Helping Australian SMEs go global in new parliamentary inquiry

The Joint StandingCommittee on Foreign Affairs, Defence and Trade has started an inquiry into supportingAustralia’s small and medium-sized businesses to leverage free trade agreements(FTA’s) to pursue export opportunities.

Chair of the JSCFADT’sTrade Sub-Committee, Mr Ted O’Brien MP, said parliamentarians want tounderstand the opportunities and challenges faced by small to medium-sized enterprises(SMEs) when seeking to capitalise on free trade agreements to drive exports of theirgoods and services into Australia’s partner countries.

“We reallywant to hear from those Australian small and medium-sized businesses which havesuccessfully taken advantage of free trade agreements to export their goods orservices into new markets across north Asia, and more established markets too suchas New Zealand, the United States, Thailand, Singapore and Chile,” Mr O’Briensaid.

“But we also wantto learn from the experiences of those small and medium-sized businesses which haveeither been wary of the risks or costs involved in exporting, or those who havetried but not succeeded with exporting into the growing list of countries withwhich Australia secured free trade agreements.”

WithAustralia recently signing a new trade agreement with Peru and on the verge ofsigning the final Comprehensive and Progressive Agreement for Trans-PacificPartnership with 11 Pacific-rim countries including new trading partners suchas Canada and Mexico this month, Mr O’Brien believes the time is right for thisinquiry to better support Australian small to medium exporters.

“We wantinsights into how supportive federal, state and territory governments and alsobusiness networks have been in encouraging smaller exporters to leverage FTAsinto worthwhile new export opportunities,” Mr O’Brien said.

“There aremany great Australian companies which have been able to capitalise on theopportunities presented by these FTAs and have reaped the rewards as aresult. We want to ensure the benefitscan be replicated many times over for other export oriented businesses,” hesaid.

NaturalEvolution based in Walkamin Queensland is the first Australian business toproduce and export banana flour and now boasts a world-first pharmaceuticalproduction plant for green bananas.

Co-founderand co-managing director Krista Watkins said Natural Evolution’s export journeybegan seven months ago in Japan. Thecompany is now looking at South Korea and China.

“TheJapan-Australia Economic Partnership Agreement (JAEPA) has not only allowedNatural Evolution to grow, but it has also helped to build positiverelationships and connections within the international market,” Ms Watkinsexplained.

“If we didn’thave JAEPA in place, exporting wouldn’t be a viable option for us. The freetrade agreement between the two countries prompted us to think globally andexpand our business, but it also encouraged companies overseas to engage inbusiness with us.”

Prior toJAEPA the tariff for banana flour was 9.6 per cent, it is currently 3.2 percent with the next reduction to occur next month (1 April 2018).

SunshineCoast business Nutworks has also benefitted from the Federal Government’s freetrade agreements in Asia.

Nutworks CEOKylie Watson said an increase in enquires spurred by the introduction of theChina-Australia Free Trade Agreement (ChAFTA), prompted the family business tostart exporting their macadamias.

“It was thetiming of the reduction in tariffs. We really started to see an increase inenquiries, particularly coming out of China,” Ms Watson said.

Prior toChAFTA the tariff for macadamias was 24 per cent, this is currently 4.8 percent and will be eliminated on 1 January 2019.

Mr O’Briensaid the time is right to support Australian SMEs to seek out and capitalise onthe enhanced trading opportunities.

“The freetrade agreements with Japan and China were only signed in 2015 and with Koreain 2014 so the Trade Sub-Committee is seeking feedback from a range of smalland medium businesses with two or three years’ experience trading goods andservices in those markets.

“A lack ofawareness of FTA benefits has been raised as one of the obstacles for many smallerbusinesses wanting to export,” Mr O’Brien said.

The terms of reference for the Committee’s inquiry are asfollows:

The Committee shall examine the opportunities and challenges facingsmall and medium Australian export-oriented businesses that seek to leveragefree trade agreements for the export of goods and services. The inquiry willhave particular regard to:

  • consideration of what products and services (e.g. inclusion and prioritisation) are negotiated in free trade agreements;
  • awareness of, and accessibility to, free trade agreements;
  • lessons learnt from attempts at leveraging free trade agreements, including barriers to implementation and success in fast-tracking export opportunities;
  • role and effectiveness of support structures and networks in helping leverage free trade agreements;
  • ongoing capacity building that will assist in creating opportunities and capturing more value from free trade agreements in the future; and
  • any other related matters.

The TradeSub-Committee invites submissions from any person, businesses or organisationswith an interest in the issues raised by these terms of reference. Submissionsaddressing all or some of the terms of reference should be lodged by 20 April2018.

The inquirywill also conduct a series of roundtables around Australia to help gatherfeedback and suggestions from small business exporters keen to leverage FTAopportunities.

Furtherdetails about the about the inquiry, including terms of reference and detailson how to contribute a submission, can be obtained from the Committee’s websitewww.aph.gov.au/jfadt or by contactingthe Committee Secretariat.

/Public Release. This material from the originating organization/author(s) may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).