FTA debate overlooks the big picture: Export Council

“Australia is having the wrong debate about trade,” said Heath Baker, head of policy at the Export Council of Australia (ECA). “Trade agreements, like the TPP-11, are only as good as the companies using them. If we’re serious about boosting economic growth through trade, then trade agreements are only part of the answer. The priority must be to address the lack of SME in export.”
The ECA has released its trade policy recommendations for 2018. The recommendations focus on how to encourage more SME into international trade.
“Australia is well behind OECD averages when it comes to both its export intensity and the contribution SME make to overall exports,” said Mr Baker.
Australia’s export intensity (its export value to GDP) is 21%, compared to an OECD average of 28%. In G7 economies, SME account for around 25% the value of goods exports — but SME only account for 14% of Australia’s export value.
Mr Baker said: “Boosting Australian SME exports to the same levels as G7 countries would add around $36 billion to Australia’s GDP. There’s no reason Australian SME shouldn’t export at the same rates as American, British or Canadian SME.
“Australia’s future prosperity can only be guaranteed by an economy that is open, outward-looking and competitive,” said ECA chairwoman Dianne Tipping. “But there are simply too few Australian SME involved in international business. Today’s SME are tomorrow’s big businesses — encouraging more SMEs into trade now will strengthen Australia’s economy in the future.”
The ECA makes policy recommendations in three areas that will help more SME start exporting:

  • Shift their mind-set to think globally and help guide them to services that will enable them to start exporting.
  • Lower the domestic barriers to export, such as the cost and complexity of obtaining export certificates and approvals.
  • Provide better support to help them grow internationally, including by adequately funding the Export Market Development Grant and the new national brand under development.

“Most importantly, we need government and industry to come together to develop and implement a strategy to get more SME involved in export. There’s no point doing the hard work to get businesses interested in export, just to have them struggle to upskill or find that the cost of obtaining documents in Australia makes them uncompetitive overseas,” Ms Tipping said. “We need a comprehensive strategy, and we’re calling on the government to lead it.”

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