APEC vital for Australia: Vaile: the Federal Minister for Trade, Mark Vaile, outlines the Government's views on regional trade policy and what the focus areas will be moving into the future - Cover Story - Brief Article - Statistical Data Included

Business Asia, Oct, 2001

The Federal Minister for trade, Mark Vaile, outlines the government's views on regional trade policy and what the focus areas will be moving into the future.

ECONOMIC ENGAGEMENT with South-East Asia remains one of the Government's highest trade policy priorities.

Australia's approach aims to bolster our trade and investment presence and to secure the best possible access and conditions for exporters. While the Government is convinced that the greatest progress towards trade liberalisation will be achieved through multilateral negotiations, and a new WTO round remains Australia's highest priority, the Government's trade policy demonstrates how regional and bilateral initiatives can complement these efforts.

APEC remains a key element of Australia's regional trade policy. In 2000, nearly three quarters of Australia's merchandise exports -- worth $82 billion -- went to other APEC economies, a 29 per cent increase over the previous year. APEC's average tariffs have declined by one-third in the last five years, and more than two-thirds of imports in APEC now take place at very low tariff levels of five per cent or less. APEC is also undertaking "nuts and bolts" work on facilitating trade -- producing real cost savings for business in areas such as customs, mutual recognition of standards and business mobility.

The current economic slowdown underlines the importance of continuing APEC's work towards open economies and economic reform, including the launch of a new round of WTO negotiations this year in Doha. We will emphasise this message at the Ministerial and Leaders' meetings to be held in Shanghai in October.

Ensuring continued prosperity in the region requires parallel reform and capacity building across a range of areas. With this in mind, Australia will also seek a strong and visionary commitment based on four parallel "pathways to prosperity" -- strong trading and investment relations, strong governance, strong markets and strong communities -- to sustain APEC's forward momentum on economic liberalisation.

Australia and New Zealand are building on years of practical business cooperation to advance economic integration with South-East Asia.

Last year the Trade Ministers of the 10 ASEAN countries, along with Australia and New Zealand, agreed to work towards a Closer Economic Partnership (CEP). In Hanoi on 16 September, we endorsed a framework for the CEP.

We also agreed to develop an instrument to formalise the framework to be signed at our next meeting in Brunei in September 2002. Although not a preferential free trade agreement, the decision to formalise the CEP is a major step forward in our relations with South-East Asia. For the first time, Australia will have a formal mechanism to address all issues affecting regional trade and investment, including in the longer term trade liberalisation. To enhance business involvement, we also agreed to establish a high level AFTA-CER business advisory council.

The Australian Government is also open to concluding regional or bilateral free trade agreements if they would be able to deliver substantial gains to Australia that could not be achieved in a similar timeframe elsewhere. The decision late last year to enter into FTA negotiations with Singapore was made in this context.

The agreement, which will be comprehensive in scope -- covering goods, services and investment -- should provide a stronger and more secure framework for doing business, including through e-commerce. While actual tariffs in both countries are already relatively low, Australia seeks to improve access to major services sectors in Singapore, including legal, financial and telecommunications services.

Australia has also agreed to undertake a joint scoping study with the Government of Thailand on ways to maximise the potential economic and trade benefits of a bilateral free trade agreement.

In addition, we are discussing the possibility of an FTA with the United States. The US is a major market for both South-East Asia and Australia, and progress on this front would provide an important boost to our broader regional trade objectives.

Our largest export destination, Japan, and our third largest, South Korea, have structural issues preventing them negotiating an FTA with Australia. The Coalition has signalled its intention to pursue with both countries Trade and Investment Facilitation Agreements (TIFAs).

China's accession to the WTO has been one of the most important trade issues in recent times. The Coalition has led international efforts to see China become a member of the global trading system, with all the benefits and responsibilities that implies. China, Australia's third largest trading partner and a powerhouse for economic growth in the Asia Pacific, should be joining the WTO later this year. After significant negotiation, Taiwan, another significant trading partner, should also join the WTO before the end of the year.

Further to all this work at global, regional and bilateral levels, this Government will continue to be open to considering bilateral arrangements with other regional countries should there be a reciprocal interest.