Trade Talk, 30 August 2018
Australia and Indonesia moving closer in IA-CEPA negotiations
Prime Minister Scott Morrison and Indonesian President Joko Widodo will meet in Indonesia on 31 August, including to discuss the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Once concluded, IA-CEPA will take the trade and investment relationship with Indonesia to the next level, heralding a new chapter of economic cooperation and commercial activity with our close neighbour.
Ministerial visit to Singapore for ASEAN-related meetings
Minister for Trade, Tourism and Investment Senator Simon Birmingham and Assistant Minister Mark Coulton are travelling to Singapore to attend the Regional Comprehensive Economic Partnership (RCEP) Ministerial Meeting. Assistant Minister Coulton will attend the East Asia Summit Economic Ministers' meeting and discuss upgrading the ASEAN-Australia-New Zealand FTA to make sure it continues to deliver benefits for businesses.
Parliamentary review recommends ratification of TPP-11
The Joint Standing Committee on Treaties completed its inquiry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as the TPP-11, and recommended that binding treaty action be taken. The Committee noted the TPP-11's tariff reduction measures were highly likely to benefit Australian business and the Agreement would provide an important, positive example of international cooperation promoting rules-based trade and investment liberalisation. The Government will now move ahead with legislation necessary to implement TPP-11.
Investment Statement and latest international investment report
Last Monday, 20 August, the Government delivered its fifth annual investment statement to the Australian Parliament. The statement highlighted the benefits Australia received from foreign investment over the last five years, including the important role that foreign-owned businesses in Australia play in contributing to our economic growth story. The statement referred to newly released Australian Bureau of Statistics data on the Economic Activity of Foreign-Owned Businesses in Australia 2014-15 and DFAT's publication International Investment Australia 2017.
Economic activity of foreign-owned businesses in Australia
Foreign direct investment in Australia supports the employment of nearly 1.2 million people, or 1 in 10 jobs in 2014-15, an Australian Bureau of Statistics study commissioned by DFAT and Austrade reveals. The study, which gathered the most up-to-date data available on the impact of foreign investment in Australia also showed that foreign-owned businesses pay higher wages on average than Australian-owned businesses. Analysis of the detailed study includes breakdowns of investment by economy and industry.
Latest overseas arrivals data
Last week's release of June Overseas Arrivals and Departures data by the Australian Bureau of Statistics shows 9.07 million visitors came to Australia in 2017-18, up 6 per cent on 2016-17. Over the year, China strengthened its position as Australia's largest source of visitors, up 12.9 per cent to 1.42 million, or 50,000 more arrivals than from New Zealand over the same period.
Exporter Sentiment Index
EFIC's August 2018 Index shows that business sentiment among Australian exporters remains positive, however the indexes reflecting confidence in future economic conditions, growth in employee numbers and increasing overseas sales revenue were lower than the last Index in February. Although overall sentiment declined slightly, the index showed exporters' confidence in their future financial situation had improved.
RBA Statement on global economy
RBA Governor Philip Lowe said the Australian economy appeared to have grown strongly over the first half of 2018, and the global outlook remained positive, in his statement to the House of Representatives Standing Committee on Economics. The possibility of an escalation in global trade tensions was adding a layer of uncertainty to this outlook, although existing measures were unlikely to derail the current global expansion. He warned that this could change if more businesses were to delay investment as a result of uncertainty.
OECD GDP growth picks up marginally in second quarter of 2018
Real GDP growth in the OECD area has picked up marginally over the year, from 0.5 per cent in the first quarter to 0.6 per cent in quarter two, according to provisional estimates issued by the OECD this week. Among the OECD's 'major seven' economies: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, the US recorded the highest annual growth (2.8 per cent), while Japan recorded the lowest growth (1 per cent), compared to the same period last year.
WTO dispute action against Canada
Australia has requested the establishment of a World Trade Organization panel to resolve a dispute with Canada on discriminatory measures affecting Australian wine exports. Canada is Australia's fourth largest export market for wine, currently valued at $187 million.
China initiates second WTO dispute against US tariffs on Chinese imports
In a request circulated to WTO members earlier this week, China has requested WTO dispute consultations with the United States concerning additional duties applied by the United States on imports of Chinese goods. The request for consultations formally initiates a WTO dispute. A separate WTO dispute regarding earlier US tariffs on Chinese goods is currently at the consultations phase, in addition to a further dispute on imports of Chinese steel and aluminium.
Would you like to benefit from being a Trusted Trader?
The Australian Government is partnering with businesses to improve their global competitiveness. As an accredited Trusted Trader, a business is able to access a series of benefits that help to streamline the clearance of their goods at the border, saving time and money. They also have exclusive access to an Australian Border Force (ABF) account manager and a 'seat at the table' to inform future benefits under the program and trade modernisation. Trusted Traders are recognised internationally for their compliant trade practices and secure supply chains, as an Authorised Economic Operator (AEO) program. The program is managed by the Department of Home Affairs and the ABF; and is free to join with no ongoing fees.
Positive impact of openness to trade and investment on Victoria
A report by the Centre for International Economics released this week on the economic and distributional impacts of Australian trade and investment liberalisation on Victoria found that liberalisation has boosted Victoria's gross state product and wages by more than 9 per cent and created more than 180,000 jobs since 1986.
The case for free trade restated
This article published by the Foundation for Economic Education provides a US perspective on the benefits of free trade. It argues that trade barriers increase costs for consumers, impede wealth creation, and heighten international tensions. It contends that trade does not occur between nations, but between individuals, and that barriers to individuals pursuing their own peaceful exchanges should be as low as possible.
Did You Know?
Nearly 30 per cent of our exports come from majority-owned overseas firms.
Upcoming Trade Events
Navigating from Potential to Delivery: The India Economic Strategy
Melbourne, VIC, 3 September 2018 / Sydney, NSW, 5 September / Brisbane, QLD, 10 September 2018 / Adelaide, SA, 12 September 2018 / Perth, WA, 13 September 2018
This Austrade and DFAT seminar, held in partnership with state governments, will focus on the future of the Australia–India economic relationship to mark the recent release of the 'India Economic Strategy: Navigating from Potential to Delivery'. Speakers, including Australia's High Commissioner to India, Harinder Sidhu, will discuss the strategy and provide insights on the trade and investment relationship, including key sectors of opportunity for Australian business.
Asian engagement: the Indo-Pacific strategy
Perth, WA, 4 September 2018
At this CEDA event, a panel will discuss how Western Australia should take advantage of the Indo Pacific century and how businesses should be prepared to take advantage of new opportunities and prepare for new risks.
2018 International Trade Expo and Conference
Adelaide, SA, 4 October 2018
This inaugural Business SA conference will have expert speakers providing insights into global trade trends and the possibilities and pitfalls of specific markets along with smaller breakout sessions focusing on a range of topics such as e-commerce, distributor selection, market research and negotiation techniques.
International Mining and Resources Conference 2018
Melbourne, VIC, 29 October – 1 November 2018
Australia's resources industry is a key driver of the economy and IMARC, Australia's largest mining conference, will bring together global leaders, executives, investors and national mining ministers from the international resource sector.
AIBC Conference 2018: Partnering for Prosperity in a World of Change
Surfers Paradise, QLD, 11-13 November 2018
In the context of evolving relationships between world powers, a challenging international economic system and new business models and technologies, this year's Australia-Indonesia Business Council annual conference will address the opportunities for Australia and Indonesia to strengthen their partnership for mutual prosperity. Speakers include Australia's Ambassador to Indonesia Gary Quinlan.