It is both a pleasure and an honour to open this 2014 Australian Services Roundtable Summit.
Over recent decades the services sector has increasingly been recognised for its contribution to economic growth and development.
The United Nations Conference on Trade and Development (UNCTAD) recently issued a paper highlighting the potential of global trade in services.
The UNCTAD study estimates that in 2011, the services sector accounted for 66 per cent of world GDP and 44 per cent of world employment.
In Australia, the significance of the service sector is even greater.
Services represent over 70 per cent of our gross domestic product (GDP) and employ four out of five Australians.
In 2012, global services exports were valued at US$4.4 trillion and accounted for 19.4 per cent of the world's total exports.
So services account for two-thirds of the worlds economic output but only a fifth of world exports.
This shows there is considerable potential for further growth in trade in services.
A recent study by the World Bank has started examining policy barriers to international trade in services.
It has also initiated a new Services Trade Restrictions Database.
The World Banks initial results indicate that some of the most restrictive policies on services trade are to be found in the fast-growing economies of Asia including China, India, Indonesia, Malaysia, the Philippines and Thailand.
It has also found a positive correlation between growth in services output and poverty alleviation in developing economies.
The World Bank has called on researchers, policy makers and the private sector to use the new database to contribute to empirical evidence and literature on barriers to trade in services.
I am sure I do not need to tell this audience just how important the services sector is in domestic and international economies.
Or about its growth potential.
Indeed, the themes of this years summit highlight the enormous opportunities presented by the service industry in our modern, globalised economy.
TRADE POLICY AND SERVICES
As shadow Minister for Trade and Investment I will make some comments on trade policy for services.
Services have, until recently, taken a back seat to goods on the international stage of trade.
Hundreds of years ago, services were not even considered as a separate exportable opportunity.
It is highly unlikely that Marco Polo gave any credit to the financiers and lawyers involved in securing shipments of spices from India to Europe.
Almost 20 years ago, in the historic Uruguay Round, the World Trade Organisation was born and new rules for freeing up international trade in goods were agreed.
The WTO and these rules on goods have resulted in significant boosts to the global economy creating wealth and jobs, and bringing generations out of poverty, on the back of trade in commodities.
But the Uruguay Round that concluded in 1994 did not secure a comparable agreement on trade in services.
The General Agreement on Trade in Service (GATS) was finalised and represented an important first step, setting out rules of national treatment and a framework for further liberalisation.
For example, GATS provided that WTO member countries should enter into successive rounds of negotiations with a view to achieving a progressively higher level of liberalisation.
That undertaking was translated into official WTO negotiations on services in early 2000. They are now part of the Doha mandate.
Unfortunately, however, the WTOs Doha Round of global trade negotiations has not moved far or fast enough since it was launched in 2001.
That has resulted in more emphasis in recent years on negotiations for bilateral and regional negotiations for preferential trade agreements.
Labor believes policy-makers must not give up on Doha and the multilateral trading system.
The benefits that come from freeing up trade multilaterally, through World Trade Organisation agreements which reduce trade barriers for all countries, are far greater than those available from bilateral trade deals.
Labor believes Australia has an important opportunity and an important responsibility as the chair of the G20 this year to take steps to breathe new life into Doha.
A successful G20 outcome would see world leaders agreeing on measures to revive the WTO negotiations.
It would also see G20 leaders committing to the principle that preferential trade agreements must support the multilateral trading system.
That is, even if we are in the second best political world of preferential negotiations, we should seek to ensure these are used as stepping stones to multilateral agreements.
In addition to the WTOs Doha round of multilateral negotiations, we should also continue to focus on the negotiations around the Trade in Services Agreement (TiSA).
Under the former Labor Government, Australia was a leading force in establishing negotiations among a group of 50 WTO members who want to progress services trade liberalisation.
After 12 months of exploratory discussion, the first rounds of negotiations for a Trade in Services Agreement (TiSA) were held at the end of April 2013.
Since then there have been seven rounds of negotiations and the next session is scheduled in Geneva in September.
Progress is reported to be good.
I hope we will see significant movement towards a high quality Trade in Services Agreement.
At a bilateral level, market access opportunities for Australian service providers in Korea and Japan appear promising under the recently-concluded free trade agreements with those countries.
These agreements will be scrutinised by Parliaments Joint Standing Committee on Treaties. KAFTA will also be examined by the Senates Foreign Affairs, Defence and Trade legislation committee.
Expert views from industry bodies will be carefully considered in these committees.
Many have already made submissions to these Committees and public hearings commenced this week.
The Financial Services Council (FSC) has contributed a thoughtful submission to JSCOT on KAFTA, and will participate in public hearings in Sydney on 29 July.
In its written submissions, the FSC points out a number of critical domestic measures needed to take advantage of the market access and investment opportunities for the service sector.
For example, it recommends the Government finishes implementing the Johnson report recommendations which are designed to ensure Australia can become a leading financial services centre for the region.
One of the key policy areas that requires collaboration and lateral thinking is what we need to do domestically to ensure trade works best for Australians.
The debate must include domestic policy frameworks that enable Australians to grasp the opportunities present in free trade agreements.
Labor is open to that discussion and welcome interesting and innovative ideas.
CONCLUSION
So I hope this has been helpful to you prior to your discussions.
Today you will be discussing complex issues relating to:
- Domestic services policy;
- New frontiers in services trade and investment; and
- Services innovation in the digital age.
I encourage you to develop ideas and policy proposals that can be taken up in the domestic and international frameworks.
I look forward to hearing about todays outcomes and helping you continue to advance the case for further liberalisation of trade in services.
So, I congratulate the Australian Services Roundtable for its engagement with both the Government and the Opposition.
This work will help Australias services businesses to navigate into new areas of international trade.
It will help open up new opportunities for economic growth and jobs, in Australia and abroad.
So thank you and congratulations to James Bond, Ian Birks, and other members of the Australian Services Roundtable, as well as the sponsors, for making this Summit possible today.
I know you will all have a very interesting and rewarding day. ENDS
