Trade policies reviewed by WTO

The WTO report on Australia’s trade poli­cies, issued ear­li­er this month, urges action to secure the gains from the min­er­als boom

A major eco­nom­ic chal­lenge con­fronting Aus­tralia, with poten­tial trade pol­i­cy impli­ca­tions, is to for­mu­late appro­pri­ate macro­eco­nom­ic and struc­tur­al poli­cies to facil­i­tate rather than impede adjust­ment to the effects of its great­ly improved terms of trade owing to the min­ing boom and the asso­ci­at­ed appre­ci­a­tion of the Aus­tralian dol­lar. The lat­ter is like­ly to reduce the com­pet­i­tive­ness of import-com­pet­ing activ­i­ties and non-min­ing exports, unless pro­duc­tiv­i­ty in these activ­i­ties can be improved. This will have far-reach­ing impli­ca­tions for the pat­tern of growth and struc­ture of the econ­o­my by neces­si­tat­ing a real­lo­ca­tion of domes­tic resources. Sig­nif­i­cant struc­tur­al adjust­ment by the non-min­ing econ­o­my will be required.” Extract from the Sec­re­tari­at assess­ment WTO Trade Pol­i­cy Review of Aus­tralia

The WTO Sec­re­tari­at reports the dis­cus­sion of our trade poli­cies by oth­er WTO Mem­bers in diplo­mat­ic terms. But it’s clear from the sum­ma­ry which of our poli­cies are the most severe irri­tants to our trad­ing part­ners.

They’re the same pol­i­cy short­com­ings that cost Aus­tralian con­sumers bil­lions of dol­lars in unnec­es­sary costs and lost oppor­tu­ni­ties.

SPS [i.e. “quar­an­tine”]. 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 [“for­eign direct invest­ment”]. 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. “

Extract from the Sum­ma­ry of the dis­cus­sion by the TPRM Chair

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