WTO Trade Policy Review of Australia

WTO-TPRStatement by Ambassador Michael Punke
Deputy U.S. Trade Representative and U.S. Permanent Representative to the World Trade Organization

Geneva, Switzerland
April 5 , 2011

-As delivered-

Thank you, Mr. Chairman. And thank you especially for agreeing to accept this important new responsibility. We would like to welcome warmly Mr. Hamish McCormick, First Assistant Secretary, Department of Foreign Affairs, and the Australian delegation, and compliment the government’s thorough report for this, its sixth Trade Policy Review. We are also appreciative, on an ongoing basis, for the contributions of Ambassador Tim Yeend to this institution. We thank the Secretariat, too, for its excellent report on the recent developments in Australia’s economic and trade policy. We appreciate Australia’s written responses to our few detailed questions and comments, which will further enhance our understanding of the future direction of Australian trade policy. My government would also like to thank our discussant, Ambassador KWOK Fook Seng, for his insightful contributions to our discussions for this TPR. We’re thankful that Ambassador KWOK has been able to hit the ground running following his recent arrival including through his work here today.

The United States applauds Australia’s sound macroeconomic policies and wide-ranging structural reforms, which have contributed to its strong economic performance over the past decade. We also welcome Australia’s commitment to the multilateral trading system, which supports its macroeconomic objectives. 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 helped catalyze trade and economic liberalization efforts around the world.

The commercial ties between the United States and Australia are strong and continue to grow. In 2010, our two-way goods trade grew 10 percent from 2009 to $30.8 billion. At the same time, investment in both directions has been increasing, with U.S. foreign direct investment in Australia up 12.6 percent in 2009 (the latest available data) from the previous year and Australian FDI in the United States up 12.4 percent in the same period.

The United States continues to hold firmly to the view that our own commitment to the multilateral system is strongly complemented by the existence of sound, comprehensive bilateral and regional agreements. The U.S.-Australia Free Trade Agreement, which went into effect in 2005, has contributed to the growth in trade and investment between our two countries. We are pleased to highlight that our total two-way trade in goods, for example, has grown by 43 percent since 2004, the year before the FTA entered into force, and our Agreement continues to foster deeper cooperation on other economic issues where we share common goals. We are further pleased to note that implementation of the agreement continues smoothly.

Moreover, we have continued to build on our positive experience with the bilateral FTA. In March 2010, the United States and Australia, along with seven other countries, began negotiations of the Trans-Pacific Partnership (TPP), with the objective of shaping a high-standard, broad-based regional agreement. We have just concluded our sixth round of negotiations and are seeking to conclude this agreement as rapidly as possible. Our expectation in advancing this Agreement is that it will complement the multilateral trading system by expanding trade liberalization.

Thus, Australia remains a strong advocate of the benefits of global trade liberalization, and is a valued partner in seeking to achieve this end. We commend Australia’s efforts, for example, to achieve stronger disciplines on fisheries subsidies and for its critical input into these negotiations as a Friend of Fish. Australia’s commitment to concluding the Doha Development Agenda negotiations has been unwavering and instrumental in helping to maintain the energy and focus needed to conclude the negotiations. We are hopeful that its dedication and commitment will play a leading role in advancing these negotiations to a successful conclusion. We look forward to our continuing work with Australia to achieve an ambitious, balanced and comprehensive Doha Agreement that results in meaningful new trade flows in industrial goods, services, and agriculture and benefits all Members.

Australia was a founding member of the Asia-Pacific Economic Cooperation (APEC) forum in 1989 and has been active in helping APEC achieve its current status – with 21 member economies comprising nearly half of the world’s population and more than half of the global economy. Since it was founded in 1989, the APEC forum has been instrumental in promoting regional and global trade and investment, and supporting the WTO and a strong outcome in the DDA. This year, the United States is proud of its role as host and chair of APEC, and we look forward to continuing our close working relationship with Australia to achieve practical, concrete, and ambitious outcomes in APEC in 2011.

Despite Australia’s exceptionally strong record, there are some areas where we would see room for further improvements. We hope this Trade Policy Review will help draw Australia’s attention to these areas where it can further liberalize its regime and enhance its competitiveness.

As one of the leading global agricultural traders, we urge the Australian Government to ensure that its SPS regulations and requirements and overall process are the least trade-restrictive possible. For example, as the Secretariat notes, Australia generally supports a standards policy that is compatible with relevant internationally-accepted standards or practices.

Likewise, the Secretariat report notes that Australia generally supports expediting foreign access for new agricultural products and in 2007 established new import risk analysis (IRA) arrangements setting specific timeframes for completion of IRAs within either 24 or 30 months. Yet, we are aware of only one example of a completed IRA that has enabled new market access for foreign-origin agricultural products since the new arrangements were put in force.

We will be interested to hear about Australia’s program of legislated tariff reductions and the timeframe for its implementation. We were advised of this program during Australia’s 2007 TPR and we look forward to knowing its status.

With regard to import licensing, we are keen to know Australia’s plans for responding to the Questionnaire on Import Licensing Procedures, as the WTO Import Licensing Agreement requires. We appreciate Australia’s offer to update its 2006 responses to the Questionnaire and we hope that Australia will submit its revised response to the Questionnaire on Import Licensing Procedures in time for its review in the Committee during 2011.

As for Australia’s “Certain Inputs to Manufacture” (CIM) scheme, the Secretariat says that this program provides duty-free entry for certain goods used in manufacturing directed towards “import replacement” and “export enhancement.” We are most interested to know how Australia implements this scheme in light of its WTO Subsidies Agreement commitments.

Mr. Chairman, Australia is one of the most dynamic and open economies in the world and a dedicated proponent of free trade. As one of Australia’s closest friends and allies, we share a strong common interest in its continued growth and prosperity. We look forward to continuing to work closely with Australia in the WTO as well as in bilateral and regional forums and in particular to our joint efforts to achieve market-opening results in the DDA and TPP negotiations.

Thank you.