Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to 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.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to make a statement.

Leave granted.

I just say firstly that I am glad to follow the member for Maranoa. I would like to take this opportunity to thank him for the exceptional collaboration that he and I have shared in this parliament as chair and deputy chair of the Trade Subcommittee. I would also like to take this opportunity to wish him all the very best as he leaves this place at the end of this parliamentary term. He has been a wonderful colleague and an exemplary Deputy Speaker. I would also like to take the opportunity to wish the member Brisbane well. As chair of the Joint Standing Committee on Foreign Affairs, Defence and Trade in this term she has also done an exceptional job in overseeing a committee that is one of the biggest in the parliament and has conducted some of the most comprehensive reports over a period of time, and in particular now.

It is also a pleasure for me to be speaking to the trade subcommittee's report into Australia's trade and investment relationships with the countries of the Middle East. The committee welcomed this opportunity to examine Australia's trade relationship with the Middle East, an important trading region, and the committee greatly appreciated the opportunity for four members of the committee to travel to the region to visit three of the states: the United Arab Emirates, Saudi Arabia, Kuwait. Two of our members went on to Qatar in December of last year. I was a member of the delegation. Our field trip gave us the opportunity to gain valuable insights into the cultural diversity of these Gulf states. We were given the opportunity to appreciate the challenges and discover the opportunities for Australia in growing trade and investment relations with the region.

Our visit also made us aware of some of the impediments that exist in growing our trade opportunities with the Middle East. It is, indeed, this report that addresses some of those impediments and offers recommendations that may help us as we go forward. The committee delegation's views from meeting these countries' ministers, government officials and leading businesspeople, as well as with the Australian heads of mission and Austrade commissioners, are well reflected in this report.

Gulf states such as the UAE, Saudi Arabia and Kuwait appreciate the value of and clearly want Australian skills and expertise, particularly in architecture and construction, railways, green building design, tertiary and vocational education and health, to help them with their own ambitious plans to diversify their economies beyond the oil and gas sector.

A number of markets in the region, such as Saudi Arabia, are developing their vocational education and training sector to diversify their economy, to reduce the dependence on foreign labour, to address domestic skill shortages and to tackle growing unemployment. Indeed, Saudi Arabia is looking to Australia and, in particular—from my home state of Victoria—to Victorian TAFE colleges to help them develop their vocational education sector, which they see as a basis upon which they will build the future skilling of their own very young population. For example, of the nearly 14,000 international students from the Middle East who come to study in Australia each year, almost 9,000 are fully funded by Saudi Arabia's Ministry of Education. The value of education exports for students from the Middle East is estimated to be worth some $700 million—a staggering amount of money. These figures are, of course, figures from the Department of Foreign Affairs, Defence and Trade.

We also heard that when these graduates of universities across Australia return to the Middle East—and we met many of them—they often become very influential alumni who actively promote Australia and Australian products and services to their colleagues and workplaces. That is why the committee recommends that the Department of Education and Training expands its international counsellor network to include a post in Saudi Arabia where the Saudi government has significant influence on students' choices of study and training. Therefore, building long-term relationships with government agencies will be important for Australia's education sector and will help raise the profile of Australian universities as a desirable destination for not only Saudi Arabian students but also Middle Eastern students.

The Middle East also represents a good source of foreign investment for Australia with some of the world's largest sovereign wealth funds based in the UAE, Saudi Arabia, Kuwait and Qatar. With fast-growing populations and arid conditions, food security is a pressing issue for many Middle Eastern countries. Some sovereign wealth funds such as Qatar's have already invested up to $425 million in Australian agriculture on behalf of the Hassad Food Company. Other funds are also looking for strategic investments in Australian agriculture. That presents many opportunities for us here at home. The committee recommends the Australian government encourage further investment by negotiating double taxation agreements with the UAE, Saudi Arabia, Kuwait and Qatar.

Also from our visit and the public hearings it became clear that many Australian exporters face a number of difficulties in the Middle East, including language and cultural barriers and a lack of understanding of the market and how to conduct business.

A highlight for the committee delegation was seeing firsthand the emergence of well-educated women in Saudi Arabia and meeting many influential and inspiring women working for change but also seeking to challenge the Western perceptions of the place of women in Saudi Arabia. The committee delegation welcomed the chance therefore to discuss a wide range of issues when meeting in Jeddah with the CEO of the Al-Sayedah Khadijah Bint Khawilid Centre for Businesswomen, Dr Bashmah Omair, and prominent business woman Dr Lama Al Sulaiman, who was a candidate in Jeddah's municipal election, the first ever municipal election where women were standing for office and permitted to vote.

The delegation met Dr Al Sulaiman and her colleagues on the historic polling day of 12 December 2015 in the city of Jeddah. Their participation in voting and in standing for office was the result of efforts by the late King Abdullah, who paved the way for Saudi women to participate in municipal elections both as candidates and as voters. The delegation—the member for Brisbane and the member for Murray, who were with me, in particular—was very pleased to meet with these very prominent women and have a discussion with Dr Al Sulaiman, who was successful in being elected. She won a seat on the Jeddah municipal council.

We enjoyed the opportunity of exchanging information about how we as women can help each other develop our causes in our respective countries. In particular, Dr Al Sulaiman told us that she looked to the history of the empowerment of women in the West and our participation in the workforce and how that has helped us advance our causes here. They look to that as an example and to see how it can be of use to them in their own country. Dr Omair told us her job at the businesswomen's centre was to open the doors for Saudi women in both business and government for women to become more involved in public policy, business and discussing various commercial interests.

The delegation also welcomed the opportunity to discuss the progress of women in Saudi Arabia with women members of the Shura Council. I want to particularly thank Dr Thoraya Ahmed Obaid and Her Excellency Dr Elham Mahjoob Ahmed Hassanain, who were both appointed to the Shura by King Abdullah. Getting to know these women in particular was a valuable experience for us. I would like to thank everyone for the opportunity that was afforded to me and my colleagues to visit the Middle East.

I agree with the chair that there was a bipartisan approach to the trade subcommittee's report on the Middle East. We all agree that this is a very valuable region for Australia's trade prosperity. In particular in my own electorate I have a very large number of people who have settled from the Middle East. Understanding the cultural nuances and the history of the Middle East is very important. It has become obvious that that understanding is very important to Australians who wish to do business in the Middle East. I would like to highlight that. The understanding of cultural nuances is very important. Cultural nuances can be an inhibiting factor if that understanding is not there. The committee noted that quite extensively in its report.

Again, I would like to thank my colleagues. I want to thank our committee secretary, Andrew Dawson, who did a remarkable job in putting together a report that I think—and my colleagues would agree—is a comprehensive document and guide for any Australian business or, indeed, any Australian who is thinking of conducting business in the Middle East. I think we put together a report that is going to stand the test of time. It is very, very useful and it makes recommendations that, if adopted, will go a long way to enhancing our trade capability in the Middle East. I recommend the report. I commend it to the House, and I thank my colleagues

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

I move:

That the House take note of the report.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for a later hour this day.