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Department of Foreign Affairs and Trade - Annual Report 2000-2001
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 Contents [Tab]  Guide [Tab]  Overviews [Tab]  Performance [Tab]  Corporate [Tab]
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

1.1.5 and 1.2.5: Multilateral trade negotiations

Effectiveness indicators

Overview

With Australia’s diverse international trade interests, improved market access and strengthened trade rules through multilateral negotiation in the World Trade Organization (WTO) Click to view related information - opens in new window represent a key vehicle for delivering significant trade benefits to Australian exporters. This is why pursuing the launch of a new round of WTO negotiations remained of central importance to Australia during 2000–01. The department has supported Mr Vaile as Australia plays a key role in the preparatory process for the next WTO Ministerial Conference in Doha, Qatar in November 2001 to maximise prospects for a round launch at that meeting. While the outlook for Doha remains uncertain, the department believes Australia’s economic interests will be best served by a round based on a manageable agenda and including our key market access objectives in agriculture, services and industrials.

Fundamental reform of agricultural trade remains a key focus for ministers and of the department’s work. The Cairns Group Click to view related information - opens in new window of agricultural exporting countries, which the Minister for Trade chairs, was again instrumental in advancing our agricultural trade objectives, including through forging closer links with key developing countries. The department played a major role in developing ambitious negotiating proposals in the mandated agriculture negotiations. The mandated services negotiations were another key focus. Our efforts to ensure industrial products are included in a new round now enjoy widespread support.

The department made full use of the WTO dispute settlement system Click to view related information - opens in new window. Successful challenges were mounted against US tariff surcharges on lamb meat and Korean restrictions on beef. Australia also participated as a third party in a number of cases initiated by other WTO member countries. To respond to increased levels of activity in the system, the department established a new WTO Trade Law Branch that will enhance our ability to identify cases where WTO leverage could be used to deliver outcomes that advance Australia’s commercial and trade policy interests.

We made significant progress in a number of accession negotiations Click to view related information - opens in new window, bringing negotiations with China and Taiwan to a stage where WTO membership by early 2002 seems very likely. The successful conclusion of these accession negotiations will bring significant commercial benefits to Australian business. Progress was also made in negotiations with Russia and Saudi Arabia.

The department pursued WTO-consistent regional trading initiatives to improve market access for Australian exporters and as a building block to global trade reform. We entered into free trade agreement negotiations Click to view related information - opens in new window with Singapore and explored other agreements, including with the United States, Thailand and Pacific island trading partners.

A major focus of the department’s work over the past year has been to improve consultation with the Australian community Click to view related information - opens in new window on WTO issues, principally through business and non-government groups. We assisted by establishing a new expert WTO Advisory Group to advise the Minister for Trade.

Beyond the WTO, we advanced Australia’s multilateral trade policy interests in a wide range of other international forums, including Asia–Pacific Economic Cooperation (APEC), the Organisation for Economic Cooperation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD) and World Intellectual Property Organization (WIPO).

See description below - click image for a larger version

Minister for Trade, Mark Vaile, meets US Trade Representative, Robert Zoellick, during a visit to Washington DC in April 2001. Discussions focused on a number of issues including the importance of an active US commitment to securing the launch of a new WTO round of global trade negotiations.

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Launching a new round of multilateral trade negotiations

The department’s lobbying efforts at the WTO Click to view related information - opens in new window in Geneva, at key international and regional meetings, and bilaterally, have been instrumental in establishing a coherent, effective preparatory process for the Doha Ministerial Conference. This has improved prospects for a round launch at Doha, though many difficult issues still need to be resolved.

There is broad acceptance by WTO members that the key market access priority areas for Australia of agriculture, services and industrial products will be included in the new round. Australia sought greater flexibility and realistic objectives and levels of ambition on so-called new trade issues like investment and competition, which were major stumbling blocks at the Seattle WTO Ministerial Meeting. We indicated our preparedness to consider a limited work program on competition policy and investment if there were broad consensus amongst both developed and developing countries, and if agreement were part of a package that secured our market access objectives.

The relationship between trade and environmental policy objectives in any future WTO negotiations has been a complex issue and one where a consensus does not yet exist. The department reinforced Mr Vaile’s expression of Australia’s strong commitment to the principle of sustainable development as a central theme guiding future negotiations. We also emphasised Australian support for the role of the WTO in promoting positive synergies between open trade, economic development and environmental protection. At the same time, we made it clear that Australia has concerns about the risks of arbitrary or unjustifiable restrictions on trade or disguised forms of protectionism.

The department engaged constructively in discussion on trade and labour issues, particularly the proposal for an international commission under the International Labor Organization (ILO) that would draw on the expertise of a range of relevant international organisations including the WTO. Australia was also active in discussions with the WTO to ensure the needs of developing countries were addressed. Over the year, Australia took a pragmatic approach to developing country concerns on the implementation of existing WTO Agreements, trying to identify what progress could be achieved in this area before Doha.

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Community consultation on a new trade round

Conscious of the need to engage the Australian community Click to view related information - opens in new window on negotiating objectives for a new round, the department launched an extensive consultation process to elicit views, frame objectives and build understanding of the potential benefits of a round. A key element of this consultation was the establishment of the Minister for Trade’s WTO Advisory Group drawn from industry, community groups, the trade union movement and academia to provide expert advice on WTO-related issues. The group held its first meeting in June 2001.

Other aspects of our work to engage the community on WTO-related issues included a call for public submissions, round-table discussions with non-government groups, and the enhancement of the departmental website as a channel for distributing information on Australia’s positions on WTO issues. Through these processes, we gained a much better understanding of the views of industry, community non-government organisations (NGOs) and the general public on WTO-related matters. We began publishing a bulletin to keep interested parties abreast of developments in the lead-up to Doha, and provided an opportunity for all State and Territory Governments to contribute to the development of Australian positions on multilateral trade issues. We also participated in the Inquiry by the Parliamentary Joint Standing Committee on Treaties into the WTO, and conducted or hosted a range of trade policy training courses and seminars for Australian officials and non-government representatives.

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Agricultural trade negotiations Click to view related information - opens in new window

The department contributed strongly to projecting a strong voice for reform progress in the negotiations on agricultural trade reform in the WTO. Since the negotiations began in March 2000, a total of 47 proposals calling for changes to the current Agreement on Agriculture have been tabled. Of the 141 WTO members, 125 contributed to these submissions. The EU, Japan, Switzerland and others have sought to moderate or block reform. The Cairns Group of agricultural exporting countries, which Mr Vaile chairs, has been at the forefront in maintaining the pressure for reform. The Group has developed and put forward a number of ambitious proposals, including calls for an end to trade-distorting domestic subsidies, an end to export subsidies and substantial increases in market access for agricultural products.

At its twenty-first meeting at Ministerial level in Banff, Canada in October 2000, the Cairns Group examined the progress made in the WTO agriculture negotiations and agreed on a strategy to maximise the pressure for achieving ambitious reform. Phase Two of the agriculture negotiations began in May 2001 with members analysing the technical aspects of how proposed reforms were actually implemented. The department has maintained its intensive efforts in this phase of the negotiations, both in terms of preparing and tabling detailed technical papers elaborating on the Cairns Group negotiating proposals and in working to build on shared interests with key WTO members such as the United States, India, Egypt and Pakistan.

In close cooperation with Agriculture, Fisheries and Forestry Australia (AFFA), the department ran two meetings of the Government’s Agricultural Trade Consultative Group (ATCG), in September 2000 and June 2001. The ATCG, co-chaired by the Minister for Trade and the Minister for Agriculture, Fisheries and Forestry, comprises leaders and senior representatives of the Australian agricultural and processed food industries. The meetings provided an opportunity for high-Ievel industry input to the development of the Government’s negotiating approach.

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Services negotiations Click to view related information - opens in new window

The department contributed to the steady progress on mandated WTO negotiations on services during the year. Members adopted negotiation guidelines and procedures in March 2001, which paved the way for more substantive discussion of market access and other issues raised in members’ negotiating proposals. Australia tabled seven negotiating proposals, covering the four professional services sub-sectors—accountancy, architecture, engineering and legal—as well as construction, financial and telecommunication services. The department prepared these proposals after close consultation with relevant line agencies, industry groups and other stakeholders. We also held talks with community groups, particularly in relation to the health, education and audio-visual services sectors.

The Trade in Services Council, which is overseeing the services negotiations, is reviewing air transport services, examining trade-related aspects of e-commerce, and developing disciplines to ensure that domestic regulation does not constitute an unnecessary barrier to trade. The department promoted Australia’s interests on these issues. We coordinated papers for the air transport review, tabled at meetings in September and December 2000, and for the Working Party on Domestic Regulation.

The department consulted widely with industry to ensure that Australia’s services exporters are attuned to the potential opportunities for better market access from the services negotiations. We continued to build a database of market access barriers, and distributed a regular newsletter to over 400 interested parties to update them on progress in the negotiations.

Australia has been active in seeking to progress WTO work on disciplines for domestic regulation, telecommunications accounting rules and the review of WTO coverage of international air transport arrangements. In general, progress has been made but there remains entrenched opposition to Australia’s preferred outcome on each issue.

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Intellectual property Click to view related information - opens in new window

The department coordinated the promotion of Australia’s interests in the ‘built-in’ reviews and negotiations of various provisions of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). We prepared two papers on the protection of geographical indications (Articles 23 and 24), and tabled papers on e-commerce, modalities for non-violation complaints (Article 64), and the review of the implementation of the TRIPS Agreement itself (Article 71).

In defining our interests for issues under consideration by the WTO’s TRIPS Council, the department consulted widely with key stakeholders, including industry, NGOs and intellectual property (IP) practitioners. Seminars were conducted in several State capital cities during the year to raise awareness of the TRIPS Agreement and the opportunities it provides for improving exporter confidence in the protection of their intellectual property in overseas markets. Over 2,000 copies of our briefing paper on TRIPS—Intellectual Property—a vital asset for Australia—have been distributed. We further developed a database of market access barriers and other intellectual property deficiencies in overseas markets, and developed a regular electronic newsletter to update stakeholders on progress in the TRIPS Council and other international intellectual property forums.

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Wine

The department is working closely with industry on two treaty-status agreements intended to facilitate the further growth of Australia’s high quality wine exports, now valued at around $1.7 billion a year. In April 2001 in Adelaide, a number of ‘New World’ wine-producing countries initialled a treaty for the mutual acceptance of wine-making practices among New World wine producers. The treaty ensures that rapidly growing exports to markets such as the United States and New Zealand will not be impeded by unnecessary technical regulations. The department is also working with Agriculture, Fisheries and Forestry Australia to finalise the outstanding issues in the 1994 Bilateral Agreement on Wine with the European Union. Industry sees this as a priority to support the continued success of our wine in Australia’s principal export market.

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Biosafety, food safety and the environment Click to view related information - opens in new window

The department supported Mr Vaile’s determination to ensure that concerns about food safety and related issues such as genetically modified foods were not used as a pretext for unjustified barriers to trade in food and other agricultural products. In international organisations such as the WTO, OECD and the Codex Alimentarius Commission (the international food standards body), we opposed attempts by the European Union and others to introduce potentially protectionist policies with reference to the ‘precautionary principle’. We successfully argued that precaution was already an integral element of the WTO’s science-based, rules-based approach to food safety and was integral to Australia’s own national regulatory systems.

We also worked with a range of other government departments and agencies in Australia, providing advice on WTO and other trade-related issues. This included the development and implementation of the joint Australia New Zealand Food Standards Code. The department strongly defended Australia’s interests on food safety and quarantine issues in a range of forums, for example, in the context of implementing appropriately stringent import regulations to minimise the risk from bovine spongiform encephalopathy (BSE, or ‘mad cow disease’) and foot and mouth disease.

On trade and environment, we ensured consistency between our approach to multilateral environment negotiations Click to view related information - opens in new window and our WTO obligations. We advocated multilateral approaches to trade and environment issues, such as through our participation as a third party in the WTO shrimp/turtle case.

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WTO compliance, dispute settlement and enforcing Australia’s rights Click to view related information - opens in new window

Departmental involvement in dispute settlement activity in the WTO continued to be strong. Resources devoted to defending Australia’s interests in WTO disputes were increased through the creation of the WTO Trade Law Branch within the department. Australia pursued 14 disputes throughout the year, three as a complainant and 11 as a third party. Australia won disputes against the United States over tariff surcharges imposed on Australian lamb meat and against the Republic of Korea over measures restricting Australian beef exports. Australia, with other countries, continues to pursue its objection to the US Byrd Amendment. The department also provided advice on Australia’s rights under the WTO dispute settlement system to a number of Australian export industries experiencing market access difficulties, including on developing strategies for using WTO leverage without initiating a formal dispute. For example, we worked successfully with the coal industry and other Commonwealth agencies to reduce trade distortions caused by US tax credits. In addition, we played an active role in advising Commonwealth, State and Territory agencies and industry groups on Australia’s WTO obligations.

The department has recognised that trade disputes can involve issues of concern to society at large and are increasingly the subject of public interest. In the past year, we introduced a monthly e-mail bulletin and reviewed the information on the WTO disputes settlement system on our website with the aim of ensuring that material was available promptly and regularly updated. We also responded to requests to address groups on developments in the dispute settlement system.

The department, in conjunction with other arms of government such as the Australian Quarantine and Inspection Service, worked hard to use our WTO rights to improve access to markets. Examples include securing agreement from Turkish authorities for continued imports of lentils from Australia and agreement from Sri Lankan authorities to delay introducing a requirement that all food imports be certified as GM (genetically modified) free.

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WTO dispute settlement system—delivering
benefits to Australian exporters

The department worked closely with the Australian meat industry to achieve successful outcomes in the WTO against import restrictions by the United States on Australian lamb and the Korean government on Australian beef. For instance, Korea is now removing its prohibition on sales of Australian beef in some 45,000 retail butcher shops (currently, only 5,000 retail butcher shops are permitted to sell Australian beef), while lamb can be exported to the United States from 15 November 2001 without quota controls. The outcomes in these cases illustrate the value to Australia of the WTO dispute settlement system in tackling unfair trade practices affecting Australian exporters of goods and services. The WTO Trade Law Branch of the department encourages exporters or companies affected by the actions of foreign governments to submit complaints for investigation. In response, the department will examine the case to determine the existence of a barrier and develop options for action. These could range from bilateral discussions (for example, the US coal subsidy issue) aimed at settling the matter to bringing a case under the WTO dispute settlement system or other appropriate international mechanisms.

Regional and free trade arrangements Click to view related information - opens in new window

The department has been exploring WTO-consistent free trade agreements (FTAs) with key trading partners. Our principal consideration in approaching FTAs has been to deliver substantial market access gains to Australia that could not be achieved in a similar timeframe by other means and in such a way as to complement our multilateral and regional trade goals. After three rounds of negotiations, significant progress has been made towards a comprehensive FTA with Singapore that will remove barriers to trade in goods and services. Separately, the department has been exploring the possibility of a bilateral FTA with the United States and seeking agreement to begin a joint scoping study on an FTA with Thailand. The department also pursued an ‘umbrella agreement’ with other members of the Pacific Islands Forum that would establish a basis on which Australia could enter into an FTA with these countries in the future.

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WTO accession negotiations Click to view related information - opens in new window

Through its participation in a number of accession negotiations involving economies seeking to accede to the WTO, the department made sustained efforts to secure improved access to export markets and more secure conditions for trade and investment by Australian firms. The high-priority negotiations during the year were with China, Taiwan, Russia, Saudi Arabia and Vietnam. Progress was made in all of these.

The negotiations with China were a major focus of our efforts, given China’s importance as a bilateral economic partner and its significance to the global trading system. We participated in several rounds of bilateral negotiations with China during the year. Solutions were negotiated to a range of trade problems faced by Australian exporters including in relation to administration of wool tariff quotas and elimination of steel quotas. Given progress made in bilateral and multilateral negotiations during the year, it now appears very likely that China and Taiwan will be able to join the WTO early next year. This will bring very significant benefits to Australian exporters through liberalised market access and reforms to trade policies that will improve conditions for doing business.

During the year, Albania, Croatia, Lithuania, Moldova and Oman joined the WTO and implemented the improved market access conditions that had been earlier negotiated by the department.

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Supporting the WTO and trade liberalisation in other international trade bodies Click to view related information - opens in new window

The department participated in all multilateral trade related international forums relevant to Australian interests, including the OECD, UNCTAD, APEC and WIPO. In the OECD, the department advanced analytical work in the OECD Trade Committee, particularly on services, tariffs and trade and development issues, and provided strong support for Mr Vaile at the annual OECD Ministerial Council Meeting (MCM). The 2001 MCM Communique included a strong commitment of support from OECD member countries for a new round of multilateral trade negotiations.

The department was active in the APEC Group on Services, which has been an effective forum for reinforcing the importance of, and adding momentum to, the WTO negotiations on services. We also played a major role in hosting the APEC Intellectual Property Rights Experts Group meeting in Sydney in March, and a separate government/industry workshop on the theme of strengthening the enforcement of intellectual property rights in APEC economies.

The department worked closely with relevant line agencies, including IP Australia, Environment Australia and the Attorney-General’s Department to coordinate Australia’s position for the WIPO Inter-Governmental Committee on Intellectual Property and Traditional Knowledge, Genetic Resources and Folklore. We participated actively on trade and development issues in UNCTAD.

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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