Trade at a Glance 2009
Home > Primary School Fast Track to Student Content > Trade at a Glance 2009 > Trade Policy at a Glance
Trade Policy at a Glance
Australia's Trade Policy
A Strong, Prosperous and Outward Looking Nation
Trade is vital to Australia's economy and the prosperity of its people.
Australia's trade policy aims to open new markets, reduce barriers to trade and improve market access for Australian goods and services. The Government is also working to improve competition, innovation and productivity behind the border. Australia is committed to full participation in the global economy and supports an open, transparent and rules-based global trading system.
The Government is pursuing improved market access for Australian exporters in global markets through multilateral trade negotiations in the World Trade Organization (WTO).
At a regional level, the Government actively engages with the Asia-Pacific Economic Cooperation (APEC) forum and the Association of South East Asian Nations (ASEAN).
The Australian Government also undertakes bilateral negotiations with key trading partners through comprehensive Free Trade Agreements.
The international trading regime of the WTO is open, equitable and enforceable. the WTO's dispute settlement system is central to that regime. It gives member countries and exporters confidence that the commitments and obligations contained in the WTO agreements will be respected. Regional fora (APEC and ASEAN) and comprehensive bilateral agreements provide exporters with further rules-based systems and a more open, fair and predictable trading environment in which to operate.
For more information on Australia's trade policy visit: www.dfat.gov.au/trade
Trade and the Global Recession
World trade has been adversely affected by the global recession, with trade volumes experiencing the largest falls since the end of WWII. East Asian economies have been particularly affected by the fall in trade flows because exports make up a large proportion of their economies.
the Government considers that keeping trade flows open by resisting protectionism and continuing to liberalise international trade are important parts of the solution to the economic downturn.
At the G20 Leaders' meeting in London in April 2009, governments from the twenty largest economies in the world agreed not to engage in protectionist measures until the end of 2010. G20 Leaders also agreed to promptly notify the WTO of protectionist measures taken. they endorsed the WTO's recent initiative to monitor and report on the impact of the financial crisis on the trade policies and trade finance of its members. the Australian Government supports the WTO in this important monitoring role.
the G20 Leaders also re-committed to reaching an ambitious and balanced conclusion to the WTO Doha Round of trade negotiations (see over). In addition, a new $250 billion trade finance facility will be established to assist the restoration of normal trade flows involving developing countries.
Australia and the WTO
As a founding member of both the WTO in 1995 and its predecessor, the General Agreement of Tariffs and Trade (GATT) in 1947, Australia has a longstanding commitment to the multilateral trading system operated by the WTO. This system provides the legal framework governing world trade. WTO Members agree on legally binding rules governing trade providing important legal certainty for their exporters.
The Australian Government's key trade policy priority is a successful conclusion to the WTO Doha Round of trade negotiations, launched in Doha, Qatar, in November 2001. It seeks real improvements in market access for Australian exports across all negotiating sectors - agriculture, industrials and services.
For more information on Australia's participation in the WTO visit: www.dfat.gov.au/trade/negotiations
The Doha Round has a strong development focus. It aims to improve developing countries' market access, reduce agricultural subsidies and increase global Aid for Trade. Aid for Trade refers to development assistance that addresses trade-related needs (such as policy, infrastructure and productive capacity) to help increase developing country participation in trade and support economic growth. Australia's Aid for Trade represents a large component of the overall aid program - about 10% - and is expected to reach around $400 million in 2009-10. Aid for Trade is part of the Government's support for the achievement of the Millennium Development Goals.
For more information on Australia's development
assistance visit:
www.ausaid.gov.au
Agricultural Trade
The Australian Government's goal in the agriculture negotiations of the Doha Round is to reform agricultural trade, which is one of the most distorted and highly protected sectors of international trade.
As Chair of the Cairns Group, the Australian Government is pushing for agricultural trade reform through the WTO. In particular, Australia is pursuing significant reductions in agricultural tariffs, deep cuts to domestic support and tight disciplines on export competition.
- The Cairns Group is a coalition of 19 agricultural exporting countries, bringing together a diverse range of developed and developing countries from Latin America, Africa and the Asia-Pacific region.
- The Cairns Group has been an influential voice in the agricultural reform debate since its formation in 1986 and continues to play a major role in pressing the WTO membership to meet the Doha Round's far-reaching mandate.
Members of the Cairns Group
- Argentina
- Australia
- Bolivia
- Brazil
- Canada
- Chile
- Colombia
- Costa Rica
- Guatemala
- Indonesia
- Malaysia
- New Zealand
- Pakistan
- Paraguay
- Peru
- Philippines
- South Africa
- Thailand
- Uruguay
Non-Agricultural Trade
In the Doha Round, the Government is pushing for reductions in tariffs and other barriers to trade in non-agricultural goods (which include industrial, forestry and seafood products). these reforms would expand potential markets for Australian industry.
Non-agricultural trade accounts for around 90 per cent of global trade in goods. A strong Doha Round outcome would provide a significant boost to the world economy, with flow-on benefits to Australia.
Services Trade
The Government is working hard to achieve better access for Australia's services exports which accounted for approximately one fifth of Australia's total exports in 2008, at $53 billion. In coming years, the services sector is predicted to be the most strongly growing sector in global trade. Education and tourism services are Australia's top services exports.
The Doha Round negotiations aim to reduce barriers that services exporters face in overseas markets by recognising qualifications and standards and investment rules and regulations relating to the temporary entry of business people. Given the importance of this sector to the Australian economy, Australia takes a prominent role in the services negotiations. Australia also promotes improved services exports through APEC and the negotiation of comprehensive Free Trade Agreements.
Trade with our region: APEC
Asia-Pacific Economic Cooperation (APEC) is the pre-eminent economic forum in our region and has delivered major gains to Australia and regional trading partners through trade liberalisation, business facilitation, and economic cooperation and technical assistance - the three pillars of APEC.
- APEC has 21 member economies which account for 48 per cent of world trade and 68 per cent of Australia's total trade.
- Together, APEC economies account for 57 per cent of world GDP, and 40 per cent of the world's population.
- Eight of Australia's 10 largest export markets are within APEC, including our top three export markets - Japan, China and the United States.
- APEC is driving an extensive trade and investment liberalisation and facilitation agenda, working towards a future Free Trade Area of the Asia-Pacific.
- APEC is increasingly focused on structural economic reform as a means of strengthening economies' competitiveness and trade and investment flows.
Members of APEC
- Australia
- Canada
- People's Republic of China
- Indonesia
- Republic of Korea
- Mexico
- Papua New Guinea
- Philippines
- Singapore
- Thailand
- Vietnam
- Brunei Darussalam
- Chile
- Hong Kong, China
- Japan
- Malaysia
- New Zealand
- Peru
- Russia
- Chinese Taipei
- United States
Australia hosted APEC in 2007, with the APEC Economic Leaders' Meeting held in Sydney in September 2007. Singapore is the 2009 host. The United States will be the host in 2010.
For more information on Australia's role in APEC visit:
www.dfat.gov.au/apec/index.html
www.apec.org
Free Trade Agreements (FTAs)
Comprehensive bilateral and regional FTAs can enhance the trading relationship if they are truly liberalising across all sectors and consistent with WTO rules and complement the multilateral trading system.
Australia has negotiated six FTAs:
- ASEAN-Australia-New Zealand (AANZFTA) 2009
- Australia-Chile Free Trade Agreement (AClFTA) 2009
- Australia-United States Free Trade Agreement (AUSFTA) 2005
- Thailand-Australia Free Trade Agreement (TAFTA) 2005
- Singapore-Australia Free Trade Agreement (SAFTA) 2003
- Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) 1983
Australia is undertaking FTA negotiations with:
- China
- Japan
- Malaysia
- The Gulf Cooperation Council (Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, United Arab Emirates)
- Republic of Korea
- Trans-Pacific Partnership Agreement
FTAs
In addition, Australia is considering a number of FTAs:
- Australia - India joint FTA feasibility study, due for completion in 2009
- Australia - Indonesia joint FTA feasibility study, completed February 2009
- Pacific Agreement on Closer Economic Relations - PACER Plus
Australia's FTAs aim to:
- Be fully consistent with WTO principles and rules, deliver WTO-plus outcomes and reinforce the multilateral trading system
- Comprehensively and substantially liberalise goods and services trade and investment
- Deliver substantial commercial and wider economic benefits to Australia more quickly than would be possible through multilateral or regional processes
- Promote stronger trade and commercial ties between participating countries, and open up opportunities for Australian exporters and investors to expand their business into key markets
- Secure Australia's competitiveness with key trading partners
- Significantly enhance Australia's broader economic, foreign policy and strategic interests