A word from the Australian Services Roundtable
James Angus Bond
President, Australian Services Roundtable
The 2018 Federal Budget funded a $15 million business engagement package with a suite of measures to support Australia’s commercial interests. For the first time, the suite of measures announced included development of a strategy to increase the competitiveness of Australia’s services industries, with a view to enhancing Australia’s services export performance. The Department of Foreign Affairs and Trade (DFAT) and the Australian Trade and Investment Commission (Austrade) set about a process of intense services industry stakeholder engagement and consultation, designed to address the impediments to services business, both at home and off-shore.
DFAT had earlier initiated a comprehensive Organisation for Economic Co-operation and Development (OECD) Study on competitiveness of Australia’s services sector, Australian Services Trade in the Global Economy, the final version of which was also published in September 2018.
The OECD Study highlighted the importance of coordinated domestic policy action in addition to international trade diplomacy. It prioritised commercial diplomacy efforts to promote behind-the-border regulatory reforms in Australia’s top services markets. It drew attention to the benefits of an ambitious trade policy agenda that spanned beyond the bilateral to include plurilateral and multilateral processes, which could contribute to rules-based certainty and predictability in global trade in services. The policy and regulatory reforms recommended by the OECD reinforced two decades of domestic business advocacy on the part of the Australian Services Roundtable (ASR) and helped build momentum towards a whole-of-government strategic response which has been two years in the making.
Industry stakeholder working groups were formed to bring business insight and experience to prioritise the issues, the sectors and the market niches which need to be addressed. It is worth summarising some key industry messages:
- Facilitating cross-border access for domestic and international talent has always ranked high on services industry lists of policy priorities – and it still does.
- Facilitating inward and outward direct investment has always been fundamental to Australia’s services presence offshore – and it still is.
- With cross-border traffic in data surpassing total flows in world trade, but the international market fragmenting due to regulatory heterogeneity, facilitating access to data has risen over the recent period to top of the priority list, including for Small and Medium Sized Enterprises (SMEs).
- To ensure they are best-practice design, domestic regulatory settings must take the international context and the trade impact into account. Australia does not have a single national market in services; regulatory disconnects across the Australian federation risk compromising our export competitiveness in services.
- Export promotion branding that attracts international visitors to Australian shores, whether tourists, students or patients, has always been important – but in 2020 the global policy response to COVID-19 has brought the movement of people to a halt, crippling the tourism and education sectors. Never has it been clearer that the nation brand must shift gears significantly to encompass promotion of Australian services firms’ creativity, innovation and solution-orientation.
It has been two years in the making, but the outcome of this intense process of industry engagement is a vital one. The Services Exports Action Plan is Australia’s first coordinated national action agenda to boost services export performance. It signals official recognition that Australia is a services economy and that all Australian industries are dependent on knowledge-intensive services inputs for their own competitiveness. It delivers services industry commitment to ongoing joint efforts with government to bring the recommended action agenda to fruition. In Australia, as in all parts of the world, the policy response to the health pandemic of 2020 has intensified the uptake and application of digital technologies and the shift to online commercial transactions in digitised services.
It is a short step from online orders, payments and delivery to online cross-border orders, payments and delivery of digitised services. With the right global business environment, including interoperable regulatory regimes that are fit for the digital age, it is a very short step for Australian firms from “born digital” to “born global”. The export opportunity is evident.
The World Trade Organization predicts that trade in services can lead the recovery from the pandemic- generated global economic downturn. The time to focus on achieving Australia’s services export potential is now.
The Australian Services Roundtable applauds DFAT’s strong leadership in initiating the OECD study of the Australian services sector and engaging intensively with industry stakeholders to take this historic step forward, ushering us into the services era.