Our recent Customs Trade and Transport update of 9 September 2013 contained some
predictions on developments in the Customs, Trade and Transport
industry following the Federal election based on policy statements
which had been issued by the incoming Federal Government.
New Ministers and Ministries
In the new structure for the Federal Government announced on 16
September 2013, responsibility for Customs and Anti-Dumping
administration will move to Scott Morrison as Minister for
Immigration and Border Protection. A new Trade and Investment
Ministry has been created which will have responsibility for
completing current FTA under negotiation, advancing negotiation
with other trade partners towards other FTA and otherwise
attracting foreign investment. The new Ministry will be led by
The FTA agenda and industry
As indicated in our last update, the new Government is planning
a focus on completing existing FTA under negotiation and to
institute and complete other FTA with other trading partners. As
part of this focus, Minister Robb has already indicated that he
wanted to boost the profile for foreign investors as a key to
advancing delayed FTA.
However, this admirable aim does lead to some additional
complexity as follows.
The new Federal Government may have to move from the
'pure' position of the previous Federal Government which
insisted on comprehensive FTA. Given the apparent inability to
complete such comprehensive FTA, one option would be for the
incoming Federal Government to compromise that position and focus
on specific interests of the negotiating parties which can be
agreed and then otherwise provide general commitments to improve
trade and co-operation in other areas at later stages. For example,
under the China FTA this could mean that China would provide
increased access to Australian primary produce at the same time as
Australia allows a more liberal regime for foreign investment to
specifically include increased foreign investment by Chinese State
Owned Enterprises (or as they are sometimes described State
The aim to liberalise foreign investment may create tensions
between the Liberal and National Party elements of the Federal
Government. From this perspective, it is relevant to note that the
Nationals have lost their usual position as providing the Minister
for Trade. This tension could immediately manifest itself in two
areas by way of example. Firstly, the current proposed Chinese
investment in the GrainCorp takeover and the recent announcement by
the Indonesian Government that it wishes to buy millions of
hectares of prime beef-farming land to support its developing beef
industry. There have been significant levels of opposition to both
types of investment. In both cases, while the investment
opportunities may come under the auspice of the Trade Minister,
doubtlessly the Nationals' Agriculture Minister will express
concerns although, ultimately, the decision on approval of such
foreign investment is likely to reside with the Federal
The incoming Prime Minister, Tony Abbott, has indicated that he
will be taking a harder line against subsidies for the domestic car
industry which policy will be implemented in conjunction with
Industry Minister Ian McFarlane who last held that job under the
previous Coalition Government which provided higher levels of
support to the Australian car industry. It may well be that the
revision or reduction in levels of support to the Australian car
industry may also be tied to mechanisms to allow increased foreign
investment and export of vehicles into Australia which would please
both the Chinese and Korean Governments.
As always, we will keep you informed of developments as they
arise. Clearly, the way in which the new Trade agenda is advanced
will be of significant interest. We would also be pleased to
provide guidance on developments and the impacts for your
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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