Marise Payne (NSW, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present two reports of the committee, together with the Hansard record of proceedings and submissions received by the committee, and move:

That the Senate take note of the reports.

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: Australia’s trade with Mexico and the region.

Since the commencement of diplomatic relations in 1966, Australia and Mexico have developed a modest but important economic relationship. Mexico is Australia’s largest trading partner in Latin America and our 33rd largest trading partner overall. Australia sits as Mexico’s 26th largest trading partner.

In examining the state of economic relationships between Australia and the other nations of the region, the committee noted the growth of trade and investment ties, albeit from relatively small bases. Encouraging expansion potential and progress has been identified in areas such as energy, mining, agribusiness, food commodities and the provision of professional services, but there is not a lot of conclusive data about movement in this area.

Increasing imports and a burgeoning education sector have seen the Australia-Mexico bilateral relationship grow significantly in recent years. In May 2006, the Hon. Alexander Downer MP, Minister for Foreign Affairs, and his Mexican counterpart established a joint experts group to explore possible directions for economic relations, including the possible negotiation of a free trade agreement, and that has reinforced the importance of this relationship to both nations.

Australia’s main exports to Central America are dairy products, in particular milk, cream, butter and cheese. Whilst still modest, two-way merchandise trade with Central America has increased significantly over recent years.

In summary, the committee has concluded that, despite the challenges of distance, poor transport links, language and cultural differences and unfamiliar business environments, there is still significant potential within the Australia-Mexico trade relationship and the trade relationships between Australia and the region. As such it did become clear to the committee that a free trade agreement with Mexico is a highly desirable outcome to the quest of both governments to progress and strengthen this relationship.

There are challenges involved for both countries in pursuing a free trade agreement. Agriculture, for example, continues to be a sensitive area, and the committee has recommended that issues relating to agriculture should be determined at an early stage of any negotiations. The committee also acknowledges that current political and business conditions in Mexico are perhaps not what you would describe as ideal for an FTA and there may be some time needed to develop conducive conditions.

In conclusion on this report, the committee would like to extend its sincere thanks to all of the officials of the Australian Embassy in Mexico City that assisted the delegation with the visit by the trade committee to Mexico. I was not part of that delegation but I understand from my colleagues who were that it was a very productive engagement. It proved very successful in terms of contacts made, opportunities identified and challenges addressed. The committee also wants to acknowledge and thank the officials and business people in Mexico for their hospitality and input.

In closing, the committee is grateful to all those who gave evidence to the inquiry. I also want to place on record that in tabling this report I do so on behalf of Mr Baird, the member for Cook, who is the Chair of the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade. I note that he has provided exceptional service in his role as chair of that subcommittee and that he retires from parliament in this round of elections. I think his contribution should be noted.

I commend the report to the Senate.

The second report of the Joint Standing Committee on Foreign Affairs, Defence and Trade is the report of the inquiry into Australian Defence Force regional air superiority. It is a quite different report in nature from the preceding one.

The matter of Australia’s regional air superiority has been the subject of both considerable discussion and commentary since 2000. The strategic guidance which is outlined in Defence 2000: our future Defence Force, which is of course known as the Defence white paper, and the acquisition and phasing out of equipment proposed in the Defence capability plan 2004-2014 have provided the basis for much of the debate amongst those key stakeholders.

The Defence Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade first examined the issue of Australia’s air combat capability in its Review of the Defence annual report 2002-03. Further to that inquiry, in June 2005 the Senate resolved that the Joint Standing Committee on Foreign Affairs, Defence and Trade:

... inquire and report into the ability of the Australian Defence Force to maintain air superiority in our region to 2020, given current planning; as well as any measures required to ensure air superiority in our region to 2020.

Although the committee has not made recommendations in this report, the report examines the various issues and the very diverse views presented during the two public hearings and indeed in the 41 submissions received during the term of this inquiry.

Strategic considerations, both global and regional, underpin Australia’s future regional air superiority. Concepts such as a balanced force structure, asymmetric threats, and an assessment of regional military capabilities are key drivers in developing a balanced ADF. Importantly, the committee does note that Australia must continue to monitor developments in the region when considering new and improved air combat capabilities.

The ADF’s current capability planning is guided by the white paper and subsequent defence policy updates released in 2003 and 2005. In examining the existing guidance and the planning for a future air combat capability, the committee notes the introduction of a new platform is underpinned by strategic policy, cost-effective delivery of capability and the constraints of providing a well-balanced ADF.

A key decision in transitioning to a new air combat capability is the withdrawal from service of the F111 in 2010. A number of commentators have indicated that they believe this retirement date is premature, and the report discusses the aircraft’s technical and maintenance issues in extending its in-service life past 2010. The report does conclude that industry could support the F111 until 2020 but there are risks, including the ability to sustain critical skills amongst the current workforce. Further, the committee notes the increasing severity of the risk profile in extending the F111 beyond 2010.

The ADF’s future capability planning is examined in the report, with particular attention being given to the acquisition of the Joint Strike Fighter, or JSF. The unique nature of the JSF project, and Australia’s decision to join the international program, provides opportunities for Australian industry that would not be available if a more traditional capital acquisition strategy had been undertaken.

However, the committee notes that any delay in the Joint Strike Fighter project would be unacceptable. We also note the government’s decision to purchase the Super Hornet aircraft to address any potential capability gap which may arise during the transition to the JSF.

The committee concludes its report with a comparative analysis of the Joint Strike Fighter and the FA22 Raptor covering issues such as capability, availability and cost. Irrespective of whether the FA22 Raptor is available for export sale to Australia, the committee notes the purchase of the JSF is considered by Defence to provide the most effective and efficient air combat capability whilst maintaining a balanced ADF.

In conclusion, again I want to thank all of those who contributed to this inquiry through submissions and discussion with the committee. I would also like to thank committee members and the secretariat staff for their efforts throughout the inquiry process and, in addition, the Defence representatives at the most senior levels for their assistance with this particular inquiry.

I commend the report to the Senate.

Question agreed to.