Trade Policy Review: Australia
This sixth Trade Policy Review of Australia has enabled us to improve our understanding of recent developments in its trade and trade-related policies, and the challenges it now faces. Our discussion has clearly benefited from the active participation of the Australian delegation, led by Mr. Hamish McCormick, First Assistant Secretary (Department of Foreign Affairs and Trade), as well as from the remarks of our discussant, Mr. Kwok Fook Seng, Ambassador of Singapore, and many interventions by Members. Australia's prompt response to almost all questions was very much appreciated.
Members acknowledged the exemplary institutionalization of transparency with regard to Australia's trade and trade-related policies as well as its role as a catalyst for unilateral reforms, including trade liberalization, that have greatly increased market flexibility and improved economic performance; over the past 20 years, Australia has experienced uninterrupted real GDP growth. They congratulated Australia for continuing to be among the most open economies in the world and successfully weathering the global financial crisis without backsliding on trade liberalization. Members commended Australia for responding appropriately to the crisis with fiscal and monetary stimuli, which had contributed to the economy's strong recovery in 2010 despite the possible adverse impact on growth of recent natural disasters (floods, cyclone). Several Members noted the marked decline in multi-factor productivity growth and were interested in plans over the longer term to reverse it. In this regard, while recognising Australia's achievements in the area of regulatory reform they sought information on further structural reforms, whose implementation was lagging and thus handicapping Australia's ability to increasing its productivity and keep its international competitive edge.
Members acknowledged that Australia's efforts to promote open markets through multilateral, regional and bilateral initiatives had provided a catalyst for trade and economic liberalization efforts around the world and reinforced WTO's objectives; in addition, note was taken of doubts over the actual benefits of its preferential trade agreements. Members praised Australia's commitment to a rules-based and transparent multilateral trading system, as well as its leading role in attempting to achieve a successful conclusion of the Doha Round. They also commended Australia for being a major provider of trade-related technical assistance, including in the area of Aid for Trade, thus enabling developing and least-developed countries to benefit from the multilateral trading system. Members also commended Australia's low average MFN applied tariff rate owing to unilateral reductions. Some Members expressed appreciation of Australia's action further strengthening protection of intellectual property rights.
Having carefully considered the interventions, questions and answers during this review, there seems to be ground for recommending that the Australian authorities give thought to improvements that could be made in the following areas:
- SPS. Virtually all Members expressed concern over Australia's strict SPS requirements, including the lack of cost-benefit analysis; they urged Australia to re-evaluate these measures with a view to bringing them more into line with international norms and thus rendering them less restrictive as regards imports.
- FDI. Some Members expressed concern over remaining foreign investment restrictions in sensitive sectors (on grounds of “national interest”) and hoped that Australia would consider liberalizing them.
- Government procurement. Some Members expressed concern over Australia's use of government procurement as an instrument of economic policy; they were critical of inter alia the “buy local” requirements by certain states and encouraged Australia to implement a single procurement policy and join the WTO Agreement on Government Procurement.
- Trade remedies. Certain Members expressed concern over the deficiencies of the anti-dumping and countervailing system, and called for lesser reliance on the former.
- Tariff structure. Despite Australia's low level of tariff protection, some Members called for further action, including the reduction in remaining tariff peaks and simplification of the tariff structure by inter alia converting non-ad valorem into ad valorem rates.
- Support. Information was sought on the operation of an export support scheme and export controls. Some members noted the level of industry-specific support provided to the automotive, textiles, clothing and footwear industries and expressed the hope that it would be reduced.
This successfully concludes our sixth Review of Australia. The large number of advance questions and the many interventions indicate the important role Australia plays at the WTO. I would once again like to thank the Australian delegation, the discussant and Members for contributing to what has been a very enlightening two days of discussions.