To achieve the White Paper’s ambition for Australia’s place in the “Asian Century”, our integration with Asia and “open(ness) to the world hinges on our capacity to participate effectively in trade, both within the Asia region and generally with the other nations of the world”.
The White Paper sets out the Government’s support for what is, in effect, an Asia-Pacific free trade zone, starting initially with individual free trade agreements with key Asian trading partners and moving ultimately to a regional free trade agreement.
To reach that goal the paper lists a number of “national objectives”:
- A more open Australian economy fully integrated with the Asian economies as a result of improvements in “our domestic arrangements”, making the flow of goods and services, capital, ideas and people easier. The White Paper targets one third of Australia’s GDP as being the outcome of trade links in Asia by 2025 (an increase over our performance in 2011 when those trade links represented 25% of the then GDP. While the percentage point increase may at first blush seem modest, its significance should be measured against the likely growth in Australia’s GDP between 2011 and 2025). This increase is to be achieved by:
- the Government having regional economic integration “at the centre of (its) decision-making processes”;
- continuing to reduce tariffs;removing those regulatory impediments to business that are seen to be unnecessary;
- developing a border management strategy which promotes the cross-border flow of goods and services based on “an intelligence-led, risk-based approach” to the international movement of people and commodities;supporting a migration and travel policy with a regulatory regime which is both consistent and fair, while at the same time effectively managing risk;
- continuing to welcome foreign investment where it is not inconsistent with the national interest and increasing the transparency of the review process;
- increasing the extent and quality of the collaboration between business and government; and
- working on a regional basis to increase openness and reduce barriers to effective integration, being conscious that, while Australia “will continue to work with our neighbours to break down trade and investment barriers and to build a deeper knowledge and understanding of each other’s arrangements”, nevertheless “the risks that can emerge from greater economic and financial integration, such as greater exposure to negative events in other countries, must be carefully managed.”
To help manage that risk the Government will support “the evolution of stable, efficient and well-regulated financial markets. Greater integration requires strong global and regional institutions, with an emphasis on inclusive, rules-based systems.”
- Making the Australian economy more open and integrated with Asia, through a combination of regional agreements, more closely aligned and consistent economic regulations, greater infrastructure connectivity and a better understanding of each country’s own arrangements. As a result, it is thought that the flow of goods, services, capital, ideas and people will be easier and Australian businesses and investors will have greater access to opportunities in Asia.
- Resulting in part from achieving objectives 1 and 2, the international recognition of Australia’s businesses as being excellent in their respective fields and successful in their operations in Asian markets.
The success of this strategy depends, as the Government itself recognises, on inter-governmental collaboration within the region, which “will be vital to securing greater accord between our arrangements and those of our neighbours.”
To that extent, success will depend not only on the Government’s ability to affect the identified domestic changes to Australia’s regulatory regime, but also on the nature and extent of the corresponding actions required of other governments in the region.
Enthusiasm for change will no doubt vary, and much will depend on the ability of the proposal’s proponents (Australia and like-minded Asian countries) to persuade others of the merits and desirability of regional free trade.
Meanwhile, it would be prudent to maintain (and grow) the volume of goods and services traded with our traditional markets as the Government’s vision as set out in the White Paper is to say the least ambitious and lacking in detail on the implementation strategy. It may yet prove to be unattainable.
How this impacts on your business
It’s early days in the journey to regional free trade as envisaged in the White Paper. Business can best position itself by identifying particular impediments to the export of their goods and services, making those impediments known to the Government directly or through industry bodies and taking steps to familiarise itself with both the unique features relevant to Asian markets and the “rules of engagement” when doing business in Asia - both cultural and regulatory.