1997-98 Actual ($’000)	1998-99 Budget ($’000)	1998-99 Budget and Additional Estimates ($’000)	1998-99 Actual ($’000)
Appropriations
Running costs	101 555	100 726	109 043	100 761
Other program costs	1 646	1 764	1 764	1 677
Total appropriations	103 201	102 490	110 807	102 438
Less adjustments	9 824	7 572	8 331	8 108
Total outlays	93 377	94 918	102 476	94 330
Staff years	608	n.a.	n.a.	554

n.a.: Not applicable.

Objectives, Performance Indicators and Results

Objective To maintain a strong, forward-looking bilateral relationship with the United States, including by advancing the trade and investment agenda in line with Australian interests.

 

Indicator The United States encouraged, through these consultations, to adopt a more purposeful approach to global trade issues, and to be more sensitive to bilateral trade concerns.

The department used the Trade and Investment Framework Arrangement and other consultations to encourage the US Administration to resist growing protectionist sentiment and to exercise leadership on international trade both in the 1999 APEC meetings and in the run-up to the World Trade Organization ministerial meeting. In the context of our lobbying on the lamb case, we impressed upon the Administration the negative impact that the restrictions would have on perceptions of this leadership role. We urged the Administration to continue to push for ‘fast-track’ negotiating authority. The department also worked closely with industry in heading off quota legislation on steel, which was put aside by the US Senate in June 1999.

Table 17

Australia's Merchandise Trade with the Amercias an Europe

Indicator The progress made in advancing trade priorities with the United States, and success in invigorating bilateral trade and investment consultative mechanisms to deliver a more systematic and comprehensive pattern of dialogue and cooperation.

The department advanced Australian trade priorities in several areas, including:

• securing US acceptance of Australia’s Meat Safety Enhancement Program;
• gaining better access for Australian oats;
• having the US import injunction on hardwoods lifted;
• obtaining US agreement to address the EU circumvention of US wheat gluten arrangements; and
• sensitising US decision-makers to our concerns about US Government-assisted agricultural exports, especially grains and dairy.

We organised the third ministerial-level meeting under the Trade and Investment Framework Arrangement, the first such meeting since 1995. We continued to advance Australia’s interests in longstanding bilateral trade issues such as intellectual property, quarantine and US food aid allocations. While we failed to prevent US safeguard restrictions on lamb meat exports, we headed off more stringent restrictions that were being canvassed earlier in the process.

Figure 21

Interests in the Americas and Europe (1.3) Organisational Chart

 

Figure 22

Commodity Composition of Merchandise Exports to the Americas and Europe

 

Objective To support continued constructive United States engagement in the region through an intensive and focused dialogue with the United States on Asia-Pacific issues, emphasising Australian perspectives and objectives.

Indicator US policies and practices, particularly on Asia-Pacific issues, encouraged in directions that protect and advance Australia’s foreign and trade interests, including through high-level dialogue.

The Australia–US Ministerial Consultations (AUSMIN) in Sydney in July 1998, which were organised by the department and the Department of Defence, and chaired by Mr Downer and the Minister for Defence, Mr Ian McLachlan, improved bilateral cooperation and mutual understanding on key regional and global economic and security issues. Principal among these were the Asian economic crisis, the outlook for Indonesia, the global implications of South Asian nuclear testing, US–China relations and Japan’s important role in the region. We also advanced specific Australian trade interests, including US restraint in the use of agricultural export subsidies, both at AUSMIN and through ongoing engagement of our embassy in Washington with US decision-makers. Through our prominent role in the Australia–US politico-military discussions in Washington in April 1999, we registered Australian perspectives on key foreign and security issues with senior US policy makers.

• Every year, Australia and the United States hold Australia–US Ministerial consultations—AUSMIN—to discuss bilateral, trade, regional and global issues important to both countries. The department supports ministers’ participation in the talks, as well as holding associated officials’ level consultations. The photo shows (left to right) Australian Minister for Defence, Mr Ian McLachlan, US Secretary of State, Dr Madeleine Albright, Australian Minister for Foreign Affairs, Mr Downer, and US Defense Secretary, Mr William Cohen, at a press conference following AUSMIN in Sydney in July 1998. photo: Navy Photographic Unit

Objective To further develop links with Europe, focusing on expanding key bilateral relationships in line with Australian interests, and developing Australia’s relations with the European Union to contribute to the achievement of Australian objectives.

Indicator The progress made in developing strengthened relations with the European Union, its member states and the European Commission, including the extent to which substantive and forward-looking outcomes are achieved at the 1999 European Union–Australia Ministerial Consultations.

The department significantly strengthened its efforts to enhance the bilateral cooperation agenda. Results include the Mutual Recognition Agreement on Conformity Assessment between Australia and the European Community, which came into effect on 1 January 1999. This agreement has reduced the administrative costs of conducting some areas of bilateral trade. Negotiations were successfully concluded to extend the scope of the bilateral Science and Technology Agreement, enabling Australian researchers to participate in a wider range of EU research and development activities. We also agreed to examine areas of mutual interest in education and training, and commenced exchanges on development cooperation.

Enhanced dialogue on Asian issues took place with several European countries and the European Commission. An exchange of views between senior Australian officials and EU Troika counterparts in Brussels in April 1999 reinforced Australia’s credentials on Asia.

Indicator The European Union, its member states and the European Commission encouraged to adopt a more purposeful approach to global trade issues, specifically support for a further round of multilateral trade negotiations, and to be more sensitive to bilateral trade concerns.

Through representations by ministers and departmental officials, we encouraged EU support for a further round of multilateral trade negotiations. The department engaged the European Commission in substantive negotiations on bilateral trade concerns in the areas of meat inspection systems, specified risk materials, tariffs on prawns and lobsters, and the bilateral wine agreement, and achieved Commission recognition that new EU legislative measures on heavy metals should be scientifically justified.

Indicator The effectiveness, timeliness and strategic focus of advocacy efforts to encourage meaningful reform of the European Union’s Common Agricultural Policy, focusing in particular on appropriately targeted representational and public diplomacy activities.

We made targeted representations, including in coordination with other Cairns Group countries, to European Union member states, the European Commission and other European institutions aimed at encouraging meaningful reform of the European Union’s Common Agricultural Policy. Regrettably, the final Agenda 2000 package represented only a limited move towards reform.

Our representations, together with those from other non-EU agricultural exporters, did succeed however in contributing to the widespread recognition—both in some areas of the Commission and some member states—of the necessity for further reform of the Common Agricultural Policy in the next round of WTO agricultural negotiations.

Indicator The effectiveness and timeliness of action taken to pursue market access and reform concerns (particularly on agriculture) with the European Union, the quality of the assessment of the implications for Australia, and the development of future strategies.

The department’s representations and negotiations helped to maintain access to the EU beef market, threatened by the European Commission’s review of Australia’s meat export establishments. The department focused on preserving Australian market share by working closely with the Australian Quarantine and Inspection Service on a strategy to achieve EU recognition of Australia’s transmissible spongiform encephalopathies (TSE)-free status, and exemption for Australian exporters from the provisions of EU bovine spongiform encephalopathy (BSE)-related legislation. At the end of the period, an EU-commissioned scientific panel considered an Australian submission on this issue. We also worked to expand access to the EU market for Australian wine through negotiations to pursue outstanding issues related to the bilateral wine agreement.

In addition, we published a departmental study aimed at assisting business to understand better the implications for Australia of the introduction of the euro. This study, launched by Mr Fischer in December 1998 and distributed to business through direct mail and the Internet, received favourable reviews in the media.

Indicator Outstanding issues under the Energy Charter Treaty with the European Community resolved in a way that reflects Australia’s core national interests.

The negotiation of a supplementary treaty was suspended in 1998. This outcome reflects Australia’s core national interests, as elements of the draft text were not acceptable to Australia.

Indicator The extent of progress made in extending and consolidating bilateral political and commercial relationships with key West European countries, particularly the United Kingdom, France and Germany.

Ministerial visits, supported by the department, served to consolidate relations between Australia and major European countries. Mr Downer and his German counterpart, Mr Joschka Fischer, launched the revised Australia–Germany Partnership 2000 Action Plan in February 1999. The visits projected a strong image to Europeans of Australia as a vibrant economy and an increasingly important financial centre, contributing to increased European business interest in investment in Australia. The United Kingdom maintained its position as the single largest investor in Australia, with total investment rising by 14.7 per cent to $146 billion in 1998. The Deutsche Bank’s concentration of its Asia-Pacific sales and trading activities in the euro in Sydney was a further demonstration of growing European interest. In cooperation with the Department of Treasury, we were also instrumental in concluding the Reciprocal Banking Arrangements with Germany, which came into force on 8 April 1999. These arrangements will provide increased opportunities for Australian banks to operate competitively in Germany.

We continued to provide Australian business with targeted assistance in Western Europe. Areas of trade expansion included traditional commodities, rapidly growing wine sales and high-tech items such as high-speed catamaran ferries.

The department played a key role in negotiating Travel Facilitation Agreements with Spain and France, which came into effect in July and August 1998 respectively. These agreements contributed to a 13 per cent increase in visitor arrivals from Spain in the six-month period to March 1999, and a 20 per cent increase in visitor arrivals from France in the latter part of 1998.

Our participation in a series of bilateral representations, including the second round of the Australia–EU dialogue on Asia-Pacific issues, enhanced the European focus on, and engagement with, our region. This was reflected in our success in encouraging stronger European support for measures to address the ongoing economic crisis in the region and specifically in enhanced assistance for East Timor and the Indonesian elections.

Objective To exploit new economic and political opportunities in Canada, Latin America, Russia and Central/Eastern Europe, particularly through active efforts to improve market access conditions and through coordination with Austrade in trade and investment promotion.

Indicator Progress made in advancing Australian interests in the bilateral trade agenda with Canada.

Our representations ensured that Australia’s quota for beef exports did not drop below 35 000 tonnes and that 10 per cent of supplementary exports were also admitted. The department undertook a review of the overall relationship with Canada and conducted inter-agency discussions on possible future initiatives. These discussions focused on opportunities to advance Australian trade and investment objectives and to highlight for senior decision-makers the depth of the relationship in other areas. Australia’s trade agenda continued to be impeded by the dispute over access for uncooked Canadian salmon.

• One of Australia’s most successful exports is the high-speed catamaran-design vehicle/passenger ferry. In 1998–99, we worked closely with business and Austrade to help expand the market for fast ferries, including to Ireland, Turkey and Venezuela. In Ireland, for example, a high-speed catamaran-design aluminium vessel, built by Austal Ltd of Western Australia and costing $70 million, will operate on the busy route from Dublin to Holyhead, Wales. The photo shows (left to right) Mr John Rothwell, Managing Director of Austal Ltd, Captain Steve Hutson of Irish Ferries, Ms Fiona Buffinton, Senior Trade Commissioner (London), and the Hon. Bob Halverson, OBE, Australian Ambassador to Ireland, at the ferry’s official launch in Dublin in June 1999. photo: Tom Sinkovits

Indicator The pursuit of new trade and investment opportunities in major and emerging European economies, and in Latin America.

During visits to Australia by the Hungarian President, Mr Arpad Göncz, and senior Polish officials, the department showcased Australia’s commercial capabilities, with the aim of highlighting investment and joint venture opportunities and advancing our market access interests in these two markets. Our emphasis on market access continued in discussions with Hungarian ministers during Mr Fischer’s visit in May 1999. In addition to raising awareness of Australian industry capability, these efforts secured a renewed waiver of the Polish tariff on Australian coarse wool, and the signing of a Joint Statement on Cooperation and Consultation with Poland, including on economic and trade issues. Following department-led negotiations, Australia also signed a Trade and Economic Cooperation Agreement with the Slovak Republic. These agreements are designed to support Australian business in the pursuit of export opportunities. Australia further demonstrated its commitment to the potential of this region by opening a new consulate-general and trade office in Bucharest, Romania.

Growing commercial opportunities in Turkey were another focus for the department. Our efforts included assisting sales of fast ferries and other trade and investment promotion initiatives.

While we had sought to position Australia to take up opportunities presented by the opening up of the Russian economy, especially in the food sector, the Russian economic crisis of August 1998 largely undermined these efforts. A planned visit to Russia by Mr Fischer to co-chair the Joint Commission for Trade and Economic Cooperation also did not proceed due to the sudden change in the Russian Government.

In Latin America, the department actively supported the efforts of Australian exporters and investors to establish a greater market presence. Our achievements included securing access for Australian beef into Chile and Argentina and wine into Venezuela and Colombia, as well as informal arrangements for wheat and carpet grass access into Brazil. In cooperation with the Australian Taxation Office, the Department of Treasury and the Attorney-General’s Department, we made good progress on preparations for a double taxation agreement between Australia and Argentina, with the final agreement expected to be signed early in the next reporting period. We assisted in securing the commissioning of an Australian-made fast ferry in Venezuela, expanding the export of education services to Venezuela and Colombia, and expanding opportunities for mining and related services. In response to market interest, we also made significant progress in establishing the phytosanitary conditions for exports to Mexico of malting barley, sorghum and cottonseed.

In November 1998, we held the inaugural meeting of the Australia–Chile Bilateral Trade and Investment Commission, designed to improve access for Australian exports and investment. The meeting resulted in increased cooperation on trade policy, particularly on WTO services negotiations.

Another initiative targeted the Mercosur Countries (Argentina, Brazil, Paraguay and Uruguay). Working closely with other agencies, the department negotiated a Declaration on Investment Principles between Australia–New Zealand and the Mercosur Countries. Signed on 14 June 1999, this declaration aims to encourage a more open and transparent investment environment.

Indicator The management of Australia’s response to developments in South-East Europe in ways that take account of Australian humanitarian and community concerns.

Working with Special Envoy Mr Malcolm Fraser, the department mobilised extensive international support as part of a diplomatic strategy aimed at obtaining the release of jailed CARE Australia workers Mr Steve Pratt and Mr Peter Wallace. The department also contributed significantly to the development of comprehensive Government policy positions on the Kosovo crisis, facilitated Australia’s $6 million contribution to humanitarian organisations operating in the region, and helped in the provision of a temporary safe haven in Australia for some 4 000 Kosovar Albanian refugees.

On Cyprus, the department worked with the Government’s Special Envoy, Ambassador John Spender, to support the ongoing diplomatic efforts under the UN Secretary-General to broker a solution to the ‘Cyprus problem’.

 

• On 31 March 1999, Yugoslav authorities detained two CARE Australia workers, Mr Steve Pratt and Mr Peter Wallace. Working closely with CARE Australia, we pursued every possible avenue to obtain access to, and secure the release of, the two men through diplomatic and other channels, both in Yugoslavia and elsewhere. We were encouraged by the broad support we received on this case from a wide range of international figures and organisations. To further efforts to secure their release, Mr Downer appointed the Rt Hon. Malcolm Fraser, AC, CH, former Prime Minister of Australia and Chairman of CARE Australia, as a Special Envoy. The photo shows Mr Fraser arriving at Zagreb airport, where he was met by Mr Brian Doolan, CARE Australia representative (middle), and Mr Mauro Kolobaric, First Secretary, Australian Embassy, Budapest. photo: Christian Joergensen