The Australian, 20 November 2019
Listening to recent commentary you’d be forgiven for thinking global trade was on its last legs — growth projections are down, US-China tensions continue, the uncertainty surrounding Brexit continues, and the rules are under pressure too. And the APEC Ministerial Meetings and Leaders Summit was cancelled.
Now, many do worry about the future of trade and the rules-based system that underpins it.
But that gets us nowhere. And in any respect, I’m optimistic, and so is the Morrison government. That’s because we have good reason to be. Australia continues to experience strong trade growth.
As I wrote in my recent short book Fit For Service, “Australia is a trading nation whose high living standards rely upon free trade which allows exports beyond our small domestic market.”
We have faith in open trade settings — they’ve helped deliver 28 consecutive years of economic growth.
And global trade rules and institutions have helped create the most prosperous period in world history, delivering a peace and development dividend. Reassuringly, others share our view. There remains strong momentum for open economies and rules-based trade. We’re forging ahead on RCEP (Regional Comprehensive Economic Partnership) because 15 of the negotiating countries see the gains to be made.
We’re leading reform efforts in the WTO so the organisation continues to underpin global rules-based trade. WTO rules provide the foundation for almost all trade, so when the WTO works well, so too does global trade.
But of course, all good reform starts at home. Modernising our trade processes is a priority for this government.
I was recently appointed chairman of the Senate Select Committee inquiry into fintech and regtech and have begun receiving submissions from the private sector.
And from what I have seen so far, Australia is ready to pounce. I want this inquiry to unleash the shackles and create jobs.
The 2019 FinTech 100 is a global list announced by FinTech Innovators. Seven Australian fintech start-ups were ranked among the world’s best, with cross-border payment provider Airwallex the highest ranked at No 32. It was followed by Judo Bank at 33 and online payment service Afterpay at 47.
The challenge now is turning our head start on fintech into exports in our own region.
The Modernising Agricultural Trade initiative is also helping businesses by updating export systems.
The initiative aims to cement Australia’s reputation as a supplier of clean, green produce, and improve supply-chain efficiency and capacity.
All this work is part of Australia’s commitments under the WTO’s Trade Facilitation Agreement (TFA), which aims to realise the global benefits of better trade facilitation. The OECD estimates that for every 1 per cent reduction in global trade costs, $US40bn would be added to world GDP.
We continue to push for the TFA’s implementation, and good progress has been made, with 147 of 164 WTO members having ratified it.
But sometimes it’s the simple things that make a difference. Take the great FTA portal developed by DFAT — it’s already been accessed more than 300,000 times.
Simple but powerful, the portal is a game-changer for small-to-medium enterprises — sorting through the minutiae of FTAs to find the information that really matters to an SME.
It also helps alleviate the “noodle bowl” of overlapping FTAs by allowing businesses to choose the agreement offering the best deal.
As well as helping exporters make use of FTAs, we must ensure that our hard-fought gains are not eroded by non-tariff barriers (NTBs), which can cost industry up to three time more than tariffs.
The government’s NTB Gateway gives businesses a further avenue to report issues and have them managed by the government. This is especially useful for SMEs.
Our ambitious FTAs
The global economy is rapidly transforming. The Morrison government intends to keep Australia ahead of the curve, defining the rules for new and evolving forms of commerce.
By 2030, Australia’s digital exports are expected to grow by 210 per cent, and total digital trade could enable up to $192bn in value to our economy.
It’s critical Australia shapes digital trade rules to reflect our interests. In the WTO, we chair e-commerce negotiations, which aim to develop the first global digital trade rules. We’re also pushing to extend the WTO moratorium on customs duties for electronic transmissions.
And we pursue similar outcomes in our FTAs. We want to develop rules that set ambitious benchmarks for our region.
That’s why I’m pleased the government launched negotiations with Singapore for a digital economy agreement. We want this to expand co-operation in emerging areas like digital identity, artificial intelligence and e-invoicing.
The agreement will be a testbed for our modernisation agenda — for instance, electronic certification for agricultural products.
Australia will benefit from co-operation on professional services, disciplines on licensing and regulation, and WTO-plus commitments on financial services and telecoms. Not to mention e-commerce rules for digital trade.
The FTA we’re negotiating with the EU also fits this bill. Similarly, our FTAs with Indonesia, Hong Kong, and Peru include trade facilitation measures.
These agreements are testament to the government’s commitment to lowering trade barriers and making it easier for our exporters.
Andrew Bragg is a Liberal Senator. This is an extract of a speech given at an ACCI Trade Modernisation Event.