Bruce Baird (Cook, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee’s report entitled Expanding Australia’s trade and investment relations with North Africa.

Ordered that the report be made a parliamentary paper.

On behalf of the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I wish to make some brief comments on the committee’s report Expanding Australia’s trade and investment relations with North Africa. The countries of North Africa represent a market nearly eight times that of Australia. Australia has yet to fully engage with the 155 million people living in Algeria, Egypt, Libya, Morocco and Tunisia. In May 2005, the Minister for Trade asked the committee to examine our trade and investment relations with North Africa and the likely future trends in these relations. The committee was also charged with assessing the role of the government and its agencies in maximising opportunities as they emerge in the region.

In addition to holding public hearings and receiving submissions, the committee visited Algeria, Egypt, Libya and Morocco to review trade and investment opportunities for Australia in person. Two members of the committee also visited Tunisia to attend the World Summit on the Information Society. During visits to Algeria, Egypt, Libya and Morocco the committee met with senior government figures, the parliaments, government agencies and departments, and importers. The contacts made included meetings with the Prime Minister of Morocco and several senior ministers in each of the cities visited. In Morocco, Algeria and Libya there was considerable television and media coverage of our visit. The response to the committee’s visit was positive and very encouraging.

We looked to see if there were any impediments to trade in this region and what could be done to capitalise on the opportunities. Although the countries are different, they share some common characteristics which are relevant to Australia’s commercial interests. GDP growth is strong in all five nations. In the resource-rich countries of Libya and Algeria, further strong growth based on escalating oil prices can be expected. Each of the countries is going through some degree of market liberalisation and reduction in taxes and tariffs. The privatisation of companies could be seen across the board.

In the region, major infrastructure projects for roads, ports, electricity, water supply, airports and agriculture represent opportunities for Australian companies. Increased consumer demand also means further opportunities in the market for Australia. Currently, the most promising are:

• wheat and agricultural products;
• livestock and meat products, particularly lamb;
• mining and agricultural equipment;
• consultancy in a wide range of areas;
• tourism training; and
• education, particularly for postgraduate students.

Of course, the biggest potential remains in the oil and gas fields, especially those of Algeria and Libya. Australia’s biggest oil explorers continue to bid for major projects in these countries, with BHP Billiton being successful in Algeria and Woodside being successful in Libya. Iron ore production as well as aluminium smelting is also possible in Libya, with BHP Billiton interests. An Australian manganese smelter is being assessed for its possibilities in Egypt.

In summary, the potential for Australia in North Africa is significant because of the opportunities in resource development, because of the GDP growth rates of the big countries and because there is export potential to Europe through the countries where trade conventions with the EU exist. In the light of its on-the-spot reconnaissance of the region, the numerous submissions it received and the evidence from public hearings, the committee concluded that Australia should ensure that appropriate resources are allocated to these markets to encourage Australia’s access and export growth.

To pursue these aims, the committee has recommended that, at the government-to-government level, the Australian government should seek to improve access for Australian exports through negotiating lower tariffs on a bilateral basis, particularly in agribusiness. It should also initiate or continue ministerial discussions with North African trading partners to address technical access issues, particularly harmonising customs and standards requirements.

Following discussions in North Africa about visa arrangements for entry to Australia, the committee recommends that there should also be closer focus on expediting visa-processing requirements. Specifically, the Department of Immigration and Multicultural Affairs should review its visa-processing arrangements for North Africa as a priority and also consider reviewing the assessment processes for North African students sponsored by these governments.

I would like to particularly thank those people from the Department of Foreign Affairs and Trade who assisted this visit and especially Dr Stephen Dyer, who has recently announced his intention to retire from his role as secretary of this committee. He has done an outstanding job, particularly as he did not go on the visit but took up the reins in assisting to write the whole report and the inquiry report when the formal part was done by somebody else. So particular thanks go to him for his outstanding assistance and his great role with the committee, and I wish him all the best for his future. (Time expired)

Geoff Prosser (Forrest, Liberal Party) Share this | Link to this | Hansard source

As a member of the Trade Subcommittee I was one of the delegates, along with my committee colleagues, who visited the countries of Algeria, Egypt, Libya, Tunisia and Morocco during November 2005 to review the trading and investment opportunities for Australian exporters. Egypt, Morocco and Tunisia are members of the World Trade Organisation, with Algeria and Libya expecting to join shortly. Most countries have free trade agreements with the European Union—that is, Italy, Germany, France and Britain—as they are keen to take advantage of their proximity and historical ties with Europe. Most also have or are negotiating free trade agreements with the USA.

There is no doubt that the oil, gas and agribusiness sectors are Australia’s dominant investments in the region. However, there is significant opportunity to develop Australia’s exports in other areas and commodities by way of value added consumer goods, manufactured products as well as expert consultancy services. Export opportunities exist in areas such as supplying mining and drilling equipment, farming equipment telecommunications infrastructure and equipment, banking systems and information technology development and in services such as hotel management and catering; training in tourism; civil engineering; high-tech goods and services; and consultancy in a wide range of areas. Last but not least is the opportunity to expand Australian education exports. More needs to be done to attract students to Australia, as most students currently travel to France or the USA.

North Africa is a very special part of the world and its infrastructure in some countries could certainly be enhanced by Australian commercial activities exporting to the region. The economies of Algeria and Libya are dominated by the oil and gas sectors, in which are involved BHP Billiton and Woodside Energy, with its onshore and offshore exploration interests. Santos also have a strong presence in North Africa and are clearly doing very well. These three companies have been active in the market, with BHP Billiton being the most successful in winning contracts and Woodside and its partners being the second largest holders of exploration acreage in Libya. I commend all three companies for their foresight.

Algeria is the principal destination for Australian lamb and mutton, and our main competitors are the New Zealanders. Algeria would welcome Australian assistance in its infrastructure development for aquaculture and is also in need of assistance in infrastructure projects for roads, ports, airports, railways, electricity, water and housing. BHP has a major investment in Algeria. Given the opportunities for Australian companies investing in North African countries, they should use BHP’s presence as a staging post for investment export opportunities into Europe. Because of the greater sophistication of the Algerian market, and its strong ties to Europe, the committee recommends that high priority be given to the establishment of a consulate-general in Algiers.

Although Australian wheat exporters are faced with competition from Russia, which has the major share of the Egyptian wheat market, there is potential for Australian companies to supply expertise in the sectors of scientific and technical urban planning, landscape architecture, construction services, air transport and management consulting. With higher incomes and more spending power, developing purchasing habits offer opportunities in the food manufacturing area. Health and medical opportunities also exist for Australian companies to supply Libya and Egypt.

Egypt is undergoing extensive modernisation of its telecommunications infrastructure and there are emerging opportunities for information and communication technologies. Impediments are not necessarily insurmountable to the region, but perhaps the biggest impediment for Australian exporters is the distance to markets. North African countries look to France and other European countries for trade opportunities and currently enjoy more favourable tariffs. Australia’s attempts to enter new markets and existing strongholds face competition from the European Union and the USA, due partly to their domestic production subsidies and historical links with North Africa.

I support the recommendation for improved access for Australian exports to be sought by negotiating lower tariffs on a bilateral basis, particularly in agribusiness. Australia does have a good presence in North Africa, and opportunities certainly exist to grow more export markets. Once Australian export markets develop then greater opportunities for future foreign direct investment will prevail. BHP, Woodside and Santos are good examples of this. I commend the report to the House. (Time expired)