OUTCOME 1: Australia's national interests protected and advanced through contributions to international security, national economic and trade performance and global cooperation
1.1.5 & 1.2.5: MULTILATERAL TRADE NEGOTIATIONS
The failure of the December 1999 Seattle ministerial meeting of the World Trade Organization (WTO) to launch a new round of trade negotiations was a major disappointment to the Government. The departments key multilateral trade objective has been to have a new round of trade negotiations launched in the WTO. For a medium-sized exporting country like Australia, such a multilateral round offers the best potential gains in terms of broadly based access to global markets and secure trading conditions. Further negotiations mandated in the WTO for agriculture and services have commenced and we have been instrumental in securing timely work programs, but optimal results will require a negotiating round with a broader agenda. The department has worked to build constituencies with other WTO members to address concerns about globalisation and to prevent frustration of further trade reform. We have also worked to broaden domestic understanding and support for trade liberalisation.
The departments intensive lobbying effortsin Geneva, bilaterally and through the APEC forumhelped build widespread support at the Seattle WTO ministerial conference in December 1999 for a new multilateral trade round focused on improved market access. A feature was the extent of developing country support for the ambitious agriculture reform proposals of the Cairns Group of agricultural exporting countries, which Australia chairs. It was, therefore, regrettable that a range of factors, including poor preparation by many WTO members, inadequate time and the excessive ambition of some in new and contentious areas, prevented a round launch at that time.
Since Seattle, the department has worked hard in support of ministers, including through strategic contributions to processes of the WTO, the United Nations Conference on Trade and Development (UNCTAD), the Organisation for Economic Cooperation and Development (OECD) and APEC to rebuild and sustain broad international support for a round launch. Political events, notably the forthcoming US presidential election, now make a launch unlikely until 2001.
In the post-Seattle environment, the absence of a new round has coincided with greater resort to WTO dispute processes as a means of advancing and enforcing members trade interests. The department strenuously defended Australias interests in cases taken by Canada on quarantine measures for salmon and by the United States on subsidies to automotive leather. Mutually satisfactory settlements were negotiated in each case, avoiding potentially damaging retaliation against Australian exports. The department established a new Disputes Investigation and Enforcement Mechanism to facilitate cooperation with Australian industry in using the WTO disputes process (see also reporting under quality and quantity information). During the year, we used the WTO process to successfully challenge Korean beef import restrictions and launch a case against US safeguard measures imposed on Australian lamb meat imports. We also exercised third party rights in a number of cases, with benefits accruing to Australias pharmaceutical, dairy, shrimp and music industries.
We finalised the agreement liberalising access for Australian goods and services to China. The agreement will cover hundreds of millions of dollars of export trade and benefit a wide range of Australian exporters. We also successfully concluded WTO accession-related market access packages with six other trading partners.
Throughout 1999, the department sought to build international support for a new trade round. We carried out extensive international and domestic consultations to elicit views, frame objectives and build understanding of potential benefits of a round. This work was assisted by a study conducted by the department earlier in 1999, and launched by the then Trade Minister, Tim Fischer, at the May 1999 OECD ministerial council meeting. The study Global Trade Reform: Maintaining Momentum established the benefits available for Australia and the global welfare gains from a short round of three to four years that focused on market access improvements for industrial products, agriculture and services, together with rules to underpin market access commitments.
The department received more than 130 submissions conveying views on Australias objectives from State Governments, businesses and industry bodies, non-government organisations and members of the public. We published an issues paper summarising these views on our website in August 1999. As part of the WTO consultations, we subsequently conducted public hearings in all State and Territory capitals and in five regional centres (see also quality and quantity information). We took the results into consideration in finalising Australias approach to the Seattle ministerial meeting negotiations.
At the Seattle ministerial meeting the Australian delegation, led by Mr Vaile, achieved widespread support for a market access-focused round and strong developing country support for the Cairns Groups ambitious agriculture reform goals. This will provide a strong basis on which to build support for the launch of a new round as soon as possible.
Since Seattle, the department has worked to rebuild and sustain support for an early round launch at the WTO in Geneva and through input into WTO, UNCTAD, OECD and APEC processes. We have supported the WTO Director-Generals efforts to improve market access for least-developed countries and introduce measured institutional reforms to build confidence. We have also worked hard to advance the mandated negotiations on agriculture and services, where solid progress will create a climate conducive to a round launch.
As part of Australias efforts to promote the launch of a new round, the Cairns Group of agricultural exporting nations, under Australias leadership, expanded its role as the primary force for agricultural trade liberalisation. Preparing for Seattle, the group met at ministerial level in Buenos Aires in August 1999 and agreed on negotiating objectives for agriculture. These reflected Australian positions, including the elimination of export subsidies and trade-distorting domestic support, and major improvements in market access. The group also agreed to counter some countries efforts to promote the multifunctionality of agriculture (such factors as rural landscape, environmental concerns, social welfare) as grounds to avoid reform.
At Seattle, the Cairns Group was highly effective in pushing for a trade-liberalising mandate, with the result that agriculture was less contentious than other issues. Greater international support for Cairns Group positions reflected its outreach efforts, led by the department, with major developing countries. The agriculture text negotiated at Seattle fully reflected the Cairns Groups negotiating objectives and will be the basis on which the group approaches renewed efforts to launch a round.
Post-Seattle, the department took a leading role in achieving a timely work program when the mandated negotiations on agriculture under Article 20 of the Agreement on Agriculture began in early 2000. We also coordinated preparation of a far-reaching negotiating proposal for the elimination of agricultural export subsidies, presented at the June 2000 negotiating session.
Services negotiations were mandated as part of agreements at the end of the last multilateral round (Uruguay Round) of trade negotiations. Before Seattle, the department used extensive industry consultations to develop Australias strategy for WTO services negotiations, working closely with the Australian Services Network and representatives of all services sectors to identify market access barriers and to secure agreement on our priorities. While agreement to comprehensive services negotiations was not secured at the Seattle ministerial meeting, good progress towards a consensus was made.
The mandated negotiations on services began on schedule in early 2000. The department was instrumental in establishing a services work program until March 2001 (the roadmap), through a paper developed in consultation with Singapore.
We also played a key role in shaping work programs for a number of services committees. Australian papers on environmental services, domestic regulation and cluster negotiations have set the agenda for discussion on those issues. Australia has also used the APEC Group on Services to develop support for services liberalisation in the WTO.
We have developed a database of barriers to inform our objectives for the services negotiations. We have also upgraded services information on our website and developed electronic mail-out and key client databases.
Apart from mandated negotiations in agriculture and services, in the lead-up to and post-Seattle there has been an upsurge in dispute settlement activity in the WTO. The department has been involved in both defending and prosecuting cases. We pursued a complaint against Korean beef import restrictions through WTO dispute settlement processes; the panel upheld our position. The findings are subject to appeal. We are currently prosecuting a complaint against US safeguard restrictions on imports of lamb meat, with the panel report due later in 2000.
We negotiated a mutually satisfactory solution with the United States in the dispute over subsidies on automotive leather (the Howe leather case). A settlement was also reached with Canada on quarantine measures on salmon. The salmon dispute involved a wide range of domestic stakeholders, including commercial and recreational fishing interests, State Governments and many Australian exporters to Canada. In each case, the settlement avoided damaging retaliation against Australian export interests.
The departments exercise of third party rights in two disputes involving intellectual property resulted in outcomes consistent with Australias approach to the issues and our domestic policy settings, with benefits for our pharmaceutical and music industries. The outcomes endorsed key aspects of our legal interpretation of the Trade Related Aspects of Intellectual Property (TRIPS) Agreement. We also worked with other agencies, industry bodies and State Governments to ensure that the United States implemented the outcome of the WTO shrimp dispute in a way that would restore Australias market access. An important first step was a US decision to allow imports for Australian prawns from the Spencer Gulf fishery in South Australia from October 1999. Similar access for the Northern Prawn Fishery was achieved in mid-2000.
As part of the Governments response to the upsurge in dispute activity, in May 2000 we conducted seminars in State and Territory capitals on a new Disputes Investigation and Enforcement Mechanism. The mechanism is designed as a government and industry partnership to maximise the benefits to Australia of the WTO dispute settlement system. Access to the mechanism was made available on-line.
In addition to dispute settlement activity, the department supported Australias participation in the Committee on Regional Trade Agreements to ensure that countries entering into regional or free trade agreements were meeting their WTO obligations and so minimising arrangements that would discriminate against Australian exporters. The department closely monitored the upsurge of interest in free trade agreements (FTAs) across the world and initiated a new senior-level dialogue with key trading partners regarding this trend. In addition, the department provided advice to ministers and the Prime Minister in their discussions on developments in FTAs and their relationship to the WTO.
Negotiations were finalised with Indiaunder Article XXVIII of the General Agreement on Tariffs and Trade (GATT)on the phasing out of trade restrictions in place for almost 40 years. The phase-out of these restrictions will ensure greater certainty and improved market access for Australian exporters.
The department also defended Australian commercial interests in the WTO generallyfor instance, by liaising closely with an Australian firm defending a countervailing and anti-dumping investigation by the European Union on polyester staple fibre. We also provided advice to companies that faced anti-dumping action taken abroad.
International and domestic debate about biotechnology and related aspects of food safety, labelling of genetically modified foods and protection of human health and the environment increased significantly during the year. The department ensured Australias WTO rights were protected in negotiations affecting agriculture trade, including the Biosafety Protocol and the OECD Working Group on Food Safety. We were involved in policy discussions on these issues in the WTO, OECD, Food and Agriculture Organisation (FAO) and the United Nations. We guarded against approaches to managing the technology and assessing risks to human health and the environment that might be inconsistent with the established international trading framework of WTO rights and obligations and undermine Australias interests as an agri-food exporter. A key element of the work was strong advocacy of the need to adopt a science-based approach to risk analysis and a rules-based approach to measures that affect trade in biotechnology products.
In Australia, the department worked closely with, and provided extensive advice on WTO issues to, a range of government agencies, including Biotechnology Australia, the Australia New Zealand Food Authority, Codex Australia, the Interim Office of the Gene Technology Regulator, and State and Territory Governments. In particular, we provided legal and technical advice to health ministers on Australias international trade obligations and the proposed AustraliaNew Zealand Food Standard for labelling of genetically modified foods. The department also participated in developing Australias National Biotechnology Strategy and Commonwealth legislation on the regulation of the use of gene technology in Australia.
The department contributed to domestic and international consideration of the legal and policy issues raised in negotiations over the Biosafety Protocol and in the Commissions for the Conservation of Antarctic Marine Living Resources and the Conservation of Southern Bluefin Tuna. This work contributed to the adoption of a catch documentation scheme to prevent illegal, unregulated and unreported fishing of toothfish in the Antarctic, and progress towards a bluefin tuna trade information scheme (see also sub-outputs 1.1.1 and 1.2.1, and 1.1.7 and 1.2.7).
The department promoted intellectual property protection and enforcement in the Asia-Pacific region, a key market for Australian intellectual property and a priority of Australian industry.
Within international forums, Australia worked with the APEC Intellectual Property Rights Expert Group and the World Intellectual Property Organization (WIPO) to advance protection of Australias trade-related intellectual property rights, and to meet Australias obligations under the TRIPS Agreement. This support resulted in:
- the signing of the WIPOAustralia Joint Statement on Co-operation for Technical Assistance in Asia and the Pacific Region;
- the APEC Joint Statement on the WTO TRIPS Agreement implementation; and
- the development of intellectual property enforcement and public education mechanisms in APEC.
Extensive industry consultations, and the wide distribution of stakeholder briefing publications (including a booklet, Intellectual Property A Vital Asset for Australia) contributed to better understanding of current trade-related intellectual property rights issues. Industry, in return, provided valuable input to the formulation of Australias responses to TRIPS reviews and negotiations.
In fulfilling Australias TRIPS obligations to provide technical assistance, and to further the interests of Australian business in strengthening intellectual property protection in export markets, we provided technical assistance to developing countries in Australias region including:
- a technical handbook to assist developing countries in their implementation of the transparency requirements of TRIPS;
- technical advice and training in Indonesia, Vietnam and Thailand on TRIPS implementation and protection; and
- policy dialogue in the APEC Intellectual Property Rights Expert Group on emerging intellectual property issues, such as electronic commerce and biotechnology.
Australia exercised third party rights in two WTO intellectual property disputesone involving Canadian patent protection for pharmaceuticals and the other exceptions under US copyright law for musicin order to safeguard the interests of Australian rights holders in key export markets.
With Australian wine exports during the year reaching a record $1.4 billion, the department is working closely with other New World wine producing countries on wine aspects of intellectual property discussions in the WTO. We made substantial progress in negotiations on a treaty on mutual acceptance of wine-making practices among New World wine producers. The treaty would create a secure basis for increased Australian access to growing markets in North and South America, and South Africa. Negotiations continue with the European Union on finalising outstanding issues in the 1994 bilateral Agreement on Wine, to support continuing growth in Australias principal export market for wine.
In the absence of a new multilateral trade round, the department pursued greater market access through negotiation of WTO accession agreements. We finalised the bilateral agreement that will liberalise access for goods and services to the Chinese market when China becomes a member of the WTO. During a May 2000 visit to China, Mr Vaile and the Chinese Minister of Foreign Trade and Economic Cooperation, Mr Shi Guangsheng, signed the agreement that formally concluded the in-principle agreement reached in May 1999.
This will provide better and more secure market access for a range of Australian goods and services. Industries that will benefit include the wool, sugar, wheat, barley, meat, seafood, horticulture, dairy, cotton, rice, oilseeds, wine, processed food, hides and skins, chemicals, pharmaceuticals, metals, information technology and auto sectors. The result will be of considerable value to a wide range of services exporters, including banking, insurance, legal, accountancy, architecture, telecommunications and distribution services.
The department negotiated an in-principle agreement with Saudi Arabia on market access issues related to Saudi Arabias accession to the WTO. The result provides a secure foundation for the growth of Australias trade with Saudi Arabia in many areas of Australian commercial interest.
Market access packages were concluded with two other Middle East markets, Oman and Jordan, and with Croatia, Moldova and Vanuatu. These will provide secure access for Australian exporters in key areas of commercial interest.
The department made many contributions to WTO committees and working groups to support further trade and investment liberalisation. Through the working groups, we continued discussions to clarify difficult issues arising out of the Seattle ministerial meeting, for example on competition and investment, and to explore possibilities for compromise.
We supported Mr Vailes participation in the tenth United Nations Conference on Trade and Development (UNCTAD X) in Bangkok and were successful in shaping conference outcomes to reflect interests that we share with developing countries, such as advancing agricultural trade reform.
We also worked hard in the OECD to advance Australias interests by shaping the direction and outcomes of the OECDs international trade policy discussions. The department supported Mr Vaile and the Treasurer, Mr Costello, who chaired the 2000 OECD ministerial council meeting, in their work to promote and protect Australian interests in a range of areas, including global economic and social concerns, multilateral trade, biotechnology and civil society issues.
The department contributed to Australias significant role in the work of WIPO, including through development of international norms on intellectual property, improved technical cooperation and management and budgetary reforms within WIPO.
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