29 Jun 2015
"The ECA's preference is for trade liberalisation to occur on a multilateral basis."
Lisa McAuley, CEO of the Export Council of Australia
It's a situation we monitor carefully at the Export Council of Australia (ECA), a not-for-profit, membership-based organisation serving as the peak industry body for Australia's exporters and importers, particularly small-to-medium businesses.
The various negotiations cover both bilateral and multilateral deals. While there are positives and negatives of both forms, the ECA's preference is for trade liberalisation to occur on a multilateral basis.
However, given the most recent Doha round of negotiations held by the World Trade Organisation has stalled, the ECA continues to promote greater international trade and investment flows through bilateral, regional and plurilateral free trade agreements.
Regardless of structure, the ECA supports international agreements serving to further liberalise trade between Australia and the rest of the world. Below is a snapshot of what is currently taking place in the trade agreement space.
World Trade Organisation Agreement on Trade Facilitation
In 2015, Trade Minister Andrew Robb announced Australia had formally accepted the World Trade Organisation Agreement on Trade Facilitation (TFA).
The ECA is a strong supporter of the TFA, which is estimated to increase global GDP by $US1 trillion per annum and create 21 million jobs, with developing nations expected to be major beneficiaries.
Australia is the seventh WTO Member to accept the agreement following the recommendation of the Joint Standing Committee on Treaties (JSCOT) in March that Australia should take binding treaty action. The agreement will come in to force after it has been accepted by two thirds of the WTO's 161 Members.
The TFA will assist Australian business by cutting red tape costs associated with exporting and importing. It will streamline customs processes, improve appeal and consultation procedures and make it easier for all businesses to navigate trade requirements and launch into new markets.
World Trade Organisation Doha Round of Negotiations
The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules.
Currently hampered by a lack of progress, the Doha program covers about 20 areas of trade. The round is also known semi-officially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries.
The round was officially launched at the WTO's Fourth Ministerial Conference in Doha, Qatar, way back in November 2001. The Doha Ministerial Declaration provided the mandate for the negotiations, including on agriculture, services and an intellectual property topic, which began earlier.
World Trade Organisation Agreement on Government Procurement
In June 2015 Australia launched its bid to join the World Trade Organisation agreement on government procurement (GPA). The deal will grant Australian businesses legally-binding access to government procurement markets estimated to be worth $US1.7 trillion.
Expanding the number of procurement markets Australia has access to while providing the certainty of a multilateral rules-based system is a big deal for local business. The ECA fully supports the Australian Government's commitment to opening new legally guaranteed export market access opportunities.
Trade in Service Agreement
Australia is jointly leading, with the US and the European Union, negotiations on a services-only free trade agreement known as the Trade in Services Agreement (TiSA). The services sector is crucial to the Australian economy, accounting for four out of five Australian jobs and constituting roughly 17 per cent of Australia's total exports.
The ECA recognises the considerable potential benefits to Australian businesses of expanding TiSA membership to include greater representation, especially from key trading partners in Asia outside those currently represented, namely South Korea, Japan, Chinese Taipei and Hong Kong.
While the ECA strongly supports the negotiations between current TiSA parties, the parties are urged to not only consider TiSA but to also consider the longer-term goal of having TiSA become a multilateral WTO Agreement and extending benefits to all parties.
For this to take place the parties currently negotiating the TiSA must consider how they can attract broader international support for the deal.
Environmental Goods Agreement
Robb announced in January 2014 that Australia would join a number of other members of the World Trade Organisation to negotiate the EGA, a plurilateral agreement aimed at removing tariffs on a range of environmental goods.
The ECA supports Australia's involvement in these negotiations and the ambition to promote free trade in environmental products. The global market for environmental goods was estimated to be worth $US1 trillion in 2012 and is expected to expand to around $US3 trillion by 2020.
In addition to Australia, WTO members currently participating in these negotiations are Canada, China, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, Korea, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei, Turkey and the United States.
While the ECA understands that negotiations will initially cover 54 environmental goods as agreed by APEC leaders in 2012, the ECA hopes the scope of goods to be covered by the EGA will increase substantially to ensure that the most benefit is gained from the negotiations.
The core activities of the ECA are focused research, advocacy, skills development and events. The group provides submissions to agencies and government on various reviews, as well as to parliamentary inquiries.
These have included submissions relating to the Korea-Australia Free Trade Agreement and the KAFTA Customs Bills, the Japan-Australia Economic Partnership Agreement and the JAPEA Customs Bills and the Trade in Services Agreement.
The ECA aims to provide Australian businesses with the skills and capabilities required to effectively trade internationally.
Australia is currently negotiating bilateral agreements with:
The recent collaboration between ANZ and the ECA to develop an online FTA Tool is a key example of our educational offerings. This website is designed to help Australian exporters navigate the basics of Australia's Free Trade Agreements (FTAs) quickly and easily.
Companies have the ability to search either by country (FTA) or by industry. The site also provides a quick and easy reference to FTAs in general and to doing business overseas.
Lisa McAuley is CEO of the Export Council of Australia.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
29 Jun 2015
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