Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

by leave—I have the pleasure to make a ministerial statement to update the House on developments with the Asia-Pacific Economic Cooperation forum (APEC) and particularly on an important meeting I attended on 31 May and 1 June—the APEC Ministers for Trade Meeting in Arequipa, Peru.

APEC is the premier forum for promoting trade and investment in the Asia-Pacific. Let us not forget, Mr Speaker, that the genesis of the APEC idea was the Australian Labor government under then Prime Minister Bob Hawke. APEC started right here, in Canberra, with a ministerial meeting in 1989. Reflecting the initiative of Prime Minister Keating, since 1993 APEC has also included an annual leaders-level meeting, which allows the leaders from around the region to hold informal discussions on important trade and economic developments as well as the broader set of regional and international issues. Importantly, APEC leaders have played a key role in responding to issues such as the Asian financial crisis, SARS, avian influenza, the Indian Ocean tsunami and North Korea.

The Rudd government will work to re-energise APEC because we are committed to it. We initiated it. We believe in it. We support it. We will continue to shape its thinking and its direction. We understand its strategic importance for prosecuting Australia’s interests as well as those of our regional partners.

The three areas of APEC’s focus—trade and investment liberalisation, business facilitation, and economic and technical cooperation—form the basis of its work and help APEC pursue the Bogor Goals of free and open trade and investment set out by APEC leaders in 1994. It was a commitment in 1994 that built off the Uruguay Round—a point I referred to yesterday.

APEC has also been instrumental not just in supporting the multilateral trade negotiations in the World Trade Organisation (WTO) but indeed in enhancing them. That is what the Bogor Declaration was—it was to say that we have not completed the argument with the Uruguay Round; we will use regional architecture to further enhance multilateral objectives in the region.

Whilst APEC did support efforts to bring the Uruguay Round to its conclusion in 1994 and continues to do that with Doha, in its day, when Labor was in office, we used it to enhance the WTO Round. We want to do that again in the expectation that we can conclude successfully the Doha Round. From the point of view again of Labor governments initiating the important reform agendas when it comes to trade and engaging the global community, it would be great to have an outcome with Doha that would bookend the two major multilateral negotiating efforts over the last two decades.

APEC is a leader in building a better environment for business and emphasises private sector participation in its activities. The APEC Business Advisory Council, which is a high-level permanent forum of regional business leaders, advises APEC leaders directly on private sector priorities and is a key part of APEC’s architecture.

Our membership of APEC expands our focus beyond the domestic market and provides tremendous opportunities to create jobs and income. Australian business has access to over 2.5 billion consumers and around 60 per cent of global income in 21 APEC member economies. These economies also purchase more than three-quarters of Australia’s exports. In 2007 Australia’s trade with APEC economies comprised almost 70 per cent of our total two-way trade. Eight of our top 10 export markets are APEC economies. So APEC does matter to this country.

By progressively reducing tariffs and other barriers to trade, APEC members’ economies have become more efficient and exports have expanded dramatically. APEC has been a driving force in the reduction of tariffs in the region from an average of 17 per cent in 1989 to around five per cent today. In the last decade APEC exports have more than doubled to nearly A$7 trillion, and APEC economies have generated 195 million new jobs.

APEC has also helped Australia’s neighbours in reducing poverty by a third in some APEC economies. Higher incomes have enabled people to have better access to safer drinking water and facilitated increased expenditure on health and education. These improving social indicators promote regional stability and generate more stable and larger markets for the goods and services Australia can provide.

The Australian Bureau of Agricultural and Resource Economics commodity forecasts released yesterday highlighted in clear terms that Australia continues to benefit from a resources boom of historic proportions. ABARE forecasts that Australia’s minerals and energy exports will grow from $120 billion in 2007-08 to $178 billion in 2008-09. Further price increases are expected for a range of Australian minerals, energy and farm exports. These figures highlight the challenge before us—to build Australia’s competitiveness and productivity in a way that sustains us beyond this resources boom.

Unlike the previous government, the Rudd government will not squander the opportunity provided by this resources boom. Rather, we will use it to shift the Australian economy onto a more sustainable, longer term footing. That means using our resources boom as a basis for building our services and investment performance. Services currently comprise 80 per cent of our economy but only about 20 per cent of exports—there is considerable room for improvement here and we need to strengthen our two-way investment flows.

On the investment front, the stock of direct investment abroad by Australian companies now stands at $318 billion. It is not far short of foreign direct investment into Australia of $357 billion. This underlines the importance of investment to the offshore strategies of Australian businesses. It also highlights the changing nature of trade. APEC has been working on these issues for many years and we want to build on this agenda. We need both pillars of the Rudd government’s trade policy to be fully deployed—bringing down trade barriers at the border, as well as important behind-the-border reforms to improve and sustain our international competitiveness.

With its successful work on trade facilitation over many years and recent agreement to extend this to investment facilitation, APEC has a central role to play in promoting reforms behind the border throughout the Asia-Pacific region. APEC work on issues like customs facilitation, business mobility and regulatory reform can have a major impact on the costs of doing business in the region, and can have a major impact on productivity growth. APEC has recently agreed to accelerate several measures in its second Trade Facilitation Action Plan, which has as its goal reducing the transaction costs facing business in the region by a further five per cent by 2010.

I have spoken many times about the importance of open regional arrangements and the contribution they can make to increasing prosperity in the region and expanding job opportunities for Australians and opportunities for Australian exporters. APEC’s agenda for strengthening regional economic integration is designed to achieve this aim.

APEC’s future work on trade, investment and economic reform for the next few years will be guided by a report endorsed by leaders on Strengthening regional economic integration (REI) and reaffirmed by the Meeting of Ministers Responsible for Trade in Peru. This document contains some fifty agreed actions and recommendations aimed at giving a boost to APEC’s efforts to promote regional economic integration. The agreed actions include: continuing support for the multilateral trading system through strong commitments and concrete actions; an examination of the options and prospects for a Free Trade Area of the Asia-Pacific (FTAAP); strengthening APEC’s work to promote high-quality free trade agreements; strengthening APEC’s work on structural reform and reducing behind-the-border barriers; and intensifying efforts to strengthen and deepen financial markets.

Australia will engage actively and constructively in the APEC discussions on the scope for a free trade agreement covering the Asia-Pacific region. To support this work, Australia recently led an examination of the possibility of enlarging or merging regional trade agreements and free trade agreements to simplify the trade landscape. Australia will continue to strongly support APEC’s ongoing encouragement of high-quality, comprehensive free trade agreements among APEC members. I was pleased to be able to convey to my colleagues in Peru news of Australia’s high-quality FTA with our APEC partner Chile, which I hope will enter into force on 1 January 2009. FTAs of this quality will boost economic integration in the Asia-Pacific. Successful implementation of the APEC program for regional economic integration offers substantial scope for boosting the economic dynamism of the Asia-Pacific region even further. We will, of course, also be talking to our regional partners about closer economic integration in the region in the context of Prime Minister Rudd’s long-term vision for a new Asia Pacific community. This proposal once again shows Australia is looking to shape the regional architecture to 2020 and beyond, and is the next logical step in deepening the sense of community in our region.

As I said earlier, getting our domestic policy settings right is a key component of what I call our twin pillars approach to trade policy. Getting our own house in order is vital, because there is no point fighting for improved market access opportunities if we as a nation are not competitive enough or productive enough to take advantage of those new opportunities. We need, above all, a trade policy that crosses traditional portfolio barriers and forms the basis of a genuine whole-of-government approach and one that acknowledges that investments and infrastructural improvements, for example, involve the states as well as Canberra. So as well as requiring a whole-of-government approach, we need a whole-of-government approach.

Many behind-the-border or structural reform issues—such as decisions on investment, and infrastructure improvements, on skills development, on innovation—require extensive consultation with state and territory governments. So I was pleased to announce in March that the Rudd government will now coordinate our efforts within the framework of the new Ministerial Council on International Trade through the Council of Australian Governments (COAG) process. The Rudd government is committed to working with the state and territory governments to restore Australia’s level of productivity and international competitiveness through better dialogue and cooperation on a broad range of trade-related issues.

Structural reform behind the border is a new and extremely important area of focus in APEC, particularly as barriers at the border continue to fall. These issues include regulatory reform, strengthening competition policy, improving governance, fighting corruption and enhancing trade and investment facilitation. To assist in this process, the Treasurer will host APEC’s first ministerial meeting on structural reform in August in Melbourne. This meeting will allow participants to share experiences with building a domestic constituency for structural reform, identify regional priorities and inject greater direction into APEC’s work on these issues. The meeting will be a key milestone to set the direction of, and build further momentum on, behind-the-border issues within APEC. With my colleague the Treasurer I look forward to working with our counterparts to further enhance APEC’s work program in this area.

The Rudd government is also committed to strengthening APEC’s links with business and ensuring it continues to play a leading role in the region. As much as trade negotiations involve government-to-government exchanges, it is critical, if we are to develop this improved competitiveness and productiveness, that we also strengthen the business-to-government relationship.

The APEC Business Advisory Council, otherwise referred to as ABAC, is a group of 63 leading businesspeople, comprising three business representatives from each of the 21 APEC economies. ABAC meets four times a year and it plays a key role in ensuring APEC reflects business priorities. Recently the Prime Minister appointed two highly respected members of the Australian business community—Mr Lindsay Fox, AC and Mr John Denton—to serve on Australia’s APEC Business Advisory Council.

Mr Fox is a leader in the transport and logistics sector in Australia and throughout the region. Mr Denton is Chair of the Business Council of Australia’s Trade and International Relations Task Force as well as being CEO of the legal firm Corrs Chambers Westgarth. Mr Fox and Mr Denton join Mr Mark Johnson, the former Deputy Chairman of Macquarie Bank and Chairman of AGL, who remains as chair of our ABAC group. Australia’s three ABAC representatives have already been active in formulating business advice to APEC and I look forward to working with them in driving APEC’s agenda.

Member economies are pursuing a number of other priorities to strengthen APEC. Institutional reform of APEC is continuing—notably a 30 per cent increase in membership contributions, the establishment of a policy support unit to boost the APEC secretariat’s analytical capacity, and a proposal to appoint a fixed-term executive director to provide greater continuity and leadership.

In addition APEC’s human security agenda also continues to expand, with new initiatives on counterterrorism, food security, cleaner energy and energy efficiency, health initiatives and emergency preparedness. Prime Minister Rudd and Indonesia’s President Yudhoyono recently agreed to take to this year’s APEC leaders meeting a joint proposal on better coordination of regional disaster response work.

APEC should fully reflect regional economic influence. That is why the Rudd government is a strong supporter of India’s membership of APEC at the end of the moratorium. This was a point referred to by the Minister for Foreign Affairs yesterday, when he was hosting Foreign Minister Mukherjee from India. Personally I have been a long-time and strong proponent of India’s membership and I will continue to be a strong advocate for India’s inclusion in the APEC forum.

The Rudd government is committed to strengthening APEC to ensure that we can best capitalise on the opportunities that will arise in the Asia-Pacific century. We need to tackle head-on the policy challenge represented by the changing nature of international trade. We need to recognise the enormous opportunities that we have in the Asia-Pacific region. APEC provides us with the mechanism to pursue these objectives.

To help shape APEC’s forward agenda, I am working closely with Peru, this year’s chair, along with future hosts Singapore, Japan and the United States, to ensure that we achieve an ambitious, cohesive approach to APEC’s ongoing work in this the first term of the Rudd Labor government. Australia has much to gain from supporting and strengthening APEC and working with our Asia-Pacific neighbours to further liberalise trade and investment in our region. I look forward to working with other members of APEC to this end.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The Minister for Trade may like to move a motion to allow the member for Groom to speak.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

by leave—I move:

That so much of the standing orders be suspended as would prevent Mr Macfarlane speaking for a period not exceeding 19 minutes.

Question agreed to.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I am delighted that the Minister for Trade has seen fit to fill in the Australian public on the outcome of his latest international trip, even if it is more than three weeks after the event. I am sure it has nothing to do with the fact that the Labor Party are having trouble filling the time in the House this week and are looking at all sorts of padding to take up time!

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Mr Crean interjecting

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I will certainly not be speaking for 20 minutes about nothing.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

You never have.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The Minister for Trade will cease interjecting and will sit in silence. The member for Groom gave him silence.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I will not be wasting the House’s time to present a ministerial statement which contains absolutely nothing. The ministerial statement contained a great little history lesson on the Asia-Pacific Economic Cooperation forum but not much else. It is the usual from the Minister for Trade: a history lesson about what the Labor Party does, never acknowledging—unlike when we were in government—what its predecessors had done. We certainly acknowledged the work that Bob Hawke did, when he was Prime Minister, in establishing APEC. We acknowledged the fact that it was a Labor government who initially set APEC on its course. We supported that. We are of course interested in what that past Prime Minister and his successor both think of the APEC alternative put up by the current Prime Minister, and I will come to that later.

I would have thought that, in a ministerial statement to the House six months into his term—and getting on to seven months—the Minister for Trade would actually be able to say something substantial other than just giving us a history lesson, firing a few political barbs—

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

You have not done much in the last 12 years, I tell you. You dropped the ball.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The Minister for Trade will desist interjecting.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I am happy to interject in the minister’s speeches if that is the way he wants to do it. I pay him the courtesy—I always do—of not interjecting through his speeches, boring though they are.

In terms of the opportunities that APEC provides to create jobs and create income in Australia, I support the minister’s words. You would not know it from his speech, but Australia did host APEC last year. Those of us who were fortunate enough to be ministers were involved in that process and we do understand how APEC works; we do not need a 20-minute lecture from him about it. I acknowledge that what he says is true and I acknowledge what he says about the importance of reducing tariffs. I also acknowledge what he says about services being an important area where we need to do more. All of those things are supported by this side of the House. I further acknowledge that productivity growth is something that every government aspires to.

We are in a time when trade is going to be important. We are in a situation where we are never sure what is going on in the trade portfolio in government. We know the minister was unable to stand up for the exporters of Australia during the budget process. He was only able to gain a one-off allocation in terms of his much-vaunted EMDG scheme. We know that, at the same time, he lost ground in terms of negotiation ability because the budgets for the FTA negotiations with China and Japan were cut. We know that he merged two government departments to try to have Austrade do the job of those two departments but with 100 fewer people. No matter how much he blusters and speaks at the box there is no way he can convince me that with 100 fewer people you can do the same job.

Letting major budget cuts undermine Australia’s exporting programs and our support agency leaves plenty of time in the minister’s diary to contemplate ministerial statements at this box, and I would have thought there would have been more content in what he said.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

As opposed to what we are hearing now.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I am happy to sit on that side of the chamber and do something about trade, unlike those who sit there and talk about doing something on trade or about having a review into doing something about trade.

We on this side of the House are committed to APEC. When in government rather than just talk about that commitment our government preferred to let our actions and achievements within APEC speak for themselves. The trade minister talks about recent developments within APEC but, again, with glaring omissions—anything that the previous government did is omitted. Anything previous governments achieve is expunged from history. The government having spent so much time during question time today highlighting the importance of taking measures to lower emissions, I would have thought the minister would have at least mentioned the Sydney declaration, which was a major achievement of APEC last year, and a truly historic international consensus on the challenges related to that issue.

The member for Hotham’s greatest achievement in trade should not be reading out a list of trade liberalisation goals of APEC. He should actually be out there doing something about it. He should actually have evidence that his actions will further trade liberalisation in the region. It is almost as if the trade minister hopes that if he studies the rules hard enough and long enough and regurgitates some statistics often enough he might overcome the fact that there is little happening in trade policy on that side of the chamber—apart, of course, from a review. You can go anywhere in government at the moment and find a review. In fact, you would probably find 10 or 20 or 30 or 40. In fact, there are over 100. I would like to see, in what are deemed to be his ministerial statements, something substantial in the next one.

We all know that he comes from a government that is renowned for frenzied, one-off announcements as the government approaches a 24-hour media cycle. Things these days are either in that 24-hour media cycle or they are in 2020. There seems to be nothing in between. I was interested that again today we got absolutely no more detail on what the Prime Minister had announced, completely out of the blue, with regard to the Asia-Pacific union. I have been fascinated listening to some of the ambassadors around the hill here who say, ‘The Prime Minister made this announcement; none of us knew anything about it. We thought we had better ring up and see what issues there are and what is planned.’ Their inquiries to the Prime Minister’s office have been fruitless—in fact, less than fruitless. It was a waste of the cost of a telephone call.

Today, in anticipation that this ministerial statement that we had been asked to come and listen to had something of substance, I thought, ‘Well, it’s two weeks down the track, let’s be honest, let’s be open, let’s listen.’ I sat at the doors when the Prime Minister announced it; at face value it was a step in the right direction. But there was nothing. We got a history lesson on APEC. We got the usual jumble of bilateral this week, multilateral next week and whatever is the flavour of the day depending on the location. Still there is nothing on the Asia-Pacific union. I wait patiently.

I know this all came as a surprise to a lot of people, including, I understand, Richard Woolcott, who found out about the proposal literally hours before the Prime Minister revealed his grand vision. There are trading partners who are important to Australia, and certainly I welcome their involvement and interest in trade policy in Australia. There is the Indian community, who have been out here. They had heard nothing about it either and they still do not know any more about it.

I mentioned earlier that we have been treated to a bit of insight from previous prime ministers about what they think about it. Both previous prime ministers Bob Hawke and Paul Keating basically said it was flawed. I guess they know something about it. I know those opposite never give credit to anything that our side of politics has done but I assume that they have some respect for their own prime ministers, and their own prime ministers’ comments were that they thought the concept of an Asia-Pacific union was flawed. We can only speculate about what black hole of Labor policy ideas this grand scheme has fallen into. We await with interest what thought bubble pops out of the Prime Minister’s head next on this. We wait—perhaps maybe the review will come out and put some meat on the bones of the Asia-Pacific union.

The trade minister says the Rudd Labor government is committed to the principles that underpin APEC. But again it seems words are favoured over actions as the evidence shows this commitment is shaping up as little more than lip service. Again, the Rudd Labor government is not living up to these principles. The trade minister talks about furthering trade liberalisation by bringing down the barriers to trade at the border, but at the same time the government seems determined to undercut the possibilities of bilateral free trade agreements, as I mentioned earlier, by cutting the budgets for the negotiations on FTAs with both China and Japan.

As for living up to the goals of APEC by removing behind-the-border barriers, the Rudd Labor government seems to have done the reverse and, instead, is intent on creating a new barrier behind the border by appointing pro-tariff former Labor premier Steve Bracks as the head of the automotive review. This issue will create a real credibility problem for Australia if a decision is made to retain tariffs. That is something that every minister has to make a decision on, and the best way to have some international credibility when you do that is to have a credible process. They have no credible process. They dispensed with the Productivity Commission—they did not want them involved; they did not want a rigorous process. They put a previous Labor premier in charge of the process and then bolstered the committee with a few union hacks to make sure that they got the answer they wanted. Well, whatever answer they want, they are in government and they have to sell it internationally as well as to the Australian people. If they are trying to be credible in this trade arena they do have to have some consistency and some substance to what they do. They have been found wanting in that regard.

Mr Deputy Speaker, I can assure you I was paying attention to the minister’s history lesson—that was only to see whether or not he was correct. I must admit I did not learn anything new. One of the features that stuck in my mind was the minister’s declaration of the Labor government’s strong support for APEC’s ongoing encouragement of comprehensive free trade agreements with APEC nations. The reason I found this statement so remarkable is that it is a marked divergence from what the trade minister has been proclaiming far and wide about Doha being his main priority, in fact at times his only priority—and in the process has downgraded the value of bilateral agreements. Either the government has seen the error of its ways and is now ready to follow the example of the previous, coalition government and adopt a comprehensive trade policy that gives strong support for both bilateral and multilateral agreements, or it is fudging the facts on its commitment to APEC principles. As for working on trade facilitation and encouraging investment, it seems strange that this government thinks the best way to do so is to merge trade facilitation bodies like Invest Australia and Austrade while slashing the staff numbers and budgets.

Earlier today I discussed the issue of engagement with Asia at the Asialink leaders forum and outlined the way in which the coalition had engaged extensively with Asian trading partners on a comprehensive basis. Those opposite do not want to acknowledge this but, in fact, the Howard government’s record on this is held in very high regard in the Asia-Pacific region. Mr Howard was a Prime Minister who looked for the opportunities when they presented themselves in order to further the trade and therefore the economic opportunities for Australia but, at the same time, to ensure that the process was mutually beneficial. On that basis, with the countries that our trade relationship grew with and that our diplomatic relationship grew with, we were able to do that in a mutually beneficial way. The trade minister spoke after me at the leaders forum but unfortunately I had a very important meeting I had to come back here for because I would have been interested to hear what he had to say. Apart from that, I was not invited to the lunch! But I will get some reports on that, and I hope what he had to say had more substance and interest than the 20-minute diatribe we have just had here. And I would like to know whether or not today is a bilateral trade day or a multilateral trade day, because it does vary depending on the audience and the place. I am always open to some insights. We did not get one today but, as I said, I am a patient man; I will wait.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Don’t think it will do you much good!

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

I think everyone can benefit from a little knowledge. We did not get anything today from the Minister for Trade that would tell us anything we did not know last year or the year before—although, as I said, we did get some interesting aspects on trade from previous prime ministers over the last few weeks. The trade minister’s course on trade 101 is obviously directed at his own frontbench colleagues because I think a lot of Asia-Pacific members have lost interest after the Prime Minister’s sudden announcement and no follow-up. I hope that the trade minister’s next statement will show a true commitment to trade liberalisation and actually show ways to consolidate and enhance market opportunities for Australian exporters. We do, after six months, need something of substance from the trade minister. We do actually need something more than a review. And we do need to know that at some point the Labor Party as the government of the day is going to move forward with a trade policy that will benefit the exporters of Australia.