Although it has been the subject of some media coverage, we are pleased to provide the following reminder as to the commencement of the ASEAN-Australia-New Zealand Free Trade Agreement (“AANZFTA”) on 1 January 2010.

The AANZFTA establishes the ”ASEAN-Australia-New Zealand Free Trade Area” and confers a number of advantages on both importers and exporters dealing with those countries.

While there is a significant degree of information available through the websites of both DFAT and the Australian Customs and Border Protection Service, that information is general in nature and needs to be specifically adopted for those importing, exporting or providing services to those traders. There are also a number of traps to be avoided and a number of steps which should now be taken to ensure that parties secure the benefits of the AANZFTA as at 1 January 2010. Clearly, we would be delighted to assist your company with those arrangements. However, some issues to consider are as follows.

• You need to make sure that the AANZFTA has commenced in relation to the countries with which you or your clients are trading. Not all countries have passed enabling legislation to enable the AANZFTA to commence on 1 January 2010. At the moment, AANZFTA is to commence for Australia, New Zealand, Brunei, Myanmar (Burma), Singapore, Vietnam and Malaysia.

• You should be aware of tariff reductions and other concessions for both imports and exports made available under the AANZFTA. Not all tariffs for goods go to zero immediately on commencement of the AANZFTA. In particular, there remains some “phasing” of import tariffs in ASEAN countries.

• If you or your clients already trade under the benefit of the Singapore and Australia Free Trade Agreement or the Thailand and Australia Free Trade Agreement or use tariff preferences relating to developing and less developed countries, then parties can still use those arrangements rather than the AANZFTA. It would be worth checking the costs and benefits in changing over to the benefits under the AANZFTA.

• The Rules of Origin to apply to goods to qualify under the AANZFTA will be determined by the tariff classifications for those goods and the contents of those goods. Clarifying the application of the AANZFTA will be relatively simple for some goods but may be more complicated for other goods, particularly where there are specific process requirements or where the goods include items from “non-originating countries” (ie countries which are not parties to the AANZFTA).

• Australian exporters will need to apply for and hold Certificates of Origin that their goods qualify under the AANZFTA. To do so will require registration with one of the two authorities in Australia who have been currently authorised to issue such Certificates of Origin (being AiG and ACCI). The importer of those goods will need to hold that Certificate of Origin to claim preferential status at the point of making the Import Declaration.

• Australian importers will need to hold correct Certificates of Origin issued by ASEAN authorities at the time of making their Import Declarations to claim preferential treatment under the AANZFTA for goods where their FOB value exceeds $1,000. This may be difficult given that only certain Government authorities in ASEAN countries will be authorised to issue such Certificates of Origin. It is important that Certificates of Origin are held at the time of making the Import Declaration as there are only limited provisions for refunds for goods for which AANZFTA status is claimed after the time of making the Import Declaration.

• There are potential penalties associated with an incorrect claim of preferential status under the AANZFTA. These will apply in addition to denial of preferential status and the requirement to repay any duty underpaid based on incorrect claims of preference.

• Parties will need to be careful in considering their supply chain for goods from the ASEAN region. For example, if goods qualify for preferential treatment under the AANZFTA, but those goods are then shipped via China or Hong Kong and packing or other work is done in those non-ASEAN countries, then the goods could lose their preferential status.

• Necessary records must be kept for at least three years (and five in the case of Australian traders). There are extensive verification provisions for Customs authorities under AANZFTA to ensure claims of preference are made correctly.

As always, there are benefits as well as risks with any new commercial arrangements. Proper due diligence and planning need to be undertaken. We are ready to assist with these matters and look forward to being of assistance to you and your clients to secure the benefit of the preferential arrangements under the AANZFTA at the earliest opportunity.

However this is where the similarity ends. While not quite to the extremes as described by Dickens, and it is always dangerous to over-simplify any analysis, the UAE and UK are currently operating in vastly different circumstances. The UAE is an economy based upon the energy sector. Initially oil and increasingly natural gas the UAE has assured income as long as the Western World continues its passion for the internal combustion engine.

Certainly the UAE is experiencing the GFC. Twelve months ago, getting a taxi in Dubai and then avoiding the inevitable traffic jam was nigh-on impossible. This year with the economic downturn (combined it must be said with the introduction of a new metro rail system) my taxi travel was both fast and efficient. Kym Hewett, Austrade’s Senior Trade Commissioner in Dubai characterised it as in the boom times the commentators were writing in Trillions of dollars, now they are talking in billions. I understand that one project on the drawing board is a fast train linking the Gulf States with Saudi Arabia, Syria and Turkey and on into Europe.

For some companies on the mission, the major highlight of the UAE component included the GITEX IT and Electronics Trade Show. Over the course of five days over 133,000 people attended this show an increase on 2008. While the numbers of people from Dubai may have been down on usual this was more than made up by the number of visitors from other countries in the region. As an indication of this, the company I currently manage was able to negotiate agreements in three new markets—Oman, Bahrain and Kuwait. We also took enquiries from Afghanistan, Saudi Arabia and Iran.

On the other hand the UK is feeling the impact of the GFC far more acutely. In a briefing we received from the Commonwealth Bank’s representatives in London, they stressed that the UK has the highest debt levels in the western world, which means that consumer spending is very much subdued. As a result relationships are taking a longer time to develop, local presence and support is important, and any non-resident company must be able to demonstrate that they are in the UK for the long term.

Like the UAE, Government spending is important and the British Government is certainly leading the world in supporting a number of new environmental initiatives. The Mission benefitted from being able to inspect first‑hand the sustainable electric transport initiatives being developed in London, and meeting with the UK’s National Housing Federation to compare strategies for addressing affordable housing and initiatives to assist low- and moderate-income purchasers. Concepts, ideas and proposals from both of these initiatives can be seen in recent ACT Government announcements.

Therefore what can we make of this whirlwind tour of two economies. Firstly, the Middle East offers significant opportunities to ACT firms. These opportunities are not just limited to Dubai but beyond into other Emirates and beyond that into other Gulf States. The UK is certainly not travelling as well as it did a few years ago. However for companies prepared to make the long-term investment in the market there are opportunities particularly in new technologies.

Can I suggest that if you are interested in talking more about either of these markets then contact Chris Horsbrough from Austrade, Dita Hunt from the Chief Ministers Department or any one of the following companies who I am sure would be more than happy to speak about their experiences:

• Academy of Interactive Entertainment;
• CIC Group;
• Canberra Institute of Technology;
• eWay;
• John Walker Crime Trends Analysis;
• Poacher’s Pantry;
• QuintessenceLabs;
• Recruitment Systems; and
• The Wise Academy.

Finally can I express my personal appreciation to the Chief Minister, his team at Business and Industry Development, Chris Horsbrough and the team at Austrade in Dubai, Abu Dhabi and London for supporting ACT Exporters and putting together such an interesting and engaging business development mission.

The following nine ACT companies, including ACT Exporters’ Network members, Recruitment Systems and the Wise Academy will be joining the ACT Chief Minister for the ten day trade mission.

CIC Security Technology
Canberra Institute of Technology
Academy of Interactive Entertainment
Invisabeam
Quintessence Labs
Recruitment Systems
John Walker Crime Trends
Poacher’s Pantry
The Wise Academy

The companies have been selected to participate based on their export readiness and the suitability of their service or product offering for the UK and UAE markets.

“The trade mission format is not about achieving immediate sales but rather building and developing new markets and customers.” says the ACT Chief Minister, Jon Stanhope

Marita Corra, Director, Inland Trading Co (Aust) Pty Ltd has visited the Middle East several times in pursuit of driving the company’s sales growth within the many five star hotels in Dubai and Abu Dhabi. 

Inland Trading exports Australian, New Zealand and South African wines from premium and highly respected vineyards to smaller and more complex international markets. 

According to Marita it is a great time for ACT businesses to explore opportunities in the Middle East.  “The business growth particularly in the United Arab Emirates is jaw dropping and there are lots of little business niches just waiting to be filled” says Marita.

Marita’s top five tips for ACT companies considering the UAE as a potential market are

1.Do your research – It is essential that you read up on or have some knowledge of the local business regulations and protocol.

2.Visit the market -  It is highly recommended that the business plan market visits to see just what it is like is highly recommended, as you can see the opportunities – just waiting for someone to step in and offer a product / service.  Please note that if you are intending to go over to the UAE to explore and develop business opportunities, consider sending the most senior person i.e. the Managing Director or CEO.  It will give your company more credibility and you get directed to the appropriate people.  It will help to avoid unnecessary time wasting.
  
3.Prepare for the heat – Consider your type of clothing, intake of refreshments and the locations of your business meetings.

4.Disposable incomes – The average incomes in the Middle East tend to be very high.  This translates into strong purchasing power. 

5.Global community – There are many foreigners living and working in the UAE so bear in mind that you are not just catering for the Emirates but to a very global community.

Sentinel Pty Ltd provides specialised services to clients in the Mining and Government sectors, including design, implementation and operation of remote environmental monitoring solutions.  Sentinel also won the Small to Medium Services Award at this year’s Export Awards 

Director, Rod Sandison accepted the Award on behalf of Sentinel’s employees. “The Sentinel team has been integral to the success of the company. The team consists of individuals with varied skill sets, who come from diverse cultural backgrounds yet, together, they maintain a strong work ethic and a dedication to excellence”.

“The ACT Export Awards have rightly earned the reputation as one of the most prestigious and significant industry awards on the Territory’s business calendar.  This in large part due to the evident ACT Government support for the Awards themselves and, more generally, to the growing level of commitment to exporting within our small to medium businesses”   Chris Faulks, CEO, Canberra Business Council said today.  

“For nine years Sentinel has been exporting its products and services to some of the harshest and most security-challenged locations in the world, with clients spread across the globe from Africa to Asia Pacific and the Dominican Republic” said Chris Faulks.

The ACT’s Emerging Exporter Award was given to Windlab Systems, a global wind energy development company.  Their track record in progressing commercially viable sites is reflected in a growing portfolio spanning Canada, USA, South Africa, Australia and New Zealand.

Other notable category winners include Aspen Medical, a provider of healthcare services to remote areas or regions of high demand and recent recipient of BWR’s most Successful Private Business (under $100 million) of the Year Award; Lucy Media Pty Ltd, a Canberra based media and entertainment company; Dysol, a world leader in the development and commercialisation of third generation photovoltaics and CIT Solutions who were praised for their work in recruiting over 1000 international students from over 75 countries annually.

Recruitment Systems Pty Ltd and Stratsec, both category winners at last year’s ACT Export Awards continued to demonstrate strong export performance taking out the Small Business and Information & Communication Technology Awards respectively in 2009.

“Motivating competitive ACT companies to become exporters and growing an export culture in the ACT through raising awareness of export opportunities is an important factor in
ensuring sustained export growth, employment and economic activity in the ACT” said Kevin Reilly, Chairperson of Canberra Business Council’s International Business Taskforce. 

The 2009 ACT Chief Minister’s Export Awards category winners:
Arts and Entertainment Award –  Lucy Media Pty Ltd
Education and Training Award - CIT Solutions Pty Ltd
Emerging Exporter Award      - Windlab Systems Pty Ltd
Information and Communication Technology Award - stratsec
Large Services Award      - Aspen Medical
Small Business Award       - Recruitment Systems Pty Ltd
Small to Medium Manufacturer Award - Dyesol Limited
Small to Medium Services Award  -  Sentinel Pty Ltd
The winners of the 2009 ACT Chief Minister’s Export Awards will automatically progress as national finalists to the 47th Australian Export Awards where one winner will receive the Prime Minister’s Exporter of the Year Award.

For more information on the ACT Chief Minister’s Export Awards please contact Brooke Anderson at brooke.anderson@canberrabusinesscouncil.com.au or 0400 090 452.

I think it can be said that I have devoted all of my working life to international business; whether it was my first job as a Japanese tour guide, over 20 years with Austrade, and now with local software developer and proud exporter Recruitment Systems; I have always felt that Australia had much to gain from engaging with the rest of the world.

Following on the great work undertaken by my predecessors in this role I look forward to working with the local business community to continue to develop the ACT’s global export presence.

Brent Juratowitch

President, ACT Exporters’ Network

Since their inception in 1851, World Expos have been about promoting the exchange of ideas and development of the world economy, culture, science and technology, allowing exhibitors to publicise and display their achievements and improve international relationships.   

Next year’s 2010 Shanghai World Expo is fast building up to be the biggest Expo in the history of World Expos.  With 229 nations and international organisations participating and between 70-80 million visitors, mainly mainland Chinese, expected to attend, the Expo is set to surpass the Beijing Olympics in terms of its ability to showcase and expose, over a sustained period, the host country and participating nations to a diverse array of cultures within dynamic and fluid environments.  

The Australian Government’s investment in the Shanghai Expo is significant, representing the largest investment Australia has ever made in a world Expo.   The federal government has certainly grasped the enormity of the event and its potential to change perceptions and showcase technically innovative, culturally diverse and intensely creative Australian communities.   

The ACT Government entered into a silver category partnership agreement with the Department of Foreign Affairs and Trade (DFAT) early this year to sponsor the Australian Pavilion.  The ACT joins six other Australian states and territories all vying for the attention of the 38,000 people expected to traverse through the pavilion on each of the 184 days of the expo.

The ACT and surrounding region’s involvement in the Expo is firmly grounded in the strong people-to-people ties which have been developed over time between Canberreans and Chinese, particularly through the 15 years of Canberra Beijing sister city relations.    

The ACT Government is keen to project a contemporary, innovative and technologically advanced image of Canberra through cultural and thematic exhibits, capability demonstrations, trade missions and the use of education scholarships and exchanges. 

The Shanghai Expo’s theme ‘Better City, Better Life’ is tailor-made for spectacular contributions showcasing Canberra and the surrounding region.  The preliminary business program prepared by the Dept. of Foreign Affairs and Trade includes fifteen key industry sectors’.  At least eight of these sectors are areas of significant competitive strength for Canberra and the surrounding region

• Tourism
• Education
• Design, construction and urban planning
• Arts, culture and creative industries
• The business of sport
• Smart technology
• Clean energy and environmental technology
• ICT

The ACT needs to look at making the most of its involvement at the Expo by shaping its contribution around each of these eight industry sectors. 

Several ideas could be to use the Expo to showcase the ACT’s strong connection with the environment through award winning urban planning and sustainable living designs.  Alternatively, the ACT could explore through, photographic and literary documentation, how the ACT Government, indigenous organisations, agri-business, environmental researchers and community groups express their awareness of ‘custodianship’ for the environment – a convergence of traditional and modern views. 

Another idea would be to focus on how Canberra’s science, research and learning institutions have helped to meet global challenges.  Identifying world firsts from CSIRO and cutting edge research from the Australian National University would be a way to position the ACT as an education destination.  The Australian Institute of Sport could design an interactive areas to trial advanced fitness diagnostics, bio mechanics and sports physiology equipment.

To gain maximum leverage from the ACT’s participation at next year’s Expo, the ACT Exporters’ Network has convened a focus group to canvass the business community’s views on how the ACT international business community engages in and around the various sector based trade and investment activities and events taking place at the Expo. 

For more information on the 2010 Shanghai World Expo please visit the website www.australianpavilion.com.au

Pitch Club is a capacity building program, designed to boost entrepreneurship and growth within the local export community.

The basic premise is that individual exporters are invited to provide a brief overview of their company and their product or service.  Each exporter has 15 min to pitch their export objective and related strategy to the panel.  Following the pitch, the panel of four experienced exporters and industry specialists offer comment and suggestions on specific elements of the export strategy, acknowledge significant success or progress, highlight areas which require further attention and offer insight into emerging trends, market intelligence and specific industry advice.

The ultimate outcome for the session is for exporters to walk away with a call to action.  The panel may recommend that the business attend a specific training course, meet with an industry specialist or connect with an export mentor on a regular basis.   

In addition to Pitch Club, the ACT Exporters’ Network runs a variety of mentorship programs which target exporting businesses at different stages of internationalisation.

For expanding exporters i.e. those businesses experienced in the exporting process and have specific resources for export, the Network has established an online mentoring support group. 

Utilising skype and other online collaboration tools, the aim is to get companies to challenge one another, on a regular basis, to create and implement export goals and to advise each other on significant export related issues. 

In this way we hope that the collective knowledge can act as a shared catalyst for growth, sounding board, devil’s advocate while also providing general support and advice to colleagues.

The International CEO Forums, sponsored by Ernst & Young cater to the CEOs and Managing Directors of international companies based in the ACT, including those ASX 500 companies, to meet with peers to discuss business operations and emerging trends and opportunities offshore.

For the first CEO Forum in July, the Network invited Alan Morrell, Senior Trade Commissioner, Hong Kong and Phil Ingram, Senior Trade Commissioner, Beijing.  The networking event offered CEOs a unique opportunity to engage directly with Austrade’s senior offshore representatives in North-East Asia and to discuss emerging trends and developments including Hong Kong’s role in China’s rapidly growing foreign investment.

In addition to pitch club, online mentoring support groups and international CEO forums, the Network also provides individual one-on-one mentoring support to new and emerging exporters.

Adrian Armitage, Global Marketing Manager, IELTS Australia provides mentoring support to a number of ACT Exporters’ Network members.  “Ultimately what I am doing is trying to be a business management sounding board for [exporters], bringing my experience and teasing out the business owner’s vision” says Adrian.

If you would like more information on the ACT Exporters’ Network mentorship programs please visit www.actexportersnetwork.com.au or contact Brooke Anderson on (02) 6247 4199.

Am I eligible to take part in Pitch Club?

To take part in pitch club, you must:

• Be an ACT registered business or have significant operations in the ACT.
•  Be a member of the ACT Exporters’ Network.
• Have tradeable goods and services and are export-capable.  A definition of export capable is listed below.
  • Yes, I can demonstrate a commitment to export.
  • Yes, I have a product or service which meets the requirements of overseas markets/exploits a market niche. 
  • Yes, I have marketing experience.
  • Yes, senior management posses’ sufficient capabilities.
  • Yes, I can demonstrate adequate production capacity. 
  • Yes, I have sufficient finance to support export.

For more information contact Zoe Piper, Consultant with Beyond Business Connections.

Email: zoe.piper@beyondbusiness.com.au

Phone: 0408 549 300

Pitch Club is a capacity building program, designed to boost entrepreneurship, innovation and growth within the local export community.

The concept is that emerging exporters will be allocated 15 min to pitch their export objective and strategy to a panel of experienced exporters and industry specialists.  The panel will provide constructive comments and feedback on all aspects of the strategy.  They will also provide the exporter with a call to action.  This call to action will identify the specific actions which need to be undertaken by the exporter and key stakeholders including the timeframe for the action to be completed and the person who will be responsible for undertaking action. 

This event is for all ACT and surrounding region exporters looking to grow their product or service into overseas markets. 

The make-up of the panel will vary depending on the industries involved, their export objectives and level of export experience.  The Network will look to include, where appropriate, an experienced exporter from the industry along with capital investors and industry specialists.

What:   Round 2 – Pitch Club

When: Thursday 12 November 2009

Where:  Acton Lounge, National Museum of Australia

RSVP:    no later than Friday 16 October 2009 to brooke.anderson@canberrabusinesscouncil.com.au

If you are interested in being part of Round 2 – Pitch Club please send me a email which briefly outlines your product or service and your specific export-objective.