Coface’s predictions are that Europe in 2012 will be marked by a recession rate of -0.1 percent, while growth will stabilise in the USA at +1.6 percent and recover in Japan at +1.8 percent. Emerging European economies are most at risk, particularly those in Eastern Europe who are heavily reliant on European banks, as it is estimated that in the last 10 years, one fifth of the growth of Eastern European economies can be attributed to trans-frontier credit.

Italy and Spain’s assessments have been downgraded to A4, affecting in turn Croatia, which is exposed to Italian risk, which has in turn been downgraded to B. The Czech Republic, Slovenia and Slovakia have been placed under negative watch, with Hungary also being downgraded to B.

The political landscape in North Africa and the Middle East has affected those emerging economies’ assessments also, with Egypt being downgraded to C, Syria to D and the positive watch being removed from Nigeria’s D rating owing to ‘problematic governance’.

President of Coface, François David said, “With no rapid response from institutions to the crisis, negative forecasts on financial markets have prompted the distrust of actors of the real economy. However, it will be the corporates that will feel the repercussions of this crisis despite that fact that they have never been managed so well. In 2012, the combination of significantly weaker growth in Europe with the drying up of credit facilities could significantly affect the companies’ credit risk.”

According to Australian entrepreneur and facilitator David Thomas, China is leading the way into the future by financially delinking themselves from troubled developed economies.

“It’s going to be imperative for the Chinese to take over the technological leadership, they’re already doing that,” Thomas said.

The accumulating debt of developed countries is resulting in China becoming the leader of foreign investment.

“What they do have which the west doesn’t have is the abundance of land, people and capital. The western world doesn’t have capital now, in fact has a lot of debt,” Thomas said.

According to Thomas this change in global leadership is a step in the right direction for Australia in continuing to survive the global financial crisis.

“We are China’s number one source of outbound investment with 36 billion dollars or so committed from China to Australia,” Thomas said.

“The biggest opportunity right now, in this part of world, down in Australia, is the opportunity to attract and source and investment from China.”

Chinese investment into Australia will be discussed at the 2012 Asian Financial Forum.

Watch the video interview with David Thomas, courtesy of HKTDC here.

The rise contributed to this year’s record trade surplus of $20.9 billion and was significantly higher than the growth in imports of goods and services, also up more than seven percent. According to a Department of Foreign Affairs and Trade (DFAT) publication, Composition of Trade 2010-11, this growth in exports was largely led by the mineral sector which recorded a growth of more than 48 percent. A 21.7 increase in fuel exports also contributed to the record year.

According to the report, China came out as Australia’s strongest two-way trade partner, followed by Japan and the United States. The report also shows that Australia’s top three exports were iron ore and concentrates, coal and education-related travel services.

The release of this document marks a new era in DFAT reporting, with an accompanying range of tables allowing users easy access to trade time series data. More information and the accompanying tables can be found on the DFAT website.

The WTO Annual Report by the Trade Policy Review Body shows global activity is down and economic performance is uneven between countries as debt levels, financial volatility and high unemployment persist, deteriorating confidence.

These risks, along with falling confidence have been magnified by the perception that government’s responses to economic challenges have so far been inadequate.

World trade growth has been slower than expected in recent months. A range of problems have hit developed economies including natural disasters, national budget issues, credit conditions and the sovereign debt crisis.

Developing countries have also been hit hard by global circumstances with signs of overheating in some of the more major markets.

In light of the deteriorating conditions the forecast for world export growth in 2011 was 5.8 percent, revised from an earlier estimate of 6.5 percent. Developed economies exports however are expected to rise by 3.7 percent, with those from developing countries expected to rise by 8.5 percent.

The economic recovery has not been strong enough to boost employment growth with employment not expected to return to its 2008 levels in high income economies until 2015.

TPRB reviews show an increase in the imposition of new trade restrictions this year, with 53 percent more restrictive measures recorded than in the previous period, although governments have largely continued to resist protectionist pressures.

Actions to shield domestic industries are adding to the downside risks for the global economy. Some sectors most affected by new restrictive trade measures are base metal and products, machinery and mechanical appliances, organic chemicals and meat products.

New restrictive measures introduced between mid-October 2010 and 2011 however, cover around 0.9 percent of world imports, down from 1.2 percent recorded in the previous period. Some countries have adopted measures  to facilitate trade by reducing or temporarily exempting import tariffs and streamlining customs procedures.

Regional Trade Agreements continue to be strong with 390 RTAs notified to the WTO as of the end of October 2011, with 211 of those in force.

Released by the Export Finance and Insurance Corporation (EFIC), the newsletter shows that the crisis has spread from the peripherals of the eurozone to its core.

EFIC Chief Economist Roger Donnelly says Italy is now on the verge of losing market access and needing a bailout or even a write-down, and other countries such as Belgium, Spain, France and Holland aren’t looking much better. “The exit of some countries is no longer unthinkable. The key to stemming the immediate debt crises, if not keeping the eurozone together, is in the hands of the European Central Bank (ECB).”

An EU deal agreed on in late October has failed to prevent higher risks and investors are concerned that a bailout fund to support these failing economies wont be enough.

Just 48 hours after the agreement, investors began to dump their holdings of Italian government bonds, bringing the 10 year yield to 7.25 percent. A seven percent yield is considered unsustainable, shown by Portugal and Ireland who were forced to seek bailouts after their borrowing costs reached this level.

“Italy is a borderline case, a country that at low interest rates looks fiscally solvent, but at high rates insolvent. It is thus prone to a self-fulfilling crisis – if the market thinks Italy will get into difficulty it will demand a high risk premium that will in turn bring on the difficulty. That is the vicious circle the country is in now,” Donnelly said.

The Italian government allegedly has €300 billion in bills and bonds that mature in 2012 and may be forced to seek a bailout from the EU and IMF.

“The snag is: that would overwhelm the available resources of both bodies, so the ECB would come under pressure to fund the government instead – using of the so-called Big Bazooka of monetary financing. But it can’t be taken for granted that the Bank will agree,” Donnelly added.

If the bank didn’t agree Italy would be forced to restructure its debt, however even if it were to agree, the eurozone crisis would not be at an end. With public and private sectors burdened with the debt of uncompetitive cost structures, the only chance of recovery comes from their external sector.

Due to the inability of eurozone nations to depreciate their own currency they may be forced long-winded internal devaluations instead, making the idea of leaving the eurozone the lesser of two evils.

According to Donnelly, “The ECB could lower interest rates further and induce euro depreciation. And strong core countries like Germany could inject some fiscal stimulus into their economies as the periphery is retrenching. But such a level of collective action seems unlikely. So this leads back to the conclusion that the eurozone is under considerable strain.”

The annual Country Brand Index (CBI) report by the global brand and innovation consultancy company documents perceptions for 2011 to 2012 of 113 nations to uncover the drivers behind the development of a country’s brand.

It says the five main influences of a brand are values, quality of life, business, culture and tourism. If a place is able to improve a person’s life, others will then be encouraged to visit, do business and build their lives there.

Australia is ranked as having the fifth strongest branding behind countries including Canada, Switzerland and New Zealand.

With a population of 34, 030 589 and 2009-10 GDP growth of over three percent, the survey says Canada is ranked first for its stable political system, tolerant society and policies that encourage immigration. Coming in second, Switzerland has a strong brand based on its skiing, festivals and food.

In comparison Australia has a population of 21, 766 711 and 2009-10 GDP growth of more than two percent. The country is known for its almost universally positive reputation, offering both the exotic and familiar in an English-speaking society that integrates well internationally.

Countries with the strongest brands performed well in all dimensions of life, business and travel, with weaker ones having no recognisable profiles in any of these.

Australia was ranked 10^th for its value system but was perceived well in areas concerning quality of life, coming second in both areas of job opportunity and places people would most like to live.

It was ranked 11^th as good for business and 8^th for tourism but did not make it to the top 25 for heritage and culture.

“This is an exciting development for Russia, Australia and the global trading system,” said Australian Trade Minister Craig Emerson.

The agreement has been welcomed by Australia and means the world’s 11th largest economy will soon join the other 153 members of the WTO.

“Membership of the WTO is a commitment to play by a set of rules designed to make trade free and fair for all Members,” said Emerson. “The WTO is a club countries want to join and no-one has ever left it.”

The accession of Russia into the WTO will guarantee improved market access for Australian exporters of agriculture, manufacturing and services, with Russia agreeing to lower some import tariffs as soon as their WTO membership becomes effective.

The announcement of Russia’s accession comes after the proposal of a new pathway for the Doha Round by Australian Prime Minister Julia Gillard. The new pathway was proposed at the recent G20 Leaders’ Meeting in Cannes.

Gillard and Emerson will seek further endorsement at APEC meetings in Honolulu this week.

Ahead of the APEC meeting itself, meetings were held with US President Obama, Julia Gillard and other Asia Pacific leaders regarding the establishment of the TPP, with the hope that Japan would also enter the agreement after an indicated interest in joining the deal. If Japan were to enter the deal, the countries involved would account for one third of global GDP.

“I’ve said consistently to Australians that trade equals jobs.  We are a great trading nation and anything we can do to increase our capacity to trade is good for Australian jobs,” Gillard said. “We will now keep working as quickly as possible with the nations involved in the Trans-Pacific Partnership to bring this matter to a conclusion.  In particular, we are aiming for the Trans-Pacific Partnership to reach the stage of a legal text during the course of 2012.”

Gillard emphasised the importance of this deal for Australian exporters and the effect it would have on Australian jobs, particularly emphasising the positive effect it would stand to have on the agricultural sector. “We are a great agricultural nation.  We have very efficient farmers, very efficient and productive farmers and when you talk to them they are very alive to the barriers that prevent them getting full access into other markets and if they had full access, then they would well and truly compete on price and quality.”

Dr Emerson also demonstrated his enthusiasm for the agreement to come into place as soon as possible, with the eventual promise of eliminating tariffs among member countries. “We’re excited about the fact that the nine partners have agreed that the goal is to eliminate all tariffs which helps move this from a concept to something that’s very practical and very real because the elimination of tariff barriers means that we have access to other countries’ markets,” Emerson said.

Gillard went on to raise her high hopes for the upcoming APEC meeting, including the possibility of working towards a “new frontier” for trade: environmental trade.  ”As our region and the world grapples with the challenge of climate change, then increasingly focus will turn to having ready access to the environmental goods that make a difference to carbon pollution and reducing carbon pollution.  It’s in all of our interests that trade in those goods is as free as possible so people can get access to the goods that they need so that they can cut back their carbon pollution,” Gillard said.

The APEC meeting is being held Sunday night local time, today AEDT.

What does this all mean for Australia’s small-to-medium exporters? It means the government has a goal of trying to remove the distortions in international trade flow that detract from quality and price being the determinants of success in another market. Some of these distortions are created by high tariff barriers at the border, but increasingly they are the ‘behind the border’ issues like quotas, content rules or trade facilitation charges and requirements that effectively bar, or price-out products and services from certain countries.

In addition to tariff reductions, as a large services exporter we need to see our businesses given the same opportunity to compete and win business as both local providers and other international players. Ensuring that IP protection is honoured in these partner countries is another important consideration.

The government has teams led by the Department of Foreign Affairs and Trade (DFAT) working on the content of future FTAs to ensure Australian business is not disadvantaged by exclusions from the partner country, and to highlight any existing issues that restrict access by our exporters.

How do they know? Well to a large extent they rely on information given by Australian businesses currently exporting to or working in, or wishing to work in, the partner country. To this end consultation sessions are run in each state to seek the experiences and views of Australian business and those that support them. There is also the ability to forward submissions, by email, letter or fax, to the negotiating teams or via your DFAT State Manager. Addresses for the FTA teams can be found on the DFAT website pages on each FTA negotiation. These views are listened to and incorporated into discussions, and the size of your company is not the determinant.

So the important action for exporters, and particularly for the small-to-medium exporter without a full time advisor, is to have a look at the agreements under negotiation, and provide your legitimate feedback and views. This is the stage where your concerns will be taken into consideration, and perhaps influence a key part of the outcome for your company and others.

The existing agreements that we have in place are also reviewed at regular intervals to see how effectively they are working, so practical experiences should also be forwarded through to DFAT.

FTAs include a lot of detail, and there may be many exporters who are not aware of the potential benefits of the agreements we have in place for their business. For instance under the tariff reduction schedules for their particular product, there may be relative advantages in exporting under say the Australia-Thailand FTA vs the AANZ FTA (which also includes Thailand). The full details on the agreements and the tariff levels (and the origin certificates where required) can be found on the DFAT website at www.dfat.gov.au.

We would encourage exporters then to take advantage of the FTAs in three ways:

1. Provide information on any issues effecting, or likely to affect your business under an FTA under negotiation.
2. Review existing agreements to ensure you are aware of benefits for your company.
3. Provide feedback on experiences (both good and bad) under existing agreements so that they work as effectively as possible.

With FTAs, the Government is listening, so have your say…

Many of Australia s trading partners are members of the Madrid Protocol, including China, Korea, Japan, Singapore, the United States of America, and countries in the European Union. As a general rule of thumb, if you wish to protect your brands through trade mark registration in three or more of these territories, it will best be done through an International Registration filed using the Madrid Protocol.

What is the Madrid Protocol?

The Madrid Protocol is a treaty providing for a centralized system of trade mark registration. It allows for a trade mark to be protected in numerous countries with just one application and resulting registration. This can provide for cheaper and simpler management of your trade mark portfolio. For example, the application will attract just one set of fees, and changes to ownership of the registration or attendance on its renewal can be completed with a single request instead of multiple forms to different Trade Marks Offices. This can result in savings at the time of launch, and also in reducing subsequent maintenance costs.

Requirements for filing

Although administered through the World Intellectual Property Organization (WIPO), the initial paperwork for a filing can be lodged locally with the Australian Trade Marks Office and official fees paid in Australian dollars. The application for International Registration needs to be based on an Australian trade mark application or registration. This is referred to as the basic trade mark. It can be a long established Australian registration, an application filed immediately prior to the filing of the International Registration, or anything in between. The International Registration must have the same owner, be for the same mark and claim

the same or only some of the goods and/or services covered by the basic trade mark.

It is advisable to have the application for an International Registration prepared and filed by a professional experienced in such matters, such as a trade mark attorney, as certain amendments are not permitted once the application has been filed and there are deadlines to monitor and meet.

Registration process

Once an application for an International Registration has been lodged with the Australian Trade Marks Office, it is checked for formalities and, if all is in order the application is forwarded to WIPO where it undergoes further formalities and classification checks. Then, once all is in order, a Certificate for the International Registration is issued. This is a misnomer, as at this stage no registration rights have been secured. Rights are only granted once protection for the International Registration has been extended to designated countries. This usually occurs after national examination processes.

WIPO sends the details of the International Registration to each of the relevant Trade Marks Offices, which then treat the International Registration in much the same way as they would a nationally filed application. Each national Trade Marks Office has its own requirements for registration. Where no objections are made by the Trade Marks Office, and no opposition is filed by a third party, the International Registration can proceed to protection in that particular country without any further action being taken.

Where objections are raised, the applicant has the option of responding to the objections or taking no further action. Sometimes an objection is made in respect of only some of the goods and/or services claimed. In some countries, like Australia, even where no response is filed, in the absence of opposition from a third party protection for an International Registration will automatically be extended to all of the other goods and services. If a response is to be filed, an address for service in the relevant designated country will be required. You will need a trade mark attorney on the ground and Australian attorneys have access to associates worldwide.

International Registrations are afforded the same rights as nationally filed applications. The protection provided by an International Registration runs for a term of 10 years from the date of its filing and can be renewed indefinitely on payment of the appropriate fees. It is possible to add further countries to the International Registration as your business grows and/or as more countries join the treaty. For example, preparation is currently being made for New Zealand to join the Madrid Protocol.

Dependency period

It should be noted that the International Registration is dependent on the Australian application or registration on which it was based for a period of five years after the filing date of the International Registration. Accordingly, owners of International Registrations should ensure that the basic trade mark is not compromised during the five-year dependency period. Otherwise, the International Registration risks cancellation, for example, through a failure to renew the basic mark or through a successful removal action for non-use.

There is an increased risk when basing an International Registration on an Australian application because if the application does not proceed to registration, the International Registration will be cancelled. In the event of a cancellation there is, however, a limited time in which it is possible to transform the International Registration into corresponding national applications or registrations.

When to act

An application for an International Registration can be made anytime once a basic trade mark is in place. Where the International Registration is filed within six months of the filing of the basic trade mark, it can receive the benefit of the basic trade mark’s priority date. This effectively backdates the filing date of the International Registration, and this strategy of claiming convention priority can be used to spread filing costs between an initial, national filing and an International Registration.

This strategy can also be used to assess the prospects of an Australian application before committing to an International Registration for the same mark. The Australian Trade Marks Office currently examines applications within four-to-five months of filing; however, this period can be shortened to one-to-two months by applying to have the examination expedited on the basis of wishing to file a corresponding application overseas.

The best way to assess the availability of your chosen trade mark and the likelihood of your Australian application or International Registration proceeding to registration is by conducting a thorough clearance search. This involves an assessment of pre-existing rights and is best conducted by a professional advisor before you launch a new brand.

Conclusion

Securing registration for your brands in all relevant markets is an important step in protecting your business. This is often best done through an International Registration, which can streamline the process for obtaining and maintaining these rights and can achieve this in the most cost-effective and expedient manner.

–Michelle Cooper is a Senior Associate with Shelton IP.

Online: www.shelstonip.com