A Local Voice for Global Trade
Export Council of Australia
As the peak industry body for the Australian export community, The Export Council of Australia (ECA) represents the next step in the evolution of the Australian Institute of Export (AIEx), which has provided education and training in the fields of exporting to both small companies and large corporations, for over 50 years.
The shift from AIE to ECA reflects the transition from a primarily educational role to one focussed on advocacy.
Australia’s endemic tall-poppy syndrome is alive and kicking but should be stamped out, according to the Export Council of Australia (ECA). Ian Murray, Executive Chairman of the ECA, believes now is the time to start talking Australian business up, rather than – as he believes is too often the case – down. “If 30 companies are exporting successfully, no one mentions the fact, but if one company goes to the wall it’s front-page news,” Mr Murray explains. “The new federal government looks like it may be more open for business than the previous administration, but that makes the need for effective advocacy more urgent than ever.”
As Mr Murray emphasises, “There is still demand for, as well as a need for the training of staff in export procedures. There is also a continuing need to remind SMEs (and a few large corporations too) that they need to consider global markets and not bury their heads in the local sand.”
International competitiveness begins very much in the domestic sphere, he says, and until Australia brings its domestic act up to the highest degree possible, it cannot hope to compete on the intensely abrasive international stage. “This is as true on a company-by-company basis as for the country as a whole,” says Mr Murray. He believes, however, that Australia has some inherent advantages to take to market: “It is unaligned, seen as ‘neutral’ and well-regarded by its training partners as a place to do business.” What is needed is fine-tuning of what should be exported, together with removing obstacles to trade and greater investment in promoting Australian trade abroad.
The ECA recently set out five main trade policy priorities for the next two years. First, Australia puts up barriers to trading which hamper businesses trying to export; red tape threatens to throttle exporting and needs reform. The ECA believes that the federal government’s trade policy should place significant focus on domestic trade issues, including trade facilitation and eliminating unnecessary regulation, as well as research and development and innovation. In doing so, Australia will become more internationally competitive and better able to capitalise on opportunities in international markets, particularly emerging economies.
Australia is now ranked tenth in the World Bank’s Doing Business Review 2013, which measures the ease of doing business in 185 countries. The ECA suggests the country is “still placed behind our major competitors including New Zealand (third), the USA (fourth) and the UK (seventh). In significantly worse shape is Australia’s Trading Across Borders ranking, which looks at the time and cost, excluding tariffs, associated with exporting and importing by sea, and the number of documents necessary to complete the transaction,” Mr Murray explains. There, Australia ranks 44th, behind Hong Kong (second), the UK (14th), the USA (22nd) and New Zealand (25th), as well as the regional average for OECD high income nations, which is 33. “There is therefore significant opportunity for Australia to improve our competitive position.”
The ECA believes that “a vigorous re-commitment by government to micro-economic reform is essential to restoring confidence and health to Australia’s trade sector. It strongly endorses the need to review and deregulate red and green tape associated with investment, competition and trade. Indeed, the Productivity Commission estimates that reducing red tape could add as much as $12 billion to national output.”
The ECA also recommends adopting the Authorised Economic Operator (AEO) programme – investigating the appropriateness of establishing a body with representatives from all border protection, trade and key regulatory agencies, including DAFF, to oversee trade competitiveness issues – and giving consideration to a programme that addresses the potential for market failure in manufacturing via an incentive that encourages capitalisation of IP through greater commercialisation.
As its second priority, the ECA believes the limitation imposed by Australia’s existing economic and physical infrastructure inhibits exporting potential, and that the lack of available Government funding could be redressed from increased investment by Australian superannuation funds and from foreign investors. This could be by way of direct investment or by public private partnerships to quell concerns regarding the perceived threat to Australia’s sovereignty. However, in order to do so, the Government needs to adopt policies to encourage different forms of long-term investment options that would be attractive both to superannuation funds and to foreign investors. The ECA recommends that government could gain greater input from the trade sector by encouraging a closer working relationship between the agencies responsible for economic and physical infrastructure and those responsible for international trade – and create new versions of infrastructure bonds or other investment vehicles, such as taxation incentives, to promote increased investment in and construction of critical infrastructure.
Third, “there should be greater, and more co-ordinated, nationally driven investment in trade promotion. The ECA would like to see a greater commitment by ministerial and diplomatic representatives to provide physical support on trade missions and for Australian companies involved in tendering for major, often government-funded projects overseas. This level of support is provided by other Governments and has proven to be of great benefit to the companies they assist. There is much benefit to be gained from a greater level of industry engagement when it comes to determining Australia’s trade policy and promotion agenda. More meaningful engagement with industry could be achieved through the establishment of a Trade and Investment Advisory Council to leverage the knowledge of business leaders in the formulation and implementation of trade policy and promotion initiatives.”
Mr Murray believes that Government needs to show support by leading trade missions and supporting Australian companies involved in tendering for major, often Government-funded projects; ensuring Austrade and EFIC are internationally competitive in terms of services and funding; retaining international marketing of education in Austrade where the in-market resources are critical to the efficient marketing of this important export sector; gaining industry input into the policies and promoting export and investment via the establishment of an industry-led Trade and Investment Advisory Council to government; and undertaking in-depth research to identify and monitor export trends, with the goal of improving current trade support programs. EFIC needs the resources and the capital to achieve its mandate, which should be flexible enough to address the evolving needs of exporters and the challenges presented by competition from overseas Export Credit Agencies.
Fourth, “Trade should be a whole-of-government issue,” says Mr Murray, and a key concern of the ECA is the need to improve the level of collaboration between government agencies, particularly those whose policies directly impact on the trade community, and the level of engagement with government and industry. “In this regard, the ECA recommends that DFAT play an increased role in inter-agency economic policy deliberations.”
The fifth policy plank is that Free Trade Agreements and other multi- or bilateral trade agreements are a positive move and support for WTO initiatives should be continued. It is the belief of the ECA that Australia should pro-actively work to deliver a package that harvests the progress that has been made in the Doha negotiations, especially on trade facilitation and the elimination of agricultural export subsidies.
The ECA is certainly a firm believer in greater free trade, and is able to point to strong evidence of its benefits to the average citizen. “There is evidence to support the fact that reductions in industry protection lead to significant benefits for everyday Australians,” shares Mr Murray. “A study conducted by the University of Adelaide’s Centre for International Economic Studies revealed that opening up the Australian economy to greater levels of trade has made Australian households better off, on average, by an estimated $3,900 per year.”
These gains have come in the form of greater income from exports and the reductions in the cost of imported and import-competing goods and services. More of the same, from a more competitive and optimally prepared Australian business community, is what Mr Murray and his team hope for – with some sympathetic responses from Canberra to come in the next few months.