1995 Global Cultural Diversity Conference Proceedings, Sydney
Open for Business: the Global Market Place
Mrs Imelda Roche AO
President, Nutri-Metics International Holdings Pty Ltd, Australia
The call for cultural understanding and global ethnic diversity has already been covered this morning by the two previous speakers, and will undoubtedly be addressed in depth by other speakers during the course of the next three days. My topic will focus on the role and influence of trade in the development of our global community especially as it will impact in Asia-Pacific. However, before I present this paper, I would like to share some thoughts on trade with you.
The Role of Trade
Trade has been fundamental to the well being of mankind almost since the dawn of time certainly well in advance of recorded history and the creation of a monetary system. Trade is a vehicle which enables mankind to contribute to the prosperity and independence of individuals and communities, without recourse to violence and wars. Trade encourages and enables mankind to develop and demonstrate productive skills.
Production and consumption are essential to every facet of our lives without trade mankind would not have progressed beyond the stone age. Productivity creates a sense of dignity and self-esteem and the ability to successfully trade enhances human dignity.
Trade is integral to the advancement of communities and nations and for the realisation of the vision mankind holds for itself now and for future generations. Trade is the glue of international friendship and partnership it is the primary reason for continuing interaction between communities and nations and provides the resources to fund the many programmes necessary to promote equity in education and the development of skills and talents to enable people everywhere to assume responsibility for their own progress and well being.
The sharing of cultural expressions art, music and entertainment such as we have enjoyed today would not be possible without the existence of our monetary system which by the way would have had little reason to have been created without trade. Trade underpins everything we do and enjoy in our lives. Trade and human progress are inseparable.
While the emergence of a burgeoning global marketplace is a relatively recent phenomenon, there is little doubt that business will continue to globalise significantly during the next decade and beyond. A number of factors will influence this important among them being the changing alliances in post-Cold War politics, the rapid dynamic economic growth in the Asia-Pacific region, the sophistication and speed of today's business practice and communication and the remarkable advances in technology all will continue to impact on business and trade and on a great many aspects of our daily lives.
While politics and the economy provide the basic framework for business to operate, technology provides the tools to make it happen. Facilities such as faxes and mobile phones have altered our perspective on the immediacy of our world, and the information superhighway through networks such as internet, will change the way we communicate both on a personal and business level.
Whereas in the past, regular personal visits were almost a mandatory prerequisite for building business relationships in other parts of the world, today we can maintain regular, and where necessary, instant contact through less resource intensive and more cost efficient means. We now have the capacity to literally, with a flick of a computer power switch, open channels to suppliers, purchasers, vendors and partners anywhere in the world. This has particularly beneficial implications for many small and medium sized businesses, which in the past have not had the resources to pursue the time-consuming and costly personal follow-up needed to establish offshore markets.
The potential for global small business is huge and remains relatively untapped and whereas the new global environment will provide new opportunities for business of every size, the greater potential for developing expansive new markets and increased employment will come from the small to medium business sector. While the potential has always been there, innovative use of new technology is now turning this potential into reality.
Today's advanced communication technology provides rapid information transfer and fast and efficient service. However technology alone cannot achieve an ideal or "level playing field" business environment. In relatively recent times, the focus within the many regional and international trade forums has been essentially on trade liberalisation and the associated need for removal of tariff and non-tariff barriers.
With the establishment of the World Trade Organisation (WTO) on 1 January 1995; the enlargement of the European Union; and the historic November 1994 Bogor declaration on APEC trade and investment liberalisation; the world trading system is at an exciting and dynamic stage of development, with the affluence of nations and industry increasingly shaped by a capacity to be competitive, efficient and market-driven.
While it is generally accepted that the so-called global marketplace is a positive there are a number of interactive elements needed to set the most appropriate framework for business to successfully operate on a global scale. Market forces working in isolation will not produce the most unilaterally beneficial and expeditious progress towards world liberalisation.
It is certainly now widely recognised, if not generally accepted, that government and business need to work together in partnership to ensure that the most appropriate and progressive, non-inhibiting policies are adopted. Certainly within the APEC context, business will play a vital and active role in influencing progressive and inclusive policy.
During the past twelve months the opportunity to serve (together with Philip Brass) as one of Australia's two Prime Ministerial appointees to the Pacific Business Forum of APEC, (the Asia Pacific Economic Co-Operation), has been a particularly significant involvement. Over the next twenty to thirty years the Asia-Pacific region, through substantial transformation of trade affiliations and regional identity, will undergo immense change, bringing with it vastly increased prosperity a process which in no small measure has already begun.
The Asia-Pacific region a community of two billion people built on rapidly expanding trade and cross border investment produces more than half the world's trade, and half the world's output. The proportion of Asia-Pacific trade between members of the Asia-Pacific community, is greater than trade between members of the European Union.
There is little doubt that Australia is well positioned to benefit greatly from growth within the region. A decade ago less than half Australia's exports went to East Asia. Today it is nearly two thirds, with our fastest growing markets right next to us, among our neighbouring Asian economies.
While our biggest single export market by far remains Japan, Australia's exports have nearly doubled as a proportion of output over the last decade and the increase is mostly accounted for by our expanding trade with East Asia.
A fine example, perhaps, of the progressive and dynamic nature of the Asia-Pacific region is reflected in the very encouraging progress we have seen emerge from APEC in such a comparatively short space of time.
As you may recall APEC was created through an Australian initiative just six years ago. It now includes 18 Pacific Rim nations, from the USA and Canada, to China and Japan, and from Thailand and Malaysia to Mexico and Chile.
Last November, in Bogor, Indonesia, the leaders from each of the member economies adopted a recommendation for free trade in the region by 2020 designed to cover trade in goods, services and investment. The achievement of this agreement was in itself an historic event.
In principle the Bogor agreement accepted recommendations from the reports prepared by two key advisory groups, established by APEC leaders: the (EPG) Eminent Persons Group, and the (PBF) Pacific Business Forum.
The PBF was established following the APEC leaders meeting in Seattle in November 1993 "to identify issues APEC should address to facilitate regional trade and investment and encourage the further development of business networks throughout the region."
The establishment of the PBF introduced a unique opportunity for business to provide the leaders of some of the most powerful nations on earth with a non-political, independent view, identifying from a business perspective what is needed.
The PBF's report "a business blueprint for APEC: strategies for growth and common prosperity", outlined the key challenges in the region from a purely business perspective, unhampered by the constrictions of diplomatic and political considerations.
The challenges identified formed the basis of a list of recommendations and priorities which PBF members, (with substantial input from business groups in the region), believe governments will need to address, to ensure progress continues towards liberalising and improving the business and economic environment and to achieve the overall objective of free trade and investment liberalisation in the Asia-Pacific region.
The PBF suggested a liberalisation deadline of (the year) 2002 for developed economies, and no later than the year 2010 for developing economies, which called for more rapid reform than the time frame suggested by the Eminent Persons Group.
And, while the leaders decided upon the more extended timeframe for liberalisation, their adoption of the PBF recommendations, in community with the work and progress achieved by ministers and officials of the member economies, as a general policy position was, I believe, a most significant trade and investment breakthrough, and will prove to be the catalyst for sustained Asia-Pacific economic dominance through the next century.
The underlying theme of the PBF's deliberations was the challenge to business of non-tariff barriers to trade and investment and the obvious need for their removal.
To facilitate this process the PBF urged leaders, as a matter of priority, to immediately adopt a policy of standstill on the introduction of new trade and investment barriers, and to incorporate the principles of a non-binding Asia-Pacific investment code.
Means of improving business facilitation was also identified as a key priority, specifically, transparency in administrative systems. Business operating in the region is often confronted with a frustrating lack of transparency of information on existing rules and regulations, as well as the nature of their enforcement.
Transparency is a particularly important objective for both the APEC forum, and all other regional trading arrangements for that matter, and does not only apply to rules and regulations. Clarity and transparency is equally important in the communications governments publicise through media and trade forums.
Given the substantial differences in business and political cultures around the world, misunderstandings can and do occur.
We all, including governments, need to be sensitive and responsive to the interpretation the intended audience might conclude from the way messages are framed and delivered. Both written and verbal communication needs to be clear and precise, leaving no room for misinterpretation.
Perhaps not among the most vital issues, nonetheless a subject which is very close to my heart as one who is constantly facing the frustratingly time-consuming challenges of arrival and departure at international airports is the ease of business travel.
I'm sure those of you here today visiting from overseas would welcome our suggestion that intra-APEC business travel would be greatly assisted through measures such as:
- visa-free entry requirements for short stays;
- multiple-entry visas or "smart cards" with expedited entry and exit facilities for frequent business travellers; and
- more liberalised work permits for temporary professional visits, and for instructors and participants on overseas vocational training programs.
Entry into many economies for management-level expatriates continues to be an exasperating process. In some economies, expatriates are required to renew their work permits annually, and these are regularly treated quite separately to visas. Working expatriates leaving the country have to apply for a re-entry visa every time. This means expatriates who are working on a regional basis sometimes have to acquire blocks of re-entry visas at a time to accommodate the need for constant intra-regional travel.
There were many other areas covered by the PBF report including:
- human resources education and infrastructure development;
- the urgent need for human resource development and access to education is well recognised.
All the recommendations, when implemented, will substantially benefit all business, be it large, medium or small.
The challenges and obstacles that lie ahead involve much more than the issues and recommendations I have outlined here. The recent meeting of financial ministers in Bali identified the continuing need for co-operation and understanding of the difficulties some economies will face in future negotiations.
Perhaps more than ever, due to dramatic changes in international politics, economies will align themselves in pragmatic multi-lateral trading blocks, in some cases industry driven the Cairns group exemplifies this.
Cultural and economic homogeneity will have little continuing relevance on the world trade stage, APEC being a very good example of this. Its 18 member economies vary considerably in culture, religion, political history and economic heritage, yet have been able to reach agreement on a common objective of free trade and investment in a comparatively short space of time.
Australia's profile as a primarily western nation in the Asia region enables us to make an important contribution to trade discussion and negotiation. In trade terms, Australia is clearly not a major player and could not expect to influence global trade through economic might, however we are a non-threatening respected ally to both east and west, and can provide useful brokerage in negotiations.
Australia is also very well placed as a launching pad and regional base for investment in Asia-Pacific and indeed both federal and state governments are actively encouraging Australian investment based on this fact. Aside from the geographics and politics, Australia possesses a great many assets most importantly our diverse citizenship and highly educated, skilled population.
As economies globalise, competitiveness will not be based on low wage levels, rather it will rely on information and skills, on innovation and flexibility, sound management, best practice and commercial agility. It is vital that business continues to embrace both the practice and principles of changing realities. The future will not be an extension of the past old practices and strategies will become irrelevant and obsolete.
Australia is seen as a liberal and open, culturally-diverse sophisticated society our ethnic communities play a large and important role in maintaining this perspective. In a very competitive world, it is extremely important for Australia to harness the international connections and understanding our ethnic groups have, as we seek to expand our markets. The collective wisdom, advice and skill that each ethnic group can provide to enhance the prosperity and well-being of all Australians must not be underestimated.
We have heard from Australia's Prime Minister Paul Keating earlier today, that Australia has 220 separate ethnic cultures currently represented in Australia, and we have also heard how multiculturalism has enriched the cultural tapestry of both Canada and Indonesia so too has Australia been similarly enriched.
Noted Australian businessman Dr Ian Lin, a leading proponent of the importance of forging even closer the links we have developed around the globe through our multicultural population, argues that our thousands of Asian students and business migrants give Australia a unique potential advantage in furthering a special understanding in cross-cultural east-west relationships. To quote Dr Lin, "Australia could well be the ideal gateway for the Westernisation of Asia and the Asianisation of the West".
Australia has a unique position in the world and a unique role to play in many spheres. Our vision for Australia through the second millennium is for its citizens to enjoy a high quality of life and, of equal importance, to contribute to global prosperity through responsible and responsive co-operative global citizenship.
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