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Monday, 22 August 2011
Page: 8711


Ms SAFFIN (Page) (10:30): On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled Australia's trade and investment relations with Asia, the Pacific and Latin America.

In accordance with standing order 39(f) the report was made a parliamentary paper.

Ms SAFFIN: It gives me great pleasure to present the committee's report for this parliament. Through a lengthy and informative inquiry, members of the Trade Subcommittee explored how we can improve Australia's trade and investment relations with the countries of Asia, the Pacific and the Americas. Trade is important to economic health and critical to the development of bilateral and multilateral relationships between countries.

On the eve of going to print with our report, the Minister for Trade, the Hon. Craig Emerson MP, informed the subcommittee that he would soon publish the government's trade policy statement. We agreed to wait for the statement and then took evidence on it. This has been incorporated into our report.

When we commenced the inquiry, little did we know that the global financial crisis was breathing down our neck and it came to besiege our nation and most of our trading partners. How Australia weathered the financial crisis is the envy of the world, in particular those with developed economies. Australia's economy is strong and is ranked 12th within the OECD for GDP purchasing power parity. Closer to home, most people seem surprised, when the miracle of Singapore is touted, to discover that the New South Wales economy is significantly larger than Singapore's.

The global financial crisis caused some alarm that commitment to open trade would dissolve, and in some cases it did. Surprisingly, though, the general commitment to open trade held largely in order to complete the Doha round of negotiations. Agricultural trade remains the most contentious issue not only for developing countries but for developed economies as well.

Trading figures for Australia are healthy and on the rise. The Australian dollar is currently trading at an all-time high against other major trading currencies. This generally has the effect of making Australian exports less competitive as the purchasing power of foreign currencies is reduced. Despite this, healthy export revenues are contributing to trade surpluses through strong market prices and demand for Australian resources. Conversely, a strong Australian dollar sees imported products becoming more competitively priced for Australian consumers, leading to increased consumption. Both of these strengths are reflected in the current health of Australia's economy.

During the inquiry, the ASEAN-Australia-New Zealand Free Trade Agreement was signed off in February 2009, which was greeted enthusiastically particularly by business. The Productivity Commission also released its report on bilateral free trade agreements. Both of these were the subject of much attention during the inquiry. The Productivity Commission's report noted, however, that there is little evidence to date to suggest that Australia's six free trade agreements have produced substantial commercial benefits. The Productivity Commission's report also found that where trade had increased it was due to trade diversion rather than trade creation. Trade facilitation features large in our report, as it did for all who gave evidence to the inquiry.

The report makes a number of recommendations focused on trade facilitation, including that Australia continue to strongly support the work in APEC on the identification and elimination of chokepoints in regional supply chains and the development of modern and efficient communication networks. The report recommends Australia work towards a complete introduction of paperless trading as soon as possible and encourage and, where necessary, assist its trading partners to achieve the same outcome.

The report also recommends that Australia should strongly encourage the complete acceptance of the APEC business travel card by the remaining members of APEC, and also explore the possibility of establishing a similar arrangement with other trading partners. It recommends COAG make improved cooperation between the Commonwealth and states, and between the states themselves, a high priority.

To achieve higher levels of efficiency in the transport and logistics supply chains, the report recommends the provision of infrastructure and trade facilitation. I note there was some movement on transport at the COAG meeting on the weekend. I note that because I prepared my contribution before that took place. The report also made several recommendations focused on boosting trade with Latin America, including improvements to visa application, skills recognition, working holiday programs and increased bilateral visits with countries in the region. Australian jobs depend in a large part on reciprocal trade and it is so for both city and country alike. This often gets lost in partisan political debate. (Time expired)