Rudd urged to drive a hard bargain on car FTAs
The Age, Melbourne
Rudd urged to drive a hard bargain on car FTAs
By Ian Porter
10 April 2008
The Rudd Government had to be more demanding than its predecessor when negotiating the automotive elements of free trade agreements, according to a leading car industry spokesman.
And the Government should also work to knock down non-tariff barriers inside potential export markets, said John Conomos, president of the Federal Chamber of Automotive Industries.
A stronger stance on export issues like these would help to underpin the future of the local car industry, which needed a big export business to back up a strong domestic market.
The call from Mr Conomos, who is also chairman emeritus of Toyota Australia, is particularly noteworthy because the imbalance of import and tax regimes between Thailand and Australia under the FTA is skewing the balance of Toyota’s business in the region.
Toyota Australia last year imported 47,000 Thai-built HiLux trucks - the HiLux was the third biggest selling vehicle in Australia - and was not able to export anything in return because of punitive Thai sales taxes on large cars.
Mr Conomos rejected the common impression among many commentators that the industry was protectionist.
"That is a view from the past. It does not reflect where we are know, or where we are going," he told the annual meeting of the chamber in Melbourne.
"The view that we are trying to shore up the local industry is completely out of touch with reality."
Australia’s tariffs are the lowest of any car manufacturing country and, with 50 different brands in the market, is generally considered to be the most competitive.
Mr Conomos said the industry had moved from being insulated and isolated to being on the verge of becoming part of the global manufacturing mix.
But in order to be a full participant in the global industry it needed to have the same access to other markets that they had to Australia.
"We believe this new Government must be more demanding in its negotiation of free trade agreements.
"The attainment of genuine reciprocal sales access is paramount to our success in export markets," he said.
He implied that Australia should not make the same mistake it made last time around, when it unilaterally cut tariffs without gaining similar reductions from foreign governments.
"To consider further cutting tariffs without agreed reciprocity can only adversely affect our global market position. The pursuit of that goal desirably should also extend to non-tariff barriers, not only in FTA negotiations, but between other countries as well."
Mr Conomos also stressed that the Government’s green car initiative held great promise for the local industry.
"(It) has the potential to move Australia onto the front foot of global development of alternative energies.
"It is impossible to understate the potential positive impact this can deliver," he said.
Toyota is known to be interested in trying to secure approval from head office to make hybrid Camry cars in Australia for local and export markets.
