Trade wind blows

AUSTRALIA’S trade policy will continue to play a crucial role in determining the future shape of the Australian automotive industry, according to Ford Australia president Tom Gorman.

Delivering a keynote speech to the annual Federation of Automotive Products Manufacturers conference in late July, Mr Gorman, who is also the Federal Chamber of Automotive Industries president, said he remained optimistic about the industry’s future in the face of increasing global pressure.

But he recognised that measures were needed to maintain the industry and to help it prosper.

In particular, he said new trade agreements would continue to sharpen competitive pressures locally but that in turn these would also open up potential new opportunities in rapidly growing markets in Asia-Pacific.

"In addition to New Zealand and Singapore, we now have new free-tradeagreements (FTA) with the United States and Thailand," he said. "And we have commenced formal negotiations with Malaysia, China, ASEAN and the United Arab Emirates."Mr Gorman told delegates it was critical for the current FTA negotiations to focus on the issue of non-tariff barriers, beyond the expected traditional tariffs and import quota arrangements usually dealt with by negotiators.

"Whether it be discriminatory and punitive taxation arrangements, shortcomings in intellectual property protection, complex local content arrangements or unique national standards, they all must be addressed," he said.

"Otherwise, any results gained from the trade negotiations will be largely academic, despite our industry’s proud record of determination, innovative design and flexible and cost-effective manufacturing."Mr Gorman said he believed intellectual property would be a critical issue for all Australian automotive industry participants as the industry moved forward.

"It will be absolutely fundamental to all of us," he said. "Firstly, it is imperative that we all have ready access to the very latest technologies, either our own or through very effective licensing agreements.

"These technologies will underpin the competitiveness of our vehicles and our manufacturing processes.

"Secondly, it is imperative that those technologies, and the competitiveadvantages they bring, are well protected. If they are not well protected,they’ll be quickly copied."Mr Gorman warned that any country copying Australian technologies could undermine this country’s competitiveness.

"This means industry participants will understandably not have the confidence to invest and seek out new technologies," he said. "That’s why the issue of intellectual property is so important in the trade negotiating arena.

"Our industry has supported the Government’s trade objectives, and acknowledges the complementary role that free-trade agreements can play in facilitating the achievement of economic growth and, of course, broader multilateral trading objectives."He said that despite new trade agreements, the Australian car industry faced some competitive challenges.

"Does anyone really believe the China challenge will conveniently go away if a formal trade agreement is not concluded?"Of course not."He added that the challenge presented by the Chinese juggernaut meant that Australia had to find innovative ways of stepping up to the challenges, among them innovation and fast-to-market products.

"Or it can be via an absolute focus on ensuring our respective businesses are very well managed."Mr Gorman said the challenges Australia faced were now "in many ways no more complex than those faced through the’80s and ’90s".

"We all had doubts as to whether we could successfully compete in the absence of high tariffs and import quotas."But, he said, as the business world had changed and moved on, so too had the Australian automotive industry.

"The challenge we all face now is to ensure we remain absolutely focused on our customers," he said.

"We have to exceed their expectations, and we have to demonstrate a preparedness to seek out new opportunities with exciting product that willcompete in an increasingly globally influenced environment."