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Australia leads call for commitments on freer freight movement.

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Media release

Monday, 5 April 2004 - MVT21/2004

Australia Leads Call For Commitments On Freer Freight Movement

Australia has launched an initiative in the World Trade Organisation urging countries to make legally-binding commitments on a ‘whole-of-supply-chain' view of the movement of freight, Trade Minister Mark Vaile announced today.

“Whether an Australian business is trying to get into overseas markets for fresh agricultural produce or provides inputs to a ‘just-in-time' production process, they need their product to arrive at the other end at the right time, in the right condition, and at the right price,” Mr Vaile said.

“Trade commitments in freight logistics create a drive toward efficient supply chains and improve market access for Australian exporters in the same way as does reducing tariffs or expanding quotas.”

Freight logistics services include the broad range of activities involved in supply chains, such as freight forwarding, cargo handling, storage, organisational activities, and transport, across the various transport modes. According to the World Bank, logistics costs are estimated to reach up to 20 per cent of total production costs in developed countries, while freight costs can account for 40 per cent of export values for certain landlocked developing countries. The value of taking a ‘whole-of-supply-chain' approach has been recognised by Hong Kong, Nicaragua, Switzerland, and Taiwan who have signed onto the Australian initiative.

“A focus on specific transport modes or on particular facilities is no longer enough as a problem at one point can break the supply chain and mean lost market opportunities,” Mr Vaile said.

“Australia wants better access for our goods in international markets. The freight logistics initiative is a logical extension of the Australian Government and industry-endorsed Australian Logistics Industry Strategy, which seeks to improve the global competitiveness of the Australian freight transport and logistics industry.”

Supported by Australian industry, the freight logistics initiative launched in Geneva Saturday morning Australian time advocates the negotiation of legally-binding commitments under the WTO's General Agreement on Trade in Services (GATS).

Services trade negotiations are taking place as part of the Doha Round of WTO trade negotiations, along with negotiations on agriculture and industrial goods.

“The Government sees market access for international services trade as a critical source of growth for Australian services industries which account for four out of every five Australian jobs,” Mr Vaile said.

The Australian freight logistics proposal is available on the DFAT website Trade in services

Contact: Matthew Doman on 02 6277 7420 Nicole Guihot (Departmental) 02 6261 1555