Ursula Stephens (NSW, Australian Labor Party) Share this | Hansard source

I seek leave to move a motion in relation to the report of the Joint Standing Committee on Foreign Affairs, Defence and Trade: Australia's trade investment relationship with Japan and the Republic of Korea.

Leave granted.

I move:

That the Senate take note of the report.

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the report entitled Australia's trade investment relationship with Japan and the Republic of Korea. The committee welcomed the opportunity to examine Australia's relationship with two of our most important trading partners. I will just speak briefly to the report now.

I will turn first to Japan. The importance of the Australia-Japan relationship should not be obscured by the rise of other countries. Japan was actually Australia's No. 1 trading partner for over 40 years and today remains second only to China. In that time, Japan has made a significant contribution to Australia's prosperity, originating with its investment in the Australian resources and energy sector in the 1960s. Today, Japan is Australia's third-largest source of foreign investment, totalling $123.4 billion in 2011. It is also Australia's second-largest market for food and agricultural products, with safe, high-quality food and reliable supply from Australia making a significant contribution to Japan's food security. On the other side of the ledger, Japan is Australia's third-largest source of imports, with products such as cars and manufactured goods in high demand by Australian consumers.

Today Japan is moving towards trade liberalisation and agricultural reform, including negotiating a free trade agreement with Australia. This agreement is a significant milestone: Japan's first with one of its top six trading partners and first with a major developed economy. The committee strongly supports the free trade agreement negotiations. The services sector is one area expected to benefit from the FTA. Education and tourism are two of Australia's most important service exports. The committee supports efforts to attract more visitors and more international students to Australia. The committee heard that Australia's particular expertise in financial services is increasingly being recognised in Japan, a country with the world's second-largest pool of investible wealth. Both countries' expertise is also being capitalised upon in investment projects, and in particular through joint ventures in third countries. The committee has recommended that the government showcase the marketing of Meat & Livestock Australia in its export facilitation activities. In the committee's view, approaches like that of the MLA's 'Aussie beef' promotion can reduce competition between individual Australian brands, improve customer awareness, and tap into Japanese perceptions of Australian food as safe, high-quality products.

Let me now turn briefly to Korea. Korea is Australia's fourth-largest trading partner and a country with which Australia shares a longstanding and complementary relationship. After the Korean War, the Australian exports of raw materials supported Korea's industrial development from the 1960s onwards; indeed, energy, minerals and metals exports continue to be the bedrock of that ongoing relationship. The committee heard about significant growth in Korean investment to secure Korea's ongoing energy needs. Korean companies are taking increasingly larger stakes in a number of Australian resource projects. With 70 per cent of its food needs met from imports, Australia also has a very important role to play in Korea's food security, providing safe, high-quality food to our fifth-largest agricultural export market. In turn, Australia continues to demand Korea's consumer products, including cars, electronics and refined fuels.

Korea's active free trade agreement schedule, including negotiations with Australia, occupied a central role in our inquiry. With Korea's FTAs in force with the United States and the European Union, the committee was concerned about the implications of ongoing delays in concluding our own agreement. Considerable attention has been given to the implications for Australia's beef exports to Korea, our third-largest beef export market, as well as to other outstanding issues such as investor-state dispute settlement. Korean importers told the committee during our visit to Seoul that, while they value Australian products for many reasons, they will be forced to look to other markets if an agreement is not concluded soon. The committee supports a comprehensive and liberalising agreement that is advantageous to all sectors, and has called for the negotiations to be prioritised. Australian businesses face a number of difficulties in Korea, including language and cultural barriers and a lack of understanding of the market. The committee considers that the importance of this market warrants priority assistance for exporters from the Australian government.

As with other areas where the relationship is overlooked, the committee has also recommended that the significance of the Australia-Korea relationship should be more widely recognised and promoted. And, finally, the committee considers that the implementation of the recommendations of the Joint Standing Committee on Foreign Affairs, Defence and Trade's report into Australia's overseas representation would help promote Australia's trade interests.

Mr Acting Deputy President, I commend the report to the Senate and seek leave to continue my remarks.

Leave granted; debate adjourned.