Chapter 7 - Trade and investment facilitation—challenges ahead for Australia and APEC
Introduction
7.1
In this chapter, the Committee looks at the
challenges ahead for APEC’s trade and investment facilitation agenda, including
the need to produce early and tangible results and to manage an ambitious and
wide-ranging program. It considers the relationship between government and
business, especially in Australia, in setting APEC’s agenda and in advancing
the process of trade and investment facilitation. Finally, the Committee
assesses Australia’s past contribution to trade and investment facilitation in
the Asia Pacific region and looks at its potential to drive the process
forward.
7.2
Clearly, APEC members have committed themselves
to a demanding program of trade and investment facilitation. In the view of the
South Australian Government:
APEC has in many ways set itself a much broader challenge,
through its trade and investment facilitation agenda, than that of an
old-fashioned free trade area, which merely aims to eliminate tariffs,
quantitative restrictions and other border measures. It is trying to reduce all
kinds of impediments to trade and transaction costs, including by tackling at
least some areas of divergence of domestic policy.[1]
The need for immediate and tangible
results
7.3
Despite APEC’s ambitious agenda, reform in
sensitive areas, such as competition policy, services, rules of origin and
dispute mediation, barely inches ahead. The gap between APEC rhetoric and
action remains wide. Dr Andrew Elek recognised that economies would need help
from each other later on to tackle these hard problems but he suggested the
best way to do this was to ‘build momentum on some of the easier ones first’.[2]
7.4
Indeed, APEC is very gradually acquiring a body
of achievements which could sustain the APEC agenda and help carry it forward
but, as noted by a number of witnesses, APEC needs to add to these
achievements.
7.5
The Australian Chamber of Commerce and Industry
(ACCI) praised the work produced by APEC work groups such as guidebooks, the
work books and the CD-ROM materials, where basic information held by national
governments has been collated and made public. It stated that, if nothing else,
the availability of such information has been useful for business in making
information accessible and transparent.[3]
The ACCI, however, suggested that the time has arrived for APEC to move ‘beyond
that information, consolidation and investigation phase and now needs to...focus
its attention on some real outcomes’.[4]
7.6
Mr Wright, Head of the Industry Policy Division
of the Department of Industry, Science and Technology, submitted that the main
danger for APEC lies in its failure to deliver trade and investment
liberalisation and facilitation outcomes. He believed that in the short to
medium term, APEC has the potential to make significant inroads in facilitation
and he looked hopefully to areas such as infrastructure development,
cooperation standards and conformance and deregulation to produce results.[5]
7.7
Along the same lines, Dr Gebbie, Acting First Assistant
Secretary, Department of Primary Industries and Energy, pointed out that
business concentrated on the much shorter-term achievements or benefits coming
out of APEC rather than the distant goal of 2010. He explained:
It is important that we have some shorter term gains that will
be understood quite directly by business and the public. This is precisely the
reason for the attempts at early voluntary sectoral liberalisation...Without some
gains in areas like that, it will be very difficult to maintain a positive
focus on APEC by business and the public.[6]
7.8
It should be noted that the EVSL initiative
endorsed at the Leaders Meeting in November 1997, included market opening and
trade facilitation reform.[7]
Mr Gebbie saw trade facilitation as a means to achieve visible and early
results and told the Committee:
The idea there is to focus and get concrete results on very real
impediments to doing business in the APEC region. The sorts of things that are
going on in the facilitation area should not be forgotten. They will be quite
important also to maintaining strong long-term business interest in what is
going on there.[8]
7.9
That APEC needs to produce tangible results was
made most forcibly by ACCI which asserted: ‘To succeed, APEC must hold fast to
its economic and commercial agenda, focusing on delivering outcomes which make
it easier for business to conduct trade, commerce and investment around the
dynamic Asia Pacific region’.[9]
ACCI believed that APEC’s value lay in what it can deliver in the trade
facilitation and the trade liberalisation area.[10] In agreeing to a road map that
will direct the future work of APEC to strengthen markets in the region, APEC
Ministers urged member economies to intensify their efforts in trade
facilitation with a focus on concrete outcomes for business.[11]
In the shadow of trade
liberalisation
7.10
As shown above, a number of witnesses looked to
trade facilitation to produce the concrete results needed to demonstrate that
APEC is an effective body in achieving real benefits for business in the
region. Some witnesses were concerned, however, that the interest shown in
trade and investment liberalisation would draw attention away from the advances
and potential gains to be made in facilitation. One commentator feared that the
emphasis given to trade liberalisation, especially the setting of the 2010 and
2020 goals, means that ‘other important benefits that it might generate may be
lost as enthusiasm wanes in the face of implementation problems’.[12]
7.11
Dr Ravenhill agreed, arguing that one of the
difficulties confronting the future of APEC is that the expected benefits of
APEC have been oversold to the public. The excessive emphasis placed on
liberalisation has overshadowed the work being pursued in facilitation and
cooperation and development areas where progress is more likely to be realised.[13] He believed that the focus on
trade liberalisation, has nowhere been more prevalent than in public
discussions in Australia. In his opinion, this has ‘led to unrealistic
expectations of what APEC is likely to achieve in this sphere’ and has
‘obscured work within the other “two pillars” of the organization; trade
facilitation and economic and technical cooperation’.[14]
7.12
Unfortunately, the nuts and bolts nature of
trade facilitation activities to date makes dull reading. Thus, although
Professor Snape felt that APEC would make significant headway in facilitation,
he felt that its very drab low profile would weaken the successful promotion of
APEC achievements especially with the Leaders Summit assuming such a prominent role
in the APEC calendar. He argued:
The problem of having the economic leaders involved is that it
raises the expectations of continued high profile success and if there is not a
continuation of high profile success coming through the APEC process then it is
very easy to imagine that the economic leaders may, in fact, start to lose some
of their enthusiasm for it; they do not get the headlines any more...
If that momentum drops down, one wonders whether the fairly
important—but mundane and non-headline grabbing—trade facilitation,
harmonisation of customs procedures and all those sorts of things can in fact
be maintained if the high profile successes are also not being maintained.[15]
7.13
This situation assumes greater significance in
light of the disappointment following the inability of APEC to proceed as
planned with fast tracking its EVSL initiative. The failure of this highly
publicised initiative to fulfil expectations raised at the Leaders’ Meeting in
1997 drew attention away from much of the solid though slow work being achieved
in areas such as trade and investment facilitation. Moreover, the failure
exposed APEC to accusations of being ineffective.
7.14
Clearly, the Bogor Declaration of 2010 and 2020
has claimed centre stage and, as the showpiece of APEC’s agenda, threatens to
obscure the mundane but valuable advances made in areas such as customs and
standards. As pointed out by the Chair of PECC:
The vision of an APEC community where goods, services and
investments flow freely and where everybody benefits has yet to seize the
imagination of our private sector—both business and the non-business sector
including consumers.[16]
7.15
Aware that the work being undertaken in trade
and investment facilitation held a low profile, Trade Ministers, in June 1999,
emphasised the importance for APEC to communicate more effectively information
about the advances being made in this area of facilitation.[17] The APEC Economic Committee
added that ‘deeper analyses on the trade facilitation would be timely, in
particular in 1999’.[18]
7.16
APEC Ministers in Auckland in September 1999
acknowledged that trade facilitation work is not well known and future outreach
efforts will be required to improve business and community understanding.[19] In amplifying this message,
the Economic Leaders in Auckland noted especially the importance ‘to better
communicate the value of APEC’s trade facilitation role’.[20]
7.17
The Committee accepts that much of the
preliminary work in APEC requires research, the collation of material and
dissemination of information, but equally, it is mindful of the need for APEC
to be seen to be making steady progress and delivering real benefits to
business in the region. The Committee recognises both the achievements and
likely benefits of APEC trade facilitation initiatives. It considers that the
interest in trade liberalisation should not detract from the body of work
already built up in trade facilitation—that, indeed, the achievements in
facilitation should be brought out from behind the shadow of trade
liberalisation.
Recommendation
The Committee recommends that a publication on trade
facilitation and economic and technical cooperation be produced as a companion
to the publication Trade Liberalisation: Opportunities for Australia.
The Committee further recommends that this publication
cover not only the achievements in the area of trade facilitation but also the
difficulties in identifying and removing the non-tariff barriers.
7.18
In this way, it may further open up debate about
trade practices in the region and encourage businesses to come forward and
advise government on their particular experiences in getting products into
other economies.
Keeping focus
7.19
Another challenge facing the APEC trade
facilitation program is in managing and coordinating the numerous and
wide-ranging projects being undertaken by the working and experts groups and
the various committees. The very effectiveness of the working groups is
threatened by having to stretch their resources across a number of projects.
The possible effect on the work of the various APEC groups has particular
significance for APEC’s agenda because of the need to produce early and
tangible benefits.
7.20
Professor Ravenhill acknowledged that APEC has
the opportunity to achieve results in facilitation but suggested that it needed
to establish a clear sense of priorities which, he argued, was lacking. He
maintained that APEC has ‘spawned a proliferation of working groups and
projects in various issue areas’. Although he agreed that these activities have
produced positive, although modest, gains in helping to reduce the transaction
costs of business among APEC members, he saw possible problems. In particular,
he could foresee that an increase in projects may lead to a dissipation of
energies with APEC having no clear sense of priorities.[21]
7.21
The ACCI also expressed concern about the number
of projects, which in 1997 were estimated to have been over 300. It believed
that APEC must ‘discard some of the dead wood’ and get back to about 40 good
projects with priority areas and that a degree of self-discipline must be
exercised in formulating programs.[22]
Mr Alan Oxley emphasised the need for closer, tighter, and more focused
management of projects. He wrote recently:
A quick review of the work programs endorsed by
Ministers...reveals that the desire to do something is stronger [than] the
capacity of officials to identify concrete work targets. There are a large
number of programs which repeat work done elsewhere; are not coordinated with
related work in other APEC working groups and other organisations; and have
nebulous purposes.[23]
7.22
The number of projects also has implications for
Australian Government departments and agencies trying to meet the demands set
by the APEC agenda. The Committee on Trade and Investment acknowledged that the
proliferation of meetings is increasingly taxing economies’ resources.[24] In turning specifically to the
activities of the APEC Transportation Working Group, Mr Bowdler, whose
department is involved with this group, acknowledged in October 1997 that the
number of projects was a worry. He told the Committee that the Group had spent
its recent meetings considering how to manage its agenda and how to retire
projects that had been completed, ‘rather than keep them dribbling on in some
way’.
We would not like to see this work program grow much more. We
would find it hard to keep up our own input... APEC can be a little unwieldy
because our working group meets only every six months. It is important to try
and keep some momentum going between those meetings. So management of the APEC
load is a significant one.[25]
7.23
The Australian Customs Service was aware that,
in spreading its resources too thinly, its efficiency could suffer. To help
manage its workload and to hold its focus, the Customs Service developed an
action plan which contained 12 items. The Service sought advice from the
private sector on its plan. Mr Holloway from the Customs Service told the
Committee that the general feedback was positive and business was able to
identify items that should be a priority. Arising from these consultations, the
Australian Customs Service identified a number of key items likely to reap
benefits for business.[26]
7.24
This difficulty in managing the number and range
of projects has been complicated by the extra demands placed on APEC resources
by the financial crisis. This problem in managing and coordinating APEC
projects applies also to the liberalisation pillar but more so to the Ecotech
pillar of APEC’s agenda.
Trade and investment
facilitation—a partnership between government and business
Public and private sector input:
Business perspective
7.25
Business has a vested interest in APEC’s agenda
to improve market access and trade facilitation. APEC’s credibility rests on
its ability to clear away obstacles to trade and investment in the region. In
1995, the then United States Secretary of State, Mr Christopher Warren,
highlighted this point when he stated:
...the real test of APEC’s success will be whether its work has
practical relevance to the business community. The private sector remains the
catalyst of this region’s dynamism. That is why APEC’s job is to remove
impediments that unnecessarily restrict business activity...APEC should permit
our businesses to function effectively across a dozen time zones and languages.
We can only achieve that goal by considering business views closely.[27]
7.26
The view that business has a vital place in
ensuring APEC’s success was strongly supported by ABAC. It noted:
Business has a crucial role to play in the achievement of APEC’s
vision. It is the principal constituency in APEC’s quest for freer and more
open trade and investment...It is also the main generator of cross-border flows
of goods, services, capital and information. The freeing of these flows, and
the broadening and deepening of transactional linkages in strategic sectors
such as finance, transportation, telecommunications and infrastructure, will be
the main gauges of APEC’s success in the ‘real world’ of business.[28]
7.27
A dominant theme running through APEC Leaders’
and Ministers’ meetings has been the potential for the private sector to
contribute to the APEC decision-making process and in its activities. At the
Vancouver summit, Leaders remarked on the increase in business participation in
APEC activities but nevertheless stressed the importance for APEC to broaden
its outreach to the business sector.[29]
In June 1999, Trade Ministers referred to the need to increase support from
business for APEC in achieving free and open trade. They noted especially the
role of the private sector in shaping APEC’s agenda on e-commerce.[30]
7.28
Australian business also recognised the value in
establishing a partnership between government and the private sector to clear
the path for trade. The Federation of Automotive Products Manufacturers saw
APEC as a forum that allows Australia at an industry level to address many of the
non-tariff trade barriers that impede free trade. It argued, for example, that
the work being done on investment, banking and business law is fundamental to
developing Australian trading relationship within the region. It stated: ‘Our
own industry has worked closely with the Australian government to drive towards
uniform standards on cars and parts, a measure that will not only save us an
enormous amount of money but one that will ultimately open many trade doors
blocked by obscure or meaningless regulation’.[31]
7.29
MTIA argued that government and business should
join forces in advancing the work of APEC to benefit Australia’s trading
interests. It stated that MTIA had the responsibility to report government
policies to its members; to influence government policies in response to its
members’ concerns; and to make sure that their members’ interests were
represented. In MTIA’s view, facilitating trade was ‘very much a two-way
activity’ between government and business.[32]
Clearly for MTIA, the collaborative efforts of government and business were
required if the obstacles faced by Australian traders were to be removed. Ms
Vivienne Filling, Principal Adviser, MTIA, told the Committee:
If the government were to bow out of the process, certainly
businesses could work together in identifying non-tariff measures, tariff
measures and investment barriers that they would want to have eliminated. When
it comes down to it, you need, first of all, the support of the government for
the actual elimination of those barriers and the leadership to keep its
government departments and businesses striving for this objective of trade and
investment liberalisation.
7.30
She believed that APEC would not achieve the
Bogor goals if governments were to step back.[33]
7.31
ACCI also underlined the need to have business
involved in the consultation and decision-making process of developing trade
facilitation strategies. It maintained that Australian diplomats and trade
negotiators can only take the APEC initiative so far—‘they can set up
processes, frameworks and mechanisms, they can build the engine and the chassis
of the car’. Nonetheless, ACCI argued that APEC’s ‘continuing momentum must
come from effective involvement by the private sector; business must put the
petrol in the car if it is to go forward...’[34]
ACCI further elaborated:
The potentially more important, and much more challenging, game
is to identify and then attack the growing number of non-tariff barriers—the
insidious rules, regulations and practices which are more often than not
designed to frustrate international trade and commerce.
The form such barriers can take seems to be limited only by
human ingenuity: peculiar customs requirements, odd quarantine rules, strange
requests for information and paperwork; unusual procedures, bizarre licensing
obligations; and the list goes on.
In many respects, these practices are often only known to
business and do not show up on government lists of trade requirements or when
they do, what seems reasonable enough can be implemented in a most unreasonable
and obstructionist way for trade and commerce.
It is these practices which business can, and must, bring to the
attention of our trade negotiators who will then have an obligation to follow
through to flush out into the open such nefarious practices and win substantive
commitments from the miscreant governments to not just wind them back but to
abolish them.
It is this team play which the Australian Chamber of Commerce
and Industry has in mind when we talk of a co-operative effort between business
and government on APEC matters where each brings to the table for the national
benefit their respective comparative advantages and expertise. [35]
7.32
In summary, ACCI argued that business identifies
the problems and our trade negotiators go into bat to remedy them.[36] It concluded:
Government will continue to be the prime player in APEC, for the
foreseeable future...government will be, if you like, the bridge that holds the
whole facility together. That is not to say that government should be the
source of the agenda, but it certainly will be the architecture that keeps the
process going.[37]
7.33
Again, on this practical level of removing
obstacles to trade, the ATIA highlighted how crucial it was for industry to be
involved in trade negotiations. It pointed out that industry must advise government
representatives on the particular markets to which they are seeking improved
access. Put simply by ATIA:
Government representatives cannot be expected to understand
which economies are of most importance to industry, and which ones currently
cause the most difficulty in market access (in terms of non-tariff barriers,
such as testing arrangements) without adequate consultation and active
involvement with industry.[38]
The Association made the point that ‘industry
representatives who are actively participating in APEC working groups should be
seen as valuable resources to the Australian Government as they provide
tangible evidence of how action on non-tariff barriers are proceeding’.[39]
Public and private sector input:
government’s perspective
7.34
DFAT maintained that it was government policy to
involve the private sector in APEC processes. It acknowledged that
collaboration between business and relevant government bodies on issues related
to APEC activities was needed if government were effectively to dismantle trade
barriers. In October 1997, Mr Peter Grey, then Australia’s Ambassador to APEC,
told the Committee that there is an almost endless stream of potentially
non-tariff barriers. He explained that DFAT sought to go out and consult with
industry and industry associations and kept a reasonably up-to-date list of all
non-tariff measures.[40]
As an example, he pointed out that governments need to be involved in
developing mutual recognition arrangements between economies. He suggested:
The ideal situation is to have mutual recognition arrangements
which work so well that once governments have signed them they may update them
from time to time, but there will be no need for other ongoing involvement.[41]
7.35
On a more specific level, the Australian Customs
Service pointed out that traders in the private sector would be the immediate
beneficiaries of the SCCP program to harmonise and simplify customs procedures.
It emphasised the importance in having business people active in charting the
direction to be taken by the SCCP. To encourage such participation, the
Australian Customs Service put in place mechanisms to facilitate dialogue with
the private sector on APEC customs issues, including regular reports on the
outcomes of all SCCP meetings and face to face meetings between Australian
Customs and industry representatives prior to each SCCP meeting.[42] In October 1997, Mr Holloway,
Acting National Manager, Executive Support Branch, Australian Customs Service,
explained to the Committee that knowledge about APEC varies significantly among
their clients. He stated:
A group of our clients has a very good knowledge of what is
going on...There is probably a much larger element of companies exporting into
the region that do not choose to have that understanding.[43]
7.36
He stated further that at a recent meeting,
intended to provide an opportunity for their clients to discuss their concerns
about customs issues in the region, only 20 out of an invited 350 attended. He
noted ‘So there is a certain amount of frustration from our part in getting
that interest from business’.[44]
7.37
Dr Imelda Roche, then an Australian ABAC
representative, also touched on the apparent reluctance of some sections of the
private sector to engage in the mutual exchange of information on APEC
activities. She informed the Committee that the annual APEC Business Forum,
convened by the Deputy Prime Minister, had met twice in Sydney with an average
attendance in excess of 150. The APEC Business Forum provides the opportunity
for business and government to work collaboratively in addressing regional
trade issues and in establishing Australia’s priorities for APEC. The forum is
part of the government’s endeavour to keep business well informed on APEC and
also acts as a conduit to keep government in touch with the views of business.[45] Dr Roche conceded that,
although the attendance at the Forum is ‘pretty good’, there is room for
improvement. She observed, ‘there is still...a degree of apathy in terms of
people responding’.[46]
Information—a two way street
7.38
Evidence placed before the Committee
emphatically underlined the value in having business and government work
jointly to identify the barriers to trade and to formulate strategies to open
markets. Despite the importance accorded by both government and some business
people to the role of the private sector in advising government, a number of
witnesses drew attention to the problems in establishing and maintaining close
links between the public and private sectors. The Customs Service and Ms Roche
spoke of apathy on the part of business. A number of witnesses felt there was
also a problem on the side of government.
7.39
Mr Matt Ngui from Wollongong University
suggested that APEC and Australia’s participation in APEC were still seen ‘very
much as a government business and that in the private sector, although it has
interests and organisations that are involved in APEC, the actual linkages
between business organisations and the organisations within APEC are still
fairly vague and unstructured’. He raised concern that business had ‘not yet
seen or is able to see, or maybe government has not yet explained to business,
what the real benefits are for business...from participation in APEC’.[47] He proposed that ‘one obvious
thing is that Australian governments need to initiate some program of
information sharing with business people in relevant industries’.[48] In particular, he noted the
difficulty for small business in obtaining information about regional trade
initiatives and in conveying their views to government about APEC.
7.40
Dr Rikki Kersten, Director, Research Institute
for Asia and the Pacific, University of Sydney, added her voice to the concerns
about public and private sector collaboration. She stated: ‘In Australia,
business looks upon APEC as a thing of government, not something that really
relates to them and the way they do business, let alone as a way to maximise
their opportunities in the region’.[49]
7.41
The South Australian Government readily
acknowledged the encouraging progress made in the area of trade facilitation
but maintained that there was a problem with the dissemination of information
about developments within APEC. It argued that ‘information on the trade and
investment facilitation agenda, which can most directly affect in the short
term business opportunities in overseas markets...is particularly scarce’. Put
succinctly, it noted that both business and State Governments know too little
about the achievements of APEC’s facilitation program and its ongoing
priorities. To remedy this situation, the South Australian Government
highlighted the value in having a mechanism in place whereby the relevant
Australian Government departments would make this sort of information readily
available.[50]
7.42
On the other hand, MTIA praised DFAT for doing a
very good job in terms of informing peak bodies about the implications of APEC.
Ms Filling told the Committee, ‘they consulted with us in great detail, for
example, on the information technology agreement. We are represented on the
business advisory forum on APEC and we have an opportunity to discuss those
issues’.[51]
7.43
The Committee acknowledges that DFAT engages the
large peak bodies in its APEC communication network but took note of evidence
suggesting that some businesses refrain from active and direct involvement with
government in developing trading strategies within the region. It also accepted
that information about APEC was not filtering through to all sections of the
Australian business community nor were all businesses encouraged to take an
active role in APEC matters.
7.44
This problem in Australia concerning weak or defective
networks of communication between government and business about APEC’s work in
facilitating trade and investment and its achievements mirrors a larger problem
throughout the APEC region as mentioned earlier in this chapter. Australia also
faces the same difficulty that APEC as an organisation confronts in effectively
conveying to business, indeed to consumers, not only information about APEC but
also more importantly the positive messages about APEC’s work. Clearly, the
imagination of the Australian business and non-business sector is yet to be
fired by ‘the vision of an APEC community where goods, services and investment
flow freely’.[52]
7.45
The Committee considers that a more determined
and concerted effort should be taken by the government and government agencies
to ensure that business and government do form a constructive partnership to
improve the trading environment in the APEC region. It recognises a need for
the Australian Government to more effectively engage business and indeed, the
community, in the debate about free and open trade and investment in the
region.
The communication network between
government departments
7.46
The AEEMA expressed concerns not only about the
communication network between business and government departments but also
between government departments themselves. Mr Gosman from AEEMA spoke to the
Committee about the confusion that can result from a lack of liaison between
agencies involved in APEC activities. He said:
...the Department of Foreign Affairs and Trade will pick up some
of the broader trade liberalisation negotiations, the industry department picks
up some of the standards issues, the department of communications picks up
telecommunications, the department of energy picks up energy, and we have been
to one or two meetings where it is obvious that some of these departments have
not been speaking to each other. We have known more about what their colleagues
are doing than they do.[53]
7.47
Despite his criticism, Mr Gosman did note in
October 1997, however, that over the previous 18 months, DFAT had increased
their specialisation in the industry area with the appointment of a trade
negotiator for automotives and a specific trade negotiator with the Supermarket
to Asia program. He was hopeful that further initiatives would be put in place
to improve interaction between industry and DFAT.[54] He was less confident about
DIST’s efforts to improve their communication links with industry. On that
matter, he supposed ‘the jury is still out on whether they have remedied that
weakness’.[55]
7.48
Customs stated that it did not have a
communication difficulty with DFAT. It did nonetheless state that the customs
expert group forms part of a specific subcommittee that ‘has a very strong
sense of identity and consensus within the group’. Mr Chapman told the
Committee that the Customs Service, in close consultation with DFAT, is able to
manage its own agenda. He acknowledged that they were fortunate that their area
was specific and technical and the group was not policy driven.[56]
7.49
At the time this evidence was taken, it appeared
that communication among government agencies and between them and the business
community was not as effective as it might have been. With the effluxion of
time, the level and effectiveness of communication among these parties would obviously
have changed. Inevitably, with an organisation as intricate and complicated as
that of APEC, maintaining full communication among the many government,
business, academic and other interested parties is a difficult task.
Nevertheless, such communication is vital in ensuring that Australia continues
to make a significant contribution to APEC’s attainment of its long-term goals.
7.50
The Australian Government should from time to
time review the APEC communication network between government agencies and the
business community in Australia in order to strengthen these links and, in
particular, to encourage greater participation by Australian companies.
Australia’s role in trade
facilitation
7.51
DFAT in general terms thought that Australia as
a small to medium-sized player in the system could have a brokering or
supportive role in APEC. Mr Peter Grey, then Australian Ambassador to APEC,
stated:
I would like to think that at least we would be able to continue
to provide, in a sense, the drive, and the policy innovation which will keep us
as a major player in the APEC context. In a range of organisations we have
shown an ability to punch above our weight, and that has largely been because
of focus, activity and trying to be innovative.
...
Australia’s role in APEC is still well recognised and still well
regarded...We continue to put forward initiatives and to take the lead on certain
issues. We are still recognised and appreciated for taking a major constructive
role in APEC. [57]
7.52
Evidence presented to the Committee shows this assessment
to be sound particularly in relation to the APEC trade and investment
facilitation agenda where Australia has taken the lead in a number of areas,
but most notably in the science and technology sectors and more recently in the
financial services sector.
7.53
CSIRO had detected ‘a great deal more respect
from the sophisticated manufacturing nations now towards Australian science and
Australian technology than perhaps was the case 10 or 15 years ago’. It
maintained ‘there is a view around the region that Australian science is
powerful, it is well targeted, we do not try to do everything, but the things
we do we do well.’ Dr Adam asserted that CSIRO is viewed by other APEC
economies as a ‘very worthwhile first port of call in the region for help, for
advice’.[58]
7.54
The National Association of Testing Authorities
(NATA) agreed, stating that Australia ‘is very well placed in terms of the
sophistication of our technical infrastructure to demonstrate that our testing
and conformity assessment activities are at world’s best practice’. Mr Anthony
Russell from NATA told the Committee:
Our standards, our legal metrology fraternity and our national
measurement system are well respected in the region. We are currently selling
our technology, and sometimes giving it through the APEC support initiatives,
to the region but we believe the benefits of that will be that the more our
regional partners mirror our arrangements and our standards of conformance, the
more simply our manufacturers and exporters will be able to add confidence to
their products et cetera, with certification and test data coming from
Australia.[59]
7.55
Establishing standards and conformance
procedures calls on highly technical skills and APEC relies on existing
specialist bodies to guide their work in this area. Indeed, the CSIRO pointed
out that APEC is ‘building on, and can build on, very longstanding and very
strong scientific collaborations in the area’.[60]
According to CSIRO, the move toward agreements was happening before the
establishment of APEC but APEC has given impetus to the move and made it
easier.[61]
CSIRO suggested that APEC has accelerated measures to reach regional agreement
on standards which in turn has sparked the move for a global agreement.
7.56
Australia is taking a prominent role in this
area and its contribution can be seen through its involvement in the Asia
Pacific Legal Metrology Forum and the Asia Pacific Laboratory Accreditation
Cooperation. Both bodies are making a valuable contribution to the work of the
SCSC.[62]
7.57
According to NATA, Australia currently enjoys
the status of operating the world’s most comprehensive and experienced national
program for laboratory accreditation. To capitalise on that resource in the
APEC context, NATA explained that it seeks to maintain a close working
relationship with both the Australian business community and governments. This
is to ensure that its technical relationships with its counterparts in APEC
continue to develop positively and to reflect the broader Australian needs and
policies for trade facilitation.[63]
7.58
NATA underlined the point:
If Australian leadership can be maintained in this area, it is
an assurance that the mechanisms developed by our trading partners for
assessing the competence of their laboratories, will reflect Australian
arrangements, rather than Australia having to adjust our infrastructure to
other modes.[64]
7.59
Australia is taking the lead not only in the
areas of science and technology. As noted in the previous chapter, it has shown
initiative, drive and leadership in introducing the APEC Business Travel Card,
in chairing the APEC Database Taskforce and in its capacity as lead shepherd in
a number of projects such as the Road Transport Harmonisation Project and the
model MRA on automotive product. Mr Crouch, the Australian ABAC representative,
observed pointedly that Australia has a valued role in the APEC process and is
highly regarded. He was sure:
Australia will continue to adopt a leading role in bringing
together a mechanism and a process whereby trade within the APEC countries can
be simplified.[65]
7.60
The Committee shares Mr Couch’s view and takes
particular note of the observation made by CSIRO that Australian science is
powerful, well targeted—that it does not try to do everything, but the things
it does it does well. The Committee suggests that this approach should go
beyond Australian science to other fields of endeavour in APEC. This strategic
approach to facilitating trade takes on greater significance in light of the
sheer scope of projects and programs embraced by the APEC agenda.
Recommendation
The Committee recommends that the Australian Government
actively encourage business, institutions and associations, such as National
Association of Testing Authorities, to continue their efforts to identify
specific areas where Australia can best contribute to facilitating trade and
investment in the APEC region and to support them in their efforts to carry
forward their ideas and initiatives.
Trade facilitation—building a
sense of community
7.61
Trade and investment liberalisation and trade
and investment facilitation are important processes for APEC but, as Dr Hadi
Soesastro pointed out, APEC should not be seen simply in the context of opening
markets. He suggested that APEC should always be seen ‘as part of the larger
context and broader objective of building the community’.[66] He goes on to state that most
people have come to recognise that APEC’s agenda needs this balance of trade
liberalisation, trade and investment facilitation as well as economic and
technical cooperation. He argued that facilitation such as harmonising rules
and regulations is ‘the most natural way to bring economies together’.[67]
7.62
As seen in work being done in the SCSC and the
SCCP, in the various working groups and in Asia Pacific Legal Metrology Forum
and Asia Pacific Laboratory Accreditation Cooperation, trade facilitation can
nurture a sense of community. Dr Elek told the Committee:
You cannot build a community of interest just simply by talking
about trade and investment. You need to start talking about all sorts of other
things that nations can cooperate on—sensible things like communication, about
harmonising customs procedures, getting better visa procedures to make business
travel easier and exchanging information about policy experience.[68]
7.63
The APEC trade and investment facilitation
agenda can help business on a practical level—it is outcome oriented and has
been able to produce concrete results. But the agenda also has the potential to
lay very firm foundations on which to build economic and technical cooperation.
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