Transcript Add title here - Canbek Economics

McGill University
North America & Global Economy
Lecturer: Dr. Kenneth Matziorinis
Country Trade Report
Australia / New Zealand & the WTO
Prepared by:
Ghada Hassan
Sirine Hirsh
260203755
260165723
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Table of contents
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-Executive summary
-New Zealand (country profile)
-Australia (country profile).
-New Zealand Agricultural products
-Australia (global positioning).
-New Zealand in Doha round.
-Australia & the WTO.
-Trade issues.
-Agricultural products.
-Trade distorting subsidies.
-Australia in Doha round.
-Environmental issues.
- Discussion outcomes.
-New Zealand & the WTO.
-Cairns group.
-REFERENCES.
-Non-agricultural products.
-Trade in services.
-Trade related technical assistance.
-International intellectual property rights.
-Trade remedies.
-Trade & environment.
-Australia & other international issues.
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Executive summary
Doha rounds were launched for the reform and liberalization
of multilateral trade rules. Australia, as well as NZ, have
pursued similar priorities:
1. liberalization of global agricultural markets.
2. reform of the agriculture support and protection
procedures.
3. to end discrimination which damages efficient
agricultural producers and denies developing countries
from benefiting from global trading system
4. secure and facilitate access to overseas markets for
Australia's services export sector and manufacturing
and industrial sectors
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Australia: Country Profile
Capital: Canberra
Chief of state: Queen of Australia ELIZABETH II (Feb 1952)
Population:20,264,082 (July 06 est.)
Growth Rate: 0.8%
• Age Distribution
– 0-14 years: 19.6% (m/f = 1.05)
15-64 years: 67.3% (m/f = 1.02)
65 years and over: 13.1% (m/f = 0.79)
• Ethnic groups: white 92%, Asian 7%, aboriginal
and other 1%
• Religious composition: Catholic 26.4%, Anglican
20.5%, other Christian 20.5%, Buddhist 1.9%, Muslim 1.5%,
other 1.2%, unspecified 12.7%, none 15.3% (2001 Census)
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Economic Indicators
• GDP (PPP): $666.3 billion
• GDP (real Growth Rate): 2.7%
• GDP (per capita): $32,900
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Economic Indicators (continued)
• GDP (by sector):
– Agriculture
3.6%
– Industry
21.2%
– Services
75.2 %(2004 est.)
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Public debt: 14.1% of GDP (2006 est.)
Current account balance: $ -41.62 billion (2006 est.)
Reserves of foreign exchange and gold: $48.25 billion
Debt – external: $585.1 billion (30 June 2006 est.)
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Export/Import
Exports
$117 billion (2006
est.)
Imports
$127.7 billion (2006 est.)
Commodities coal, gold, meat,
wool, alumina, iron
ore, wheat,
machinery and
transport equipment
machinery and transport
equipment, computers and
office machines,
telecommunication
equipment and parts; crude
oil and petroleum products
Partners
US 13.9%, China 13.7%,
Japan 11%, Singapore
5.6%, Germany 5.6%
(2005)
Japan 20.3%, China
11.5%, South Korea
7.9%, US 6.7%, New
Zealand6.5%, India
5% (2005)
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International agreements
Australia-USA free trade agreement (AUSFTA):
- agriculture: improve access.
- beef annual quota.
- automotive eliminate tariffs.
Thailand- Australia (TAFTA).
Singapore – Australia ( SAFTA ).
Australia – New Zealand ( Australia New Zealand Closer
Economic Relations Trade Agreement ).
All agreements are made to improve trade and reduce tariffs on goods
and services.
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Australia global ranking
• Human Development Index:
– Australia: ranked=3, HDI = 0.957 (high human development)
– New Zealand: ranked=20, HDI=0.936 (high human development)
• Corruption Index:
– Australia: Ranked=9/163, CPI=8.7
– New Zealand: rank=1/163, CPI=9.6
• Global Competitiveness Index:
– Australia: rank=19
– New Zealand: rank=23
• Democracy Index:
– Australia: rank=8
– New Zealand: rank=1
CPI = Corruption perceptions index
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Australia & Canada as trade partners
• Canada is the 18th-largest merchandise trading partner
$2.73billion ($1.43bn in imports and $1.35bn in exports)
• Australian main exports: wine, nickel ores,
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medicaments, and services trade exporting.
Australian main imports: motor vehicle,
telecommunications equipment, and pork.
Trade: Canada liberal but apply tariff peaks.
Australia invited Canada to Cairns Group 1986.
Australian FDI in Canada $3.16bn in 2005
Canadian FDI in Australia $5.8bn in 2005
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Australia and the WTO:
-The World Trade Organization (WTO) established after
Uruguay round ,regulates the global rules of trade and
ensures trade flows as smoothly, predictably and freely
as possible.
-Australian importers have been able to pass savings on to
consumers, reducing the cost of many everyday goods.
-Australia continue to push for the negotiations to address
the damaging agricultural policies of some countries,
such as export subsidies, which unfairly support their
farmers and lock other countries’ out of their markets.
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Agriculture products
Agriculture in Australia is a major industry and accounts for
approximately 3% of Australia’s GDP.
• Australian farm sector is an export oriented sector, with
an average around two thirds of total production being
exported.
• Australia accounted for 2.8% of all worldwide agricultural
exports.
• In 2004-05 agricultural products, including processed
food and beverages, accounted for (20.8%) of Australian
merchandise exports.
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Agriculture products (cont’d)
Australia is a vocal supporter of fair trade in agriculture.
Agriculture sector allover the world remains the highest
sector with domestic support,reached over US$ 257
billion done by rich developed countries.
Australia subsidies in 2004 to agricultural sector were
only 4%.
It is estimated that Australian farmers’ real income
would rise by around 65%, or A$16 billion per year, if
this sector is liberalized world wide .
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Australia position in Doha round
• Australia pushed for three main outcomes in the Doha
round in the agricultural sector which are:
• Concrete reductions in financial domestic support
• Markets access which concentrate on cutting tariffs:
Australia wants to lower the tariffs enough to create real
opportunities for increased farm trade
• Elimination of export subsidies that is done by many
developed countries for this sector.
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Discussion outcomes:
• The market access part in the framework agreement
provided for tariff reductions, leading after that to real
access improvements for all products. Although
negotiations that took place in Cancun ministerial
meeting did not achieve any progress regarding this
matter.
• During the Hong Kong Ministerial Meeting, WTO
members agreed to fulfill the commitment made in the
July 2004 Framework Agreement and agreed to eliminate
export subsidies by end 2013
• Elimination of different kinds of subsidy elements for
agricultural products such as export credits, food aid, and
exporting state trading enterprises.
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Discussion outcomes (cont’d):
• Regarding the non tariff barriers The World Trade
Organization's (WTO) has done the quarantine
agreement (the Sanitary and Physioanitary Agreement)
which allows all WTO members (including Australia) to
set their own level of quarantine protection for protecting
their environment, health and people .
• Under Services Agreement, every WTO must make
commitment on opening up to foreign service providers.
Under GATTS, such opening does not need to be same
for all members.
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Cairns group
The Cairns Group coalition of 19 agricultural fair traders,
chaired by Australia
The Cairns group is a group of countries that don’t give
subsidies to their farmers as well as sharing the same
opinion which is the importance of eliminating subsidies
to the agricultural sector .
Australia and the Cairns Group will continue to be at the
forefront of the negotiations, pushing for real outcomes in
the negotiations for agricultural trade liberalization .
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Non agricultural/industrial products
• Non-agricultural products, including all industrial, mineral,
energy, and fishery and forestry products, account for 82
per cent of Australia’s merchandise exports
• The minerals and energy sector is the largest export
industry in Australia accounting for 43 per cent of total
exports in 2005. Australia industrial sector is participating
by 26.6% from the Australian GDP.
• The Doha agenda on non-agricultural market access is
aiming in its negotiations to reduce or eliminate tariffs,
including tariff peaks, high tariffs and tariff escalation, as
well as non-tariff barriers .
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Non agricultural/industrial products
(cont’d)
• Australia has a priority in the Doha Round in the
lowering of tariffs and reducing other barriers to
trade in industrial products as it is expected after
this reforms to assist in enhancing the Australian
industry exports.
• Negotiations on these industrial goods in the
Doha Round were known as the non-agricultural
market access or the "NAMA" negotiations.
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Trade in services:
• Australia is a main player in pushing to open the world
services market through the WTO’s Rounds of
negotiations.
• Trade in services account for 19 per cent of world export
activity in 2004 .
• services sector is participating in the Australian GDP
with 71% (2005 est).
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*WTO and GATS
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Services in Australian economy
• Australia is a world-class provider of a range of services,
such as telecommunications, travel, banking and
insurance.
• Services exports presented 71 per cent of Australia's
gross domestic product (GDP),and employee 84% of
australian workers.
• Over the last ten years Australian exports of services
have increased by an average of almost 6 per cent per
year.
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Trade-related technical assistance
• Australia recognizes that trade-related technical assistance is
important to developing countries and is committed to enhance this
issue which will enable developing countries to participate more
actively in the negotiations.
• As Chair of the Cairns Group, Australia led the push for reductions in
barriers that rich countries impose on exports from developing
countries.
• Australia fully opened its markets to all products from Least
Developed Countries from 1 July 2003.
• Australia is actively participating, to strengthen considering the
differences between developed and developing countries in stages of
economic, financial and technological development to make them
more clear during the negotiations and the commitments of the
developing countries.
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International intellectual property rights
• Intellectual property is an integral part of international
trade, and its importance is increasing as the effective
use of knowledge contributes ever more to national
economic prosperity.
• The current value of intellectual property in Australia is at
least $30 billion.
• Australia has vital interests in the agreed international
standards on the protection of intellectual property rights.
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Trade remedies
Negotiate to clarify and improve measures in antidumping
agreements.
Negotiate measures on subsidies agreements.
Australia submitted 2 proposals:
-remedy for subsidy removal .
-proposal on prohibited export subsidies.
Negotiation to simplify and harmonize international trade
procedures to assist the movement of goods.
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Trade and environment:
Australia view is:
• Countries should not use trade policy to force
environmental objectives.
• Instead, liberalization of trade will result in increased
economic prosperity which will result in turn to
increased resources devoted to Environmental
management.
In Doha rounds, WTO countries agreed to:
• Improve market access to environmental products.
• Improve market access in developing countries to help
economic and environment development.
• Labeling requirements for environmental purposes.
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Australia and international issues
Tariffs imposed on goods imported into Australia will be 5 to
10% less than the WTO commitments set out in the
consolidated schedule.
Since 1995 Australia has been involved in a number of
disputes as a complainant, a respondent or as a third
party and results achieved to date have delivered real
economic benefits to Australia.
-Australia is also working with the WTO to provide real
opportunities for exporters of goods and services by
reducing protection and barriers.
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New Zealand: Country Profile
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Population: 4,076,140 (July 06 est.)
Growth Rate: 0.99%
GDP (PPP): $106 billion
GDP (real Growth Rate): 1.9%
GDP (per capita): $26,000
GDP (by sector):
– Agriculture
4.3%
– Industry
26.9%
– Services 68.8%(2006 est.)
Public debt: 19.9% of GDP (2006 est.)
Current account balance: $-7.944 billion (2006 est.)
Reserves of foreign exchange and gold: $10 billion
Debt – external: $47 billion (2006 est.)
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New Zealand Export/Import
• Exports: $23.69 billion (2006 est.)
• Exports
– Commodities: dairy products, meat, wood and wood products,
fish, machinery
– Partners: Australia 21.4%, US 14.1%, Japan 10.6%, China 5.1%,
UK 4.7% (2005)
• Imports: $25.23 billion (2006 est.)
– Commodities: machinery and equipment, vehicles and aircraft,
petroleum, electronics, textiles, plastics
– Partners: Australia 20.9%, US 11%, Japan 11%, China 10.9%,
Germany 4.9% (2005)
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New Zealand agricultural products
• New Zealand stands for the benefits of its farmers; they
want their agricultural exporters to benefit from the same
opportunities in world markets, agriculture represents
4.3% from the GDP.
• Goals for New Zealand in agriculture:
• Increasing market access for their products, specially in
the big markets.
• Elimination of all types of export subsidies.
• Securing major reductions in domestic subsidies.
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New Zealand non-agricultural products
• Industrial products represent 26.9% in the GDP.
• They include all manufactured goods (from textiles,
clothing and footwear to steel and aluminum) as well as
forest and fish products, chemicals, and minerals.
• Non-agricultural products is about 46% of New Zealand’s
export receipts in 2005, with a value of about NZ$14.2
billion.
• Negotiations on these industrial goods in the Doha
Round were known as the non-agricultural market access
or the "NAMA" negotiations.
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New Zealand goals in Doha round
New Zealand’s objectives for non-agricultural market
access are to:
• Improving trade conditions for the New Zealand forestry
and fisheries sectors.
• Secure the maximum possible improvement in existing
access and trading conditions for all non-agricultural
products.
• Secure the best situation possible for New Zealand in the
World Trade Organization negotiations in this sector
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Trade issues
New Zealand’s trade and development policy is the principle
that trade can reduce poverty, but that developing countries
face challenges making trade useful for development .
New Zealand has offered duty-free access to imports from
most Pacific Island countries and extended this advantage
to all of the world’s least-developed countries (LDCs),
making it one of the few developed countries to take this
step.
Improving market access for agricultural products will lead to
tangible benefits for developing countries.
Trade in services is also important to many developing
countries that have their own export interests in services
ranging from construction to education and all this points
are of an interest to New Zealand too.
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Trade-distorting subsidies
Using trade-distorting subsidies in its 2 faces;
domestic support measures and export subsidies
significantly distorts the global trading system.
New Zealand is looking for a positive outcome in
implementing the following:
• Tangible reductions in the use of trade-distorting
subsidies
• Elimination of export subsidies
• Opening agricultural markets
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Environmental issues
New Zealand aims to harmonize its objectives for trade and
for the environment ,to achieve the objective of
promoting sustainable development worldwide.
In 2001, the New Zealand government adopted a
framework for integrating environment issues and trade
agreements.
New Zealand is having also great concern for more Market
Access for its Environmental Goods and Services.
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New Zealand & the WTO
There is a tangible overlap between the objectives of developing
countries and of New Zealand in the Round and after.
New Zealand takes into consideration regarding the developing
countries that:
• International trade has a positive effect on poverty reduction and
improves long-term economic growth in developing countries.
• New Zealand will promote development through improving market
access for all products.
• New Zealand supports initiatives of the developing countries to allow
them for lower cuts and longer timeframes for reducing tariffs.
• New Zealand considers that appropriately and effectively targeted
technical assistance is needed to ensure that developing countries
are able to use trade to enhance their development
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References
1. https://www.cia.gov/cia/publications/factbook/geos/as.html
2. http://en.wikipedia.org/wiki/Agriculture_in_Australia
3. http://www.dfat.gov.au
4. http://www.dfat.gov.au
5. http://www.wto.org
6. http://www.dfat.gov.au
7. https://www.cia.gov/cia/publications/factbook/geos/as.html
8. https://www.cia.gov/cia/publications/factbook/geos/nz.html
9. http://www.mfat.govt.nz
10. http://www.cia.gov/cia/publications/factbook/geos/nz.html
11. http://en.wikipedia.org/wiki/Economy_of_New_Zealand
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