the WTO endorses a minimalist, business-led and user-friendly approach to the regulation of e-commerce.

The outcome of the sanitary and phytosanitary (SPS) review achieved our objective of avoiding renegotiation of the SPS Agreement, with its associated risk of weakening reliance on a science-based approach to risk assessment and management. We also secured improvements in the transparency of the agreement’s operations.

Indicator



The degree to which Australian positions are reflected in the work of the WTO’s committees and working groups.

The department’s work in the WTO committees and working groups assisted in ensuring a high profile for trade liberalising views, including on agriculture, trade facilitation, market access barriers, rules on goods and services, and institutional issues. In addition, we actively engaged in the Information Exchange Program on services, in negotiations on domestic regulation, and in the consideration of emergency safeguards and subsidies as applied to services trade. We also engaged in the promotion of a relatively cheap, simple, fair means of registering geographical terms applied to wine and spirits.

Our substantial efforts contributed to outcomes in the Sanitary and Phytosanitary Committee that reflect Australian positions, notably on technical issues and implementation. Outcomes in the Committee on Agriculture and in the Analysis and Information Exchange process also reflect our position, notably on ‘multi-functionality’ and agricultural reform in general. We also ensured that the work programs of the working groups on competition and investment were consistent with Australia’s objectives.

Indicator



The degree to which results of meetings of the Cairns Group reflect Australia’s multilateral trade policy objectives and advance the cause of further trade liberalisation.

We played a key role in maintaining the cohesion and effectiveness of the Cairns Group, including the group’s endorsement of Australian proposals in relation to WTO preparatory processes, and of Cairns Group ministerial statements on export subsidies and the European Union’s Common Agricultural Policy reform program. We also coordinated Cairns Group members’ input into the WTO Committee on Agriculture and into the Analysis and Information Exchange.

Objective



To ensure that Australian business is aware of, and is able to capitalise upon, market access opportunities arising from negotiations in multilateral forums, and that regional trading arrangements result in fairer and more equitable market access opportunities for Australian exporters.

Indicator



The contribution made to greater business understanding of trade liberalisation, Australia’s multilateral trade objectives, and opportunities arising from multilateral negotiations.

In February 1999, Mr Fischer announced that, for the first time, the Government would be seeking public submissions to help refine Australia’s WTO negotiating agenda. We had a strong response to this call, receiving submissions from four peak industry bodies, two State governments, 46 industry bodies and companies, 21 non-government organisations and some 60 individuals.

We also engaged in wide-ranging consultations with industry bodies on the new round of multilateral trade negotiations. Feedback indicated that this consultation improved industry’s awareness of these negotiations, and led to a greater appreciation of their relevance to industry interests.

In relation to new trade issues, the department developed support from Australian wine and biotechnology industries for the Government’s push for trade liberalisation, including access to the European Union, membership of the New World Wine Group and the patenting of life forms by the biotechnology industry.

We also strengthened industry support for agricultural trade liberalisation through contributions to the Australian Bureau for Agricultural Research and Economics Outlook Conference, the Agricultural Trade Consultative Group and other industry consultations.

Objective




To maintain and expand departmental links with business, non-government organisations, academia and the media in order to engage them as appropriate in the formulation of Australia’s approaches to international trade policy issues and to inform them of trade policy developments.

Indicator



The provision of formal and informal consultation processes to allow key stakeholders (other departments, States, Territories, industry and non-government organisations) an opportunity to contribute to the development of Australian positions on multilateral trade issues.

In response to the public consultation process on a proposed new round of multilateral trade negotiations, States, Territories and industry registered a wide degree of support for the Government’s broad trade policy, including for a new round.

We organised workshops on services and on electronic commerce in Canberra, Sydney, Melbourne and Brisbane. Attendance levels were high, and participants’ feedback positive. We also conducted extensive consultations with the Australian wine industry on wine trade issues. In preparing for agriculture negotiations, strong links were established with industry, notably through our meetings with the Agricultural Trade Consultative Group and consultations with individual agricultural sectors. A new position of Trade Facilitator for Agricultural Products was created to support these negotiations, and the department also funded certain activities of the industry’s Trade Representative for Agricultural Industries, Mr Graham Blight.

In the automotive leather dispute with the United States, we liaised closely with the company concerned (Howe Leather) in preparing and presenting submissions to the WTO panel conducting the case. These consultations are continuing as the panel findings are implemented. The department consulted closely with industry and State governments on anti-dumping and countervailing action taken against Australia. We also consulted other government agencies in developing whole-of-government positions in relation to anti-dumping complaints. In addition, regular consultations have led to a high degree of like-mindedness on government procurement among State and Territory governments, including on an approach to a new trade round.

We also contributed to a raised awareness among key industry and government agency stakeholders on a range of other issues. These issues included the importance of the protection of geographical terms applied to wine, spirits and other agricultural and food products; the patentability exclusions in Trade-Related Aspects of Intellectual Property Rights standards; parallel importation; the Convention on Biodiversity; and market access benefits from the implementation of other countries’ General Agreement on Trade in Services commitments. Awareness-raising and policy coordination were facilitated through effective use of the departmental website and Internet, direct mail, workshops and contributions to industry newsletters.

Indicator



The extent to which an informed debate is stimulated about the benefits of trade reform, including environmental benefits, that feeds into preparations for a new round, especially on the agriculture and fisheries sectors in protectionist countries.

The department sought to inform debate on the benefits of trade reform through a range of activities, including publication of a monograph, lectures and workshops. The monograph, Global Trade Reform, was well received by the media as well as by industry bodies, as was the Secretary’s speech at the annual trade policy lecture at the Melbourne Business School (which was subsequently published by the Melbourne Business School). Departmental workshops on services trade liberalisation held in Melbourne and Sydney (hosted by Mr Fischer) and in Brisbane were attended by over 100 representatives from business and industry. In response, we received 19 public submissions on services trade liberalisation in the proposed new multilateral trade round. Discussion at the workshops indicated a heightened level of awareness of the importance of a new round of trade negotiations.

We also prepared a paper analysing the environmental and developmental benefits of trade reform. Presented at two WTO high-level symposiums on environment and development (both held in March 1999 and attended by some 130 non-government organisations, 130 government delegates and 26 representatives of international organisations), the paper contributed to the growing recognition of these benefits. The paper’s analysis of the benefits of reform of agriculture and fisheries subsidies served as a catalyst for the release of two media statements. One of these was on agricultural trade reform (issued by the Cairns Group) and the other on fisheries subsidies (issued by Australia and several like-minded countries). Both received international press coverage.

Indicator



The degree of support from major clients for our approach to multilateral trade policy, and to sectoral initiatives and negotiations.

Business and industry responses to the public consultation process (detailed above) that we have conducted on the new round of trade negotiations indicate a generally high level of support within Australia for our overall multilateral trade policy. Broader community views revealed differences in opinion on the integration of investment and environmental policies into the WTO.


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