September 23, 2002

Trade Policy Review of Australia

Statement of the U.S. Representative

Thank you, Mr. Chairman. The United States is pleased to participate in Australia's Trade Policy Review and appreciates the thorough report of the Secretariat, which provided us a detailed review of recent developments in Australia's economic and trade policy. We have provided detailed questions and comments on the report for Australia's consideration and look forward to receiving responses from the Australian delegation, which will further enhance our understanding of the future direction of Australian trade policy.

Australia has long recognized its interest in weaving a network of global trade ties, and in fact, was founded in large part on the hopes of profitable trade. Today, Australia's unilateral and multilateral trade liberalization has made it one of the most open economies in the world. Its confident global orientation has benefitted not only Australia, but its many trading partners, the United States among them. The United States applauds Australia's unwavering commitment to opening markets for trade, development and economic opportunity and its active role in the campaign to advance openness, democracy, and the rule of law.

The economic and cultural ties between the United States and Australia are strong and growing. In the last decade, trade has increasing significantly. Bilateral goods trade between the United States and Australia totaled $17.4 billion last year, an increase of 40 percent since 1991. Australia receives 20 percent of its goods from the United States and exports 11 percent of its goods to the United States. Indeed, Australia's exports to the United States have grown faster than its sales to any of Australia's other major trading partners. Services trade between the United States and Australia also has grown by more than 50 percent in the past 10 years, totaling nearly $9 billion in 2000. Moreover, the United States is the largest foreign investor in Australia and fully half of Australia's foreign investment goes to the United States, generating enhanced employment opportunities in both countries.

The sound macroeconomic policies and structural reforms undertaken by the Australian Government as well as its general trade policies have contributed to its strong economic performance over the past decade. Australia early on anticipated the potential impact of the IT revolution on economic growth and positioned itself well to compete in New Economy industries. As the Secretariat's report notes, IT spending as a share of GDP in Australia is second in the world and knowledge-based industries account for nearly half of Australia's GDP. The developments are certain to further increase the efficiency of the Australian economy and boost its future economic potential.

Australia's aggressive efforts to promote open markets through multilateral, regional, and bilateral initiatives have not only enhanced the competitiveness of the Australian economy but catalyzed liberalization efforts around the world. There is no doubt that Australia is one of the most effective advocates of the benefits of global trade liberalization. Australia was instrumental in helping to generate the momentum necessary to overcome the challenges we all faced in launching a new trade round last year in Doha and it continues to play a leading role in advancing the negotiations toward a successful conclusion.

Despite this remarkable record, there are some areas in which the Australian Government could make further improvements. Continued efforts to remove the outstanding trade restrictions would increase efficiency in the Australian economy and help create the basis for sustained economic growth in the future. Such actions would also compliment Australia's calls for global trade liberalization and regulatory reforms, giving impetus to the global trade negotiations that Australia is working so hard to promote. Our questions on Australia's trade regime are provided in a constructive spirit, and we would like to thank the Australian delegation in advance for considering them.

As one of the leading global agricultural traders, we would urge the Australian Government to review its SPS regulations and requirements and overall process with an eye to ensuring that its system is the least trade-restrictive possible. As the Secretariat's report noted, Australia's SPS measures have been criticized by a number of its trading partners who consider them unduly restrictive, and therefore protectionist. Certainly, as one of the foremost supporters of the WTO, Australia needs to seriously consider changes that would ensure the health and safety of its agriculture and food supply while minimizing negative effects on trade.

In addition, we would urge the Australian Government to end its involvement in promoting certain agricultural products, as well as in the telecommunications sector. We look forward to hearing Australia comments on de-regulatory steps it may be considering.

We urge the Australian Government to continue to take steps to strengthen its IPR regime. As a country that sees its future bound to New Economy industries, Australia understands the importance of a strong IPR regime well. As such, we would urge Australia to take steps to tighten its restrictions on parallel imports, and to consider ways to address copyright piracy, software decompilation and other IPR issues, including enforcement.

As the Secretariat's report noted, services comprise the largest and fastest growing component of the Australian economy and Australia is a strong supporter of the WTO services negotiations. The United States and Australia have worked together closely to eliminate discriminatory requirements for professional service providers and to develop mutual recognition agreements to ease the burdens facing entry into foreign service markets. We would urge Australia to eliminate remaining market access barriers in this sector, including in remaining service sector barriers B including in the financial services, telecommunications, broadcasting, advertising, motion pictures, film, and other services sectors B and to eliminate uncertainty resulting from the Australian Government investment screening process.

Finally, we are interested in Australia's comments on whether it is considering pursuing accession to the GPA.

Mr. Chairman, Australia is one of the most dynamic economies in the world and among the world's strongest and most dedicated proponents of free trade. As one of Australia's closest friends and allies, we share a strong common interest in its continued growth and prosperity. It is with this perspective in mind that we believe Australia will take our comments and questions in the constructive spirit in which they are intended. We hope this Trade Policy Review will help draw Australia's attention to those areas where it can further liberalize its regime or align itself with emerging global positions.

Thank you.