Trade and International Affairs


Recommendation Summary

  • Release timely data on both importers and exporters to improve the understanding of the characteristics of these companies and to aid policy-making and support services
  • Work with private sector representative bodies such as CCIQ to deliver improved services to exporters in a collaborative approach to improve the reach of initiatives and reduce the risk that Government actions “crowd out” private sector led initiatives.
  • Continue to collaborate with industry representatives, such as the CCIQ and its members, to develop and deliver simple resources for SMEs to capitalise on Free Trade Agreements. These resources should be easily accessible to the public and reduce Non-Tariff Barriers to international trade.  Accelerate work on the “Single Window” by incorporating private sector initiatives in trade modernisation.
  • Undertake economic assessment of our existing and proposed trade agreements to ensure they are delivering (or likely to deliver) economic benefits to Australia.
  • Undertake a “stocktake” to consider the value of maintaining bilateral preferential trade agreements where the same nations are party to wider regional agreements.
  • Continue to identify and seek to address non-tariff barriers that adversely affect trade, both domestic and international.
  • Significantly modify the Trusted Trader programme to embrace the concept of “innocent until proven guilty” through a demerits style application for non-compliance.  Restore the Export Market Development Grants scheme to $200 million, and streamline and improve scheme administration.
  • Restore Tradestart to the previous funding and delivery models
  • Cap 2019-20 aid funding commitments, inclusive of climate change funding, at $5 billion. Beyond that, defer the trajectory in increased Aid until such time as the budget provides a secure and ongoing surplus.
  • Ensure the financial resources underpinning the Anti-Dumping Commission reflect the reasonable and justifiable workload of the commission, and discourage investigation of frivolous matters or cases that are unlikely to succeed.

CCIQ is a champion of free trade and investment and recognises the importance of getting more Australian businesses internationally engaged. We support the Government’s efforts to assist the development of Australian international trade through securing improvements through the multiple fora of unilateral reform, multilateral agreements, regional and bilateral trade and investment treaties.

The benefits of free trade to Australian businesses are about more than just increased exports. While boosting exports increases income, importing attractively priced goods, services and IP benefits Australian businesses by lowering costs. This can boost profitability or increase production by improving competiveness and opportunities to participate in the production of different goods and services through ‘global supply chains’. Free flow of investment both in and out of Australia also provides access to new capital for domestic businesses, income generating opportunities overseas, and cutting edge business practices.

1. The importance of trade data

The ABS details the Characteristics of Australian Exporters, with 2016-17 the latest year available:

  • The number of exporters of goods in 2016-17 was 51,992, an increase of 1.4% from 2015- 16.
  • The number of goods exporters remained relatively stable across all industries, with small declines in agriculture, fisheries and forestry (4%) and construction (3%) offset by a small rise in the number of wholesale trade (3.2%) and retail trade (1.8%) exporters.
  • The total value of goods exports increased to $291 billion in 2016-17, up 19% from 2015- 16. The increase was driven mainly by an increase in good exports by the mining industry (up $39 billion or 35%) and agriculture fishing and forestry (up $3.4 billion or 20%).

Unfortunately, the same level of statistics are not available for Australian importers. The only figures available relate to 2003-4 4 . This report noted:

The number of goods importers was estimated to be 60,661 in 2003-04, an increase of 3,328 (6%). The increase was mostly in importers in the $10,000 and less than $100,000 category, up by 2,209 (7%). The number of service importers fell by 91 to 2,150. Of the businesses engaged in service imports, 1,179 (55%) were also goods importers. Adjusting for the duplication, the total number of importers was derived at 61,632.

We understand that the Department of Home Affairs collects import information and it is assumed that data exists but it appears that it is not publicly released.

Australia should be seeking to expand the number of internationally engaged companies, however, it is essential that we have an informed basis for policy development.

Policy Recommendation: 

  • Release timely data on both importers and exporters to improve the understanding of the characteristics of these companies and to aid policy-making and support services.

2. Make trade agreements more accessible to business

CCIQ has welcomed the investment by the Government in recent years, of programmes committed to helping Australian business better understand Trade Agreements. Partly this will be used to support outreach seminars advising of the availability of each of the three North Asian deals, along with support for the development of an Australian online platform/portal that will enable the FTA content to be more accessible to Business. Alongside these developments however we would welcome a closer ongoing relationship between the Australian Chamber, our members and the Government agencies in this field, to support the creation of an internationally engaged commercial sector and to avoid any crowding out of private sector initiatives.

Policy Recommendation:

  • Work with private sector representative bodies such as the CCIQ and our extensive network of business organisations to deliver improved services to exporters in a collaborative approach to improve the reach of initiatives and reduce the risk that Government actions “crowd out” private sector led initiatives.

3. Increased promotion of government-developed tools

The efforts by the Federal Government to support increased understanding of Preferential Trade Agreement content are to be commended. The Department of Foreign Affairs and Trade ‘FTA Portal’ is a good example of collaboration between Government and Industry to develop a widely available tool that improves the accessibility of the PTA benefits to businesses. The success of this tool indicates that improving education (particularly amongst SMEs) with respect to PTA’s, is a viable method of reducing Non-Tariff Barriers.

We are heartened by the effort of the Federal Government to provide $10.5 million in 2018-19 to the Dept. of Home Affairs to ‘transform and modernise Australia’s international trade supply chain to deliver more efficient and secure trade processing.’ This will be dedicated in large part to the ‘completion of an initial business case to provide a ‘single window’ for international trade documentation, creating a system that is seamless, digital, automated and user-friendly.’5 However progress on the “Single Window” has been slow.

On the other hand, industry isn’t waiting for the Government. The Australian Chamber and partners PwC and Port of Brisbane, have developed a “Trade Community System” through the use of Blockchain Technology. When fully implemented, this will save on average about $450 per container, or at least $1 billion annually to the Australian economy.

However, it is important that the ‘single-window’ approach is developed with the assistance of peak bodies and industry members, so as to ensure that the functional aspects of the program leverage industry best practice and interoperability.

We would welcome further collaboration to develop and promote these simple tools for SMEs wishing to engage in international trade.

Policy Recommendation: 

  • Continue to collaborate with industry representatives, such as CCIQ and its members, to develop and deliver simple resources for SMEs to capitalise on Free Trade Agreements. These resources should be easily accessible to the public and reduce NonTariff Barriers to international trade.
  • Accelerate work on the “Single Window” by incorporating private sector initiatives in trade modernisation.

4. Need for objective, independent economic analysis

The rationale for trade agreements is to generate net economic benefits and an increase in aggregate trade flows between countries. Objective economic analysis, independent of the negotiating parties, needs to be conducted to provide confidence to both the Parliament and the public that the range of agreements in place and being pursued, are of benefit to the Australian economy.

CCIQ is a staunch advocate for free trade and a strong supporter of the efforts of successive Coalition and Labor governments to liberalise trade and investment and open our economy. We have consistently raised concerns about aspects of Australia’s treaty making processes and have monitored the response of government to recommendations from recent treaty inquiries. Notwithstanding significant interest from business, these processes are yet to be reformed in a way that meets these concerns. The private sector, the main provider and creator of jobs in Australia, and a tax payer, wants to be assured that taxpayers’ monies are spent wisely in the pursuit of trade agreements.

Policy Recommendation: 

  • Undertake economic assessment6 of our existing and proposed trade agreements to ensure they are delivering (or likely to deliver) economic benefits to Australia.
  • Undertake a “stocktake” of the value of maintaining bilateral preferential trade agreements where the same nations are party to wider regional agreements.

5. Non-Tariff Barriers

Despite the preferentially reduced tariffs for qualifying goods in certain markets under various Preferential Trade Agreements, increasingly we are hearing from members that non-tariff barriers (NTBs) are becoming a greater concern.

The B20 often raises concerns with the G20 about the global rise in NTBs, - Of particular concern to the business community are non-tariff barriers related to localisation measures, state-owned enterprises (SOEs) and public procurement.

NTBs that are preventing many businesses from accessing export opportunities include:

  • Challenges identifying and developing relationships with distributors and customers.
  • Difficulties navigating local languages, cultures, customs and business practices.
  • Costs and uncertainty around the protection of intellectual property.
  • Difficulties complying with local laws and regulation (in particular labour and tax laws).
  • Restrictions or delays in the repatriation of funds to Australia.
  • Resource intensive in-country product testing and validation requirements, some of which may be inconsistent with Australian requirements and practices.

Export quotas as well as sanitary and phytosanitary (SPS) measures also pose restrictions on trade, particularly for exports of agri-food products. These measures can significantly limit market access, regardless of whether an FTA is in place.

It is of considerable concern that nations that espouse “free trade” and sign agreements to this effect, also seek to create and implement new, novel and often much less transparent protectionist measures to support their local industries.

Policy Recommendation: 

  • Continue to identify and seek to address non-tariff barriers that adversely affect trade, both domestic and international.

6. Trusted Trader Scheme

The Department of Home Affairs is implementing a “Trusted Trader” (TT) scheme and currently around 150 companies have become “Trusted Traders”. The Department seeks to dramatically increase this level of participation.

CCIQ supports the intent of this scheme but we question the design as the scheme and the benefits on offer. In relation to this we make the following points:

  • While “trusted” traders may be part of this scheme, it automatically places those not in the scheme in the “untrusted” group, even though they don’t pose any particular risks. We are hearing anecdotally that international buying companies are beginning to enforce TT compliance as a requirement for commercial dealings. This means it is becoming a barrier to trade.
  • The scheme adds costs and compliance to companies that prior to the scheme, in general, already complied in terms of safety and regulatory compliance. Hence, it adds costs and red tape to otherwise compliant companies.
  • We have argued that the design would be better if it assumed compliance for all companies unless they demonstrate non-compliance. That is, a demerits based scheme rather than a merits based scheme. Such a scheme in other places means points are removed from full compliance based on indiscretions rather than needing to demonstrate compliance in the first instance. Such a scheme would mean all traders were “trusted” until proven otherwise – an approach consistent with common law.
  • We have also offered that the existing Certificate of Origin registration process and engagement, provides the basis for the “know your client” components necessary to create the foundations for such a scheme. We would be delighted to work with the Department to improve the scheme – particularly for SMEs.

Policy Recommendation

  • Significantly modify the Trusted Trader programme to embrace the concept of “innocent until proven guilty” through a demerits style application for non-compliance.

7. Competing in developing markets

Increasingly global trade is being dominated by global supply chains. That is products are “made in the world” not in one country or another. Similarly services are increasingly delivered through cross border supply and the internet. Australia is a long way from major markets and those we regard as in our neighbourhood are also being targeted by other competitors. Australia cannot rely on reputation alone as our key competitive characteristic. We must continue to strive to reduce costs and increase innovation in order to maintain and grow our globally competitive position.

The Government needs to seriously commit to deep engagement in global supply chains and develop an appropriate programme to assist business to engage in them. The Australian Chamber, with its unparalleled international network, would be a willing partner in such an initiative.

The Export Market Development Grants (EMDG) scheme, administered by Austrade, partly supports export promotion expenses of eligible enterprises in order to boost exports of Australian produced goods and services. In recent years the EMDG scheme funding has fluctuated between $125 million and $200 million. The 2015 review of the EMDG found that for every one dollar invested, seven dollars were returned to Australia. In our efforts to drive growth and jobs, such a scheme cannot be underfunded.

Along similar lines, TradeStart has become an essential front line delivery program for Austrade which engages the SME exporter and delivers substantial contribution for Australia. Continued underfunding to the TradeStart budget and limitations on the ability to deliver services to emerging exporters has seriously diluted the ability to grow our SME export community and previous funding and delivery models be re-instated.

Policy Recommendation:

  • Restore the Export Market Development Grants scheme to $200 million, and streamline and improve scheme administration.

Policy Recommendation:

  • Restore Tradestart to the previous funding and delivery models.

8. Official Development Aid

CCIQ is supportive of Aid for Trade approaches where aid investments assist to improve trade facilitation and market access for Australian products and services. The principle means for alleviating poverty is economic development.

Australia had previously committed under the Millennium Development Goals to provide 0.5% of GDP in Official Development Aid. While this is a worthy goal, in the context of improving the federal budget position, Australia needs to retain a prudent approach to reaching this goal.

Australia has also continued to make commitments for climate change financing in the most recent international climate change negotiations. CCIQ supports all forms of international investment in climate change and aid being considered in a combined package in reaching our commitment of 0.5% of GDP in aid funding.

Policy Recommendation:

  • Cap 2019-20 aid funding commitments, inclusive of climate change funding, at $5 billion. Beyond that, defer the trajectory in increased aid until such time as the budget provides a secure and ongoing surplus.

9. Anti-Dumping Commission

Anti-dumping remedies, and some other appropriate trade remedies, are allowable under our WTO commitments and form an important avenue to address predatory pricing from international competitors, but we cannot allow our anti-dumping system to become a vector for protectionism.

It is important that our Anti-Dumping Commission operates in a way that embraces the stimulatory effects of healthy international competition while providing appropriate assistance to those impacted by predatory behaviour.

There have been increasing calls for greater activity (and therefore increased budget) in the actions and investigations conducted by the Anti-Dumping Commission. The actions of the ADC should be supported by a national interest test that assesses the value of any action to the entire economy and not just the directly impacted companies or industry.

Policy Recommendation: 

  • Ensure the financial resources underpinning the Anti-Dumping Commission reflect the reasonable and justifiable workload of the commission, and discourage investigation of frivolous matters or cases that are unlikely to succeed.