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Monday, 15 September 2003
Page: 19979

Mr BAIRD (12:31 PM) —On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled Expanding Australia's trade and investment relationship with the countries of central Europe, together with evidence received by the committee.

Ordered that the report be printed.

Mr BAIRD —The report is the product of an inquiry conducted by the Trade Subcommittee through 2002 and 2003. The terms of reference for the inquiry were referred to the committee on 12 August 2002. The inquiry represents the first effort by the parliament to critically analyse trade and investment opportunities for Australia in the countries of central Europe. Not much more than a decade ago, these nations were part of the Eastern bloc of nations, with seemingly immutable economic and political ties to the USSR. The collapse of the Soviet Union and the subsequent demise of the Eastern bloc dramatically and irreversibly changed the trajectory of the countries of central Europe. Where once there were authoritarian political structures and centrally planned economies, there are now flourishing democracies and prosperous market economies. Where once there was a grey uniformity of life and industry was tied to a paternal master, there is now plurality and vibrancy and a striving to join the European Union. Central Europe has clearly changed forever.

Cognisant of the dramatic changes taking place and the opportunities such changes inevitably yield, the committee felt it was an opportune time to re-evaluate Australia's trade and investment relations with these nations. In undertaking the inquiry, it was hoped that information about specific and general opportunities for trade and investment would emerge. This belief was borne out. This report attempts to document these opportunities and make recommendations on how the Australian government can assist Australian investors and industry to capitalise on those opportunities.

The key finding of the inquiry is that there is an information failure between Australia and central Europe. Australia's economic strengths place it well to assist central Europe with its transition to a modern liberal democracy. Our strengths match central Europe's needs, and its transition trajectory promises major opportunities. The synergies and the potential are there, yet substantial trade and investment between Australia and the region has failed to emerge. The main ingredient missing from this potentially fruitful economic equation is knowledge of each other's markets and each other's needs. The committee believes that, if this information failure were remedied, existing opportunities would drive much greater trade and investment, to the advantage of both Australia and central Europe. This conclusion is the foundation of the report.

Accordingly, the report recommends a range of measures to increase mutual awareness and mutual understanding of trade and investment opportunities. The suggested measures can be grouped into three categories. The first involves several awareness-raising activities, including: sending a senior trade mission to the region, led by the Minister for Trade; sending a senior e-commerce and e-government focused trade mission to the region, led by the Minister for Communications, Information Technology and the Arts; increasing support for Australian and central European firms' use of European trade fairs; including central European participants in the Australian Tourist Commission's Australian Tourist Exchange program; encouraging two-way student flows by increasing scholarship numbers and by encouraging research links; and encouraging industry specific trade missions to central Europe in areas of high potential.

The second category recommends a range of government measures to address the existing impediments to increased trade and investment. These include: supporting Australian firms seeking EBRD funding by providing tied aid to the EBRD; encouraging links between Australian and central European research institutions to help them access the European Commission's Sixth Framework science research funding scheme; reconfiguring certain diplomatic arrangements in central Europe to better support Australian trade and investment activity; improving Australian trade representation at the World Bank and the European Commission; and reassessing visa requirements for students from central Europe who wish to study in Australia.

Finally, the report also recommends that Austrade develop a new export strategy for the region that considers the areas of Australia's strongest comparative advantage—namely, services, agribusiness and manufacturing. Within the services sector, the committee viewed the following areas as having particular potential: e-commerce and related services; e-govern-ment technology and services; government services; tourism training; land titling; agricultural services; and environment related services. In agribusiness, the committee viewed wool, leather and related products, and wine products as areas of high potential. In manufacturing, the committee saw automotive equip-ment, smart card technology, building materials and environmental equipment as promising.

The committee's abiding impression from the inquiry is of the dynamism and resultant opportunities in the countries of central Europe. The committee hopes that this report will focus the minds of the relevant Australian policy makers on the key issues in trade and investment relations with central Europe and provide some insights into how to enhance them.

I would like to acknowledge the assistance of the Department of Foreign Affairs and Trade and the support of Austrade during the inquiry and visit. In particular I would like to thank Alex Brooking from the Department of Foreign Affairs and Trade for his outstanding assistance, and John Price and Peter Kane from Austrade. All three did an outstanding job. The officers from the Department of Foreign Affairs and Trade both within Australia and overseas were outstanding. The hospitality provided by ambassadors and trade commissioners was excellent. Also the arrangements made in terms of coordinating the business appointments with various chambers of commerce and industry groups were particularly outstanding. We were very well served by DFAT in terms of this visit.

I would also like to acknowledge the Trade Subcommittee secretariat, Adam Cunningham and Pierre Huetter, in the conduct of the inquiry and their preparation of the report, which was not easy, especially as neither of them actually accompanied us on the visit. But we worked through that, and I was particularly grateful for the final result in terms of the report that was achieved.

Finally I think it is appropriate that I should commend my colleagues in terms of this report. Those include Senator Alan Ferguson who led the committee—when we broke into two groups—in Romania and Bulgaria. He was accompanied by Mr Hawker on that visit, and, as with the rest of the visit, Mr Jull, Mr Prosser and Mr Thompson also accompanied us on those visits. They were particularly conscientious in their approaches to the visit, approaching it in a very workmanlike way. Senator Eggleston was involved in the program as well and contributed significantly.

We are very pleased with the outcome of the report. We approached the report initially on the basis that it would not represent particularly new opportunities but we would look at it nevertheless. What we found were new market economies that had turned their backs on the old Eastern bloc and were looking to the West in terms of opportunities, particularly in relation to e-business, land titling, hospital services and tourism services. We believe that this area of the world represents significant opportunities for Australia. In many ways, their economies are like Australia's in the fifties and sixties and therefore they are best able to take advantage of the opportunities represented by Australia's experience, particularly as it relates to e-commerce. That is why we made the recommendation in relation to trade missions led by the Minister for Trade and also a particular e-government mission, to be led by the minister for communications. We also looked at some of the establishment that we have and the need for an embassy to be established in Prague. This was part of our overall recommendations. I commend the report to the House. (Time expired)

The SPEAKER —Does the member for Cook wish to move a motion in connection with the report to enable it to be debated on a future occasion?