The Future of Trade

An Expert's View about Trade Agreements in Australia

Posted on: 19 Apr 2010

WIth cooperation between public and private sector export service providers, and a drive by Trade Minister Mark Vaile and Austrade’s Peter O’Byrne, our export industry has performed well. But more needs to be done to drive growth further, writes Ian Murray

EXPORT EX-FILES THE FUTURE OF TRADE WITH COOPERATION BETWEEN PUBLIC AND PRIVATE SECTOR EXPORT SERVICE PROVIDERS, AND A DRIVE BY TRADE MINISTER MARK VAILE AND AUSTRADE?S PETER O?BYRNE, OUR EXPORT INDUSTRY HAS PERFORMED WELL. BUT MORE NEEDS TO BE DONE TO DRIVE GROWTH FURTHER, WRITES IAN MURRAY Recently I attended a workshop, arranged by Austrade, which supported by the fact that exports as a percentage of GDP rose looked at the future of export and what needs to be done to drive strongly through the late nineties. And while dropping between it harder and faster. What made the program worthwhile, from my 2002 and 2004 due to drought, they came back quite strongly in perspective, was the inclusion of outside providers like Australian 2005 to be just under 20 percent (bearing in mind that in the 1980s Business Limited, chambers of commerce, state government it was less than 15 percent of GDP). agencies and a good cross section of real exporters. So where do we go from here? Australia has 1.5 percent of The session started with a really good presentation from Phil the world economy, so there?s another 98.5 percent to exploit. The Ruthven, chairman of IBISWorld. He was able to set the scene for areas that provide the strongest opportunity for Australia outside a very fruitful discussion by looking at Australia?s export history of the mining sector are likely to be in services, including areas and world events to forecast the future. While a number of really like transport and logistics, and a whole raft of professional and IT interesting points were raised, there were a couple that related to services. Export growth is probably going to be driven by small to China that were quite amazing, such as how China?s real average medium businesses and those who can capture a dominant share gross domestic product (GDP) growth has been 8.2 percent since of niche (even ultra-niche) markets. Companies looking for export 1950. And the massive change in its industry mix which shows opportunities will need to become more open to strategic alliances, agriculture falling from 46 percent in 1955 to 14 percent in 2005, provide elements in the international supply chain and be prepared being replaced by manufacturing which has grown from 21 percent to manufacture overseas where appropriate. Exporters need to also to almost 42 percent over the same period. Then there?s the be very aware of China, its growth and demand on resources. prediction China will become the world?s third biggest economy by In order to service this ?new-age? exporter, the export service 2010 and second biggest between 2015 and 2020. sector players will need to work more cohesively in order to provide He also raised the issue of outsourcing at different levels a more complete set of services?like the soon-to-be-released SME (household, business, overseas), which will continue to have an Working Capital product, developed jointly between EFIC and the enormous impact on business, particularly service sectors in trade; private sector banks. and predicted the Aussie dollar would fall to around 58 cents in And that?s what the workshop was all about. Service providers of 2008, which would provide a stimulus to exports if and when the Australia are well placed to provide exporters of all shapes and sizes resources boom settles. with all the help they need to take their share of that 98.5 percent. Our export performance and balance of trade was another point raised, and one close to my heart. Goodness knows how *Ian Murray is executive director of the Australian Institute of Export. often we?re hit over the head by the press saying how poor our export performance is, when in fact, the biggest influence on our current account is incomes and interest, not the balance between exports and imports. And while the obvious spikes occur in trade, the import/export balance is really not of major concern. This is 6 I JUNE 2006
Posted: 19 April 2010

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