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A better plan for trade.



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A Better Plan for Trade

  • A Better Plan for Trade
  • Key Initiatives
  • The Failure of the Howard Government
  • Labor's initiatives
  • Incentives to export
  • Promoting our exports
  • Opening new markets
  • Shaping the nation for export
  • Resources to do the job
  • Export Access Scheme
  • Costing

A Better Plan For Trade

Australia's economic prosperity is heavily reliant upon trade.

 

Australia generated over $104 billion in exports last year, representing about 21 per cent o f the economy and providing jobs for more than a million Australians.

 

Labor has a strong commitment to increase Australia's capacity to export because greater trade will improve our standard of living and create more jobs. Labor believes that trade policy can make a real contribution to a Labor's goal of reducing unemployment to 5%.

 

To this end, Labor will encourage a strong export culture for Australia.

 

The Howard Government has failed to recognise the importance of trade to the wellbeing of Australians . The Coalition has abolished or slashed funding for key export programs and trade promotion.

 

The Howard Government has been complacent in the face of the regional economic turmoil, and has shown little interest in pursuing Australia's broader trading interests in multilateral trade organisations, such as APEC and the World Trade Organisation (WTO).

 

Labor believes that in the face of this international political and economic uncertainty, it is more important that ever that "trade activism" is returned to the forefront of Government strategy.

Labor considers the needs of exporters as lying at the heart of trade policy. Labor will assist business to:

 

  • Maintain a business presence in our regional Asian markets;
  • Expand their market share or establish a prese nce in the leading world markets of Europe and North America;
  • Diversify into new markets and seek non-traditional trading partners.

In Government, Labor will restore the central role played by trade policy in ensuring economic prosperity. Labor's trade p lan will increase exports, boost jobs, add to economic growth, and restore Australia's leadership role in multilateral trade forums.

Key Initiatives

Incentives to Export

Labor will:

 

  • allocate an additional $90 million over three years to the Export Market Development Grants Scheme (EMDG). Labor will also broaden its scope, and improve its administrative efficiency.
  • commit $71 million over two years (commencing 2000-01) to establish a new scheme, the International Trade Trust (ITT), that will assist export companies that need access to a revolving loan scheme to further consolidate a presence in the international market.
  • will commit $75 million over two years (commencing 2000-01) to establish a Green Development Project Scheme to provide mixed credit suppor t for development cooperation projects in emerging regional economies.

Promoting our Exports

Labor will:

 

  • conduct a review of Austrade, to assess the degree to which the Howard Government cuts have affected the ability of the organisation to provide a qua lity service in a time of increased pressure for our exporters.
  • increase resources dedicated to Trade Missions, and will seek the highest level industry and public sector participation; National Trade Missions will be organised to Asia, Europe and the Uni ted States.
  • work with the States to assist a bid for the year 2002 World Trade Expo for Australia.
  • review the current format of the Australia Summit, and announce our response in sufficient time to hold a national trade and investment conference in 2000, coinciding with the Sydney Olympics.

Opening New Markets

Labor will:

 

  • work to increase the pace of trade liberalisation in the region, ensuring that APEC members lower tariff levels and remove other barriers to trade.
  • consult widely with industry on the national objectives for the 1999 WTO Agricultural Round.
  • consult with industry to propose to the Cairns Group a strategy, aimed at achieving breakthroughs in the 1999 WTO round of agricultural trade liberalisation and in the proposed WTO Millennium Round .
  • hold systematic consultations with industry sectors before finalising our goals for a Millennium round.
  • support Chinese application for membership of the WTO, and will propose reasonable steps for any outstanding matters of membership to be addressed.
  • work with industry, including in support of initiatives by the Australian Industry Group, to pursue closer AFTA-CER linkages.
  • investigate the economic advantages in pursuing a comprehensive trade agreement with the United States.
  • establish an Advocacy Unit within the Department of Foreign Affairs and Trade, consisting of trade and legal experts, to protect ou r national and industry interests at the WTO. Labor will conduct talks with the private Bar to further develop Australia's WTO expertise.

Shaping the Nation for Export

Labor will:

 

  • develop a comprehensive program to increase the overall level of Australia n IT exports focusing particularly on the needs of small and first time exporters.
  • commit $24 million over three years to promote Australia's quality education export services.
  • report annually to the nation on our achievements in trade and investment.

Resources to do the Job

Labor will:

 

  • commit $9 million each year (commencing 2000-01) to strengthen public diplomacy, to meet the resource needs of an activist trade policy, and to assist in restoring the diminished capability imposed by Howard Government c uts.
  • expand and restructure the East Asian Analytical Unit into a new unit, the Bureau of International Economics (BIE).

The Export Access Scheme

Labor will:

 

  • elevate the standing and profile of the Export Access Scheme.

The Failure Of The Howard Government

The Howard Government has failed Australian exporters. The Coalition has inflicted deep budget cuts to programs that assist Australian exporters to increase their export earnings and market share.

 

Since 1996, over $359 million has been cut from prog rams that had been directed mainly at small to medium size exporters to encourage them to develop markets overseas. These Budget cuts have been maintained even in the face of increased difficulties now faced by exporters following the Asian economic slowdown.

 

  • Export Incentives : Cuts to Export Market Marketing Development Grants (EMDG) Scheme, research and development programs, and the abolition of key industry programs including the International Trade Enhancement Scheme (ITES), and the mixed credit scheme , the Development Import Finance Facility (DIFF), have not only affected Australia's battling small and medium exporters, but have "sucked" money and growth out of the economy to the order of $3 billion.
  • Trade Promotion: Australian companies have lacked G overnment support to exhibit at trade fairs. The National Trade and Investment Outlook Conference (NTIOC) was abolished in 1996 and a replacement event was delayed by a year. Queensland's bid for the Year 2002 World Trade Fair has been jeopardised by lack of Howard Government support.

 

  • Multilateral Trade Negotiations : The Howard Government has "downsized" Australia's involvement in international trade forums, such as APEC and the WTO, neglecting multilateral approaches to opening up new markets. Trade Mini ster, Tim Fischer, has missed two of the last three APEC Trade Minister's meetings.

 

 

  • Public trade infrastructure : Public Service cuts, in particular to Austrade and the Department of Foreign Affairs and Trade, have dramatically reduced the Government's c apacity to provide services to exporters and to accelerate trade negotiations.

 

Overall, the Howard Government has placed a low priority on the needs of Australia's exporters and has been complacent in the face of the regional and now global economic slow down.

Trade and a GST

The Howard Government has failed to offer a strategy to Australian exporters for the future. All they have offered is a new tax - the 10% GST.

 

A GST will not provide a lasting benefit to Australia's trade performance. The Treasurer's former Senior Adviser, Mr Matthew Ryan, now Deputy Head of the government's Taxation Taskforce, wrote in a research paper in 1995 that there was, "essentially no trade effect", in moving to a GST type tax system.

 

Labor's tax reform plan "A Fairer Tax Sys tem: With No GST" addresses the issue of the effect of the GST on our export performance;

 

"A GST is no panacea for Australia's trade balance. Australia's wholesale sales tax system has been designed to impose the minimum costs on exporters compatible with low costs of tax administration and tax compliance. Only a little over $1 Billion of WST costs is imposed on our $110 Billion of annual exports. Removing the effect of wholesale sales tax from our traded goods will make a barely measurable impact on export costs: exporters would be much more helped by restoring government support for R&D, Export Market and Development, and similar programs."

"Australia's tourism industry would be dealt a major blow by the Coalition's proposed GST. Overseas visitors would be deterred by increased costs of holidays in Australia. Australian holiday-makers would be encouraged to take GST-free flights to GST-free holiday destinations overseas.

Australia's exports of education services would suffer as the families of overseas students calculated the impact of the GST on their meals and accommodation, their books and stationary, bus and rail fares, phone and postage costs and so on - and then opted for schools and universities outside Australia"

 

Labor is committed to increasing resources and redesigning export incentives to further advantage export companies in winning new markets - without a GST.

Labor's Initiatives

Incentives to Export

Labor recognises the need for Government schemes that are designed to assist exporters overcome the difficulties they face, particularly to assist small and medium sized exporters enter new markets or to maintain a presence in markets presently experiencing an economic downturn.

 

The Export Marketing Development Grants Scheme

Labor will allocate an additional $90 million over three years to the Export Market Development Grants Scheme (EMDG). Labor will also broaden its scope, and improve its administrative efficiency.

 

Labor recognises the immense value of the EMDG scheme, particularly in light of the difficulties being felt by many small exporters in the face of the regional economic downturn, but believes that the scheme needs to be adequately resourced.

 

The Howard Government limited participation by small and first time exporters in the EMDG when it slashed its budget and introduced administrative complexity into the scheme.

Labor will extensively restructure and reform the EMDG scheme to allow increased participation by smaller exporters. Labor will conduct an immediate review of the scheme, consulting widely with Industry and other users.

 

Labor's review of the EMDG will include consideration of:

 

  • Removal of the funding cap and administrative impediments for first time exporters;
  • Reintroduction of allowances for the preparation of tenders, quotations and patents and for bringing business contacts to Australia;
  • Encouragement and flex ibility to allow a wider range of industry participation in the scheme, for example the education services sector.
  • The lowering of the minimum and/or maximum expenditure threshold to allow a greater participation from small exporters;
  • Lengthening the per iod of employment of overseas consultants from the present three months and reviewing the rules for overseas consultants.

 

The International Trade Trust

 

Labor will commit $71 million over two years (commencing 2000-01) to establish a new scheme, the International Trade Trust (ITT), that will assist export companies that need access to a revolving loan scheme to further consolidate a presence in the international market.

The ITT will be established after consultation with industry. The scheme will fill the gap created by the axing of the ITES scheme.

 

Labor's international Trade Trust will be replenished, over time, through borrower companies repaying their debt (or by endowing the Scheme with a royalty flow).

 

The Green Development Projects Scheme

Labor will commit $75 million over two years (commencing 2000-01) to establish a Green Development Project Scheme to provide mixed credit support for development cooperation projects in emerging regional economies.

 

The scheme will focus on providing development assistance for environmental and/or ecologically sustainable projects, in areas such as sustainable land, water and waste management, pollution control, and energy efficiency.

 

The Green Development Project Scheme will be implemented after consultation with key recipient nations, likely service and technology providers in Australia, and relevant government agencies.

 

A mixed credit scheme, such as the Green Development Scheme is essential to match concessional financing being provided by other countries and thus assist Australian firms compete for development cooperation projects.

Promoting our Exports

Labor recognises that Government can play an important role in advancing trad e efforts in new and existing markets, through an active program of national trade missions and promotions in support of Australia's exporters.

 

Austrade - A World Leader

Labor is a strong supporter of Austrade; the Government's trade marketing and promotion agency. Labor considers the agency is essential in providing good quality, unique market intelligence to introduce small and medium size exporters to the international marketplace, and in assisting companies to win new contracts and promote their goods.

 

Labor believes that cuts to Austrade funding imposed by the Howard Government have limited its ability to provide assistance and services that small to medium size companies.

 

Labor will conduct a review of Austrade, to assess the degree to which the Howard Government cuts have affected the ability of the organisation to provide a quality service in a time of increased pressure for our exporters.

 

Labor is committed to ensuring that Austrade is a world leader in trade promotional activities.

 

National Trade Missions

Labor believes National Trade Missions, if properly organised and targeted, can be of significant value to Australian companies.

 

Labor will increase resources dedicated to Trade Missions, and will seek the highest level industry and public sector participation. In the first year of a Beazley Labor Government, National Trade Missions will be organised to Asia, Europe and the United States.

 

International Trade Fairs and Expos

Labor is committed to providing a greater emphasis on trade promotion activities, including trade fairs and expos, so that Australian businesses can win their fair share of new markets.

Labor will ensure that Austrade focuses on the opportunities that arise from trade fairs and will work more closely with industry and the States to ensure an Australian presence at every major international trade event and a strengthening of the 'Team Australia' concept.

 

Labor will work with the States to assist a bid for the year 2002 World Trade Expo for Australia.

 

The Australia Summit

Labor is committed to holding an annual national trade and investment event that attracts foreign clients, showcases Australian expertise and products, and which will contribute to the strengthening of our export culture.

 

The 1999 Australia Summit will proceed as planned. However Labor will review the current format of the Australia Summit, and announce our response in sufficient time to hold a national trade and investment conference in 2000, coinciding with the Sydney Olympics.

 

Public Diplomacy

Labor considers Australia's multicultural and racially tolerant society as one of the nation's strengths and as a powerful advantage in trade.

 

Labor believes that an active trade and regional diplomatic stance, supported by a focused "public diplomacy" campaign, is the best way to strengthen Australia's positive image overseas.

 

Labor will commit additional resources and activism to this program - these are identified in Additional Funding to DFAT and Austrade (below).

Opening New Markets

Labor recognises that the removal of barriers to fair trade through negotiation, whether through bilateral means or through multilateral regional, global or sectoral bodies remains at the heart of Australia's trade policy.

 

While a Labor Government will vigorously pursue bilateral negotiations, Labor recognises that, historically, Australia has achieved its most significant trade advances through successful multilateral trade negotiations and this approach still offers the greatest opportunity.

Labor will dedicate increased resources, strategy and activism to this task.

 

Increased Role for Australia in APEC

 

Labor sees APEC as a key arena for increasing regional and global trade liberalisation. It is estimated that APEC trade liberalisation and facilitation will increase Australia's real income by 6.8% or $40 billion and create thousands of new jobs for Australians.

 

This is why Labor considers success in APEC as vital to our national interest.

 

Labor will work to increase the pace of trade liberalisation in the region, ensuring that APEC members lower tariff levels and r emove other barriers to trade.

 

Under Labor Australia will proceed with early voluntary sectoral liberalisation commitments - with a focus on automotive parts and the food sector.

 

The 1999 Year of Agricultural Trade Liberalisation

Labor considers the 1999 WTO Agricultural Round of international trade negotiations as a national trade priority. Labor will consult widely with industry on the national objectives for the Round.

 

A feature of Labor's strategy will be the conduct of an active high level international lobbying campaign directed at breaking down the resistance of key foreign governments to opening markets in agriculture - particularly in Europe, Japan and the United States.

 

Labor will work through the Cairns Group and with primary industry organisations and agricultural exporters to achieve this goal.

 

The Cairns Group

Labor will inject leadership and activism into the Cairns Group of agricultural nations.

While, Labor recognises that the Cairns Group is a voluntary grouping of agriculture exporting countries committed to liberalising world agriculture trade, Australia has a responsibility as Chair of the group, to provide leadership by proposing initiatives for consideration and endorsement. Labor is committed to providing this leadership.

 

A Labor Government will consult with industry to propose to the Cairns Group a strategy, aimed at achieving breakthroughs in the 1999 WTO round of agricultural trade liberalisation and in the proposed WTO Millennium Round.

 

Labor will support our strategy with an active global lobbying campaign to open agricultural markets.

 

The WTO and the Millennium Round

Labor strongly supports a further round of WTO international trade negotiations to coincide with the new millennium.

 

Labor believes that further market liberalisation will assist the world economy grow and can be a strong antidote for present global economic ills.

 

A Beazley Labor Government will hold systematic consultations with industry sectors before finalising our goals for a Millennium round.

A Labor Government will support Chinese application for membership of the WTO, and will propose reasonable steps for any outstanding matters of membership to be addressed.

 

Strengthening AFTA-CER Linkages

Labor believes that despite the distinctively different characteristics of the ASEAN Free Trade Area (AFTA) and the Australian-New Zealand Closer Economic Relations Agreement (CER) there is considerable value in supporting initiatives to bring these trade groupings together.

Labor is committed to working with industry, including in support of initiatives by the Australian Industry Group, to pursue closer AFTA-CER linkages.

 

Australia/United States Comprehensive Trade Agreement

Labor will investigate the economic advantages in pursuing a comprehensive trade agreement with the United States.

 

Australia/Europe Trade Treaty

Labor believes there is scope to reopening negotiations for a formal trade treaty between Europe and Australia, despite the Howard Government's recent failure to secure an agreement. Labor will consult with human rights groups on this issue.

 

WTO Rules Challenges

Labor will establish an Advocacy Unit within the Department of Foreign Affairs and Trade, consisting of trade and legal experts, to protect our national and industry interests at the WTO. Labor will conduct talks with the private Bar to further develop Australia's WTO expertise.

Shaping the Nation for Export

Labor recognises that Trade policy cannot exist in isolation from domestic economic policy settings.

 

For Labor, industry policy, wit h its aim of improving the productivity of Australian industry through advancing international competitiveness and expanding exports, is integral and complementary to its Trade focus.

 

Labor's Industry Strategic Action Plans are important components of Labor strategy to shape the Nation for Export.

 

Government/Industry Consultations

Labor places the highest priority on establishing close government/private sector links on trade and on working with Australian industry.

 

Labor acknowledges and supports the development of international business linkages, particularly at industry association level and notably through regional organisations, including APEC.

 

Inter-Departmental Links

Labor is committed to ensuring that Australia's trade interests are underpinned by a world class, professional bureaucracy operating to the highest standards of efficiency and effectiveness.

Labor will implement closer working relationships between Cabinet Ministers and their departments to maximise the national trade interest, including non-traditional trade departments such as those responsible for the finance sector, education, health, IT and communications.

Labor will ensure closer coordination between Federal and State Government.

 

Attracting Investment

Labor acknowledges that a high and sustainable level of capital investment is a strong contributor to economic growth and job creation. While capital flows between countries are now more volatile than ever, competition between countries for foreign investment is increasing.

Under a Beazley Labor Government, Australia will be a more attractive destination for foreign investors. Labor's trade promotional efforts will build upon the incentives announced in our Industry policy to attract investment.

 

Expanding Australia's Trade in E-Commerce and IT

Labor will develop a comprehensive program to increase the overall level of Australian IT exports focusing particularly on the needs of small and first time exporters.

Australia's IT industry is one of our top export earners, exceeding $4 billion in earnings for 1995. There are presently some 13,500 IT specialist businesses employing just over half a million Australians.

 

Information technology is a rapidly expanding global industry - offering enormous potential for 'skill-rich' countries like Australia. However, Australia's trade deficit on IT is presently running 4:1 against Australia - it is likely to widen from the 1995 figure of $14 billion to $30 billion by 2005.

 

Labor will work to redress the deficit by developing our IT sector. Labor's specific tax incentives for venture capital and research and development as outlined in our tax package will assist IT companies develop export products.

 

Labor will target E-Commerce as a growth area will work to assist Australian exporters take advantages of opportunities which present themselves.

 

Education Exports - New Horizons

Labor will commit $24 million over three years to promote Australia's quality education export services.

 

Education exports are already Australia's fifth largest export industry, worth over $3.5 billion a year and employing thousands of Australians.

 

The education exports sector is increasingly competitive but is a sector in which the Howard government has be en reluctant to recognise.

 

Key features of the education exports program are further set out in Labor's Education Exports:

 

New Horizons Policy but include:

 

  • Export Promotion: in key source countries and emerging growth markets;
  • Export Facilitation: th rough ensuring improved industry access to Government export infrastructure, including the EMDG;
  • Education Export Roundtable: will be established to ensure a "whole-of-government" approach to the needs of the education export industry;
  • Cross-Sector Netwo rk: of education-industry-business-government will be established to find reinforcing ways of improving education exports;
  • Universal Student Visa: Labor will introduce a Universal Student Visa, priced competitively, to cover all courses and units.
  • Studen t Entitlements: Foreign students part-time work entitlements will remain, while Labor will assist students undertake necessary post-University experience required in some courses.

 

A Labor Government will work closely with educational institutions and ind ustry bodies to implement this strategy.

 

National Trade Report

Labor will report annually to the nation on our achievements in trade and investment. The report will include progress reports on trade negotiation, achieving market openings and will detail the value open markets create for the national economy and industry sectors.

Resources to do the Job

Labor will provide additional resources and an activist approach in revitalising Australia's export sector. Labor will work to restore the damage done to Australia's public trade infrastructure.

T he Howard Government has inflicted deep spending cuts on essential public service trade infrastructure, in particular to Austrade and the Department of Foreign Affairs and Trade.

These funding reductions have dramatically reduced the Government's capacity to provide services to exporters and to conduct Australia's critical trade negotiations at a time of crisis is several key markets.

 

Additional Funding for DFAT and Austrade

Labor will commit $9 million each year (commencing 2000-01) to strengthen public diplomacy, to meet the resource needs of an activist trade policy, and to assist in restoring the diminished capability imposed by Howard Government cuts.

 

Labor will implement a number of reforms to arrest the diminishing capability of the Department of Foreign Affairs and Trade and Austrade including: 

  • Additional resources to the Trade Divisions of DFAT to ensure that they are adequately equipped to deal with the demands of the 1999 Round of Agricultural Trade Liberalisation, the Millennium Round and the e nhanced role a Labor government will play in the Cairns group.
  • Advocacy unit for the WTO. A Labor government will commit additional resources to our effort in the WTO including the establishment of an advocacy unit to deal with WTO legal matters.
  • Expand the East Asian Analytical Unit into a new body, the Bureau of International Economics .
  • Market Access Guides. To assist companies develop new markets DFAT, in consultation with Austrade, will publish a comprehensive series of Market Access guides for our k ey markets.
  • Country Economic Briefs. Improve the frequency of Country Economic Briefs. Budget cuts have seen the production of updates of the CEB lag.

 

Labor will also seek to improve the skill base of DFAT and Austrade through providing greater flexibil ity between the public and private sector while restoring a secure and productive working environment.

 

Bureau of International Economics

Labor recognises the need for Government to maintain a first rate research capability to guide Australia's policy makers and to complement private sector research.

Labor will expand and restructure the East Asian Analytical Unit into a new unit, the Bureau of International Economics (BIE).

 

The Bureau of International Economics will complete the program set down for the EAAU but will also conduct studies on markets in Southern Africa, the Middle East and South America.

Labor will seek closer relationships between the new Unit, the private sector and academics, including the co-sponsorship of research and the establishment of a management Board.

The Export Access Scheme

In consultation with industry, Labor will elevate the standing and profile of the Export Access Scheme - the cornerstone of Austrade's networking and co-operation with business and industry associations.

Costing

 

98-99

99-00

00-01

01-02

Total

Export Market Development Grants

0

12.0

34.0

44.0

90.0

International Trade Trust

0

0

35.0

36.0

71.0

Green Development Projects scheme

0

0

35.0

40.0

75.0

Review of Austrade

0

0

0

0

0

National Trade Missio ns

0

0

0

0

0

International trade fairs and expos

0

0

0

0

0

Australia Summit

0

0

0

0

0

Role for Australia in APEC

0

0

0

0

0

1999 Year of Agricultural Trade Liberalisation

0

0

0

0

0

Cairns group

0

0

0

0

0

WTO and the Millennium Round

0

0

0

0

0

AFTA-CE R linkages

0

0

0

0

0

Australia/US Trade Agreement

0

0

0

0

0

Government/industry consultations

0

0

0

0

0

Inter-Departmental links

0

0

0

0

0

Attracting investment

0

0

0

0

0

Expanding Australia's E-Commerce trade

0

0

0

0

0

Education exports - New Horizo ns

0

8.0

8.0

8.0

24.0

National trade report

0

0

0

0

0

Additional funding to DFAT and Austrade

0

0

9.0

9.0

18.0

Bureau of International Economics

0

0

0

0

0

Export Access Scheme

0

0

0

0

0

Export Finance Insurance Corporation

0

0

0

0

0

TOTAL

0

20.0

112.0

128.0

260.0

 

Authorised by Gary Gray, 19 National Circuit, Barton ACT 2600