Strengthen APEC as the pre-eminent forum for economic co-operation 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 domestic impediments to growth in trade;
Advance the Team Australia concept through development of the National Trade Strategy Consultative Process;
Implement an expanded, targeted and policy-oriented business support program;
Provide advice to Ministers and the Department on developments in the global, regional and domestic economies; and
Disseminate, particularly to the business community, commercially useful information and statistics through country economic briefs, statistical services and other publications
Sub-program 1.6 was managed by the Department’s Economic and Trade Development Division. This comprised four branches-the Asia Pacific Economic Cooperation (APEC) Branch, International Competitiveness Branch, Trade Analysis Branch and the National Trade Strategy and Business Affairs Branch. Overseas posts contributed significantly to the sub-program, particularly through economic reporting and in the work of the APEC Branch. The Department’s regional offices played an important role in relations with Australian business and the wider community under the sub-program.
Successful consolidation of APEC;
Cooperation with the private sector and state governments, under the National Trade Strategy Consultative Process, in the development of country and sectoral trade strategies and the identification of priority trade and investment issues;
Relevant and timely analytical and statistical reports and briefings for government and private sector clients;
Activity under the sub-program maintained Australia’s influence in multilateral economic organisations and broadened understanding and acceptance of Australian policies.
Asia Pacific Economic Cooperation (APEC)
The Department played a leading role during 1993-94 in the further consolidation of APEC as the principal forum promoting economic cooperation in the Asia-Pacific region. In accordance with the high priority Australia attaches to APEC, the Department has been actively engaged in the work of the grouping, particularly in the key areas of trade and investment facilitation and liberalisation.
Australia, through Foreign Affairs and Trade and other government departments and agencies, continues to play an initiating role in APEC and has been successful in expanding the scope of APEC’s activities designed to enhance regional economic integration. APEC’s economic significance has been recognised in other international fora, as has its role in promoting a successful conclusion to the Uruguay Round of GATT negotiations.
Together with the Prime Minister’s Department, Foreign Affairs and Trade assisted in advancing Prime Minister Keating’s proposal for periodic meetings of APEC leaders. The proposal was taken up by US President Clinton, and an historic first leaders’ meeting was held on Blake Island near Seattle in November 1993. The Blake Island meeting marked a strong commitment to APEC at the highest political level and paved the way for another APEC leaders’ meeting to be held in Bogor, Indonesia in November 1994.
At Blake Island, leaders agreed to a vision statement which presented a common view on the value of APEC as a framework for economic cooperation in the region, underlined APEC’s support for the multilateral trading system, pledged to continue to reduce trade and investment barriers in APEC, and provided a definition for a future ‘community of Asia-Pacific economies’-all of which were outcomes in line with Australian objectives. The Department also assisted in the development of specific initiatives which were proposed by the Prime Minister and adopted at the Blake Island meeting, on development of a non-binding code of principles on investment, strengthening regional cooperation in the area of product standards, and building on Uruguay Round outcomes at the regional level. Following the Seattle meeting the Department and other government agencies have worked to implement these initiatives as well as others adopted by leaders.
The Fifth APEC Ministerial Meeting which took place in Seattle in November 1993, immediately before the leaders’ meeting, was attended by the Minister for Foreign Affairs, Senator Evans, and the Minister for Trade, Senator Cook. The ministerial meeting agreed on a trade and investment framework which set out long-term aims for APEC in trade and investment matters and established a permanent Committee on Trade and Investment tasked with pursuing those objectives. Ministers also approved an APEC work program for 1994, which included continuing work on investment, standards, customs, tariff data, and non-tariff measures, as well as new work in the areas of review and implementation of Uruguay Round outcomes and small and medium enterprise policy. The Department has been active in pursuing Australian interests in all these areas of work.
In Seattle, APEC Ministers also received the initial report of the Eminent Persons Group (EPG), which set out a long-term vision for open trade in the Asia-Pacific region and recommended initiatives in four areas: regional and global trade liberalisation; trade facilitation programs; technical cooperation; and institutionalisation of APEC. Ministers instructed officials to develop practical programs to implement many of these recommendations, and asked the EPG to present further, more specific proposals to advance its long-term vision to the next ministerial meeting in November 1994. The EPG report has provided the backdrop against which the Department has been pursuing much of its work on trade facilitation and liberalisation.
The Department has been working closely with other government and non-government agencies to advance Australia’s interests through all APEC mechanisms, including the Committee on Trade and Investment, the Ad Hoc Group on Economic Trends and Issues, and working groups which are working to strengthen cooperation in areas such as telecommunications, human resource development, energy and transportation. Australia has also participated in the activities of the Pacific Economic Cooperation Council (PECC) whose observer status in APEC provides an opportunity for private sector and research community input to the APEC process. The Pacific Business Forum, a leaders’ initiative, was another means of injecting business views on APEC’s role. Australia’s representatives, nominated by the Prime Minister, are Mr Philip Brass and Mrs Imelda Roche.
Trade competitiveness
With the establishment of the International Competitiveness Branch in early 1994, the Department enhanced its research, analysis and policy advice capacity on key trade, economic and environmental issues affecting Australia’s international competitiveness. This recognised that a key element to boosting Australia’s international competitiveness is a domestic environment that will allow firms to perform at their best.
The Department contributed to the preparation of the White Paper on Employment and Growth, (‘Working Nation’). Trade initiatives aimed at strengthening our global network, pursuing trade liberalisation and providing an environment domestically which is conducive to business growth and competitiveness were announced in the white paper to assist Australian industry to develop international business and trade.
Increasing attention is being paid in Australia and internationally to trade and environment issues, including to the economic implications of international environment conventions. The establishment of the International Competitiveness Branch has raised the Department’s capacity to analyse the trade and economic impacts of environment issues. The Department was heavily involved in the development of the Government’s initial response to the Decision of the second Conference of the Parties to the Basel Convention to prohibit immediately the export of hazardous wastes for disposal from OECD to non- OECD states and to phase out by 31 December 1997 all exports of hazardous waste destined for recycling or recovery operations from OECD to non-OECD states. It has also been working closely with other agencies and Australian industry on the amendments required to the Hazardous Waste (Regulation of Exports and Imports) Act 1989 to enable Australia to meet its obligations under the Basel Convention.
The Department worked closely with the Australian Bureau of Agriculture and Resource Economics (ABARE) to develop more sophisticated analytical and research capacity on trade and environment issues. This continuing cooperation helps to ensure Australia is well positioned to assess the economic and trade impacts of existing and possible future commitments under the Framework Convention on Climate Change. This research work will also play an important role in the policy formulation process and in the development of Australia’s negotiating objectives and strategies on climate change issues.
More generally a policy-related research program has been established in the Department to examine trade competitiveness and related issues. Work has commenced on how internationalisation of the domestic economy affects small and medium sized Australian enterprises (SMEs). The project is expected to provide an overview of the pattern and extent of SME globalisation and an analysis of the strategies SMEs have used to globalise successfully.
The linkages between trade and competition policy in Australia are also being examined. The study will examine how changes in trade policy (in particular tariff reductions) in the last decade have reinforced domestic competition policy. The study will also examine the desirability of multilateral, regional and bilateral agreements on competition policy and possible implications of such agreements for Australia.
Trade strategy and coordination
There were major developments during the year under the National Trade Strategy Consultative Process (NTSCP). The NTSCP was launched in 1991 as a means of ensuring effective cooperation between the Commonwealth and the States, and with industry and trade unions. It has developed into an important means for identification of trade priorities and coordination of trade and investment efforts to advance the internationalisation of the Australian economy.
At a ministerial meeting held in August 1993 Commonwealth, State and Territory ministers responsible for international trade and business development agreed to a set of national trade priorities and to the ‘Team Australia’ concept, with a commitment to putting Australia in the front rank of exporting economies by the year 2000. This objective will be pursued, inter alia, through ensuring a continuing high level of collaboration between governments, industry and unions on trade and investment issues. Ministers also agreed to a forward action program of issues identified at the annual meeting of the Trade and Investment Forum (comprising senior Commonwealth and State officials, peak national industry association and union representatives) in July 1993. The program identified a number of priority trade and investment issues and formed the basis of the NTSCP work program for 1993-94.
In response to an industry proposal at the Trade and Investment Forum, the Department organised an NTSCP forum on micro-economic reform in Canberra in December 1993. The report of that forum provided a timely input into the Government’s policy development for the white paper on employment and growth, ‘Working Nation’.
At an inter-sessional meeting of the Trade and Investment Forum held in February 1994, participants gave strong support to the NTSCP’s key working document, the Trade and Investment Development (‘TRAID’) paper which provides strategies for Australia’s priority export markets, as well as detailed sectoral strategies. The TRAID paper was being revised for publication in late 1994 with input from a broad range of Commonwealth agencies, State ministries, peak industry organisations and union representatives.
The role and direction of the NTSCP was reviewed by participants during the year to ensure it retains its strategic focus and reflects issues of priority concern to participants. Major scheduled meetings for the next year include an inter-sessional meeting of the Trade and Investment Forum in August 1994, the annual Trade and Investment Forum in early 1995 and a meeting of Commonwealth and State Ministers shortly after the forum meeting.
Following a decision by Cabinet the Department assumed the role as chair of a new Standing Interdepartmental Committee on Export Coordination. The committee, consisting of a wide range of Commonwealth agencies, met on three occasions during the year to plan and coordinate off-shore trade- related activity as well as trade policies and programs. The committee has provided an important means of coordinating trade activity at the Commonwealth level and provides an important adjunct to the National Trade Strategy Consultative Process.
The Department has also worked closely with the Department of Industry, Science and Technology following the decision in the context of the white paper to establish a national board of industry, trade and investment. The decision recognises that trade promotion and facilitation, industry development and investment facilitation need to be closely integrated and more strongly driven by the market signals coming from the international economic and trade environment.
Trade Policy Advisory Council
The Trade Policy Advisory Council (formerly the Trade Development Council), the Minister for Trade’s key private sector advisory body, met in July and September 1993 and June 1994. The council was restructured during the period to enhance its capacity to provide business input to Australia’s evolving short to medium-term trade policy priorities in the fluid post-Uruguay Round international trading environment. The council will, among other things, provide an important conduit for enhanced Australian business input to APEC. It has continued to provide an important link between the Minister, the Department, the business community and trade unions throughout the year. Further information appears in the appendix on non-statutory bodies.
Export culture
Following on from the findings of the McKinsey Study on Emerging Exporters of the need to promote a stronger export culture within the Australian business community, the Department convened the National Trade and Investment Outlook Conference (NTIOC) in Melbourne from 24 to 26 November 1993. The conference was designed to bring together decision makers from all sectors of business and present them with international trading and investment opportunities.
The evaluation of NTIOC ’93 has been uniformly positive. It was attended by around 1 000 participants including Australian and international business people and senior government officials and trade representatives. The conference focused on 12 markets: Indonesia, India, China, USA, Republic of Korea, New Zealand, Malaysia, Thailand, Japan, Taiwan, Chile and Germany. Representatives from each of these countries were brought to NTIOC by the Australian Government. The conference was successful in achieving its aim of providing Australian business with strategic market information and quality networking opportunities. A number of business deals have been written as a result of NTIOC ’93 and other ventures are currently being negotiated.
NTIOC is to be held annually and is set to become a major trade and investment event in Australia. NTIOC ’94 will be held in Melbourne from 6 to 8 December. The theme will be ‘Creating Networks for New Business’.
Business support
The Department has strengthened its capacity to ensure that business has ready access to the Department’s business-related services and programs and to ensure that business concerns are reflected in policy considerations. A Business Affairs Unit was established in the Department in late 1993 to provide a central contact point with business at the corporate level. In partnership with other areas of the Department and Austrade, the unit utilises the Department’s global network and expertise to engage in policy dialogue with business and to help Australian business secure profitable international links through a range of services. These include a program of briefings to business and seminars provided by skilled staff with knowledge and experience of diplomatic and trade negotiations who are available to visit companies or address conferences.
Trade and Investment Promotion Service
During 1993-94 the Department’s Trade and Investment Promotion Service (TIPS) continued to provide assistance to developing countries to facilitate trade and investment promotion activities. TIPS funded activities under three programs from $3 477 000 provided by AIDAB through the trade development component of its overseas development cooperation program (see program 6.0).
A wide ranging review of the TIPS program was undertaken in 1993-94 with substantial changes approved by Ministers to the delivery of TIPS programs and the structure of TIPS operations. The revised arrangements will continue for three years from 1 July 1994 and will be reviewed in the final year.
Under the new program, TIPS will continue to provide assistance to developing countries to facilitate trade and investment promotion activities. However, the focus will shift from trade to the promotion of investment opportunities in client countries in the Asia-Pacific region. Key components of the new program include targeted investment promotions; sponsored participation in major trade fairs and displays; market advice on products and trade contacts; reports on the Australian import market; and training seminars and workshops on investment and trade promotion and marketing.
A number of strategic alliances have been established to ensure the program is relevant to the needs of both Australian and developing country firms interested in industrial development. Consultations have been undertaken with developing country trade and investment agencies, Australian industry and specific industry display organisers.
Trade analysis
Information on and analysis of domestic and international trade and economic developments are integral input to improving Australia’s trade performance and development of trade policies. The Department continued to monitor changes in Australia’s economic activity affecting its trade performance and prospects. Such work during the year included assessments of the balance of payments implications of commodity and financial market developments, and analysis of the medium-term economic outlook for Australia’s major trading partners. Work continued on a medium-term project designed to enhance our understanding of Australian foreign investment abroad. The Department’s Economic and Trade Review, produced half-yearly and available to the public, includes surveys of the economic developments and outlook of major East Asian economies. This is based on assessments prepared by Australia’s overseas missions and supplements information on the Australian economy, trade and investment and on the economic outlook for OECD economies.
In 1993-94, the Department continued to disseminate information of commercial relevance collected by its overseas missions through the Country Economic Brief program and the Cable Subscription Service. The Country Economic Briefs remained popular, with more than 9000 briefs covering 32 countries sold to Australian companies in 1993-94. In the first year of operation, 164 subscriptions to the Cable Subscription Service were received. The service complements the Country Economic Briefs by providing more detailed and up-to-date reports on developments in 11 Asian countries. Arrangements were made for the Cable Subscription Service to be more accessible, with cables to be made available through the AAP Group’s electronically delivered Asia Pulse Service in 1994-95.
Accurate and timely statistics are essential to trade policy development and trade promotion. The Trade Analysis Branch undertook almost 800 trade statistical projects during the year. The Department’s international trade statistics database system was expanded in scope and key user agencies were provided with on-line access. The government sector-particularly other areas of Foreign Affairs and Trade-was the major user of the ‘s statistical services. Private sector demand grew in 1993-94 to around 25% of requests for information. Austrade accounted for 22.3%.
The Department enhanced the analytical content of its publications, including a major contribution to the debate on domestic business investment. The range of published work was expanded. A new publication, Trade with the Americas, was planned for introduction in 1994-95. The scope of the publication, Trade with the European Community, was extended to include the European Free Trade Association in 1994- 95. In 1993, a total of 2600 publications was sold, including almost 800 subscriptions to the main publication, Composition of Trade. (Composition of Trade includes about 300 pages of trade statistical tabulations).
The Department participated in government and the Export Finance and Insurance Corporation (EFIC) consideration of trade finance policies and proposals, particularly through the departmental Secretary’s membership of the board of EFIC. As well as bringing foreign and trade policy perspectives to bear, the Department drew on its expertise to assist in assessment of country risk, including consideration of applications under the National Interest Account referred to the Government by EFIC. The Department’s participation has allowed EFIC and the Government to be better informed on the provision of trade finance and insurance to Australians exporting overseas.
In association with Treasury and AIDAB, the Department has given priority to encouraging sustainable steady economic growth in developing countries through Australia’s membership of the International Financial Institutions. This has included an emphasis on poverty alleviation as well as improving Australia’s trade links with the countries involved. In particular, the Department contributed to the development of Australia’s position on a general capital increase for the Asian Development Bank (ADB), the first increase for over a decade, which was agreed to late in the year.
The Department provides advice on political, economic and trade issues associated with Australia’s membership of international financial institutions (IFIs). The Department has significant involvement in negotiations which resulted in the resumption of lending by the IFIs to Vietnam and Cambodia after almost two decades. Over the last year the Department also provided advice on operational reviews of the ADB and the European Bank for Reconstruction and Development (EBRD) conducted within the organisations involved.
United Nations Industrial Development Organization (UNIDO)
The visit to Australia in early February 1994 by the Director-General of UNIDO, Mr Mauricio de Maria y Campos, provided an opportunity for the Director-General to gain a full appreciation of Australian industries’ ability to assist UNIDO in fulfilling its charter of promoting and accelerating, through technical assistance and other means, industrial development in developing countries.
While in Australia, the Director-General signed an agreement with the Government of Western Australia to establish a Centre for Applications of Solar Energy (CASE) in Perth to promote the commercial use of solar energy technologies in developing countries.
Economic and Social Commission for Asia and the Pacific (ESCAP)
At the 50th session of ESCAP in New Delhi from 5-13 April, the Australian delegation pursued the Government’s priorities of seeking increased ESCAP resources to assist Pacific Island developing countries to meet their development objectives; ensuring that ESCAP placed increased emphasis on social development issues, in particular women in development issues; and the continuing goal of encouraging ESCAP to become more efficient and effective. The increased importance of social development issues is reflected in the theme for the 51st session of ESCAP to be held in Bangkok in 1995: ‘Strengthening of Regional Cooperation in Human Resource Development with Special Reference to the Social Implications of Sustainable Economic Growth in Asia and the Pacific’.