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Thursday, 23 September 1999
Page: 10406


Mr VAILE (Trade) (3:19 PM) —by leave—I thank the House for this opportunity to report on the outcomes of my visit earlier this month to four South American countries, and on the meetings of the Cairns Group and APEC that I also attended.

In Buenos Aires, I chaired the 19th Ministerial Meeting of the Cairns Group of fair trading agricultural nations from 27-29 August. Coming less than three months before the World Trade Organisation meeting at Seattle, which is expected to agree on an agenda and a framework for WTO trade negotiations, the Cairns Group meeting could not have been more timely. I am pleased to report that, in a strongly worded communique, the group reaffirmed its commitment to an ambitious liberalising outcome from the next round of agricultural negotiations and agreed to work closely during the lead-up to Seattle.

The meeting reconfirmed the group's ambitions for freer, fairer and more market oriented global trading conditions, with trade in agriculture placed on the same footing as trade in other products. The group agreed that, at Seattle, they would push for a clear and detailed mandate for agricultural negotiations to ensure they begin on time, conclude before 2003, and have clear objectives.

The group also welcomed the strong message of support from Mr Dan Glickman, US Secretary for Agriculture, who was a guest at the meeting and who assured us that the United States would not agree to any WTO outcome that did not include a good result on agriculture. Given the broad convergence of Cairns Group and US interests, Secretary Glickman agreed that the United States should cooperate closely with the Cairns Group in the lead-up to Seattle and beyond. Secretary Glickman's presence also gave me another opportunity to convey Australia's continuing concerns over the US decision to restrict Australian lamb exports, and also to seek details on the United States' proposed $US7.5 billion emergency farm aid package. Secretary Glickman assured me that the proposed package would not breach US obligations under the WTO. Cairns Group ministers agreed to meet next in Seattle, on the eve of the WTO conference, and again in Canada next year.

During my trip to South America from 27 August to 5 September, I visited Argentina, Brazil, Peru and Uruguay. Highlights of those visits included the signature of a double taxation agreement with Argentina, the opening of the new Australian Consulate-General and Austrade office in Lima and an IDP Education Australia office in Sao Paulo, as well as high-level official and business contacts in all countries that were visited. My meetings with Australian business representatives emphasised the trade and investment opportunities for Australian companies in the region, particularly in the mining, agribusiness, infrastructure and services sectors.

The rapid development of these markets demonstrates the effectiveness of the government's policy of encouraging greater market diversification by Australian exporters. Merchandise exports to South America were valued at just $200 million in the mid-1980s, but have grown to around $900 million in 1998-99. While Australia's exports are concentrated in the minerals and resources sector, exports of manufactures have grown strongly in the last decade and now account for over 40 per cent of all exports. With merchandise imports from South America valued at $550 million in 1998-99, Australia enjoys a substantial merchandise trade surplus with the region. South America is also a promising market for services. Australian exports of services now exceed $250 million. Apart from traditional areas like banking, finance and mining, there are also new opportunities in education, superannuation, health and telecommunications.

Investment, estimated at $3.6 billion in mid-1998, has been the cornerstone of Australia's involvement in the region. South America's strong resource and agricultural base has been attractive to Australian companies—particularly the mining sector, but the range of Australian investment is diversifying. The longer term economic outlook for the countries I visited is positive. All have massive natural resources and increasingly affluent populations, and are moving towards more open markets. Opportunities in South America warrant a fresh look by Australian businesses. The government is doing its part to help, as the new trade focused consulate-general in Lima demonstrates. The current inquiry by the Joint Standing Committee on Foreign Affairs, Defence and Trade into Australia's trade and investment relationship with South America will provide a valuable review of Australia's links with this region.

Together with my colleague the Minister for Foreign Affairs, I attended the APEC Ministerial Meeting in Auckland on 9 and 10 September. I went with three key objectives: to produce a strong unambiguous statement of support by APEC for the launch of a new WTO round; to maintain the emphasis in APEC on trade and investment liberalisation and to ensure that individual action plans reflect a determination to meet the Bogor goals; and to highlight the useful trade facilitation work that has been done by APEC and to accelerate progress where possible.

I am pleased to report that the ministerial and leaders meetings delivered strong outcomes that very much met these objectives. We now have an unambiguous commitment by the Asia-Pacific region to a pragmatic set of negotiations that deliver substantial improvements in market access. The agreement forged by APEC in Auckland, which has set the scene for a successful WTO meeting in Seattle, includes: a call for comprehensive market access negotiations, including on industrial tariffs in addition to agriculture and services; agreement that the round should be completed in three years as a single package without precluding the possibility of implementation of early results on a provisional basis, including the accelerated tariff liberalisation package; and, on agriculture, a commitment to participate actively and constructively in the negotiations and support for the elimination of agricultural export subsidies and unjustifiable export prohibitions and restrictions.

Another significant outcome of the meeting was agreement to improve APEC members' individual action plans—the documents which record the steps economies have taken, or will take, to reach the APEC goals of free and open trade and investment. I will be working hard to ensure that the individual action plan process delivers better market access for Australian companies and that the plans themselves are improved. To this end, Australia will provide technical assistance to help developing economy APEC members produce better plans. I presented Australia's own individual action plan to APEC in Auckland. I have the pleasure of tabling it today for the information of honourable members. I commend it to the House.

I also used the margins of the APEC meeting to launch a study on the benefits to APEC members of opening up sugar markets in the region. Australian sugar producers are the most efficient in the world and I will be doing all I can to highlight the distortions in global sugar trade, including at the WTO meeting in Seattle.

The other outcome from Auckland with which I was closely involved was an agreement to boost business facilitation. APEC's work on streamlining standards, customs procedures and business travel, and in other areas, complements the more traditional trade liberalisation work and reduces costs of conducting business in the region in a very concrete and direct way. For example, the Auckland meeting signed off on a new mutual recognition agreement on conformity assessment for electrical and electronic goods, which could take five per cent off the production costs of this $US250 billion regional trade, saving exporters and consumers up to $US12.5 billion a year, once fully implemented. APEC ministers agreed in Auckland to give more attention to this practical kind of work and to involve business groups more in setting priorities and taking advice.

The Cairns Group and APEC meetings have laid the groundwork for the crucial WTO meeting in Seattle. I am encouraged by the great support Australia has generated for its WTO objectives. Our government is deter mined to pull out all stops to ensure that those objectives are met.