AUSTRALIA'S ECONOMIC INTERESTS
Australia’s economic well-being and growth depend on trade and investment. Over 1.7 million Australian jobs are directly or indirectly connected to exports. Australia is currently pursuing an ambitious and broad-ranging trade policy agenda which combines mutually reinforcing multilateral, regional and bilateral strategies to open new markets, reduce barriers to trade and promote Australian goods and services internationally.
Australia’s trade policies and strategies are described in more detail in the Trade Minister’s annual Trade Statement and are discussed at National Trade Consultations and meetings of the Trade Policy Advisory Council.
WORLD TRADE ORGANIZATION
Australia is a strong supporter of the World Trade Organization (WTO) as the chief forum for global trade liberalisation. Australia’s current multilateral trade objective is the successful conclusion of the Doha round of trade negotiations, launched in 2001. The round could potentially deliver substantial improvements to Australia’s access to global markets - particularly in agriculture, services and industrial products - and reduce other distortions, particularly in the agriculture sector. Australia actively encourages WTO members to engage constructively in the negotiations. The issues are complex and progress has tended to be slow, due to the diverse interests of the WTO’s membership. Nevertheless, in August 2004 WTO members reached agreement on a ‘Framework Package’ that helped increase the momentum of negotiations across all sectors and launched negotiations on a new trade facilitation agreement.
Australia co-founded and chairs the Cairns Group of 17 agricultural fair traders, which seeks to redress global distortions in agriculture trade. Achieving a favourable outcome on agriculture in the Doha round is a major priority - and challenge - for Australia and other Group members. Some progress has been made, for example in obtaining the commitment of WTO members under the Framework Package to eliminate the most trade distorting form of agricultural support - export subsidies - which are already illegal under WTO rules for non-agricultural products. Australia is also encouraging a high level of ambition in WTO negotiations on further liberalisation of industrial products and services, given industrials account for 76% of Australia’s merchandise exports and Australia’s services exports continue to grow rapidly.
Australia pursues a number of other trade objectives through the WTO. For example, Australia recently successfully challenged the EU’s sugar regime, with significant potential benefits for the Australian sugar industry.
Australia participates in negotiations with countries seeking to join the WTO, and works with regional developing and least developed countries to assist them in their efforts to accede. Australia provided such assistance to Cambodia, which acceded to the WTO in 2004, bringing the total WTO membership to 148.
ASIA-PACIFIC ECONOMIC COOPERATION
Australia strongly supports the Asia-Pacific Economic Cooperation (APEC) forum, which makes an important contribution to regional cooperation, economic growth and stability. APEC’s core mission is encompassed in the ‘Bogor Goals’ to achieve free and open trade and investment in the Asia-Pacific region through trade liberalisation, trade facilitation and economic and technical assistance for developing member economies. In recent years, APEC Leaders have recognised that economic prosperity is not possible without security and, at their annual meeting in 2003, adopted the complementary goal of protecting the security of their peoples.
Australia is working to promote and implement key elements of APEC’s agenda, including trade and investment liberalisation and facilitation, counter-terrorism and secure trade, and disaster response and emergency preparedness.
Responsibility for hosting APEC meetings rotates among members annually. Australia will host APEC in 2007.
FREE TRADE AGREEMENTS
Australia negotiates Free Trade Agreements (FTAs) with important trading partners to deliver improved access for Australian exporters in target markets. FTAs are consistent with WTO principles, help to open up all trade in goods, provide improved conditions for services trade and investment, and are generally faster to negotiate and implement than other trade deals.
The Australia New Zealand Closer Economic Relations (CER) Trade Agreement is Australia’s longest-standing free trade agreement, having begun in 1983. The Agreement covers all trans-Tasman trade in goods and most services and is supported by a network of bilateral arrangements. It is widely regarded as a model trade agreement and has been very successful in boosting trans-Tasman trade and investment links and strengthening the international competitiveness of both economies.
Australia’s second free trade agreement - the Singapore-Australia Free Trade Agreement (SAFTA) - entered into force in 2003. In addition to tariff elimination, the agreement guarantees increased market access for Australian exporters of services and provides a more open and predictable business environment.
The Thailand-Australia Free Trade Agreement (TAFTA) - which entered into force on 1 January 2005 - is a major market opening agreement that will lead to the complete elimination of Thailand’s significant tariffs across all sectors. On entry into force, more than half of Thailand’s 5,000 tariffs - accounting for nearly 80% of Australia’s exports to Thailand - were eliminated. Tariffs not immediately eliminated will be phased down. TAFTA improves the environment for bilateral services trade, investment and business mobility.
The Australia-United States Free Trade Agreement (AUSFTA) - which also entered into force on 1 January 2005 - is a landmark agreement with the world’s largest economy. It led to significantly improved access for Australian industrial and agricultural goods in the USA and provides important guarantees to underpin substantial bilateral services trade. The successful negotiation of AUSFTA demonstrates the increasing importance of Australia as a trade and investment partner for the USA.
Australia is negotiating a number of possible new FTAs. Together with New Zealand, Australia is undertaking negotiations with the ten members of ASEAN. Australia has also commenced negotiations towards possible new agreements with the United Arab Emirates, Malaysia and China.