Originally published by Lloyds List - June 2016
The 2016 Federal election campaign has been chugging along for several weeks now with most of the focus given over to domestic economic policy issues such as tax and national debt. While this is no doubt important, many in industry have been keen to hear from the major parties on their trade and investment policies, especially as the Federal budget did not contain significant new initiatives.
Although the Coalition trade policy had been out for a little while, the ALP trade policy was only released recently (8 June) at the same time as the Trade and Investment Minister and the Shadow Trade and Investment Minister appeared at an election event presented by the Export Council of Australia (ECA) and the Australian Chamber of Commerce and Industry sponsored by the ANZ Bank. The event was attended by over 200 guests and was broadcasted live by Sky TV and the ECA. The ECA media release at http://www.export.org.au/media-centre/ provides a summary of the event.
Given the precedence which trade policy has taken in the public domain both in Australia and overseas (thank you Mr "No trade for you" Trump) I thought it may be useful to consider some of the highlights of both parties policies – as well as a little X factor (more on that later).
The coalition agenda
The completion and implementation of the 3 North Asia FTAs, the negotiation of the TPP, and support of recent WTO initiatives in the Trade Facilitation Agreement, the Agreements to reduce tariffs on Information Technology and Environmental goods and the Agreement to eliminate subsidies on agricultural goods had certainly given the Government significant credit in the trade policy space. As a result we looked with some excitement for the release of the coalition trade policy agenda.
As released some of the highlight policies were:
- To establish a "single window" for export documentation
- Concluding current FTA negotiations (RCEP, India, Indonesia, GCC ad Pacer Plus)
- Initiating new FTA negotiations with the EU
- Investigating possible FTAs with Canada, Mexico and Colombia among others
- Looking to existing Trade and investment Agreements to improve opportunities and address trade barriers which arise
- Working through APEC, the G20, the OECD and the WTO to create more open international markets for trade and investment
- More education on FTAs and other trade opportunities through FTA seminars and expansion of the current online portal
- Establishing a Professional Services Mutual Recognition Unit and leading negotiations on the WTO Trade in Services Agreement to assist with advancing services exports (currently 70% of GDP but only 21% of exports)
- Taking steps to "reinvigorate" the WTO.
Much of this is general and details of the means to advance these aims are not provided. The focus on exports only for the single – window is a little disappointing (albeit predictable) as is the absence of direct focus on means to address Non – Tariff Measures (TMS) which represent an increasing problem to trade. It is also difficult to foresee how Australia can unilaterally reinvigorate the WTO without help from other counties or significant additional investment in funding and other resources to DFAT.
The ALP agenda
Again adopting the mantra of "generating jobs through trade and investment" the ALP policy contains some different emphases,
- Addressing barriers to exports by adopting a regular "Trade Barriers Analysis" modelled on that conducted by the USTR as a stocktake on opportunities and barriers and taking action on those barriers.
- Working with trading partners to streamline and harmonise RoO under existing FTAs and for use in future FTAs
- Working with Asian trading partners to implement arrangements under the WTO Trade Facilitation Agreement. This would include providing assistance for these reforms in developing countries by way of "aid for trade"
- A revised focus on multilateral trading outcomes through the WTO
- Encourage investment in agriculture and agribusiness by removing perceived restrictive screening thresholds. This would increase the FIRB screening threshold to $50M for agricultural land acquisition, remove the agribusiness screening category and review the screening of investments in non – sensitive sectors by many Asian investors
- Adopting measures to improve public support for the trade agenda with more transparency including the disclosure of goals of FTAs before negotiations commence, providing public updates during engagement, having more briefings, releasing draft texts where feasible and tabling proposed FTAs before signing
- Requesting JSCOT to inquire and repot on the FTA negotiation process
- "Protecting Australian sovereignty" by refusing to include ISDS provisions in new FTAs and seeking to have them removed from current FTAs where possible or, if not, to update and reform the provisions with modern safeguard provisions.
- Including labour market safeguards in FTAs by way of requiring labour market testing in the first instance before recourse to overseas skilled labour.
The review on NTMs and RoOs are very welcome but there may be some concerns on the ability to implement some of these initiatives as they will depend heavily on trading partners under current and proposed FTAs.
The X factor
Both parties were at pains to emphasise the importance of taking steps to engage the public on the merits of the trade and investment agenda to address some perceived protectionist commentary from many in the population. That approach seems to have been embraced by Senator Xenophon in recent times who has proposed that Australia withdraw from the TPP, the WTO Agreement on Government Procurement as well as other WTO initiatives. This is not entirely surprising given his desire to support particular local industries and given earlier comments by the Senator in other forums. For example I once appeared before the Senator when he proposed legislation to amend the anti – dumping provisions in a way inconsistent to the WTO Agreement – when told that he then asked why we had to observe WTO Agreements in any event.
Not long now!
In a few weeks we will know the election result and will see how many of these trade policies are actually implemented.