Tuesday, 7 August, 2018
Are Australia’s free trade agreements sufficiently accessible and useful to Hunter small to medium enterprises?
Hunter-based business, government and industry group representatives shared their experiences in a roundtable discussion in Newcastle on 1 August.
The discussion was recorded for Hansard. It will help to inform the Commonwealth Joint Standing Committee on Foreign Affairs, Defence and Trade’s inquiry into Access to free trade agreements (FTAs) by small and medium sized enterprises.
The HRF Centre facilitated the event. Professor Will Rifkin, HRF Centre Director, and Dr Anthea Bill, Lead Economist, set the scene for visiting members of the Trade Sub-Committee*. They provided a presentation on the Hunter regional economy and insights on local businesses.
Dr Bill said that small and medium-sized enterprises (SMEs) are prevalent in the Hunter. Two-thirds of local businesses employ fewer than four people.
“The wind back in mining investment had a greater impact on the regional economy than the 1999 closure of BHP’s steel making facility,” Dr Bill revealed. “It resulted in a five per cent fall in employment in the region in 2013. While employment has since recovered, it demonstrates the Hunter economy’s vulnerability to the boom-and-bust cycles of mining.”
Professor Rifkin explained that the development of foreign trade for Hunter businesses depends on key transport infrastructure projects.
“We have heard about potential advantages of a very fast train link to Sydney, a container terminal in the Port of Newcastle and direct international air connections. The potential for such developments were discussed at the Hunter Economic breakfast last week,” he said. “There are innovative SMEs taking advantage of opportunities presented by free trade agreements. They could benefit from improved connectivity to major global markets.”
Participants in the roundtable sessions represented a cross-section of industry sectors. They included the Port of Newcastle, Hunternet, Hunter Business Chamber and Australian Industry Group. Executives from 10 local businesses added insights from their experiences.
Key points made by participants at the roundtable included:
- establishing a one-stop-shop for information and training for Hunter SMEs on the advantages and opportunities presented by FTEs;
- taking a more holistic approach when negotiating FTAs, that includes logistics and supply chains, to maximise opportunities for SMEs to take advantage of agreements;
- make it more difficult to import finished products into Australia to prevent the erosion of intellectual property;
- ensure that FTAs include bilateral trade agreements to enable Australian importers, as well as exporters, to benefit from them;
- improve publicity about the opportunities presented by Australia’s FTAs;
- SMEs negotiating foreign trade encounter more substantial hurdles than tariffs, which are often not covered by FTAs; and
- provide more business advisers to assist SMEs to negotiate FTAs, such as those provided as part of the Government’s Entrepeneurs’ Programme.
Dr Greg Whiteley, Managing Director of Whiteley Corporation, complimented the committee members for coming to Newcastle.
“I thoroughly endorse this initiative of the Joint Standing Committee, to enable businesses to be heard,” he said. “The value of direct consultation should never be understated.”
The HRF Centre will continue to facilitate inquiries and forums that enable Hunter voices to be heard on issues of regional and national significance.
Caption: Dr Anthea Bill and Prof. Will Rifkin present at the inquiry to (L-R) Bert van Manen MP, Ted O’Brien MP (Chair), Andrew Dawson (Inquiry Secretary) and Graham Perrett MP (Deputy Chair)
A briefing paper on FTEs, prepared for the roundtable participants by University of Newcastle finance student Logan O’Halloran during his internship with HRF Centre, can be downloaded by clicking on the link below.