'Seizing Opportunities for SMEs: Free Trade'
Address to APEC SMEMM (Small & Medium Enterprise Ministerial Meeting) on
Small Business Policies to Facilitate Small Business Entry to Markets
Ambassador Bill Tweddell
25 September 2015
Thank you, Chair; thank you to the Philippines for organising this excellent event; and warm greetings to all APEC economies present here today.
Unfortunately, Australia’s recently appointed Minister for Small Business was unable to attend this meeting today. Her loss is my gain.
As you may be aware, on 20 September, the Hon Kelly O’Dwyer MP was appointed Small Business Minister and Assistant Treasurer.
For me, it’s my pleasure to be here with you in Iloilo City. It is a city I’ve grown to love in my time as Ambassador to the Philippines. The region is an economic hub and an absolutely perfect place to talk about seizing opportunities!
This meeting itself, of course, represents an exciting opportunity to share developments in the small business policies of APEC economies.
Delegation leaders, we are all here today to share approaches on how governments can help business benefit from the outcomes and use of free trade agreements.
So let me share Australia’s thinking with you.
At the last APEC SME Ministerial Meeting in China, Australia’s then Minister for Small Business said Australia was open for business.
Indeed, we’re not just open for business; we are also pursuing an economic diplomacy agenda based on four key pillars.
The first of those pillars is that APEC economies can gain from trade liberalisation and opening up new markets that create opportunities for SMEs.
The second is that, by supporting global growth, we can increase prosperity across both the APEC region and the globe.
Thirdly, if we are to create new jobs, then attracting productive investment is key.
The fourth and final pillar is that advancing business development and entrepreneurship will result in flow-on effects and benefits across the APEC region.
By pursuing these four pillars, we are promoting opportunities for SMEs in APEC economies.
In Australia, we are committed to ensuring Australia is the very best place to start and grow a small business.
The Australian Government is a passionate advocate for small businesses and has put a lot of effort into creating an environment where SMEs can thrive and succeed.
That’s why we have thought long and hard about how to improve our small-to-medium enterprise landscape. We know we need a multi pronged approach.
For example, in our federal budget last May, the Government announced a Growing Jobs and Small Business package. It’s a package of which we are immensely proud, because it’s all about helping small businesses invest more, grow more, employ more, and export more.
In fact, it’s the biggest small business initiative in Australia’s history.
At its heart are tax cuts for over 2 million Australian small businesses, to help drive investment and employment across our economy.
It also provides immediate deductibility for all assets costing under $20,000, and includes a $40 million reduction in red tape and $70 million to support entrepreneurship.
We also know that free trade agreements (FTAs) are a big part of helping SMEs access new markets.
Australia recently signed FTAs with China, Korea and Japan. Implementation of these agreements will enable exporters, including SMEs, to gain improved market access to goods and services through tariff elimination and trade liberalisation.
Each free trade agreement on its own represents an outstanding deal for APEC economies.
Collectively, they won’t just give a huge boost to the region’s export competitiveness; they will also have an extraordinary impact on the global economy in the years ahead.
As I said at the outset, we’re here to share our approaches on helping business benefit from FTAs.
For our part, Australia wants to help more businesses get export-ready. We also want more export-ready businesses to get started, and more exporting businesses to go further.
And we want to see the two-way investment benefits of the agreements flow.
We’ve seen that start to happen already in the form of two rounds of tariff cuts under the agreements with Korea and Japan.
So trade and the benefits from these agreements are already being realised.
And, in the case of Australia’s FTA with China, an important milestone was reached in June 2015. Our two countries are now working towards achieving entry into force of this agreement during this part of 2015.
We realise, of course, that the end goal isn’t limited to striking trade deals.
The goal is to use those deals as a means to opening doors towards more economic growth, new business opportunities and new jobs – in short, to create more prosperity for business and for APEC economies.
Once signed, an FTA’s real rewards flow to those who do the hard work – the businesses, the innovators, the hard workers across the global economy who will jump at the opportunities offered by these new market openings.
But to be truly open for business means we don’t just want to conclude great deals. We want to work with all of you to turn competitive advantages into export and investment successes, as well as new sources of growth.
Before concluding, let me briefly touch on what the Australian Government expects from our trade liberalisation agenda for SMEs in our country.
Flowing on from our FTAs with China, Japan, Korea, which are already lowering barriers to trade and opening new markets for Australian goods and services, we expect to see business expansion and economies of scale that may not have been achievable through the domestic market alone.
So with 90 per cent of Australia’s exporters representing SMEs, there is significant additional potential for SMEs to engage more actively in world markets.
We firmly believe that APEC SMEs are just as well-placed to take advantage of these benefits given their adaptability and flexibility, as well as their ability to quickly enter and exit the market in response to price and demand conditions.
But APEC SMEs don’t need to be active exporters to benefit from free trade agreements, because the increased activity generated by FTAs will provide additional opportunities.
Just for starters, the lower tariffs on imports will provide new opportunities for more competitive pricing, a wider range of choices around business inputs, and result in a better chance for APEC businesses to compete in domestic and international markets.
Increased investment in the APEC region arising from FTAs can also provide opportunities for competitive local SMEs to connect with global value chains, which, in turn, will help them benefit from the international investors’ networks. On top of that, they’ll experience what it’s like to operate in their home markets and broader global networks.
Delegation leaders, in conclusion, let me say that I am certain SMEs in our region are well placed to maximise all of these gains and more. It is up to us to help make that happen.