I think I would be one of the first to say that Doha and multilateral trade negotiations would be at the top of the heap of any strategic agenda on trade. But in saying that, like anything in business, long-term strategies are crucial but so too are short-term tactics. Today in the world of the small to medium exporter ‘Rome is burning’ and the fire is not about to go out for some time yet. Research recently conducted by the Australian Institute of Export on the effect of the exchange rate on export sales can leave us in no doubt that exporters are hurting and that if the rate remains above parity they will hurt a lot more. The study conducted in the last week of October found that 60 percent of those surveyed believe the high Australian dollar has had a negative impact on sales, with over 50 percent saying that the impact is between 10 percent and 30 percent. Twenty five percent believed the current impact is more than 30 percent. A reduction in sales, of course, is one thing but equally or even more important is the effect the high dollar is having on margins which have probably already been under pressure from the Global Financial Crisis (GFC). That may have softened here but certainly hasn’t softened for Aussie companies doing business in the USA or Europe. The margins too of exporters who are selling into Asia or the Middle East are under pressure as many of the customers they deal with will only do business in US dollars. I fully accept that for many exporters there is an upside and this clearly came out in the study. If you are importing a significant amount of raw materials as components for export products, if you are purchasing equipment from overseas or for that matter setting up manufacturing facilities offshore, there has never been a better time than now. But sadly not everybody is in that position. For exporters in agriculture, especially wine, this certainly doesn’t apply, for companies involved in film production or repair and maintenance in Australia we have become very expensive. Education, Australia’s third biggest export, is getting more expensive every day and inbound tourism is certainly less attractive to US visitors than it has been for over 30 years. On top of the rising dollar and the GFC there is that other little matter of rising interest rates. One of the greatest concerns shown by respondents was simply that. To them, a high dollar and high interest rates would result in cut-backs in investment and staff in an attempt to maintain a margin that will keep them in business. Cutting back is often the immediate reaction. Others reported that consideration of moving operations overseas was now high on their agenda, and there were those who simply said that the rising dollar is the catalyst for getting out of export altogether. None of these options is good for Australia, for employment, for investment or for adding to the nation’s wealth. And if cutting back means losing hard fought market share, that’s really not good for anybody either. Clearly this research supports the strongly held view of many in trade that Australia is on the cusp of experiencing a significant change to the make-up of what denotes its exports portfolio. Government needs to ask itself if it wants exports almost entirely driven by minerals or if it wants a balanced portfolio where agriculture, education, manufacturing and services continue to play a role. In my book the answer is simple. Australia, for a raft of reasons, like any well managed business needs to have a healthy export sector rich in diversity, strong in confidence and willing to invest in its future. While the situation today is not desperate, it is serious. The study shows clearly that confidence is not strong, investment is slowing and cut-backs are occurring. The Government needs to collaborate with industry through the various representative bodies to establish the mechanisms needed to address the immediate issues, implement tactical programs that will breathe confidence back into businesses and work with industry to set long-term strategic priorities.