Senator COOK (4:36 PM) —I rise to support the report of the Joint Standing Committee on Foreign Affairs, Defence and Trade entitled Expanding Australia's trade and investment relationship with the countries of Central Europe. Senator Ferguson has been quite generous in acknowledging the role I and Senator Kerry O'Brien have played in this, but I have to set the record straight and say that the greatest preponderance of appreciation ought to go to the Liberal Party chair of this committee, the Hon. Bruce Baird, and the other members of the committee because they did most of the work.

While it is nice for the Labor Party to be enveloped in this cloak of appreciation, we should in fact call it straight and say that they did most of the work and we came along in endorsing the report. The result is a very effective and useful report, one that we are very pleased to endorse. We acknowledge the work that has been done by the leaders of this committee. It is not often in this chamber that people are generous enough to adopt a bipartisan approach and acknowledge what those on the other side have done, but this is one of those occasions. I am sure colleagues on my side would not be pleased if that proper acknowledgment, which I have just made, was not given.

The Joint Standing Committee on Foreign Affairs, Defence and Trade is a great institution in this parliament. The Trade Subcommittee, in living up to that reputation, started on this report late last year. Central Europe is an important area in the world but an area of the world that Australia does not have a great deal of immediate association with. Sure, in multicultural Australia there are a number of ethnic communities that have their home in, or relate to, countries in central Europe. Part of the strength of our multiculturalism is the languages, customs and traditions that are known to those ethnic minorities. Those communities can help Australian business by working with them to enlarge their export opportunities in central Europe.

The countries that this report covers—Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania and Bulgaria—are in the main countries that are slated to be included in the European Union under the enlargement proposals adopted last year in Brussels by the European Union. To be embraced and be part of the union they have had to set up their economies to meet the stringent budgetary requirements of entry, and they have done that. In being involved in a bigger trade bloc they can look forward to stronger economic growth and development of their own economies.

So from an Australian point of view there ought to be a great deal of interest in this area. The trade balance is really in deficit for Australia; it is in surplus for that region. All the countries that are the subject of this report have gone from lower levels of economic growth—and I refer to graph 2.1 of the report—to better levels of economic growth. The countries that are seemingly doing best are Hungary, Poland and Bulgaria; they are the main exceptions to low growth. While growth in the case of the others is slower than one would have wanted to see, nonetheless it is a pretty solid outlook, and that seems to be the outlook for economic growth for this region in the short term.

Inflation as a problem for the region has been wildly out of control—the most outstanding exception being the Czech Republic. But, as this study shows, inflation is now under control and it is speeding along within acceptable limits. It can be improved further but, nonetheless, for countries that have been high performers in the inflation stakes, one would say this is a far better outcome. Poland and the Czech Republic have been able to attract foreign direct investment in considerable quantities. That means that the international investment community rates those countries highly, and Australian business should pay attention to that rating. Foreign direct investment in other countries tapers off, but nonetheless their performances have been solid. Unemployment is high by Australian standards but is basically static. In some countries it is worsening just a little, but the employment circumstances appear to be more solid than before. Real interest rates, while on the high side by our standards, are nonetheless under control and are mostly in a band of about four to eight per cent.

So overall you can say the outlook is solid. Given the expectation that European enlargement will mean stronger economic growth, Australian business should read this report in some considerable detail and pay attention to what a growing and sophisticated economy in that part of the world—where we have ethnic ties—will offer as an export destination for Australian goods and services.

The export account bottomed in 1991—the worst year in the contemporary period—but it has rebounded strongly since then. The total value of our exports is $650 million. The gap is widening in favour of that region over Australia. We import from there $410 million worth of products and services and we export about $250 million, meaning there is roughly a deficit of around $160 million. That is a good reason why Australian companies should think about opportunities to help us bridge that deficit and put ourselves back into a strong surplus position.

Our economy is in a very advantageous position to deliver the sorts of goods and services that growing economies in that part of the world want access to to fuel their own growth and to underpin the living standards of their own people. So we are a country that can supply what they are looking for. It is a matter of making the connections. This report makes a number of I think serious and sensible recommendations that if adopted would fuel that growth, build close relationships with the region and see that Australian entrepreneurs had better outcome and export market opportunities.

This report identifies opportunities in the education exports area. This is a market that we could do well to exploit more fully in that part of the world. This report makes a series of recommendations. One is that we get inside the international institutions like the European Bank of Reconstruction and Development and the World Bank to look at projects those international financial institutions are providing in that part of the world, because Australia can play a key role in picking up some of the contracts that spring off those types of projects. It recommends that we look at upgrading our Austrade representation in Hungary—and I think that is an admirable recommendation; that we think about re-establishing our embassy in Prague—that centre of the region and a very strong growing economy in Czechoslovakia; that a ministerial trade mission be considered—and I think that is a very strong recommendation; and that we look at the e-commerce opportunities that are resplendent throughout the region. Recommendation 16 is one that ought to be referred to directly. It asks that Austrade produce a business strategy paper to look at services, agribusiness and manufacturing opportunities, and I would endorse that strongly.

This is a valuable report. I recommend that the Australian business community become familiar with it, particular any Australian company that is thinking about how to expand its export horizons. It breaks the ice and bridges a gap on an issue that needed to be dealt with. In this part of the world we are a long way from developments in Central Europe, but this report shines a light on the possibilities and makes sensible and practical recommendations about how we might take advantage of them. I certainly endorse the remarks of the former speaker, Senator Ferguson, and commend the report.