Exporters welcome free trade zone discussions but warn industry still under pressure

Exporters have welcomed talks of new trade agreements coming out of the APEC summit in Japan but suggest longer-term problems such as the high Australian dollar will continue to keep businesses under pressure.

Ian Murray, executive director of the Australian Institute of Export, says companies have welcomed the discussions but warn they are still suffering and require assistance.

“The first thing I would say is that we are very strongly on side with the multi-lateral agreements, and obviously we would love to see things like Doha start pushing ahead for the longer-term,” he says.

The comments come as a number of member nations attending the APEC summit on Tokyo made agreements to pursue free-trade programs.

The APEC communiqué released by the member nations urged all to pursue “concrete initiatives”, with Japanese prime minister Naoto Kan saying leaders had committed to “move forward with trade”.

“We are confident that APEC is well on track toward achieving the goal of free and open trade and investment among its economies,” he said at the event.

“We endorse the report on APEC’s 2010 economies’ progress towards the Bogor goals and conclude that while more work remains to be done, these 13 economies have made significant progress toward achieving the Bogor goals.”

A second agreement was made regarding the Trade Pacific Partnership, which Australia will consider entering over the long-term. Current members, which include Chile, New Zealand and Singapore, all have agreements regarding free trade and Australia, the United States and South Korea are all considering joining.

A separate commitment was also made regarding the Doha plan, which has been in discussion for nearly a decade between member countries. Japan showed signs of entering the agreement with all members saying they would bring talks to an “end game” in 2011.

However, Gillard said the Australian Government will pursue other avenues for exports as well, saying that, “we won’t keep all our eggs in the one basket”.

Murray welcomes the talks, and says members hope the Doha agreement can be passed by 2011 to give assistance for a suffering industry.

“I think the key benefits of that plan include the opening of the door to very low tariff rates, and this will provide an enormous amount of assistance for third-world countries.”

“We’ve always been on side with various free trade agreements, particularly within the APEC community, but where appropriate we’ve also been supportive of various other trade agreements in the Pacific area.”

But Murray also says exporters are still facing some significant challenges and these agreements won’t support the industry in the short-term. He warns US president Barack Obama has been pushing for free trade agreements for some of Australia’s key trading partners, which could increase competition for Australian businesses.

“We’ve also seen Barack Obama saying they aren’t going to hold back, and the US is going to push its agenda to get as many export opportunities as possible, particularly in markets that are some of Australia’s key trading markets.”

Murray says businesses need to think up new ways to compete against American competitors, but this will be hard with little Government support – the Australian Institute of Export has previously said the Government should increase funding for the Export Market Development Grant and that request remains in play.

“We need to meet competition with competition here. This is not a light-hearted game for exporters, and on the other side you have Europe with a weak currency and competitive prices. Australia has to be careful that we aren’t caught in the pincers between Europe and the United States.”