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Department of Foreign Affairs and Trade - Annual Report 2000-2001
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OUTPUT 1.1
Protection and advancement of Australia’s international interests through the diplomatic network and Canberra-based activity

OUTPUT 1.2
Provision of policy advice and analysis to Portfolio Ministers

1.1.3 and 1.2.3: Americas and Europe

Effectiveness indicators

Overview

Australia’s interests in the Americas Click to view related information - opens in new window and Europe Click to view related information - opens in new window continued to receive concentrated attention this year. Australia’s alliance with the United States was given particular emphasis in this, the 50th anniversary year of the ANZUS Treaty. A key priority was to build links with the new Bush Administration to advance Australian interests. The European Union (EU), taken as a single market, and the United States are among our largest trading partners in terms of two-way trade, and are our two largest sources of foreign direct investment. Advancing our trade and investment interests in these economies was a primary objective, including through conveying our concerns to the United States and the EU on their agricultural sector assistance programs and protecting Australian interests across a wide range of issues. Australia’s merchandise exports to EU countries grew by 16 per cent to almost $14 billion and those to the United States by 21 per cent to $11.7 billion in 2000–01.

The department’s efforts to advance our political and strategic interests with countries in the Americas and Europe included:

Highlights of the department’s achievements in support of Australian trade and investment interests in the Americas and Europe included:

Our capacity to advance Australian interests in Europe was enhanced with the opening of new embassies in Portugal and Denmark.

Advancing Australia’s interests in the Americas and Europe in 2000–01 took place against a background of presidential and congressional elections in the United States and a strong internal focus in the European Union. The EU was focused on enlargement, managing the bovine spongiform encephalopathy (BSE) and foot-and-mouth disease (FMD) crises and beginning preparations for the introduction of euro notes and coins.

See description below - click image for a larger version

Alexander Downer at a joint press conference with his US counterpart, Secretary of State Colin Powell, during a visit to Washington DC in March 2001. Mr Downer also met other senior members of the Bush Administration’s foreign, security and trade policy team.

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The United States Click to view related information - opens in new window

The department’s effort to encourage US policies and practices in directions favourable to Australia focused on the election, transition and commencement of the new Administration and Congress. The Embassy in Washington established good relations with the Bush and Gore campaigns and, following the November 2000 elections, briefed the Bush transition team and the new congressional leadership on Australia’s priorities and interests. This advocacy continued through the establishment of President Bush’s administration from January 2001 and the inauguration of the 107th Congress. The departmental secretary also made early contact with key officials and congressional representatives in a visit to Washington in February, in preparation for successful visits by Mr Downer in March and Mr Vaile in April.

The 50th anniversary in 2001 of the signing of the ANZUS Treaty was a background theme of our lobbying that has had strong resonance with the new Bush Administration. The United States has been active in anniversary celebrations in Australia that have included major US Navy ship visits and a high-profile conference at the University of Sydney in June. Visits to Australia by senior US officials in May and June enabled ministers to underscore Australia’s interest in high quality US engagement in the Asia-Pacific region—particularly the importance of good US relations with Japan, China, Indonesia and the Republic of Korea and Indonesia. This dialogue was scheduled to continue through the Australia–United States Ministerial Consultations (AUSMIN) planned for the end of July 2001 and the Prime Minister’s visit to Washington in September 2001.

Trade issues have been prominent in the department’s early engagement with the Bush Administration and the new Congress. Australia has taken every opportunity to urge the United States to work towards the launch of a new WTO round of multilateral trade negotiations. At the same time, ministers have proposed that Australia and the United States explore a bilateral free trade agreement consistent with our WTO objectives. There was high-level dialogue on these issues with US officials, key members of Congress and senior business people.

On bilateral trade issues, the department continued to register our concern over large US emergency farm assistance payments, US assistance to agricultural exports and the impact of US food aid allocations in commercial markets, especially of grains and dairy products. We were also involved in seeking to protect Australian interests in the US safeguard action concerning wheat gluten imports. We continued to pursue the WTO case against the US lamb meat safeguard measure. Other trade issues in which the department was involved included:

Figure 10. Australia’s merchandise trade with the United States

Click for a larger version. This information is available as an image only - a paper copy is available by phoning (02) 6261 3114 or from Ausinfo bookshops or by visiting www.ausaid.gov.au/publications

Source: Compiled by DFAT from ABS data

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Europe

European Union Click to view related information - opens in new window

Australia’s interests in the EU were advanced through a number of high level visits to Australia in 2000–01. Visits by officials from the European Commission, including the Commissioner for External Relations, Mr Chris Patten, and the Commissioner for Education and Culture, Ms Vivienne Reding, helped move forward the bilateral cooperation agenda, as did the Australia–European Commission ministerial consultations held in Canberra in April 2001. Major outcomes facilitated by the department, in cooperation with other departments and agencies, included:

Australia and the EU maintained a valuable dialogue on global and regional issues through ministerial consultations with the EU Presidency in July 2000 and February 2001 and a meeting between the department and EU officials on Asia-Pacific issues in June 2001. This was complemented by the visit of a delegation from the European Parliament in May 2001 and the wide-ranging discussions held with the members of the delegation.

The department continued to maintain strong pressure on the EU to reform the Common Agricultural Policy (CAP). Our efforts helped ensure Australia maintained its access to the EU beef and sheep meat markets, in spite of the difficulties in the EU market resulting from the BSE and FMD crises. Working closely with industry, the department achieved improved access for Australian prawns into the EU market, and extended the Australia–European Union Coal Agreement, limiting EU subsidies, until July 2002.

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Figure 11. Australia’s merchandise trade with the European Union

Click for a larger version. This information is available as an image only - a paper copy is available by phoning (02) 6261 3114 or from Ausinfo bookshops or by visiting www.ausaid.gov.au/publications

Source: Compiled by DFAT from ABS data

Major and emerging European economies Click to view related information - opens in new window

Building on a strong performance in the previous year, the department made progress during the year in encouraging Australia’s bilateral trade and investment links with major European economies. We also contributed significantly to enhancing Australia’s political and strategic dialogue with Europe and keeping Australia’s views on key foreign and security issues before influential European countries. We made particular efforts to encourage concerted European support for the launch of a new WTO round of multilateral trade negotiations at Doha, Qatar in November 2001.

These objectives were pursued and achieved in a number of ways, including:

The departmental Secretary’s participation in Secretary-to-Secretary talks in Paris in May 2001 and the conduct of the department’s strategic political/military talks with the officials from the French Ministry of Foreign Affairs and the French Ministry of Defence in Canberra in March 2001 reinforced the department’s dialogue with France on Asia-Pacific regional security and other global issues. We also sought to strengthen our strategic dialogue with Germany through high-quality political/military officials talks held in Canberra in March 2001.

The department helped to implement initiatives announced during the Prime Minister’s visit to London in July 2000 to mark the centenary of the passage of the Commonwealth of Australia Constitution Act through the British Parliament. These initiatives included the signing of a memorandum of understanding on e-commerce, e-government and cooperation in the information technology industries in November 2000.

Trade interests lay at the heart of the department’s activities in Central, East and South Europe during the year. Economic reform continued throughout the region at varying speeds, directly affecting Australian trade and investment interests. The department helped facilitate a number of agreements with these countries that allowed particular achievements in the energy and resources, and food and livestock export sectors. A combination of reduced demand, more lucrative markets for Australian exporters elsewhere and high tariff and non-tariff barriers meant early hopes were not realised for increased sales of beef to Central and Eastern Europe following interruption to supplies from traditional source countries affected by BSE and FMD. Work on improving access and removing tariff barriers in these markets is on-going and some successes in opening opportunities for sales of alternatives to beef, such as game meat and live animals, were achieved.

The department continued efforts to improve access for Australian exports to the Russian market, and kept industry informed of commercial opportunities in Russia flowing from the reform process there. Slow progress in some key areas of reform continued to hamper trade and investment opportunities. The department participated in bilateral treaty negotiations with Russia during the year, leading to the signature of double taxation and space cooperation agreements, thereby strengthening the formal framework for our bilateral commercial relations. Signature of the space cooperation agreement was an important development for Australia and should facilitate development of commercial spaceports in Australia, using Russian technology, and Australia’s entry into the growing, high technology space launch market. The department also worked closely with the Australian meat industry and other agencies to improve access to the Russian and Central Asian market for Australian meat exports.

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Table 3. Australia’s regional trade with Europe

EXPORTS

IMPORTS

1999–00
($M)

2000–01
($M)

TREND
GROWTH
1995–96 TO
2000–01

1999–00
($M)

2000–01
($M)

TREND
GROWTH
1995–96 TO
2000–01

UK

4,158

4,639

13.9

6,350

6,321

5.6

Italy

1,575

2,100

8.4

3,043

3,259

8.4

Germany

1,245

1,490

5.6

5,791

6,174

6.1

Belgium-Luxembourg

1,089

1,003

7.3

737

828

0.8

France

871

1,079

6.8

2,228

2,478

5.4

Total European Union

12,039

13,963

11.4

24,340

25,509

6.1

Total East Europe

422

592

7.2

308

353

12.6

Other Europe

681

722

–7.4

1,570

1,549

6.9

Total

13,142

15,277

9.8

26,219

27,411

6.2

Source: Compiled by DFAT from ABS data

Canada

Extensive bilateral cooperation with Canada Click to view related information - opens in new window was maintained with exchanges on a range of whole-of-government issues, such as health and migration. Cooperation between foreign ministries was close, both operationally, including through the consular sharing agreement, and on policy issues in multilateral forums, including on trade, the environment and arms control.

Mr Downer and his Canadian counterpart, Mr John Manley, agreed to inaugurate a new ministerial-level forum, the Canada-Australia Dialogue (CAD).

The bilateral trade relationship (exports increased 50 per cent in 2000–01) benefited from improved atmospherics following resolution of the longstanding salmon dispute in the first half of 2000. We continued to monitor ongoing, long-term access for Australian beef into Canada at a time when fluctuating supply raised questions about Australia’s capacity to regularly fill its country quota.

The department supported an ambitious public diplomacy program, ‘Gateway Australia’, organised in February 2001 by the High Commission in Ottawa in conjunction with the city’s annual ‘Winterlude’ festival. This proved a highly successful promotion of Australia and contributed to Australia’s selection as the ‘showcase’ country in a Canadian Technology in Government event in the second half of 2001.

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Latin America

The department continued to promote opportunities for increased trade and investment with Latin America Click to view related information - opens in new window and to improve market access. In Mexico, we worked with other agencies to secure a tariff exemption for Australian wool, facilitate access for Australian cereals and meat, and help with a successful tender for the supply of coal to Mexico’s power industry. The Argentine lamb market was opened to Australian producers. We helped the Australian dairy industry ensure our dairy products were exempted from Brazilian antidumping measures.

The formal architecture of our relations with Argentina was strengthened with the signing of an agreement on Cooperation on Education and Training and the initialling of a Nuclear Safeguards Agreement. We finalised the text of an Investment Promotion and Protection Agreement with Uruguay.

The department supported Mr Downer’s visit to Brazil, Argentina and Chile in March 2001, his first to Latin America as Foreign Minister. In Chile, Mr Downer participated in the inaugural ministerial meeting of the Forum for East Asia–Latin America Cooperation (FEALAC), which will promote increased awareness and cooperation between the two regions. Australia will co-chair the Forum’s education/science and technology working group.

On 23 March 2001, Mr Downer and Mr Vaile announced the creation of the Council on Australia Latin America Relations, which aims to strengthen ties between Australia and the countries of Latin America. The Council, membership of which will be drawn from business, government and the academic community, will make recommendations to ministers about how the Government can help Australian exporters take advantage of the commercial opportunities available in the markets of Latin America. The department launched the publication Doing Business in Brazil—an Introductory Guide, highlighting the opportunities available in the world’s ninth largest economy.

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Table 4. Australia’s regional trade with the Americas

EXPORTS

IMPORTS

1999–00
($M)

2000–01
($M)

TREND
GROWTH
1995–96 TO
2000–01

1999–00
($M)

2000–01
($M)

TREND
GROWTH
1995–96 TO
2000–01

USA

9,602

11,654

19.7

23,135

22,356

6.1

Canada

1,175

1,768

4.8

1,726

2,431

51.4

Mexico

254

368

29.9

442

441

9.5

Total NAFTA

11,038

13,810

17.5

25,558

24,927

6.2

Total Caribbean

154

155

47.0

218

142

–12.6

Brazil

470

546

8.4

441

647

7.3

Chile

129

132

–4.3

61

79

–9.5

Argentina

96

106

–1.8

73

130

6.1

Total South America

798

922

3.6

641

965

5.3

Total

12,026

14,913

16.5

26,252

25,942

6.2

Source: Compiled by DFAT from ABS data

The Balkans and Cyprus Click to view related information - opens in new window

Developments in the Balkans continued to cause great concern, especially from the viewpoint of the safety of Australian travellers visiting the region. The removal of the Milosevic regime and the democratic elections in Yugoslavia towards the end of 2000 were welcome developments, and have provided a basis to re-build what had traditionally been a friendly and productive relationship.

The appointment of a new Special Envoy for Cyprus, the Hon. Jim Short, demonstrated the Australian Government’s ongoing commitment to assist in United Nations efforts to find a solution to the Cyprus dispute.

Reporting against quality and quantity indicators and administered items begins on page 103. The financial and staffing resources summary for outcome 1 is at Appendix 2.

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