Bruce Scott (Maranoa, Deputy-Speaker) Share this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report from its inquiry into Australia's trade and investment relationships with countries of the Middle East. I ask leave of the House to make a short statement in connection with this report.

Leave granted.

The committee welcomed this opportunity to examine Australia's relationship with an important trading region and greatly appreciated the contribution of the 57 submissions we received. The committee heard from a diverse range of 47 organisations and individuals during 22 public hearings, including the diplomatic representatives of eight Middle Eastern countries.

Over the past decade Australia's trade and investment relations have grown with many of the 18 countries that make up the Middle East and North Africa region, stretching from Morocco through to Iran.

In 2015 Australia's two-way merchandise trade with the region, with a combined population of more than 420 million people, was worth nearly $15 billion.

With several of these countries now beset by security issues that make trade nearly impossible, it is Australia's exports to six oil-rich Gulf States that dominate much of our trade with the region. In 2015 Australia's two-way trade with the Gulf Cooperation Council's member nations—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—was alone worth more than $12 billion.

This growing trade is why the Australian government has been working to restart free trade negotiations with the GCC nations, which stalled in 2009. The trade subcommittee recommends that if negotiations do not recommence this year then the Australian government should actively pursue bilateral agreements on trade, services and investment with the larger Gulf trading partners, such as the UAE, and also beyond the GCC with emerging nations such as Iran, Morocco, Egypt and Jordan.

Government ministers and officials in the UAE and Kuwait raised their interest in the GCC resuming free trade negotiations with Australia with a delegation of committee members who had travelled to the Middle East in December 2015. The delegation's observations on a range of trade issues are reflected in the body of the report.

Australia's two-way trade with its largest trading partner, the UAE, in 2014-15 was worth more than $6 billion. Australia's trade relationship with Saudi Arabia is worth some $2 billion.

Central to this trade relationship has been an extraordinary growth in flights between Australia and the UAE. Code sharing between Qantas and Emirates as well as Etihad's partnership with Virgin Australia has resulted in more than 150 flights per week between Australia's major cities and Dubai or Abu Dhabi.

This has led to premium cargos of chilled Australian lamb, seafood, cheeses, peaches and pears—and more—filling these airliners' holds with the best Australia has to offer. Emirates carried over 100,000 tonnes of air cargo from Australia last year alone, and Etihad more than 30,000 tonnes, much of it fresh produce.

But barriers to trade with the Middle East do exist. While tariffs on most Australian exports into the Gulf States are a manageable five per cent, Morocco, for instance, applies a tariff of nearly 300 per cent on Australian sheep meat. Israel applies no tariff on frozen Australian beef but a 190 per cent tariff on fresh or chilled beef. Governments need to address these trade issues in the Middle East.

Food exports will be a major growth area for Australia, with the Gulf States needing to import nearly 90 per cent of their food. Australian food exports to the Middle East grew from $700 million in 2005 to almost $3 billion in 2014.

Services will be another growth area, with total services trade between Australia and the Middle East worth nearly $5 billion in 2014-15.

The committee heard that Australian service companies and consultants were much in demand in the UAE, Saudi Arabia, Kuwait and Qatar. These countries are building new airports, hotels and metro stations, along with multimillion-dollar sports stadiums, hospitals and railway networks, across their countries.

In a highly competitive global marketplace, Australian universities and colleges are attracting almost 14,000 international students from the Middle East each year. Saudi Arabia's Ministry of Education, which sends almost 9,000 fully funded students to study at universities across Australia, raised concerns about the complexity of the student visa applications.

For this reason the committee welcomes the simplified student visa framework proposed by the Department of Immigration and Border Protection but recommends that the department benchmark its student visa process against international competitors and also undertake a review of the process a year after its introduction to see how it is working.

The Department of Agriculture and Water Resources' counsellor based in the UAE won praise from major food exporters, such as the meat and dairy industries, for helping to open doors for their products. The committee recommends that this program be expanded beyond the UAE and Saudi Arabia with a new agricultural counsellor posted in Iran to assist food exporters gain access to this emerging market.

During public hearings, the committee heard a range of views on the impact of federal, state and territory governments and business associations, all promoting their own commercial interests in the Middle East and saying whether this leads to confusion or trade mission fatigue among Middle Eastern governments and potential clients. The committee recommends a joint government study with state and territory governments of Australia's trade promotion efforts with a view to coordinate a more coherent and unified strategy.

We are optimistic that Australia can build on its strong reputation as a reliable exporter of clean, green food for the Middle East, along with education and other services, and to forge much closer trade and investment relationships with the region. While Australia's trade with Asia is strong, it would be prudent for Australia to diversify its trade into another fast-growing market such as the Middle East and the North Africa region.

As I commend this report to the chamber I also thank my deputy chair for this report. I also note that members of the committee worked hard on this report. They were all committed to a bipartisan report. There is no dissenting report, and that is sometimes unusual in reports. I thank the deputy chair for her support and I thank all those who participated in bringing forward what I think is a very major report. I look forward in the next parliament to hearing the response from the trade minister on the recommendations. I also want to thank the secretariat for the professional support that they have given us and for the invaluable work that they do. Without their support we, as members of parliament, may struggle to bring forward such a comprehensive report. I thank the chair of the full committee who just joined me—the member for Brisbane. It is also one of her last days, like myself, in this chamber. I thank her for the work she has done as chair of the full committee, for the confidence she has had in me and for bringing forward such a comprehensive report in relation to the trade and investment opportunities with the Middle East.

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