While Australia’s trade in financial services remains strong, the data indicates most sales take place through overseas in-country affiliates, rather than via direct sales from Australia. Analysts said the figures highlighted the need for Australian companies to establish a physical presence in export markets in order to take maximum advantage of the market for services.

Last financial year, the key markets for Australian trade in financial services were New Zealand, the United Kingdom, the United States, Hong Kong and Singapore.

The strong figures were released against a backdrop of a slight decline in Australian services exports, with trade down 0.5 percent to $52.4 billion last financial year.

Held in Hannover, Germany from from 1-5 March this year, the fair is an annual international showcase for innovations in the international information and communications technology (ICT) industry and attracts around 500,000 attendees from 100 countries, 5,100 exhibitors and over 7,000 members of the press and media.

Deutsche Messe AG’s Onsite Matchmaking service is intended to help businesses identify potential business partners before the fair and make appointments for interested parties to meet onsite in a dedicated area in Hall 8 at CeBit in a choice of settings, ranging from a boardroom table to an exclusive lounge.

Attending companies can register to set up their matchmaking profile at www.cebitmatchmaking.de and purpose designed software will identify suitable contacts which are then vetted by agents who create a list for approval by the businesses seeking partnerships.

Once participants have made a final selection they will receive a detailed schedule of up to seven appointments a day. Registration costs 300 euros with an additional fee of 100 euros for each meeting and a variable charge depending on the chosen venue.

For more information and a link for registration go to www.cebit-matchmaking.de

Award categories will include freight and logistics, banking and financial services, education and training, business services, software and information technology. The event is organised by the Import Export Show.

The awards website goes up in March when the categories will be announced. Importers and exporters will be able to nominate contenders for an award and to vote.

The winners are to be announced on the inaugural awards night on Thursday 15 September 2011. The event will be held at the Grand Pavilion, Rosehill Gardens Event Centre, Sydney.

Companies interested in sponsoring the awards should contact the organisers at http://email.maverickmav.com.au/t/r/l/sdijrd/hjiyjtily/y

With an astounding 60 percent of the population under 30 years of age, the masses have never been so well educated, well connected or well travelled. The demand for brand names and luxury items is exploding, as awareness and wealth accumulate, providing Australian exporters a willing consumer market filled with repression-based desire for all things western.

Senior manager and international growth specialist at the NSW Business Chamber Ian Bennett says, “Australian exporters are not giving Vietnam sufficient consideration. Most people are still thinking of Vietnam under the old cadre system; they don’t realise that the technocrats and modernists have taken over.”

Vietnam is one of the 10 members of the Association of South East Asian Nations (ASEAN), and Australian exporters looking to build relationships have never had easier conditions in which to do so now that the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is in force. The agreement provides a progressive reduction or, in most cases, elimination of tariffs on Australian goods exports, and an elimination of all Australian tariffs from AANZFTA parties. This advantage over other countries that are yet to sign an FTA with Vietnam is substantial, yet fleeting, as it is in negotiation with many other countries for FTAs.

The economy, once centrally planned but now market-based, withstood the global financial crisis relatively well. Tony Burchill, senior trade commissioner at Austrade, says the market is expecting growth of around six percent this calendar year.
Bennett continues: “Vietnam wasn’t really affected, simply because they don’t have hedge funds and derivatives like other, more sophisticated, markets.”

Current Australian exports to Vietnam are worth almost $1.25 billion, with wheat, copper, aluminium and cereal preparations the major Australian exports. While trade relations with Vietnam appear to be at an all-time high, exporters must be aware of remaining obstacles.

New exporters

“It’s a good complementary market for Australian exporters on a number of fronts,” Burchill says. “Where Vietnam offers a lot of scope, particularly for new exporters, is in the services area. Vietnam needs technology and advanced skills, so we’re seeing a lot of companies coming over to work in the energy sector, and in the building and property sector: for instance, engineers, architects and surveyors.”

The growth of the middle class has created a desire for premium brands and labels, especially clothing, food and wine. “A lot of Vietnamese people have travelled widely overseas and seen what’s available in other markets, and they want those things. They can also see the health benefits of eating and drinking well,” Bennett explains. “With the evolution of the Vietnamese economy, there’s increasing wealth at various levels and now they can afford these products,” he adds.

Grain is a particular area of focus in the food industry, as it is required to make the increasingly popular noodles eaten around the country, while luxury automobiles have become a must-have status symbol in recent times.

Cold storage systems for food were once an issue, but it’s now less difficult because of the entry of German hypermarket, Metro, into the community. Bringing their own cold storage supply chains with them, they have helped to improve the overall market by making it more competitive.

AANZFTA has paved the way for the professional services sector to become a growth market, due to the relaxation of many of the requirements that practitioners previously had to meet. “The nation’s rapid commercial and industrial growth has led to an increase in the demand for international legal services firms, human resources and accounting practices. There are increasing opportunities for an array of business consulting firms through the many multilateral project activities that occur in Vietnam, including those of the Asian Development Bank and World Bank,” Burchill says.

Free trade agreements

Earlier this year, the Australian Industry Group (Ai Group) released results from a survey they conducted among small to large exporters on the benefits of free trade agreements. The survey found that in more than half of all cases, for all countries with which Australia has a bilateral FTA, businesses reported no benefits.

Far from saying that FTAs were a waste of time, the survey results indicated that agreements were just the beginning and that businesses need more than signatures to succeed, says Innes Willox, director of International and Government Relations at Ai Group. “What industry is saying is there needs to be more follow-through to help take advantage of opportunities that might arise from an FTA.”

He confirms that while “industry basically welcomes the concept of free trade because of the potential market access, the FTAs alone guarantee nothing. It doesn’t mean the floodgates open and the market is suddenly wholly accessible,” he explains.

Parliamentary Secretary for Trade Anthony Byrne sees an FTA as a symbol of a “global commitment to an open international trade and investment system”, particularly in the wake of the global financial crisis, when protectionism threatened world trade. Therefore, regional agreements such as the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which came into force at the beginning of this year, sends a clear message against protectionism, he says.

The breadth of the agreement, covering goods and services, investment, intellectual property, e-commerce, business travel, competition policy and capacity building, provides opportunities for exporters across the board. “One key feature of AANZFTA is that, even if it does not deliver perfect market access right now, over time the barriers will fall for most products,” Byrne notes. “FTAs are not panaceas for exporters, but they are steps forward on the road to greater market access and require a bit of faith to work.”

Living documents

“The benefits come over a period of time,” agrees Cameron MacMillan, former trade commissioner and current executive director of International Business at global business advisory BDO (QLD). “They are living documents and there are regular negotiation points where our government can go to the American government or the Chilean government or whoever and say ‘we’d like a review of the situation’. Prior to the FTA, we never had that opportunity.”

MacMillan believes FTAs are a great way to understand issues between markets, starting from the negotiation phase. “You never get a better opportunity to put your dirty laundry on the table, so to speak. If you have an issue with a country, it’s the most appropriate time to bring it up and negotiate. It takes the relationship to a whole new level,” he says.

This then paves the way for a priority trade relationship, one that enables Australia to more easily change aspects of the agreement as the economic environment evolves, he says. “The fact that it is a living document means you can go back at agreed intervals and say ‘this isn’t working for me’, whereas prior to that there was no foundation for negotiation, you just fought battle-by-battle and it wasn’t a relationship.”

An FTA “opens up discussion”, says MacMillan. “It focuses people on the outstanding issues and endeavours to make the operating environment more transparent.”

Doing business

While negotiation is an important aspect of an FTA, exporters are understandably more interested in the benefits to be gained after the parties have signed the agreement. MacMillan points out that an FTA merely lays the groundwork for open business, so it is unlikely that everyone will see benefits from day one. “FTAs don’t do business for people, they just set environments,” he says. “It doesn’t mean exporters can relax, but it does mean they need to do more research.”

Willox says exporters need to understand this crucial point about FTAs—while the agreement may open a market, a business still needs to make it work. “There are the issues of making contact, developing business proposals, developing your credibility, marketing,” he explains. “It takes a long time to build up credibility, and that would be the case if there was an FTA or not. There are a whole lot of other factors at play. The FTA is not the whole answer.”

He believes government and industry need to work together to achieve the trade results expected when parties sign an FTA. “Governments are quite rightly proud of having an FTA, they’re not easy things to negotiate, but there’s a feeling that industry is not taking advantage of it,” Willox observes. “Industry is a little bit reticent to jump fully into the pool of a new market without some sort of help. FTAs do present opportunities, but it takes a long time.”

In short, although exporters need to be aware of the access to a market allowed by an FTA, they also need to select the market on its own merits, not just because Australia has an FTA with a party.

Western Australia had the rising price of iron ore and gold behind it to clinch its position as the nation’s leading export state, and Queensland prospered via sales of coal and beef. The Smart State has now overtaken New South Wales as Australia’s second-biggest exporter.

NSW had coal to thank for almost $13 billion in revenue, but also recorded the nation’s highest growth in service exports, an increase of 6.7 percent to garner $21.6 billion.

Natural gas was the rising earner for the Northern Territory, while education-related travel helped the Australian Capital Territory.

“Strong commodity prices, demand from China, and Australia’s diversified trade base were factors in the resilient performance of the nation’s exporters in the face of the global economic crisis,” said Minister for Trade Simon Crean, adding that the new ASEAN-Australia-New Zealand Free Trade Agreement would help exporters “gain new markets and diversify their exports in the fastest growing region of the world”.

To download the report, see the DFAT website.

“They weren’t prepared to deal seriously on their sensitive issues, agriculture and services. Theirs is an economy that’s not well developed on services, and we’re a very well developed economy on services and we’re saying it’s got to be a comprehensive FTA,” said Minister for Trade Simon Crean. “They’ve now agreed that the meeting will proceed in February on the basis there will be serious discussion on these issues. That’s a significant breakthrough.”

The Australian government has marked the resumption of FTA negotiations as a good sign that Australia-China relations are back on track.

Crean met his Chinese counterpart Chen Deming on the sidelines of the APEC summit in Singapore last week to arrange the FTA deal.

The awards recognise NSW companies that excel in all aspects of international trade between NSW and Hong Kong. Presented at the Hilton Hotel at a ceremony on Friday night, the awards were given to the following businesses:

• Export of Goods: AUNEW
• Export of Services: Global Experience
• Import of Goods: Bay Bee Cino
• Import of Services: KVB Kunlun
• Creative SME: Hong Kong Dim Sim Kitchen
• Contribution to Industry: Master Builders Association-NSW
• Grand Award: Master Builders Association-NSW

“We were greatly impressed by the high standards and enthusiasm of the entrants in this year’s competition and warmly congratulate all entrants,” said Wong. “We had an increase of entrants by 50 percent. This is an outstanding result which reflects the fact that our Business Awards is a popular platform being used for local SMEs for recognition and publicity.”

Judging criteria included an entrant’s professional approach to business practice, their standard of marketing strategies, level of innovation, creativity and proportion of import/export turnover.

Both Crean and Kirk agreed that Australia and the US could do more to enhance the trade initiated through the Australia-US Free Trade Agreement.

“With the services sector contributing more than 70 percent of growth and 20 to 30 percent of exports in our respective economies, we are working with the United States on continuing to expand access for the high quality professional service providers Australia has to offer the US market,” said Crean.

The minister also raised concerns about the 2008 US Farm Bill, mandatory country-of-origin labelling for beef, the US Dairy Import Assessment, and Dairy Export Subsidies program in light of Australian farmers’ push to gain better market access for our agricultural exports.

The two representatives also discussed synergies for concluding the World Trade Organisation Doha Round in 2010.

Smith said China’s inland ‘tier 2′ cities were ripe for Australia’s green building expertise. “The rapid growth of Changsha’s economy, as in many other regional centres, is creating huge demand for housing and construction,” he noted.

“The MOU covers a wide range of sustainable development areas including green building and construction, emissions reduction technologies, environmental planning and consultation services, waste treatment and disposal and trade and financial services related to sustainable city management.”

The redevelopment of Changsha City is considered a pilot project under the Chinese Government’s strategy to build further sustainable cities across the country, he added.

Earlier this week, Austrade and the Green Building Council of Australia (GBCA) signed a separate MOU to help facilitate closer ties between the GBCA and the China Green Building Council.