- SMEs, First Nations and diaspora communities
Overview
5.1The Committee received evidence outlining issues and challenges that particularly impact the ability of small and medium sized enterprises (SMEs), First Nations, and diaspora communities to engage with and benefit from trade. It is suggested that these groups are underrepresented in trade and have considerable scope to engage further, bringing greater economic and social benefits.
5.2Given that SMEs are more acutely affected by limited awareness, and the costs and complexity associated with trade, actions taken to address these challenges will greatly improve their ability to take up trade opportunities. First Nations trade could be encouraged by supporting areas where First Nations businesses and communities have unique products or advantages such as tourism, native bush foods and botanicals, and art and cultural products. Australia’s large diaspora communities have considerable strengths that can be better leveraged to engage further in trade opportunities and support Australia’s trade interests, which could be encouraged by offering consultation and engagement activities in non-English languages and media.
5.3Targeted education and outreach were identified as having an important role in overcoming awareness and capacity challenges encountered by SMEs, First Nations, and diaspora communities. Building on current activities, outreach and engagement providing tailored information and advice could support greater access to the benefits of trade. Across these groups, submitters identified that there is insufficient data and information available to provide a clear picture of how they currently engage with trade and free trade agreements (FTAs). This is considered important to understand the scope for greater uptake of trade opportunities and what types of support may be effective.
5.4It should be noted that there is a large degree of overlap between the SMEs and First Nations or diaspora community groups, that is, most First Nations and diaspora community led businesses are also SMEs. This chapter covers evidence relevant to issues and challenges affecting the ability of SMEs, First Nations, and diaspora communities to engage in trade. Chapter 3 considers the level of understanding and awareness of the benefits of trade including how it impacts on the ability of Australian businesses to access those benefits. Chapter 4 outlines broader challenges and barriers to accessing and maximising the benefits of trade and FTAs. The issues outlined in Chapters 3 and 4 also broadly apply to SMEs, First Nations, and diaspora communities and their engagement with trade.
Small and medium sized enterprises
5.5Using Australian Bureau of Statistics (ABS) data, the Australian Small Business and Family Enterprise Ombudsman estimates that small (0-19 employees) and medium (20-199 employees) sized enterprises comprise 99.8 per cent of all businesses in Australia (June 2024). It highlights their contribution to the Australian economy by estimating that combined, SMEs employ over 8 million people or 67 per cent of the private sector workforce and contribute almost $1 trillion or 56 per cent to gross domestic product (GDP) (2022-23).
5.6The Department of Foreign Affairs and Trade (DFAT) cited that of 56,000 businesses that exported goods 89 per cent were SMEs, however large businesses accounted for 96 per cent of exports by value (2019-20). Of 124,500 businesses that imported goods 93 per cent were SMEs, but large businesses accounted for 86 per cent of imports by value (2020-21).
5.7Submitters widely identified that trade and FTAs can bring substantial benefits for SMEs. For example, the Bankwest Curtin Economics Centre (BCEC) outlined that accessing international markets through FTAs offers large growth opportunities to SMEs (particularly start-ups) through exporting products and services overseas, or attracting foreign investment.
Challenges faced by SMEs in engaging with trade and FTAs
5.8Despite the potential benefits, SMEs were considered to lag behind larger businesses in their engagement with trade and FTAs. Submitters identified two main challenges by SMEs: limited awareness of how agreements can facilitate expansion into international markets, and the complexity and administrative costs associated with trade and FTAs.
5.9Many submitters made the point that the complexity and administrative costs that apply broadly are more acutely faced by SMEs. For example, the Northern Territory Department of Industry, Tourism and Trade (NTDITT) noted that navigating the regulatory requirements of FTAs incurs administrative and financial costs that are disproportionately burdensome for smaller businesses.
5.10Similarly, the Business Council for Sustainable Development Australia (BCSDA) stated that many SMEs: ‘… struggle with the complexity and administrative burden associated with FTAs’ and that ‘…uptake is higher among businesses with dedicated resources to navigate international trade regulations.’
5.11The Australian Dairy Industry Council (ADIC) also commented that the administrative complexity and burden associated with FTAs: ‘… is especially challenging for [SMEs] that may lack the resources to manage these requirements effectively.’
5.12The Australian Industry Group (Ai Group) outlined areas where SMEs face particular complexities and often lack awareness:
A significant proportion of SMEs have a limited understanding of how to assess their products in accordance with rules of origin [RoO], how to navigate the procedures for entering service markets, and how to utilise other trade-related provisions available in FTAs, including long-term certificates of origin [CoO], advance rulings, and methods for resolving disputes.
5.13Ai Group also outlined that SMEs on the export side are often not aware that their goods can receive preferential tariffs under FTAs, particularly if relevant documentation is handled by service provides or importers.
5.14NTDITT similarly identified that many SMEs rely on customers brokers, freight forwarders or importers and are not directly aware of the benefits of individual FTAs, limiting their ability to make informed decisions and leverage opportunities.
5.15Mr Richard Basil-Jones, Chief Executive Officer (CEO) of the Australia-United Kingdom Chamber of Commerce reflected that in relation to the Australia-United Kingdom FTA (A-UKFTA), SMEs were generally aware of the removal of tariffs under the agreement but had limited awareness or understanding of the benefits of other provisions relating to mobility, recognition of qualifications, First Nations, government procurement, and e-commerce.
5.16Dr Wei Li advised that in many Asian countries SMEs often operate with strong emphasis on social and informal networks, which means that understanding and meeting the complex rules and regulations required to engage in international trade can be particularly challenging.
5.17BCEC advised that SMEs often take on significant risk when expanding to access international markets, particularly through exposure to supply chain disruptions, trade disputes, changes to bilateral agreements, geopolitical tensions, and slowdowns in sales. It added that unlike SMEs, large businesses generally have the capacity and scale to balance their exposure to these risks and often have a greater ability to react to the impact of changes in the international trade environment on their business.
5.18There are particular challenges for business based in regional and remote areas. In evidence to the Committee’s inquiry on negotiating FTAs, Mrs Sarah Whelan, CEO, Karratha & Districts Chamber of Commerce & Industry, identified the lack of knowledge about how to engage with export opportunities, logistical challenges, and the absence of dedicated funding as the main barriers to entry to international markets:
A lot of people are unsure of how to go about it and how to enter those markets. They do have products and services that are available, but making those connections with the international market is challenging because of where to start. The other one would be the logistics. We have a lot of ports up here, but a lot of them are privately owned, so it is understanding the logistics because we are quite remote… And also access to financial resources… A lot of our funding and bits and pieces around here are really specific to the area rather than thinking on a global scale.
Improving SME access to the benefits of trade
Targeted education and outreach
5.19A number of stakeholders put forward the need for targeted education and outreach to build awareness and capacity amongst SMEs to enable them to better access the benefits of trade and FTAs. For example, the NTDITT observed: ‘There is a need for more targeted education and outreach programs to raise awareness among Northern Territory [NT] businesses, particularly [SMEs], about the specific opportunities and advantages provided by [FTAs].’
5.20Similarly, the BCSDA advocated for targeted education programs and resources to support SMEs to better understand the benefits offered by FTAs and how to meet the regulatory requirements to access new markets. It further suggested that Austrade’s existing programs could be expanded to include more tailored modules.
5.21The Australian Information Industry Association (AIIA) also commented on the need for government efforts aimed at increasing engagement with trade to focus on SMEs: ‘Greater awareness and education about the benefits of FTAs, particularly focussed on the SME portion of the market, may be needed to maximise benefits to Australian industries.’
5.22The Eastwood Chinese Business Collective (ECBC) and the Voice of Korean Australian Businesses (VoKAB) both told the Committee that there is significant potential for greater trade amongst their respective diaspora community led SMEs. However, these businesses often don’t have the resources to understand and utilise FTAs and would benefit from greater targeted outreach and engagement from Austrade.
5.23The BCSDA recommended the establishment of a dedicated FTA advisory service within Austrade, aimed specifically at SMEs that would provide tailored advice, training, and resources to help businesses understand and utilise FTAs effectively. It pointed to the United Kingdom’s (UK) Export Support Service as a program that has successfully provided similar advice to SMEs to increase uptake of FTAs.
5.24Ai Group suggested the Australian Government should increase resources to assist SMEs to build capacity to navigate the complexities of FTAs, including to improve understanding of RoO and CoO. It concluded that: ‘… the government must develop a long-term, effective plan for educating SMEs about the contents of FTAs and how to use them.’
5.25Mr Chris Barnes, Head of International Affairs at the Australian Chamber of Commerce and Industry (ACCI) noted that a key role of their organisation is to assist companies from very small business to large corporates to engage in new export opportunities and take advantage of FTAs.
5.26Mr Jay Meek, General Manager, Trade Branch, Trade and Investment Group, Austrade, outlined Austrade’s approach to education and outreach and described activities targeted at SMEs in relation to the Australia-India Economic Cooperation and Trade Agreement (A-IECTA):
We knew what provisions were in that [FTA], and we started building awareness campaigns and promotional material for SME businesses and running sessions with them about what those benefits look like. That involved a roadshow right across Australia, bringing business together to hear about it. There were webinars that they could join from their phone, where they could hear about those opportunities. We then take it a step further, where we go in market and take delegations.
5.27Mr Jay Meek, Austrade also advised that the suite of digital services and tools developed in recent years to provide information on FTAs, such as the Go Global Toolkit, provides a much greater level of accessibility to a wider audience and is of particular benefit to SMEs.
5.28Similarly, the AIIA considered that online tools and digital platforms can help overcome the costs and barriers to the trade in digital goods and services that disproportionately affect SMEs.
5.29Dr Sabine Pittrof, Chair, German Australian Business Council, told the Committee that to better engage with SMEs Austrade needs to be equipped to do more of its current work rather than needing to take a different approach:
I think Austrade will need more funding to do that… at least over here, we're not seeing them in a position to take on any more than they do at the moment. In general, I think it would be great if there could be a lot of information outreach. There could be seminars, there could be in-person events and there could be newsletters distributed, for instance. But all of that needs a little bit of funding. It might not have to be a lot, but it does need the money to back this up. My view is that it's not a matter of Austrade or the states not doing what they should be doing. I think, in fact, they do… They're doing what they can, but they have limited resources both in terms of staff and in terms of funding.
5.30Several stakeholders discussed the role of international chambers of commerce and business councils in assisting SMEs to better understand and engage in trade opportunities. For example, Mr Patrick Mayoh, NSW President, Australia China Business Council (ACBC) noted the differing levels of understanding amongst its members of the benefits of the China-Australia FTA (ChAFTA):
Some of our larger members who have a presence in China have an outstanding knowledge… At the other end of the spectrum, [SMEs], are the ones that I think need our help. They're looking to export to China, but have no idea how to do it, who are the relevant authorities, what are the benefits under ChAFTA. I think there is a role… for us at ACBC to help them navigate that process, even if it is pointing them in the direction of existing tools like the FTA portal.
5.31Austrade mentioned that it has undertaken activities to promote the benefits and opportunities contained in recent agreements such as the A-UKFTA by directly engaging with SMEs in partnership with the Australia-UK Chamber of Commerce.
Other programs and strategies
5.32Several suggestions beyond education and outreach were made to increase the capacity for SMEs to take advantage of the benefits of trade and FTAs.
5.33BCEC suggested that greater uptake of trade and FTAs could be encouraged by exploring strategies that support SMEs to mitigate the initial risk of engaging in international trade. Dr Daniel Kiely, Senior Research Fellow at BCEC told the Committee that this could be achieved through promotion and expansion of existing initiatives such as those offered through the Small Business Development Corporation.
5.34The AIIA advocated that in recognition of the role of SMEs in driving innovation and the difficulties faced in accessing global supply lines, FTAs should include specific commitments to increase SME engagement in trade, such as those contained in the A-UKFTA.
5.35The BCEC emphasised that: ‘… the full extent to which FTAs affect businesses based on business size needs to be better understood.’ It later added that better information and data are required to track and enhance our: ‘… understanding if SMEs have the information, knowledge, and skills required to maximise the full potential of trade and the benefits of existing and new FTAs.’
5.36An example of an approach used in other countries to better support SME engagement in trade is the Korea Trade-Investment Promotion Agency (KOTRA). KOTRA is the national organisation responsible for promoting trade and investment under the Ministry of Trade, Industry and Energy. KOTRA operates 131 overseas offices in 85 countries, and: ‘… helps foreign companies, organizations, and governments explore business opportunities and forge partnerships with Korea.’
First Nations
5.37The First Nations business sector is growing and is expected to continue to grow. The National Indigenous Australians Agency (NIAA) referred to recent estimates showing that First Nations businesses contribute more than $16 billion to the Australian economy and employ 116,795 people.
5.38The NIAA highlighted that many First Nations entrepreneurs have established successful businesses and that First Nations peoples are pursuing business opportunities as a vehicle for economic self-determination. It added that: ‘A strong, diverse and self-supporting First Nations economy is key to empowering First Nations peoples, and placing First Nations business owners, their families and communities in control of their economic future.’
5.39Mr Darren Godwell, CEO, i2i Development Global (i2i DG) told the Committee as part of its inquiry on negotiating FTAs about the potential for First Nations businesses to engage with international trade:
We believe that [there] is a very strong case to be made that, in that very fast-growing sector of the Australian economy—Indigenous businesses—there are significant opportunities for those Indigenous companies to extend their services and product into overseas markets. We believe that there is an opportunity for those businesses to secure greater exports into new markets.
5.40The NIAA explained that trade and FTAs can play a role in advancing economic and social outcomes for First Nations Australians and can provide new opportunities and revenue streams for First Nations exporters as well as promote investment into First Nations enterprises.
5.41DFAT’s website elaborates on the potential benefits of participation in international trade for First Nations businesses and communities:
An inclusive First Nations trade and investment agenda has the potential to deliver economic growth and economic prosperity for First Nations businesses and their communities.
… In addition, First Nations exporting businesses are role models and multipliers – they are more likely to train and employ Indigenous staff and channel profits back into their communities. The value of Indigenous trade is felt back along the supply chain and into communities on-country where jobs and wealth are created. In turn, this has the potential to contribute to a broad range of Closing the Gap targets and support improved family and community wellbeing.
Challenges faced by First Nations in engaging with trade and FTAs
5.42Despite their being considerable opportunities and benefits, submitters raised specific challenges faced by First Nations businesses and communities in engaging with trade and FTAs. For example, the BCSDA broadly linked First Nations communities’ limited access to the benefits of trade and FTAs to a lack of information, resources, and access to international networks.
5.43Nagula Jarndu Designs is a not-for-profit First Nations entity based in Broome, Western Australia, that primarily produces textiles with a focus on social enterprise through art. It told the Committee about its difficult experience in exploring trade opportunities with little access to direct assistance from government or bodies such as chambers of commerce.
5.44Nagula Jarndu Designs emphasised that while it has an interest in engaging with international markets, it must also do so in a way that remains committed to its purpose and role in the community. Ms Eunice Yu, Manager, Nagula Jarndu Designs explained to the Committee:
We see ourselves as a social enterprise rather than a business directly. So, understanding the different interpretations about how people operate within First Nations economies… There's a lot that has to be accommodated in terms of bringing people along the journey.
[…]
The lens we look through is as a collective. Our business structure may need to change in terms of having a different form of governance for the actual business side of it. We don't know what that looks like. That is what we're dealing with at the moment, seeing how naturally we've grown so much…. We're just doing what we love to do. That's how we see it. Of course, all of the financial side of things have to work as well.
5.45Challenges in attracting investment to support international expansion was also raised by Mr Darren Godwell, i2i DG who told the Committee that First Nations businesses appear to be underrepresented in inflows of foreign direct investment. He elaborated that:
Indigenous interests currently extend across over 50 per cent of the continent of Australia. Significant investment opportunities around critical minerals, rare earths, base metals, mining activities on base metals, agriculture and some Indigenous botanicals would go directly to those Indigenous land interests. Being able to access foreign direct investment, like everybody else in the Australian economy, would bring those valuable capital resources to expanding those economic opportunities. A key part of lifting the value of export earnings derived from Indigenous products and then from Indigenous businesses goes to the extent of the support we extend to those Indigenous export businesses.
Improving First Nations access to the benefits of trade
5.46The Committee received evidence that made proposals to improve First Nations access to the benefits trade through building engagement, awareness, and capacity as well as providing greater support through FTAs and to First Nations led sectors.
Consultation, representation and engagement
5.47DFAT advised that it connects with First Nations groups as part of its consultation and engagement processes in the development of FTAs as well as in activities to raise awareness of the benefits and opportunities of FTAs once they are in force.
5.48The Department of Agriculture, Fisheries and Forestry (DAFF) also stated that the Government is working to ensure that First Nations groups are better involved in consultation processes as Australia increasingly seeks to improve trade outcomes for First Nations people, including recognising their cultural and leadership role in agriculture.
5.49Both the NIAA and DFAT highlighted the establishment of the pilot First Nations Trade and Investment Advisory Group. The NIAA explained that it: ‘… will support a more streamlined and coordinated engagement with First Nations representatives, and will intersect with work underway by the Ministerial Council on Trade and Investment that is exploring how Australian governments can work together to improve the trade and investment outcomes of First Nations enterprises.’
5.50The NIAA, DFAT and DAFF all drew attention to the appointment in April 2023 of Australia’s inaugural Ambassador for First Nations Peoples, Mr Justin Mohamed, to lead the Office for First Nations International Engagement within DFAT. The office which will work in partnership with First Nations and across government in areas including trade and investment, intellectual property and exports, climate change, human rights, tourism and development.
5.51Mr Darren Godwell, i2i DG proposed that there would be considerable value in a First Nations peak body focused on trade and investment matters, particularly export opportunities for First Nations businesses. He also emphasised that while such a body should ultimately be sustained by those who it represents, there is a role for government to support it in a similar way to that provided to industry and business peak bodies.
Targeted education and outreach
5.52The BCSDA recommended the implementation of community-specific trade facilitation programs to address their specific needs. It noted that this could include the expansion of existing initiatives to provide greater support and resources to First Nations businesses. It also highlighted Canada’s Indigenous Export Strategy that offers targeted support to Indigenous businesses, helping them navigate international markets and leverage trade agreements.
5.53I2i DG suggested that First Nations interests are underrepresented in resources allocated to implementation measures once FTAs are in force and drew a link to the lack of specific clauses advancing First Nations interests in agreements.
5.54DAFF advised that it is supporting an Export Readiness Pilot for First Nations Agriculture with the aim: ‘… to uplift the export readiness of First Nations’ businesses by using digital and paper-based traceability systems to meet export requirements and consumer demands.’
FTA provisions
5.55Including specific provisions FTAs can play a role in increasing First Nations trade opportunities and benefits. The A-UKFTA was cited as an agreement that promotes the commercial interests of First Nations producers. It includes provisions that provide for royalty payments to be made for the resale of art products, which although not specific to First Nations artists is likely to bring particular benefits to that community.
5.56The Canada-United States-Mexico Agreement was also referred to as an example of an agreement that includes Indigenous specific clauses, including preferential treatment for predominantly Indigenous industries such as outlining a process for handcrafted Indigenous textile and apparel goods to be considered duty-free.
5.57The Productivity Commission pointed out that FTA provisions specific to products that originate from certain communities, such as First Nations communities, can bring considerable benefits to those communities. However, it cautioned that while such provisions can create benefits, it is important to carefully assess the associated transaction costs and market distortions that they may create.
5.58The NIAA emphasised that First Nations communities should not be disadvantaged by FTAs, and therefore it is important to ensure that governments retain the ability to protect intellectual and cultural property as well as efforts to promote economic inclusion through domestic measures like the Australian Government’s Indigenous Procurement Policy.
Tourism sector
5.59Tourism is a key sector through which First Nations Australians engage with the international economy, and which provides significant benefits to First Nations communities. The NIAA observed that tourism allows: ‘… practitioners to financially benefit from the unique skills, knowledges and heritage of the world’s oldest continuous cultures. More importantly it provides an avenue for First Nations Australians to share, maintain and pass on important cultural practices and traditions.’
5.60Australia’s national visitor economy strategy, THRIVE 2030, includes the aim to leverage First Nations cultures as a competitive advantage for Australian travel experiences by embedding First Nations cultures into Australia’s brand positioning and developing First Nations tourism opportunities. Support through THRIVE 2030 has provided First Nations tourism opportunities through grants for operators to expand tourism services, a program to deliver tailored mentoring to tourism businesses, and co-investments with state and territory governments who identify and co-design tourism projects with First Nations communities.
5.61The NIAA also advised that it is working with Austrade, Tourism Australia, state and territory governments, and First Nations representatives to codesign a First Nations Visitor Economy partnership to support greater participation in the visitor economy.
5.62Spirits & Cocktails Australia (SCA) drew a link between increased use of native foods and botanicals in Australian spirits products (see below) and increased demand for natural and cultural tourism. This would bring greater benefits to First Nations business and communities.
Native foods and botanicals
5.63The native foods and botanicals industry was recognised as having significant potential to continue to expand through international trade and bring greater benefits to First Nations communities.
5.64The NTDITT explained that native foods or bushfoods are integral to First Nations cultural identity and connection to country and that traditionally an estimated 10,000 native species have been used for food, fibre, shelter, and ceremonial purposes.
5.65SCA outlined that increasing trends towards new products, authenticity, premiumisation, and products that can demonstrate ESG (environmental, social, and governance) benefits provides opportunities for uniquely Australian flavours, and in particular for native and indigenous ingredients in Australian spirits. It added that: ‘The potential growth in the promotion of indigenous produce in Australian spirits presents a significant opportunity to develop First Nations businesses.’
5.66The NTDITT also identified opportunities to harvest, produce and export native foods for the high value cosmetic and nutraceutical markets.
5.67SCA cited New South Wales (NSW) Government research that found that growth in the native foods and botanicals industry is limited by marketing, insufficient production methods and technology, and the inability to develop business models that scale whilst maintaining First Nations knowledge, culture and control.
5.68The NTDITT also underscored the importance of expanding the industry ‘while respecting and maintaining cultural identity and connections’ as well as supporting greater influence and involvement from First Nations communities.
5.69Several submitters identified challenges in exporting native foods and botanicals through receiving country regulations and requirements. For example, Trade and Investment Queensland (TIQ) referred to difficulties faced by exporters of First Nations food products to the UK, where they are being required to provide evidence of safe consumption of the product for 25 years or to go through a full authorisation process as a new food. It added that the issue is currently being worked through by the Australian, UK and European Union (EU) governments.
5.70Ms Sandra North, Member, Australian Distillers Association (ADA) shared firsthand experience of the benefits of Australian spirits with First Nations ingredients as well as the difficulties faced in exporting, using the example of gin produced by Seven Seasons that contains ants harvested from Larrakia Country in the NT. Ms North told the Committee that:
In the restaurant trade, chefs order perhaps 100 grams of green ants. But, in distilling, we order hundreds of kilos of green ants every year. As with the other native bush foods that we use, we buy in bulk… Many distilleries in Australia now use native bush foods in their spirits. We're value-adding to that product.
[…]
When we tried to get this through to the [United States], they told me that these ants are an insect and a biosecurity risk. I tried explaining that they are sterilised in 40 per cent alcohol… In the UK, I was asked to register this as a food item, as they wouldn't recognise it as a beverage because of the ants. In China, I can't get a definitive answer from customs whether they're going to let this product in or not, as with some of the other native bush foods.
5.71The NTDITT advised that native foods face several challenges related to Harmonized System Codes (HS Codes), which are used internationally for the classification of traded products. These include a lack of specific codes for classification and inconsistent classification between countries which can lead to reduced market access, delays in customs clearance, higher tariffs, stricter quarantine requirements, and difficulty in tracking trade volumes and values. It added that it is vital these challenges are addressed by better recognition of native foods within the system, education and training for customers officials, and collaboration between the industry and government to ensure accurate classification.
5.72Ms Sandra North, ADA also referred to HS Codes as being a barrier: ‘… because there's no HS code for these ingredients, there's no understanding of them and there are no specifications.’
Intellectual property and geographical indications
5.73Some stakeholders discussed the notion of ‘geographical indications’ (GIs) and how their introduction could bring additional economic and social benefits to First Nations communities. The NTDITT recommended developing a legislative framework to recognise GIs and explained how they could bring additional benefits:
[GIs] can be a powerful tool for protecting the intellectual property and authenticity of Aboriginal flora and fauna in Australia.
… GI’s can protect the traditional knowledge and cultural heritage of Aboriginal communities preventing unauthorised use of their flora and fauna. GI’s can add value to Aboriginal products, helping to create premium markets and providing economic benefits to Aboriginal communities through sustainable and culturally appropriate commercialisation. This ensures that consumers receive authentic products, enhancing trust and recognition in the market.
5.74I2i DG outlined the case for recognising knowledge in Indigenous plants and botanicals in Australia as the basis for GIs:
They are not growing Kakadu plum in Spain. Yet we see multinational cosmetics companies selling skin care products in the EU that openly market Kakadu plum as the active ingredient. There is no way for us to contest it, and those companies are not asked to prove the authenticity or the supply chain of that Kakadu plum in their product. Obviously, if they were—as they do with many of their own ingredients in their own products—we would capture more of that wholesale market for Kakadu plum production in Australian markets, particularly in northern Australia.
5.75I2i DG made a connection with the inclination for consumers being increasingly willing to pay a premium for products that can demonstrate provenance and authenticity:
… by Australia securing Indigenous botanicals and naming them by species and by usage, by upholding similar standards to those that have been developed over many decades in the EU, we would, in effect, capture the export values of those wholesale markets immediately for Australian businesses and producers, primary producers in regional and remote parts of Australia.
5.76The NIAA advised that in 2024, after 24 years of deliberation, the World Intellectual Property Organization (WIPO) agreed by consensus, to conclude the Treaty on Intellectual Property, Genetic Resources and Associated Traditional Knowledge at a Diplomatic Conference in Geneva. It elaborated that:
The treaty provides First Nations Australians with a clearer pathway to benefit from the use of genetic resources and traditional knowledges that have existed and evolved for tens of thousands of years. Key to the treaty is the core transparency requirement that requires disclosure of the use of genetic resources such as medicinal plants and agricultural crops, and associated traditional knowledges when seeking a patent. This recognition aligns with the Australian Government’s commitment to introduce new stand-alone legislation to protect First Nations traditional knowledges and cultural expressions, including to address the harm caused by fake art, merchandise and souvenirs.
Research and data
5.77Several stakeholders identified the absence of research and data to provide insight into how and to what extent First Nations businesses and communities engage in international trade. For example, the Productivity Commission stated that there are knowledge gaps in understanding engagement with trade and FTAs amongst different communities and that it supports the need for future research into how First Nations communities benefit from FTAs.
5.78BCEC made a similar point, noting that it is not aware of data to the level that would indicate how certain communities, such as First Nations communities, are engaging with international trade. It added that better quality data to be able to track down to that level of engagement with international trade would be beneficial.
5.79DFAT explained that FTA utilisation on the export side is measured through customs data obtained from trading partners, and that this data does not contain information that identifies or provides insight into the level of First Nations participation in trade and use of FTAs.
5.80Mr Darren Godwell of i2i DG told the Committee that it is not known to what extent First Nations businesses are engaged in trade and suggested that this is because the relevant data is not being captured. He added that: ‘In the absence of good quality data, we'll probably make poorer decisions, and we'll make decisions on assumptions rather than on data.’ Mr Godwell also emphasised the importance of understanding the extent to which First Nations businesses access existing support for Australian businesses to expand into new markets and the need to set targets around their participation.
5.81As mentioned above, a key element for First Nations business growth and expansion into international market is increased access to foreign direct investment. Mr Darren Godwell, i2i DG explained that there is insufficient data on the value of foreign direct investment flowing to First Nations businesses or interests and that this is something that needs to be addressed.
Diaspora communities
5.82Australia is a diverse and multicultural nation with many large diaspora communities. ABS data shows that 30.7 per cent of Australia’s population, or 8.18 million people, were born overseas (as at June 2023).
5.83As seen in Table 5.1, the most common countries of birth within the Australian population other than Australia are England, India, China and New Zealand (NZ). While the number of Australians born in England and NZ has historically been high, the number born in Asian countries has increased the most in recent years. Between 2013 and 2023 the countries of birth with the highest increases were India (467,000), China (223,000), Nepal (144,000), and the Philippines (143,000).
Table 5.1 Top 10 countries of birth for Australia’s estimated resident population
| | |
England | 961.57 | 3.6 |
India | 845.80 | 3.2 |
China* | 655.76 | 2.5 |
New Zealand | 598.09 | 2.2 |
Philippines | 361.86 | 1.4 |
Vietnam | 298.96 | 1.1 |
South Africa | 214.79 | 0.8 |
Malaysia | 180.47 | 0.7 |
Nepal | 179.05 | 0.7 |
Italy | 158.99 | 0.6 |
Total overseas-born | 6408.74 | 30.7 |
Total Australian-born | 16719.39 | 69.3 |
Total population | 23128.13 | 100 |
*Excludes Hong Kong, Macau and Taiwan.
Source: Australian Bureau of Statistics, Australia's Population by Country of Birth, June 2023.
5.84In addition to first generation migrants born overseas, the Australian population consists of many more descendants of migrants that retain close personal, cultural and economic ties to their countries of origin. The 2021 Census recorded that 48.2 per cent of Australians have at least one parent born overseas.
5.85Notably, while new arrivals from some countries that have traditionally been a source of migrants to Australia are slowing, such as Italy, the number of second-generation migrants and those reporting Italian ancestry has continued to grow.
Contribution and strengths of Australian diaspora communities
5.86Submitters and witnesses drew the Committee’s attention to the significant role that diaspora communities play in Australia’s trade, as well as their broader economic and social contributions. In doing so, many also identified the potential for diaspora communities to have greater engagement in trade, bringing increased benefits to those communities, Australian businesses, and the nation.
5.87It was commonly observed that diaspora communities possess highly valuable knowledge, skills, and networks that can facilitate greater engagement in international trade and that these communities and their strengths are an underutilised resource.
5.88Mr Sung Ho (Steve) Choi, Vice President, VoKAB reflected on the strengths of Korean-Australians and the contribution of the community:
Their dual cultural proficiency and linguistic fluency positions them as ideal trade and investment intermediaries, capable of bridging gaps between the two. This community has driven innovation and growth across diverse industries, including food export, education, technology and cultural goods. These contributions reflect and enrich the multicultural fabric of Australia.
5.89Dr Wei Li advised that understanding both the cultural and institutional differences between Australia and Asian countries is a unique advantage for the Asian diaspora that is not held by many Australian businesses. Some of the important institutional differences that can be significant challenges for companies when they expand internationally are the operation of the government, the legal system and law enforcement, and industry standards
5.90Dr Wei Li, explained how many members of the Asian-Australian diaspora have been able to leverage their knowledge, skills, and networks related to their country of origin to succeed both building products and services in the Australian market as well as taking products to the global market.
5.91Dr Wei Li also told the Committee that in contrast to the traditional notion of a community-based business or shop, the contemporary Asian-Australian diaspora led businesses is increasingly providing products and services into larger, mainstream markets. This is led by a new generation that are young, entrepreneurial, well-educated, adept at digital and social media, and often have corporate experience before starting their own businesses. The new generation of Asian diaspora businesspeople believe that they can use their strengths to leverage the advantages from the Asian market and are highly ambitious:
For a lot of these companies, even when they've started as quite small, their aim is quite high. They want to become a global business and they want to become a global leader in a certain area. They don't just constrain themselves within the Australian boundary. Really, when they're small, they're already looking quite high.
5.92Despite their significant strengths and growing contributions, submitters were of the view that diaspora communities have potential to make even greater contributions to Australia’s trade. However, diaspora communities face challenges in accessing the opportunities offered by trade and FTAs.
5.93VoKAB commented that despite the success of the Korea-Australia FTA (K-AFTA): ‘… many Korean-Australian businesses lack the knowledge and resources to navigate its complexities and capitalise on its benefits. This translates to lost opportunities for growth, job creation, and economic prosperity for both Australia and Korea.’ Mr Sung Ho (Steve) Choi, VoKAB elaborated by telling the Committee that the benefits of trade are not equally accessible, especially for SMEs led by Korean Australian entrepreneurs:
By empowering this community, we can tap into its members' unique ability to act as cultural and economic bridges, fostering stronger ties between the two countries. Addressing these systemic barriers and unlocking this potential will drive innovation, bolster the economy and reflect the strength of Australia's multicultural society.
5.94Dr Wei Li submitted that fragmentation of information is a major issue and that there is a need for better understanding, particularly among diaspora communities, of how FTAs can be utilised to support products and services to expand into new markets.
Increasing engagement with and leveraging diaspora communities
5.95Stakeholders made a range of suggestions for how the Australian Government can better engage with and leverage diaspora communities to increase the benefits of trade and FTAs.
Stakeholder engagement and consultation
5.96DFAT outlined its extensive stakeholder engagement and consultation architecture for FTA negotiations as well as for promotion and awareness building activities once an FTA is in force. These are discussed in greater detail in Chapter 3.
5.97Mr Ravi Kewalram, First Assistant Secretary, Free Trade Agreements and Stakeholder Engagement Division, DFAT told the Committee that DFAT’s approach is to offer open invitations and engage with all interested stakeholders. Mr Kewalram explained that international business councils and chambers of commerce, which include members of diaspora communities, are generally participants in the Department’s stakeholder engagement and consultation processes:
As part of that, in developing the agenda or mandate or the objectives for an FTA, through the negotiations and in the implementation and the promotion of the FTA, we work with a range of stakeholders which includes very directly relevant chambers of commerce, for example, and which are focused on the bilateral trading relationship.
[…]
In the actual FTA negotiations, there are a lot of interactions with diaspora communities, which are often very active members, for example, of those chambers of commerce. Following the conclusion of an FTA, we also then work with Austrade and other colleagues in engaging those chambers of commerce or briefing various groupings of diaspora communities to talk about the FTA that might be of most interest to them and that community.
5.98Beyond direct engagement with bilateral business councils and chambers of commerce as well as diaspora community organisations in FTA consultation processes, DFAT also supports and engages with a range of councils, foundations and institutes who also work with diaspora communities. For example, the Council for Australia-India Relations.
5.99DFAT acknowledged that despite its extensive stakeholder engagement and consultation activities, there may still be groups that have an interest but are not aware, and that it is always looking for ways to improve its approach to make sure that it can get information to anyone who might have an interest.
Non-English language and media
5.100The Committee heard from submitters and witnesses about the potential to better connect with diaspora communities in Australia by using non-English languages and non-English language media platforms.
5.101Austrade advised that it undertakes extensive advertising and promotional activities in foreign languages and foreign language media when promoting trade and investment opportunities within Australia overseas. However, both DFAT and Austrade explained that promotional and awareness building material about trade and FTAs produced for a domestic audience are published in English and disseminated through English language media or social media platforms.
5.102Mrs Jessica Hamilton, General Manager, Simplified Trade, Communications and Marketing Branch, Policy and Programs Group at Austrade told the Committee that:
To date in Australia we have been advertising and promoting in English. We do a lot of translations when we are promoting Australia internationally, which is a core part of our 'business as usual'… At this point in time, for our domestic engagement today, we haven't offered translated content. But we do want to make sure that our content is accessible and usable, and that our digital services are inclusive. Our engagement with the Australian business community in terms of taking advantage of the trade [and] investment opportunities that are available across South-East Asia, is definitely something we are working on at the moment and will be considering.
5.103VoKAB noted that while migrants may have an interest as well as relevant knowledge and expertise their language skills may still be minimal. Ms Julianne Lee said that: ‘It's very important to remember that there are newcomers for different languages, and maybe they're not confident yet but they do have the skills to help them to explore those markets.’ Mr Sung Ho (Steve) Choi added that it is important to provide targeted, summarised information about FTAs: ‘… if you give a summary of what's in there, especially, and take out all those bits with coalmining, cars, electric trains—this is something that can benefit small businesses… to understand and see what kind of benefit you can take out of this agreement. If you tell them, they start thinking, 'Okay, this is what I can do.' In that regard, the language is pretty important to promote them to start thinking about it—easy access.’
5.104The ECBC also observed that English is a second language for many people in diaspora led businesses in Australia, particularly in SMEs, and that communicating with people and businesses through published material and workshops would be beneficial to increase understanding of trade and FTA opportunities.
5.105Both VoKAB and the ACBC identified an opportunity to engage with respective diaspora communities in their languages through digital and social media. Mr Patrick Mayo, NSW President, ACBC told the Committee:
I listen to SBS radio… and they regularly have advertisements. Very often it's Australian health insurance providers. It would be great to hear… [for example] an advertisement from Austrade in Chinese on SBS Mandarin radio…
In digital media, I know there are sensitivities around certain applications, but Xiaohongshu, for example—'little red book'—is hugely popular in the Chinese community. In all my engagements at least with the Chinese Australian communities handing over a business card is not done anymore; it's all through WeChat. We do deals over WeChat… So it's all through the Chinese language media.
5.106Similarly, Ms Julianne Lee, VoKAB, stated that VoKAB proposes: ‘… using multilingual social channels and broadcasters like SBS Korea to provide updates on K-AFTA. These platforms could help SMEs stay informed about trade opportunities and policy changes, bridging language and information gaps.’
5.107Dr Wei Li advised that Asian-Australian businesses have a higher level of use and engagement with social media for business and marketing purposes.
5.108The ECBC suggested that while organisations such as theirs can provide some assistance to SMEs that are seeking to invest in import/export activities, there is value in simplified information and information in non-English languages being provided directly by government because it provides a sense of support and safety.
Chambers of commerce and business councils
5.109The role of bilateral chambers of commerce and business councils was raised, including their potential to play a greater role in engaging diaspora communities.
5.110ACCI noted the importance of international business chambers that are dedicated to growing bilateral trade and investment relationships. It explained that: ‘While not solely comprised of members of the diaspora in those particular trade partners, such groups do provide a valuable focal point for those – such as members of diaspora groups – with a pre-existing interest in those particular markets.’
5.111Mr Jay Meek, Austrade outlined to the Committee its work to collaborate with and better utilise international chambers and business councils:
As part of the strategy to strengthen two-way trade between Australia and South-East Asian countries we have an extensive outreach program starting with those chambers of commerce to leverage what they're doing with their membership in particular, and there's obviously a strong diaspora component to that… One of the reasons why we are trying to strengthen that relationship is to drive more value into those chambers, so that they can get more members to come in and hear that information.
5.112The ACBC noted that it has extensive membership and that international chambers could be used more by government as an avenue to disseminate messages and information from Austrade and DFAT.
5.113VoKAB noted that organisations such as theirs are well-placed to work with government on utilising opportunities under existing trade agreements and trade policy development to ensure that diaspora views are heard and expertise in leveraged.
5.114The BCSDA suggested that: ‘… partnerships with diaspora business councils can help leverage the cultural and linguistic advantages of diaspora communities to access new markets, as seen in the success of Indian-Australian businesses in the information technology sector through the Australia-India Comprehensive Economic Cooperation Agreement (A-ICECA).’
5.115Austrade noted that international business chambers and councils are primarily driven and funded by members and that they differ in terms of size, scale and capability. However, supporting them to increase their value will allow them to increase their capability and be more sustainable.
Targeted actions, strategies and programs
5.116Austrade informed the Committee about its plans to build on its engagement with diaspora communities in Australia:
There are about a million diaspora here, in Australia, who have origins in South-East Asia, and we're looking at how we activate and listen to that community and guide other businesses, and that's a key piece of what we do. I would say that, through the years of engagement that we've had with many businesses and helping them to go overseas, a lot of them are actually from the diaspora.
5.117DFAT and Austrade both acknowledged that there is more work to be done to map, engage with and activate Australia’s Southeast Asian diaspora communities and that doing so is a key part of Australia’s Southeast Asia Economic Strategy to 2040.
5.118Some submitters indicated a need for more awareness and capacity building activities targeted at specific communities and bilateral relationships. For example, VoKAB were of the view that the potential of the Australia-Korea trade relationship is not being maximised because it is underrepresented in trade facilitation efforts, dedicated strategies and programs, and tailored resources. As a result many Australian-Korean businesses remain unaware of the specific benefits that K-AFTA offers.
5.119Several stakeholders mentioned the use of webinars to promote and build awareness of trade opportunities, including in non-English languages, as a useful mechanism to engage with diaspora communities.
5.120Dr Wei Li suggested that the Australia Government could encourage greater engagement of diaspora communities in trade opportunities by supporting collaboration, including through existing funding and initiatives: ‘Enhanced support for cross-collaboration between diaspora communities and mainstream Australian business sectors could facilitate a more cohesive integration, leveraging the unique capabilities and international networks that these communities bring to the table.’
5.121Ms Julianne Lee, VoKAB, proposed the creation of a Korean-Australia business exchange modelled on the successful Australia Southeast Asia Business Exchange. Such an exchange would provide a structured framework to strengthen the trade relationship by leveraging the networks and expertise of Korean-Australians to bridge cultural and business gaps, unlock new market opportunities, prioritise high-growth areas beyond commodities, and increase participation of SMEs.
5.122Case studies were identified as valuable for highlighting the success of diaspora led businesses engaged in international trade to build awareness, demonstrate potential, and provide inspiration to others in the community. Dr Wei Li told the Committee about the benefits of case studies:
By publicly acknowledging and promoting their success stories and economic contributions, there is potential not only to enhance their visibility but also to attract further investment and interest, thereby strengthening Australia’s overall trade position. This approach could also serve to mitigate any negative perceptions or biases associated with geopolitical issues, showcasing the positive impacts of these communities on the national economy.
5.123Some drew attention to the need for greater research to better understand and support diaspora communities to engage in trade. For example, BCEC commented that more research and better-quality data tracking how diaspora communities engage with international markets would be beneficial in understanding how they could be better supported.
5.124VoKAB also pointed to the importance of quality and in-depth research, in relation to the Australia-Korea trade relationship, into what diaspora communities and businesses need and how governments can better support them. It recommended establishing a dedicated research team to identify high-potential sectors and emerging market trends within the FTA framework.
5.125BCEC and Group of Eight Australia (Go8) underscored the value of Australia’s international education sector in creating connections and opportunities for trade. BCEC explained that: ‘… international education plays a really important role there as well, where we build that soft diplomacy and also those business-to-business links when international students, say, return home or even stay here to work. They have those connections which are really important.’ Go8 made a similar point in relation to the provisions around student and research mobility in the A-UKFTA, explaining that it: ‘… recognises the importance of the movement of people – or the sharing of experience and building of expertise and cultural know-how – as a fundamental pillar of innovation, and a driver of long-term, sustainable relationships.’
Committee comment
5.126The evidence received strongly suggests that there are significant research and data gaps in understanding how and to what extent small and medium sized enterprises (SMEs), First Nations, and diaspora communities engage in international trade. The Committee is of the view that this information is essential if these groups are to be encouraged to realise their significant potential to engage further in and gain greater benefits from trade. Any policies, programs, and activities designed to increase engagement with trade amongst these businesses and communities must be informed by high quality data and information about the current level of uptake, how they participate, and what would be most effective to support greater uptake.
5.127There is consistent evidence that many businesses, in particular SMEs, First Nations, and diaspora communities, are not aware of the opportunities international trade provides, nor how to access them. There is a need for targeted education and outreach programs to build awareness and capacity amongst these groups. While the relevant government agencies are actively engaging with these groups and doing great work in this area these efforts must be continued and expanded. To be most effective, targeted activities must provide specific, tailored advice, training and resources across business ownership types and demographics, geographic locations, sectors, and import/export markets. The Committee believes that these efforts would benefit from a long-term strategy to identify and prioritise target areas and the type of information they require to significantly uplift the capacity of these groups to participate in and benefit from trade and free trade agreements (FTAs). As discussed in Chapter 3, both government at all levels and industry bodies have a role to play. As indicated previously, current digital tools and services as well as digital communications such as webinars are important for improving engagement with a wider audience but more needs to be done to make these tools and activities known.
5.128SMEs make an enormous contribution to the Australian economy. While many participate in international trade, there is undoubtedly potential for SMEs to engage more with trade and bring greater benefits to those businesses and the Australia economy. SMEs face the same challenges as larger business in accessing the benefits of trade as outlined in the Chapters 3 and 4 of this report, often to a greater degree. They also face specific and unique challenges in engaging with trade and FTAs. Given the number and diversity of SMEs in the economy, it is difficult to find uniform approaches to improving SME access to the benefits of trade. However, any wider efforts to reduce the complexity and administrative costs involved in both being aware of the potential benefits and accessing them would in general disproportionately benefit SMEs.
5.129The Committee recognises the growing First Nations business sector’s significant contribution to the Australian economy and their positive impact on First Nations communities. For many of these businesses, and business that will emerge in the future, there are opportunities for growth through participation in international trade whether that be offering unique products to overseas markets or attracting foreign investment into domestic businesses. There is no doubt that capitalising on this potential will bring greater benefits to First Nations businesses and communities.
5.130The Committee welcomes the Australian Government’s substantive efforts to increase consultation, engagement, and representation of First Nations interests and perspectives across Australia’s trade agenda. First Nations businesses face challenges in engaging with trade, particularly lack of information and resources to understand how trade and FTAs can apply to them. As for SMEs, greater resources must be allocated to targeted outreach and engagement programs to support the needs of First Nations businesses.
5.131The Committee recognises that the ability to attract capital investment into First Nations businesses is essential to their ability to scale up to engage in international trade. The Committee believes that more work needs to be done to identify and understand the level of foreign investment flowing to First Nations businesses and to investigate how it can be supported to increase.
5.132The Committee agrees that areas where First Nations businesses and communities hold unique products and services, or other advantages such as tourism and native foods and botanicals should be encouraged to grow and benefit from increased international engagement. The Committee was particularly interested in the immense economic, social, and cultural benefits of the native foods and botanicals industry and were concerned about some of the barriers that were raised. The Australian Government should prioritise addressing issues related to the export of First Nations foods and botanicals regulations and requirements, including greater recognition and consistency in the application of classifications.
5.133The Committee acknowledges the invaluable contribution of diaspora communities to the social fabric and economic strength of Australia. While many already do so, the Committee is of the view that there is considerable underutilised potential amongst diaspora communities to use their knowledge, skills, and connections to their country of origin to engage further in international trade. These valuable strengths can be harnessed to facilitate greater trade by both diaspora community led businesses and the wider Australian business community. Greater engagement of diaspora community members in international trade would bring additional benefits to those communities, businesses, and the Australian economy as well as strengthening diplomatic and cultural ties. The Committee was pleased to hear about the essential work underway to map and activate Australia’s Southeast Asian diaspora communities.
5.134The Committee acknowledges the Department of Foreign Affairs and Trade’s (DFAT) extensive and open approach to stakeholder consultation and engagement matters on trade. However, there are at least some members amongst diaspora communities that are not well-aware of the department’s activities and continued efforts should be made to reach as many interested stakeholders as possible.
5.135Government engagement with SMEs, who are generally focussed on building and running their businesses, is notoriously difficult even when factors such as language are not in play. Given the potential for greater participation of diaspora communities in trade it is important that they are considered a key target audience for government outreach and engagement activities. Many of these community members speak non-English languages as their first language and utilise non-English language media. Many, particularly in the younger Asia diaspora cohort, are highly engaged with digital and social media platforms. To reach this audience the Australian Government should be undertaking priority outreach and engagement activities to build awareness of trade opportunities in languages other than English not just overseas but also domestically. In addition, the Australian Government where appropriate, should also undertake trade promotion and engagement activities, as well as communications about international trade and business opportunities in non-English language traditional media as well as through digital and social media platforms.
5.136The Committee is of the view that bilateral chambers of commerce and business councils play an important role in strengthening bilateral trade relationships and could be supported to do more to engage with diaspora communities, particularly at the SME level, to improve their awareness and capacity to benefit from trade and FTAs. Support could be for both self-directed initiatives and in collaboration with or on behalf of government to disseminate key information and messages. The Committee also believes that there is value in encouraging greater collaboration between diaspora community business leaders, as well as bilateral chambers of commerce and business councils, and the wider Australian business community.
5.137Such engagement should not only be top-down information from government to business about opportunities but should genuinely seek to engage with and learn lessons from businesses that are already successful in trade. The Committee is aware, anecdotally, of examples of success stories by Australian companies, including those led by members of diaspora communities, that are engaging in trade, including in markets where there is no FTA place.
Recommendations
5.138The Committee recommends that the Australian Government support research and other initiatives to capture data to better understand how and to what extent certain groups such as small and medium sized enterprises, First Nations businesses, and diaspora communities engage with and benefit from trade and free trade agreements.
5.139The Committee recommends that the Australian Government develop a long-term strategy for enhanced targeted education and outreach programs among certain groups such as small and medium sized enterprises, First Nations, and diaspora communities to build awareness and capacity to engage with and benefit from trade.
5.140The Committee recommends that the Australian Government prioritise and expedite efforts to address barriers and challenges to the export of native foods and botanicals.
5.141The Committee recommends that the Department of Foreign Affairs and Trade as well as Austrade provide awareness and capacity building communications material and engagement activities in non-English languages to more effectively engage with the Australian diaspora communities of key trading partners.
5.142The Committee recommends that the Department of Foreign Affairs and Trade as well as Austrade promote engagement activities and trade facilitation initiatives in non-English media and social media, where appropriate, to more effectively engage with the Australian diaspora communities of key trading partners.