Government efforts to increase SME utilisation of FTAs
7.1
DFAT submitted that improving universal accessibility of SMEs to FTAs requires “continued efforts to raise awareness and understanding of FTAs, and assistance to current and future SMEs in their journey to export”.
The options identified by PwC to optimise utilisation of FTAs are consistent with Government policy and reflected in our ongoing work program. The Portfolio is working with industry associations, businesses, trade intermediaries, domestic agencies and our FTA partners to progress these important initiatives to assist businesses. In particular, we acknowledge the particular benefits to SMEs associated with streamlining and reducing administrative costs associated with FTA documentation.
7.2
Mr Martin Squire, General Manager, Trade and International Branch, Department of Industry, Innovation and Science wants to encourage SMEs to explore their export options to help grow their business.
…it's very much around encouraging the cultural change within small to medium-sized enterprises; particularly, encouraging them to look seriously at the export opportunities and take advantage of them if they're suitable for their firms. We know, from a statistical basis, that firms that export do a lot better on wages, on capital productivity, on growth and on long-term survival.
7.3
Sunshine Coast Council submitted that SMEs would welcome the expertise of representative bodies such as the Export Council of Australia, the Australian Chamber of Commerce and Industry, the Australian Institute of Export, and other organisations to provide specialised information and education on exporting. According to the Council, a HSBC study has found that “more tailored export assistance from government and other intermediary authorities would increase SME export uptake by 64 per cent”.
Many of the challenges associated with exporting are based on misinformation, lack of knowledge sharing and ill-informed perceptions around free trade and foreign markets.
7.4
The Sunshine Coast Council believed the fundamentals to capturing value from the FTAs are:
Building the capacity of SMEs to better select international export destinations
Emphasising the importance of business partner selection,
Emphasising that the key to success of export operations is not merely exporting to markets, but establishing relationships with both businesses and consumers in the chosen market, where ultimately the transactions are made.
7.5
The Sunshine Coast Council would welcome the Australian Government:
modelling the costs of administering the FTA on SMEs to understand whether the costs could inhibit the companies (and their people) supposed to benefit from actioning the FTA
providing an FTA look-up tool with key administration details and costs and templates of benefit to exporters
providing increased resources prior to and post FTA negotiations to ensure regional businesses know how to access and can budget (plan) in advance; and
recognising that there may be more benefit to a business expanding in an existing market than entering a new FTA market and ensure funding (e.g., export grants) can assist in both scenarios.
7.6
Chief Executive Officer of the Export Council of Australia, Ms Alina Bain, wanted the Government to look at coherent strategic programs around capacity building.
So it's acknowledging that FTAs are important and a part of that training but that there are the 50 other pieces that an SME needs. We would like to see government funding being used efficiently and effectively for that training.
7.7
Mr Todd Miller, the General Manager of International Trade at the Department of Trade, Tourism and Investment, South Australia see merit in more targeted marketing of these FTAs to in-country importers and distributors buying the Australian goods and services.
I think the next level of improvement that would need to be made would be to actually start, and increase, the marketing of our FTAs to those international markets. One of the keys to that when you're negotiating an SME into another market is that those international importers and distributors don't know of or perhaps care about that free trade agreement or what the actual benefit is to that importer. In a lot of cases the tariff importer, if they're purchasing free on board from this end, has the tariff benefit, quite often, at their end. So one of the key things that we had is that marketing overseas via the Commonwealth network to those key markets and those key distributors would absolutely help our SMEs.
7.8
KPMG noted a range of tools and educational initiatives are available to SMEs through various federal and state government departments and agencies with exporting goods or services.
However we are of the view that a coordinated approach between government, industry associations and professional advisors to help SMEs navigate free trade agreements using advanced technology through an integrated single window is critical.
7.9
Chief Executive Officer of the Hunter Business Chamber, Mr Bob Hawes, wants the Government to focus on is what the Government has control over such as taxes, charges and regulation, and improving how that trade related infrastructure would make things simpler—as opposed to things which it does not have control over, which extends to the overseas markets Australia does trade with.
7.10
Ms Glenys Schuntner, Chief Executive Officer of Regional Development Australia Townsville and North West Queensland Inc. believes North Queensland’s opportunity going forward is to be able to “capture opportunities for further value adding in our existing industries”.
…is nurture along a whole lot of new development industries, possibly some of the industries that we haven’t even thought of yet, in terms of coming out of digital economy and small business space about where the new growth industries are. A lot of those are of course in the services sector.
We'd also encourage the thought that regional Australia has just as much an interest in those new service economy developments as we do in the traditional export arena of our commodities and our agriculture.
7.11
The Managing Director of Masterol Foods, Mr Nathan Cater, would welcome more insight on how others have managed the trade barriers beyond tariffs.
We understand that FTAs are about more than just tariffs, but the business community would be able to more easily perceive that they involve a holistic approach to the types of barriers that we've encountered, and that there are active measures in place to trace through the actual experiences that people may go through in availing themselves of the opportunities that are on offer.
7.12
Trade consultants KPMG believes professional services firms like itself, Australian corporations and the Australian Government are all well placed to take a lead in helping SMEs to overcome the barriers to utilising FTAs. KPMG submitted a number of key initiatives that it believed would help SMEs to engage more effectively with Asia and, indeed, with all FTA trading partners:
Helping SMEs to formulate effective market engagement strategies;
Helping SMEs to develop useful commercial relationships; and
Making export administration clearer and compliance simpler.
Helping SMEs to formulate effective market engagement strategies
7.13
KPMG stated it regularly assists businesses through its Access Asia initiative to understand how to engage effectively with Asian export markets.
Our consistent experience is that SMEs rush to perceived opportunities without doing their homework. They require comprehensive market-entry and then growth strategies which consider the wider regulatory, local market and nontariff hurdles to market success, including the benefits of FTAs and how best to access them.
7.14
According to Cross & Co Lawyers, Australia’s trade competitors understand SME exporters are the life blood of their economies and provide significant support, either through tax breaks, direct support or a combination of both.
7.15
Cross & Co Lawyers pointed to research by the Australian Chief Economist published in 2018 that found exporters employ 24 per cent more people, have 40 per cent greater value add, are 13 per cent more productive and pay 11.5 per cent higher salaries than non-exporters.
The Federal Government in decreasing SME export support by 50 per cent since 1996, is swimming against the international tide.
7.16
International and domestic research confirms SME internationalisation as a key catalyst to wage growth, according to Cross & Co Lawyers citing Harvard's Michael Porter, who observed higher productivity in “trade exposed” SME’s.
A 2015 Report commissioned by Goldman Sachs found internationally active SME’s in the UK were three times more likely to introduce new products or services than domestic focused companies. It found strong evidence that SME internationalisation lifted productivity. The OECD has made similar findings.
Helping SMEs to develop useful commercial relationships
7.17
KPMG highlighted how SMEs entering a new market often require support in finding appropriate, trustworthy supply-chain and distribution partners and in then developing an understanding of mutual goals.
We believe that government (including Austrade and EFIC) could work with professional services firms and corporations to effectively leverage networks across Asian markets to conduct high-level due-diligence activities to determine the suitability of potential in-country partners, provide Australian SMEs with a trusted network and to establish realistic expectations regarding business cultures and relationships.
Making export administration clearer and compliance simpler
7.18
KPMG suggested providing SMEs with access to easy-to-use and intuitive digital systems and documents to determine FTA eligibility, to help with obtaining export certificates and the relevant approvals.
…establishing a 'single window' to government, would enable SMEs to speed up the export process and allow them to focus on the complexities of doing business in Asia.
Technological solutions to export compliance
7.19
Documentary compliance requirements, according to KPMG, are a key cause of friction in the management of modern supply chains. KPMG believed technology can and should play a major role in facilitating and removing barriers to international trade.
…exploration of options to modernise the way our businesses engage with international markets, including by developing a digital 'single window' for international trade that would enable the centralised submission of electronically standardised import and export requirements.
7.20
KPMG pointed to the benefits of technology shown in UN economic modelling suggesting that the digitisation of trade paperwork could help bolster Asia-Pacific countries’ exports by USD 257 billion a year. KPMG welcomed the Department of Home Affairs’ trade modernisation agenda and the role that emerging technologies such as distributed ledgers, artificial intelligence and data analytics can play in facilitating transparent, secure and frictionless trade flows.
7.21
KPMG promotes the use of advanced data analytics and visualisation to help importers and exporters map their supply chain and to “diagnose pain-points, efficiency drags and to identify and exploit commercial opportunities under trade facilitation frameworks”.
We are also actively exploring how robotic process automation and artificial intelligence can be used to augment high-volume, recurrent tasks associated with the use of FTAs such as the identification and application of FTA rules of origin, standardisation of documentation processes and management of compliance.
7.22
KPMG sees the Australian Government having a key role in assisting SMEs to access cost-effective technology-enabled pathways to use FTAs and develop practical skills in the use of technology.
This could include facilitating greater collaboration with professional services providers to ideate and develop digital solutions to alleviate the administrative and operational burdens of FTA claim compliance and to elevate SMEs' understanding of the potential applications of technology to their operating environment.
Training Provider (FTA-TP) grants.
7.23
Twenty-six organisations across Australia received FTA Training Provider Grants from Austrade worth a total of $2.14 million. DFAT submitted that FTA-TP grant recipients are member-based business organisations with significant SME outreach capacity.
The purpose of the funding is to deliver technical FTA knowledge that increases SMEs’ FTA utilisation in North Asian markets. To date, successful grant recipients have delivered over 120 technical FTA training sessions nationally.
7.24
FTA-TP grant information sessions were held in capital cities or via webinar before the commencement of each grant round. According to DFAT, these sessions were marketed to both member-based business organisations and state government counterparts to encourage engagement from interested stakeholders.
State and territory governments have supported grant recipients by providing speakers for training sessions, venues and, in some cases, additional small grants to boost funding.
7.25
The 120 FTA training sessions were delivered nationally by member-based business organisations such as chambers of commerce, industry associations, bilateral chambers, peak industry bodies, universities and TAFE colleges, through the FTA Training Provider Grant program.
7.26
Ms Kelly Ralston, Chief Client Officer, Austrade, outlined the grants have gone to member based organisations to promote FTAs and the technical aspects of these trade agreements to their members.
The role of those groups is to help build technical training on some of the very technical aspects of free trade agreements. The members that have been covered by those agreements have reached some 300,000 Australian businesses. Training is being delivered by those organisations in a number of ways: through seminars, through one-on-one coaching and through podcasts. I think some podcasts reached some 4,000 people. There are a range of mechanisms to actually engage with the companies that are members of those organisations.
7.27
Mr Warren Cross, Senior Legal Counsel, Cross & Co Lawyers expressed his belief that Austrade have not been too adept at being able to sell FTAs in the areas of services in niche markets.
FTAs in the areas of goods are relatively simple. I've got grapes. I used to pay 20 percent tariff; I now pay five. Services are a little more complex, and I think sometimes it would be better, instead of funding government educational programs, to give money to the trade organisations and let them market that.
7.28
Mr Cross outlined if it was him allocating government resources for growing the trade in services, he would for example give $50,000 to the engineers association and let them work out exactly what the opportunities for engineers to export services are under the FTA.
Those organisations can then target the exact areas where there are opportunities. The problem that Austrade is confronting is that it's a generalist in a specialist world. That's the problem it's confronting. It's trying to be all things to all people, and it's impossible. The world now is niche. It's about niche opportunities, and the successful Australian exporters in the SME space have always been niche.
7.29
The Committee recommends that the Australian Government makes better use of data and technology for identifying and helping Australian small and medium enterprises (SMEs) capture international trade opportunities by:
Embracing e-commerce as a key enabler of trade and including e-commerce as a key feature in future FTAs;
Delivering simplified, user-friendly digital resources and trade technologies to assist SMEs by making it easier to find the export information required for each trade agreement;
Assessing how trade consultant advisory agencies, business chambers and industry representative bodies can provide greater assistance to SMEs in collaboration with governments, including consideration of joint pilots to build the readiness and technological capacity of SMEs; and
Broadening the base and deepening the granularity of export data that is collected, analysed and published so it can better guide exporters and policy makers.
FTA workshops by the Chamber of Commerce and Industry of WA
7.30
The Chamber of Commerce and Industry of Western Australia (CCI) outlined it was contracted by Austrade to run two FTA training workshops over the past 12 months of 2017 and 2018. CCI delivered these workshops over 12 separate events to a wide range of sectors across Perth and the regional areas of WA, which were attended by 185 people in total.
7.31
According to CCI the feedback from these events has indicated that they have been very well received and have proven to be an invaluable opportunity to business.
The key finding from these workshops has been that SMEs often lack the experience, knowledge and skills to fully understand and utilise complex FTAs to their advantage.
7.32
CCI believes its delivery of the workshops has gone a long way to “improving business' understanding of FTAs and provided an important point-of-difference to other FTA events provided in an increasingly crowded market”.
Subsidising SMEs to access the services of customs brokers
7.33
Considering the challenges many SMEs have with understanding tariff classifications, the Freight & Trade Alliance believed improved utilisation of trade agreements by SMEs will only be improved by increasing access of small business to customs professionals.
7.34
FTA submitted this could be achieved by:
i.
Funding free trade agreement export sessions by SMEs with licensed customs brokers;
ii.
Subsidising customs broker services for certain eligible SMEs;
iii.
Creating more awareness of the role of customs brokers within the SME export community.
7.35
The FTA admitted while service providers are generally fluent in inbound trade compliance requirements since training is mandatory in this area, the Alliance see a gap in the knowledge of service providers when it comes to export requirements.
Gaps that have been identified include an understanding of export restrictions, import quotas with trading partners, rules of origin and certificate of origin requirements, distribution hub issues (increasingly an issue), packaging and product standards, import licenses, as well as day-to-day issues relating to import tariffs.
7.36
FTA believed free trade agreement utilisation can be improved by increasing the professional development opportunities provided to freight forwarders and logistics service providers in respect to free trade agreement utilisation so they will provide “better advice and guidance to their SME exporter clients”.
7.37
The FTA submitted that increased utilisation of trade agreements by SMEs could be achieved by:
i.
Funding ongoing professional development opportunities for freight forwarders with a focus on export compliance and free trade agreements;
ii.
Increasing awareness of the role of freight forwarders within the SME community;
iii.
Providing grants for export strategy planning assistance;
iv.
Supporting the freight forwarding community in fostering SME export opportunities.
7.38
In 2017 Austrade funded a Freight & Trade Alliance and Australian Peak Shippers Association project to up-skill Australian customs brokers and freight forwarders in the North Asian free trade agreements. The FTA submitted the project, funded by a one-off grant of $99,020, delivered moderate to advanced level content addressing free trade agreements and non-tariff barriers to trade as they relate to exports, to freight forwarders, customs brokers, as well as customised content that was made available to their SME exporter clients.
7.39
While the FTA claimed the Austrade project was a “great success, with all milestones delivered”, it highlighted there are over 455 licensed customs brokerages across Australia listed on the Department of Home Affairs website, and more than over 1,000 licensed individual brokers.
With the ever-evolving landscape of free trade agreements and the prospect of future changes to tariff regimes, more funding support is needed to ensure that all service providers have access to regular and ongoing professional development in this area.
FTA voucher scheme to assist SME exporters access trade advice
7.40
The Global Trade Professionals Alliance has submitted their support for the Australian Government offering an export voucher scheme for SME exporters to help cover some of their financial costs of professional advice similar to what the Government of Ireland offers its exporters.
7.41
For a business looking to navigate their way through Brexit and who are unsure what to do next, the Irish Government’s equivalent of Austrade InterTradeIreland offers 100 per cent financial support up to £2000/€2000 (inclusive of VAT) towards professional advice in relation to Brexit matters, according to GTPA.
This support can help a business get advice on specific issues such as movement of labour, goods, services and currency management.
7.42
GTPA outlined the Ireland’s eligibility criteria for business to access the financial support:
The company must be a registered small business (250 employees or less) and either an annual turnover < €50m or Balance Sheet total <£43m.
The assistance requested must relate to a cross-border issue
The company must be a manufacturing or internationally tradable service companies
7.43
The GTPA recommends a similar FTA Voucher be introduced by the Australian government for MSMEs to access financial support to assist them to seek the right advice from consultants/ mentors specifically on accessing and utilising Australia’s FTA network.
This should tie to the first recommendation to ensure that business has access to a trusted network of competent advisors with the right capabilities and technical knowledge.
7.44
The GTPA also recommended that the Australian Government could tie the FTA Voucher scheme into the development of an FTA benefits bureau where those seeking detailed information can call an adviser.
7.45
The Government should look outsource the operations of an FTA Bureau to a not for profit organisation focused on delivering international trade capability development.
7.46
Chief Executive Officer, Global Trade Professionals Alliance, Ms Lisa McAuley, wanted the Australian Government to consider introducing a voucher scheme similar to Ireland’s to help support businesses to get the right consulting support to export goods and services.
The GTPA recommends a similar scheme could be introduced by Australian governments to basically assist the small to medium enterprises to access the right support from consulting service providers that can give them the technical knowledge that they need to help understand how to navigate and understand the benefits of FTAs.
Asialink Business recommendations to build capacity
7.47
Drawing on its extensive experience in supporting SMEs to expand or enter new export markets in Asia, Asialink Business through its partnership with the Department of Industry, Innovation and Science, outlined its six recommendations for consideration to build Asian capabilities across all sectors.
1
Seek to build-in and better integrate Asia capability training into domestic trade advocacy and efforts to promote utilisation of FTAs by SMEs. In particular, integrating existing Asia capability programs into FTA outreach, with a holistic approach spanning the spectrum of knowledge acquisition, awareness and capability/action.
2
Ensure ongoing capability and capacity development adopts a ‘whole-of export-journey’ approach, in which FTA utilisation is contextualised within the broader journey from building awareness of international opportunities to successfully taking a product/service to a global market.
3
Undertake more detailed research and mapping into how SMEs access export opportunities, including where FTAs are not utilised, and also the growing emergence of new and non-traditional export channels such as e-commerce platforms. These platforms such as Alibaba and JD.com are becoming increasingly popular platforms for Australian SMEs to sell into major markets like China.
4
Continue to support an active trade advocacy agenda, and tailoring communication strategies that better target SMEs. Seek to communicate with SMEs via peak bodies or organisations that represent them or their sectors, by highlights business case studies and other success stories.
5
Translate awareness of opportunities in Asia into real business action and outcomes, including support to distil the complexity associated with understanding ‘Rules of Origin’ (RoO) requirements for products and consideration of new innovative and digital ‘single window’ options to ease the burden on SMEs.
6
Strengthen and prioritise building an Asia capable Australian workforce, including continued support for Asialink Business to ensuret Australian SMEs are ready, and able to, engage with Asia and utilise free trade agreements.
Bolstering trade links for SMEs with Europe
7.48
Australian Business in Europe-France (ABIE-France) submitted that in order to succeed in France, Australian SME’s would benefit from support which goes beyond the framework of a typical FTA. ABIE recommended the Government considers both ‘tried and true’ and new ways of supporting exporters including:
Mentoring programs involving the Australian expatriate business community in France which has extensive experience doing business in France.
Australian and French governmental cooperation to showcase Australian SMEs at major European events (for example VivaTech) in order to give legitimacy by association which is essential to success in France.
Targeted government-led delegations to France to visit strategic sites, make introductions and host seminars on doing business in France.
Austrade, DFAT and French government assistance with helping Australian businesses better understand the administrative culture and practice in France. Referrals to help SMEs to seek advice on French business culture and labour law would be beneficial.
Joint French and Australian government assistance for Australian SMEs currently headquartered in London needing to relocate to Europe following BREXIT. According ABIE-France, “Paris is one of the true global cities in Europe, with high quality infrastructure, skilled people, research incentives, excellent access to the rest of Europe and an unparalleled cultural and intellectual life”.
Innovative Franco-Australian partnerships.
Having regard to the fact that SMEs are not often well-resourced or connected, ABIE-France wants better information for SMEs on:
Useful websites publishing developments and opportunities in Europe in priority areas (noting the variety of French initiatives)
EU and WTO rules on tendering for projects in Europe
7.49
ABIE-France believed Australian SMEs would benefit from “greater investment in language training and business and cultural exchange with France for startups, social businesses, freelance workers, graduates and executives”.
Australia needs a strategy for identifying and promoting the right business here. Beyond this, SMEs need opportunities to be visible and support to appreciate the cultural and business context in Europe. This is as critical to their success as favourable trade terms.
Developing business networks between the EU and Australia
7.50
Ahead of any FTA with the EU, ABIE-France recommended that the Government confirms its strategic priority areas for exporting goods and services to Europe.
Despite being a sophisticated market, there are areas where France can benefit from Australian goods and services. For example, Ramsay Healthcare has been successful in the French private medical clinic sector in France.
7.51
The German Australian Business Council (GABC) is a business network based in Europe established two decades ago with both Australian and German companies as members to “foster long term relationships between Germany and Australia”.
Aimed at advancing both company and individual pursuits, we communicate and catalyze opportunities through business networking and other activities. The German Australian Business Council focuses on building relationships through business activities between Germany and Australia.
7.52
The GABC supported the work of an international network of German chambers of commerce throughout the world. This network is funded mostly by membership fees but has some support from the German Federal Government and the European Union.
7.53
One of the chambers is the German-Australian Chamber of Industry and Commerce (GACIC) based in Sydney with chapters in Melbourne and Brisbane.
This international network is often the “first port of call” for German companies interested in exporting to other countries. The network provides information about exporting, local product standards, setting up companies and may provide additional services, such as the reclamation of GST. Several companies have reported that these chambers have been extremely helpful in establishing business through contacts as well as information and we know that this engagement has been part of the success in Germany’s export led economy.
7.54
GACIC submitted its role for German business in Australia and representing more than 900 companies active in bilateral business relationships.
These companies represent a variety of industry sectors and are particularly small to medium-sized enterprises (SMEs) and medium-sized German companies ("Mittelstand").
The GACIC supports a free trade and investment environment and is committed to deepening economic links and business exchanges between Australia, Germany and the European Union as well as the wider Inda-Pacific region.
7.55
The GACIC called for any information for SMEs about relevant tariff barriers, including the reduction and removal of tariff barriers, to be “easily accessible through credible and reliable sources”.
In respect of non-tariff trade barriers, it is conducive to the success of FTA's that all relevant regulations are SME-friendly. Key aspects include using plain English in the FTA's, having low documentation requirements and including country-of-origin regulations that are SME friendly. As SMEs are usually not equipped to establish separate compliance departments, it is critical that relevant regulations are easily understandable and applicable for the business owner or business development manager interested in possible international trade opportunities.
7.56
To find opportunities for Australian exporters, ABIE-France believed a comprehensive analysis of Australian SME capability is required to identify areas where Australian companies have developed niche technologies or services with a potential to develop in Europe.
Impact of migration policies and diaspora on trade
7.57
Mr Jonathon Cheng’s 2016 report Engaging Diasporas: The case of Australia and other key countries drew upon an academic definition of diaspora by academics Agunias and Newland describing diasporas as emigrants and their descendants who live outside the country of their birth and ancestry, either on a temporary or permanent basis, yet still maintain affective and material ties to their countries of origin that they identify with.
7.58
Mr Cheng’s report noted that in the past, technology and distance often played an inhibiting role in preventing diasporas from connecting effectively with their ‘homelands’.
More recently however, and particularly in the past two to three decades, the communications revolution and rapid transformation of transportation has made it much easier for people to migrate and explore international linkages and business opportunities. This has entailed members of diasporas attempting to utilise their cross-cultural skills to their own benefit, often developing people-to-people links across diverse sectors including business, trade and science.
7.59
Professor Fazal Rizvi from the University of Melbourne explained in an article based on his joint report Australia’s Diaspora Advantage in 2016 that “immigration no longer necessarily involves an expectation of permanent detachment from an immigrant’s country of origin”.
Dual and even multiple citizenships have now become available to many Australians. Furthermore, an increasing proportion of immigrants to Australia from Asia are highly skilled, often at a very high level. Many come to Australia not only with intellectual but also financial resources, prepared to invest in both local and global enterprises.
7.60
Professor Rizvi highlighted the path from international education to migration has now become a well-trodden one.
The decision of many Asians to migrate to Australia is also now much better informed than ever before, as indeed is the ability of immigrants to remain connected with friends and family at home and elsewhere, using new communication and transport technologies. Many Chinese-Australians, for example, spend an average of two to three hours each day on WeChat or Weibo. This enables them to keep up with social trends and remain in touch with economic and political developments in China.
7.61
Mr Cheng’s report supported development of a diaspora engagement strategy and to leverage the knowledge of immigrants of their countries of origin. The report stated diasporas in Australia can play a key role in trade, investment, and skills and knowledge transfer.
Diaspora members create connections between producers and consumers in countries of origin (COO) and country of residence (COR), as well as introduce products from a country of origin to new markets. Diasporas invest directly in their CORs, and can also share valuable market information about their COO with entrepreneurs and firms in their COR. The ‘immigrant effect’ explains how firms founded by immigrants, or who have immigrants in key decision-making processes, are more likely to enter foreign markets.
7.62
Mr Cheng’s report stated the presence of a “prominent diaspora can arguably have a strong positive economic effect, irrespective of policy settings or frameworks”.
Evidence is particularly strong in the case of the Chinese diaspora, where a number of studies have shown that overseas Chinese co-ethnic networks can facilitate trade and foreign direct investment (FDI). For example, an empirical study showed that between 1970 and 2010 the Chinese diaspora “exerted a statistically and economically significant effect on host countries’ long-run economic growth” through increasing trade openness by 31 per cent, enhancing investment by 18 per cent, and increasing total factor productivity by 51 per cent (Priebe & Rudolf 2015)
7.63
Mr Sean Keenihan, the President of South Australia Branch of the Australia China Business Council believes sympathetic migration policies can help states such as South Australia and regional areas attract SMEs.
…keep open and have differentiated migration pathways for people who economically contribute to the growth of small business, particularly in places like South Australia.
7.64
Ms Judy Zhu, the General Manager of the Australia (Melbourne) Exhibition Centre, wants more focus on education about FTAs and also better understanding of the cultural and business differences between Australia and trading partners.
We need more education sessions to educate these businesses and also more supportive policies to encourage local businesses to go to overseas markets to learn their cultures and also more relaxed immigration or whatever policies to encourage businesses from overseas to come here.
7.65
Mr Simon Yeh, President, Australian Taiwanese Chamber of Commerce (QLD) Inc. outlined how the ATCC was actively encouraging closer links between mostly Taiwanese businesses in Australia and Taiwan.
The Australian Taiwanese Chamber of Commerce is mostly involved with Taiwanese businesses. Last year we went back to Taiwan with the Ipswich mayor for a trip to build business and cultural relationships. We do that on an ongoing basis now, so if anyone's interested in going back to Taiwan for a business trip they can get us to get involved and we can help them to connect with small businesses and government councils.
7.66
Mr Yeh says a lot of ATCC members have Taiwanese origins and also are involved in import-export trade with Asian markets.
To a certain extent, the Taiwanese government has been pushing a lot of business to come into Australia with their new policy. So one of the things that we have been focused on is encouraging Australian businesses to promote business here and helping businesses in Taiwan to come here and establish themselves. So we've got banks coming over, and I believe there were some food exports and imports here. That's what we are mainly focused on at this stage.
7.67
Mr Chris James, Executive Director, NORTH Link, which is the umbrella business networking body for Melbourne's north, saw advantages from forging closer trade links between an ethnic diaspora living in Australia and their countries of origin.
We've taken members to trade shows in Thailand and Dubai, and we've also hosted an inbound delegation from Chongqing in China. We've also developed relationships with local Chinese traders who trade goods back to China as well as through Chinese business networks locally.
7.68
The Committee recommends that the Australian Government commissions an audit into the untapped human capacity of Australian nationals living and working overseas and Australia’s multi-ethnic diasporas living and working in Australia and their related chambers and associations with a view to formulating a strategy to unlock that capacity to advance Australia’s interests, including opportunities for Australian small and medium enterprises.
Mr Ted O'Brien MPSenator the Hon Ian Macdonald
ChairChair
Trade Sub-CommitteeJoint Standing Committee on Foreign
Affairs, Defence and Trade
13 February 201913 February 2019