Ian Murray, executive director of the Australian Institute of Export, takes stock of international trade under the Coalition, and looks at the possible changes to export under Federal Labor.
After 11 years of Coalition control our trade agenda has moved to new hands. In its time at the helm tradition was maintained with three Nationals representing the Coalition as Minister for Trade. While holding this important portfolio, both Tim Fischer and Mark Vaile were at the same time Deputy Prime Minister. All three had rural backgrounds, all three were passionate about their task and were avid supporters of the ‘level playing field’ and WTO.
In keeping with conservative governments of the past, and I would assume those that may follow, trade assistance policy was firmly based on the philosophy that government provides the structure or the means while industry does the business. This, along with the stagnating Doha Round, was undoubtedly the driving force behind the many and varied Free Trade Agreements we have in place and those currently on the drawing board.
Measuring one government’s trade performance against another is not easy and probably not wise. Booms come and go, currencies go up and down, and world economies chop and change. However, I think it can be argued that the outgoing government leaves the trade portfolio in pretty good shape. Export is a higher proportion of GDP than it was 10 years ago and, despite enormous competition, manufacturing remains a significant contributor to export earnings. Services exports have grown, particularly in education and financial services, and Australia managed its way very successfully through the Asian crisis. Trade is without doubt higher on the business agenda than it was 10 years ago, and Australia is today seen as serious player in world trade negotiations.
Exporting and the Labor Government
The Labor Government will now write the next chapter. In his trade policy released before the election, Labor’s incoming Trade Minister, Simon Crean, said: “Strong and sustained export growth is essential for Australia’s long-term economic prosperity and for providing well paid, rewarding jobs. Labor believes that the sustained export growth we need will occur only if Australia’s trade promotion policies, programs and structures, are renewed and reinvigorated.” So what sort of changes can we expect from ‘Exports Australia’, Labor’s plan to drive export growth across the whole economy?
First, we can expect a review of export policy and programs. Labor’s plan is aimed at developing a policy and program mix that will position exporters to take maximum advantage of the ongoing resources boom, and to develop our full export potential in other sectors. Special emphasis will be placed on services exports, particularly the export of financial services and the export of clean energy technology. Labor will, its policy document says, revitalise and appoint a business advisory group to Austrade, invest an additional $50 million in the Export Market Development Grants (EMDG) scheme in 2009/10, and refocus Australian trade policy to achieve better outcomes for Australian businesses.
What this means to Australian business only time will tell. Non-conservative governments have in the past tended to focus greater attention on ‘push’ rather than ‘pull’ mechanisms, like Free Trade Agreements. If the result is a stronger emphasis being placed on export skills development, improving infrastructure, strengthening incumbent programs like EMDG and TradeStart, building better communications capabilities while retaining our strong offshore presence, the outcomes should be very positive. We wish Trade Minister Crean and his team every success.
—Ian Murray is executive director of the Australian Institute of Export.
