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Monday, 14 October 1991
Page: 1879


Mr MARTIN(10.04 p.m.) —-I rise to support the Customs Tariff Amendment Bill (No. 2) 1991. As has been indicated, the principal amendments being proposed relate to five major issues. The first is the granting of developing country status to Czechoslovakia and Namibia; the second is the removal of duty on parts of wheelchairs; the next is the definition of orange juice; the next is a reduction in the rate of duty on aviation gasoline; and, finally, the removal of duty on certain educational, scientific and cultural material.

The issue I want to comment on tonight, however, is that of tariff preferences for developing countries. This issue was commented on in at least one report by the House of Representatives Standing Committee on Finance and Public Administration, that of its examination of the Australian Customs Service. I think it was during the last Parliament that this issue was raised with that Committee as part of an ongoing examination of the role played by the Customs Service and of the relationship between Australia and so-called developing countries. In that report, which was a unanimous report of that Committee, it was quite clearly indicated that developing country preferences should be eliminated.

Examples were given of countries that were given developing country status, and therefore attracted special attention and treatment from this Government in its trading relationship, but were in fact at the forefront of steel production in the world--not just in this part of the world but in the whole world. In effect, the technological development that was taking place in countries such as Taiwan and Korea while Australia was, in its own way, taking up the challenge of trying to meet the technological changes in those countries--and was making a reasonably good job of it--meant that it was hardly appropriate to apply developing country status to those countries. As a result, I believe that this legislation, which partly addresses that general issue, is quite appropriate, and I am pleased to see that the Government has acted by introducing it.

The Australian system of tariff preferences for developing countries provides preferential treatment of imports for developing countries, as the term suggests. They receive a discount of 5 per cent off the general industry assistance tariffs of over 5 per cent; otherwise they are not subject to industry assistance tariffs at all. As time has gone on it has become totally inappropriate to provide that particular assistance to some of those countries in respect of shoes, for example.

In particular, the comments in respect of Asia are most appropriate at the present time. I have had the opportunity to look at some statistics on major import sources for Australia between 1982 and 1990. If we look at the trading relationship that exists between our country and other major trading blocs around the world, we can see clearly that many of those countries which to date have attracted that so-called developing country status are in fact in Asia or the Asia-Pacific region. But times have changed. They have not stood still; they have embraced technological change; they have embraced the latest in equipment; they have embraced some practices in industrial relations with which this country would not necessarily have an affinity--although I suggest that there are probably some people in this place who would suggest that we should. Nevertheless, they have also seen some major changes taking place in their economic circumstances.

Returning to this table which I have extracted, it is interesting to note that, for developing countries, the percentage share of major import sources from 1982 to 1990 has remained reasonably constant. In 1982, for example, developing countries--and I have defined what they are, and the Bill certainly does that--represented something like 27.46 per cent of the major import sources for Australia. That went downwards in 1983, 1984, 1985 and, indeed, 1986, to a low of about 20.53 per cent. But what we have seen since that time is a slight increase such as that in 1990, when that percentage figure was 23.28 per cent. So those countries defined as developing countries still provided nearly a quarter of major import sources for Australia. It is therefore a very important trading bloc, and one of which we need to take consideration.

However, the other interesting point that arises out of this is that it is not all plain sailing. We have heard the term `a level playing field' bandied around in reference to trade, to sanctions, to GATT agreements and to the Uruguay Round. They are all buzz words at present. Australia is out there trumpeting the benefits of having a level playing field in trade, yet it is not really playing on a level playing field. I suppose it is a bit like what the Australian rugby union team did to Wales in the UK in the World Cup a couple of nights ago. It is not two teams that are equally balanced in this trading relationship. One is stronger than the other because of a variety of incentives put in place; yet we as a team on that playing field trying to get some advantage find that not only is the playing field not level but also there is a very stiff wind blowing downhill in the second half with the other team. Consequently, that is to our great disadvantage.

It is interesting that imports from these developing countries totalled about $12 billion in 1989, and exports from Australia to those developing countries amounted to $17 billion. That accounted for about 36 per cent of Australia's total exports, so there is this very close relationship between the two. Over 60 per cent of the imports from developing countries are accounted for by six countries. Interestingly, of course, they are all from Asia--Taiwan, South Korea, Singapore, China, Hong Kong and Malaysia. How one could possibly say that most of those countries on that list are developing countries is beyond me. Accordingly, the legislation tonight addresses that problem.

The Government, in its March 1991 statement Building a Competitive Australia, announced a number of steps to improve our trading position, and they are relevant to this discussion today. The first was to maintain our vigorous national campaign to try to achieve equal treatment for agriculture under the GATT umbrella to avoid the chaos and insanity of a trade war. Of course, we have had recently the Minister for Trade and Overseas Development (Dr Blewett) and appropriate representatives from both sides of the Parliament travel to Europe to try to argue this case. We have seen the same group travel to the United States a couple of months ago to argue that case but, unfortunately, to this point in time, again to go back to that so-called level playing field argument, we just do not seem to be able to talk to the right people to get an appropriate position for Australia.

Secondly, the 1991 statement Building a Competitive Australia talked about helping our farmers and manufacturers to take effective action against foreign producers who seek to dump their products on the Australian market at unfair prices. I and a number of other members of this place have spoken previously and at great length about dumping and the problems that causes. We have also spoken at great length about the time taken to investigate dumping action and cases that are brought to the attention of appropriate officials. Whilst the Government has moved some way to try to address that problem, it has not moved far enough, and as recently as this afternoon some discussion was going on amongst colleagues on this side of the House about the question of dumping and what could be done about it. It is an issue that needs further examination and I commend that to the Government to pursue. This is probably in line with what the honourable member for Barker (Mr McLachlan) was talking about in sending appropriate signals to manufacturing and industry in this country that Government policy is in tune with their concerns and their problems.

Coming back to steel again--an issue that I know reasonably well--for example, I know that in the steel industry plan which was put in place by our Government in 1983, a direct component of that dealt with the issue of the potential for dumping steel products in this country and, appropriately, having the Government take action as required to ensure that that did not happen. That was an important component--not the most important but nevertheless an important component--of the restructuring that occurred then of the steel industry which gave some degree of stability and certainty to one industry in this country. As I have said, I commend to the Government further consideration of that whole issue of dumping.

The statement went on to provide a considerable sum of money, $2m, to continue the Australian made campaign to try to reduce Australia's reliance on imports. That is good as far as it goes. I have no difficulties with that. But, of course, the other side of the coin is that one should have equivalent products made in Australia that one can buy. As part of that buy Australian campaign one would hope that that is the case. But, basically, what Australia has to move more towards is import replacement, import replacement industries, and processing in this country of primary products and other things that we produce. I suppose that the woolly jumper is a classic example. Why do we just shear the sheep and send the wool overseas and then import a jumper that has been manufactured from Australian wool? Why do we not simply try to ensure that, even in some minor way, some of the primary produce that we mine or manufacture in other locations is processed so that there is value added to that product from which Australia benefits.


Mr McLachlan —-That makes manufacturing more efficient.


Mr MARTIN —-The honourable member for Barker very discreetly and very quietly suggested that we need to make manufacturing a little more efficient and more effective and perhaps to have appropriate policies in place from government in a macro-economic sense to set the scene to enable that to happen. Frankly, I could not agree with him more. That is appropriate. Maybe the business taxation suggestions from Senator Button, referred to earlier, are an appropriate first step in that direction. That is not the only step but it is certainly one. Maybe we need to try to convince those primary producers and others and the manufacturing and secondary industries that there is a source of venture capital to promote some of those other industries that we need. I take the view that at present we have this massive pool of savings out in the community, in the main locked up in superannuation funds. Perhaps a proportion of those could be used as a venture capital substitute for investment in improving secondary manufacturing--a pool of resources that could be loaned at reasonable interest rates to people in manufacturing and in this way stimulate economic activity in this country.

This debate has ranged across a wide range of issues, but they are all consistent with the theme of the Government in looking at ways in which Customs tariffs need to be continually reviewed and the way in which this whole concept of phasing out preferential tariff arrangements for Singapore, Taiwan, Hong Kong and the Republic of Korea from 1 July 1992 will impact on that. As I have said, those four countries alone are major manufacturing nations in their own right. I do not think anyone could suggest that they are developing countries. Accordingly, the sorts of preferences that we have allowed to continue in our trading relationship in the Asian region for so long I think now are appropriately being phased out.

Let us face it: it is in the Asian region that Australia's trading future in the main lies. That is not to say that there will not be markets in the United States, the Americas generally or in Europe for certain products; but essentially they will be in the Asian region. We as a Parliament and as a Government have to look at ways in which that can be encouraged. There is no doubt that there is a massive market immediately to the north of this country. It is time to promote that, whether it be through Austrade, through trade missions led by business leaders of this country going to those sorts of countries or whatever; I do not care. But there is this massive market to which we have access.

It is my view that this legislation will make a contribution towards improving Australia's trading relationship with our near neighbours. It will also make a contribution particularly to ensure that, as far as developing country preferences are concerned, those that in the past have had this special relationship with Australia no longer need to have that relationship.

However, going the reverse in respect of Czechoslovakia and Namibia is based on a different set of circumstances and premises and I do not regard that as in any way contrary to the removal of the sorts of preferences for the Asian countries to which I referred. On the contrary, we have had a massive breaking down of the walls, particularly in eastern Europe as far as political stability is concerned. We have also looked at ways in which developing countries in Africa need special assistance. Again, I feel it is appropriate for a country of the status of Australia and, accordingly, I do not see any conflict in granting developing country status to those two countries.

The legislation is important. It is an ongoing contribution to improving the role Australia can play in the world, particularly in regard to our trading relationships with our near neighbours. I commend the legislation to the House and hope that we will continue to note with a great deal of pleasure and certainty that our trading relationship with Asia is on the increase and we should continue to promote it.