Speech at the GM Holden 'Export to Korea' launch
Melbourne, 5 September 2008
Acknowledgments and introduction
The Hon Theo Theophanous, Victorian Minister for Industry and Trade.
Thank you for inviting me to the launch of the new, all-Australian GM Holden vehicle bound for Korea.
Its also a great pleasure to be back here in Port Melbourne, which was my father Frank Crean's electorate for some 26 years in the Federal Parliament, including periods he served as federal Treasurer, Trade Minister and later as Deputy Prime Minister.
The timing of this launch is apt.
It takes place in the 60th birthday year of GM Holden.
Korea
Coincidentally this year is also the 60th anniversary of the Republic of Korea.
And this launch of exports is even more appropriate following the Prime Minister's successful visit to the ROK last month, the first by an Australian Prime Minister in three years.
The Prime Minister's visit made an important step in promoting our bilateral ties with a country we value highly as a close economic partner with increasing links to our high-technology sectors.
The Prime Minister's visit also led to an agreement with the Korean President to hold preparatory talks on negotiating a free trade agreement. This is a promising move towards achieving the Government's goal of securing a comprehensive FTA with Korea.
The ROK is Australia's sixth largest trading partner and fourth largest export market.
And this export deal will contribute strongly to further increasing Australia's trade with Korea.
Labor Party connection
In almost all of GM Holden's 60-year history it has persisted in exporting “Australia's own car” to the four corners of the earth.
Ever since Prime Minister Ben Chifley launched the first Holden in 1948, later designated as the Holden FX.
I'm not sure if Chifley ever drove a Holden. I imagine that as a railway engine driver in his home town of Bathurst, New South Wales, he preferred to go by train.
But there can be no doubting that he inspired another Labor leader, Industry Minister John Button's 1984 car plan, which spurred Australia's entire motor vehicle industry to new export heights.
Government's support for the sector
Personally, and as Trade Minister, I am committed to a viable and internationally competitive automotive sector in Australia - a sector that plays to its strengths in innovation and design.
It's a sector which cuts across just about every aspect of our economy and employs over 65 000 people directly, and a great deal more indirectly.
Bracks Report
This is why the Government commissioned the Bracks Report on the automotive sector, and why I have been in close contact with Industry Minister Senator Kim Carr to highlight the importance of trade policy in opening up international markets to allow greater penetration for Australian exports.
The Bracks Report,which was delivered last month, made important recommendations on ways to boost innovation in the auto industry, on the impact of climate change and access to global supply chains.
It also highlighted the need for Australian auto manufacturers to position themselves better to produce green cars, for example by developing and adopting fuel efficient technologies.
Green Car Innovation Fund
Holden's work on carbon-cutting vehicles and green manufacturing processes meshes in well with the Government's Green Car Innovation Fund.
This envisages $500 million over five years commencing in 2011-12.
Under this initiative, industry will be asked to match the Government's contribution on at least a three-to-one dollar basis, generating at least $2 billion in investment.
The fund is a downpayment on encouraging the Australian automotive industry to drive innovation in energy and fuel efficiency through design and technology.
This represents the economic opportunity that can be obtained as we address the challenges of climate change while maintaining critical automotive industry jobs.
Twin Pillars
The Government recognises that trade does not exist in isolation, however, and that generating exports requires integrated Government policies that support a productive and competitive economy.
The Government's ‘twin pillars' trade policy is designed to support Australian exporters and open new markets for our goods and services.
We are promoting trade reform "at the border" through the Doha Round of multilateral trade negotiations, regional institutions such as APEC, and bilateral Free Trade Agreements, such as our efforts to look at negotiating an FTA with Korea.
Although the July WTO ministerial meeting did not reach final agreement, real progress was made, and I am in regular contact with my counterparts in Geneva, Brasilia, Washington, Brussels, New Delhi and other global capitals to push for a good outcome.
In the post-war period, world trade has been growing at three times the rate of world output – this rate of growth has slowed in recent years.
The message is clear: Every effort must be made to open up markets on a multilateral front to address major distortions in world trade, to provide a much-needed confidence boost to the global economy.
And we are promoting reforms "behind the border", the second pillar to our trade policy, to remove infrastructure bottlenecks, enhance training and skills and remove red tape to help make exporters more competitive and efficient.
AANZFTA achievement
Last week was a great week for Australian exporters.
The negotiations that were concluded in Singapore on an ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) were the largest free trade agreement that Australia has ever negotiated.
ASEAN accounts for around 16 per cent of Australia's trade in goods and services, worth $71 billion. As a combined market, it's larger than China; it's larger than Japan and it's larger than the United States.
This agreement will liberalise commerce on up to 97 per cent of Australia's current trade with the key ASEAN markets by 2015.
Non-Least Developed Country ASEAN nations have offered between 90 to 99 per cent tariff elimination. This is a huge step forward to advancing our goals to create free and open trade in the Asia Pacific – the Bogor Goals under APEC.
It is particularly important to the manufacturing sector, as it will cover 30 per cent of our manufactured exports.
This agreement is also the most comprehensive free trade agreement that ASEAN has negotiated, and shows what's possible when we harness the strength of the Closer Economic Relationship with New Zealand to negotiate.
Furthermore, it is Australia's first regional FTA.
It will support the development of regional supply chains and more efficient and integrated manufacturing sectors. This should be of particular relevance to the automotive industry, where global and regional supply chains are an increasingly essential aspect of the way manufacturing is structured.
The automotive industry is one of the most heavily protected sectors in ASEAN. Negotiations on the automotive sector have therefore been one of the most difficult areas of the negotiations. We have not yet concluded bilateral market access negotiations with all ten ASEANs, particularly in relation to the automotive sector.
But a number of good commitments have already been secured.
For a wide range of manufactured goods, such as machinery and parts, electrical equipment, instruments and gaming machines, Australian exporters will see current tariffs, most in the 5 to 20 per cent range, reduced and eliminated, in most cases by 2013, and with many of the lower tariffs eliminated as early as 2010.
In the auto sector, tariffs on most automotive parts in several countries will be eliminated, and tariffs on passenger motor vehicles in a number of countries will be eliminated within a reasonable time period.
We are still seeking additional improvements focusing on faster elimination of tariffs on passenger motor vehicles.
Negotiators will be seeking to address these issues over the next few weeks, and I will be working closely with Australia's automotive industry to open up trade in autos in the region.
Exporting expertise
With the export of Holdens to Korea, Korean consumers can be sure that their GM Daewoo Veritas six-cylinder sedan, based on GM Holden's successful WM Caprice, comes with Australian experience.
- the experience of a company that has produced seven million vehicles.
- the experience of a company with Australia's largest and longest running automotive export program––more than 772,000 vehicles delivered to overseas markets for over 50 years
- the experience of a company that generated export revenue worth almost $1.6 billion last year.
Conclusion
I'm proud that this car bound for Korea is 100 per cent Australian-designed in my home state of Victoria.
The Veritas certainly showcases Aussie innovation in Korea.
I'm sure the Koreans would agree that “she's a beauty”, just as Chifley said when the first FX rolled off the line in 1948.
With hindsight, perhaps he was referring to the company just as much as to the car.
Thank you.