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Dan Tehan hunting $28bn in ‘lost’ foreign investment

Trade Minister Dan Tehan will meet with bankers, fund man­agers and his counterparts in Washington, London, Berlin and Brussels to restore a $28bn a year drop in foreign investment.

Dan Tehan, right, says ‘we’re going to use our record through the pandemic to offer ourselves up as a safe and reliable destination for investors’. Picture: Nicole Cleary
Dan Tehan, right, says ‘we’re going to use our record through the pandemic to offer ourselves up as a safe and reliable destination for investors’. Picture: Nicole Cleary

Trade Minister Dan Tehan will meet with bankers, fund man­agers and his counterparts in Washington, London, Berlin and Brussels next month as the federal government attempts to restore a $28bn a year drop in foreign investment.

In an interview with The Australian, Mr Tehan said strengthening trade and investment engagement with Quadrilateral Security Dialogue partners — the US, India and Japan — was a key priority, together with World Trade Organisation reform.

He said he hoped to seal free-trade agreements with the EU and Britain by Christmas, but declared he would not compromise on the quality of the deals.

Mr Tehan has his first coronavirus vaccination on Thursday, and will travel to the US, the UK, Belgium, Germany and ­possibly France next month for face-to-face trade talks with ministerial counterparts and potential ­investors.

He’ll pitch Australia’s resilience through the pandemics as a key selling point, highlighting the government’s health response and fiscal stimulus, and the ­nation’s “rock solid” economic fundamentals.

Mr Tehan has phone calls scheduled in coming weeks with newly sworn-in US Trade ­Representative Katherine Tai and ­Indian counterpart Piyush Goyal, and spoke recently to Japan’s Trade Minister, Hiroshi Kajiyama.

He said he hoped China would re-engage with Australia “sooner rather than later”, ending $20bn in trade strikes against Australian exporters.

But he said: “We won’t be putting everything else on standstill. There is plenty more for us to be getting on with.”

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Australia’s push for WTO reform is high on the agenda, with the minister to participate in an upcoming meeting of the 13-­nation Ottawa Group, which is working to get the trade umpire functioning properly again.

The UN Conference on Trade and Development reported in January that foreign investment into Australia fell 46 per cent last year — from $50.3bn in 2019 to $22bn in 2020.

Mr Tehan said he was determined to reverse that investment slump. “Like the government’s success in restoring jobs to pre-­pandemic levels, we’ve set our sights on getting investment flows back to where they were before the COVID-19,” he said.

“We’re going to use our record through the pandemic to offer ourselves up as a safe and reliable destination for investors.”

A new Austrade publication sets out Australia’s case, lauding the nation’s “exceptional performance” in 2019-20, which saw GDP fall by just 2.4 per cent, compared with an average 4.9 per cent for advanced economies.

“Our entrepreneurial streak is underpinned by sound regulation, a lack of corruption and the rule of law,” the Benchmark Report says.

The government wants to drive investment across the board, but particularly in services industries such as finance, business consulting and healthcare.

“CBDs are such drivers of economic growth for us. If people want to work from home, we’ll need to find alternative ways to get money and activity back into our CBDs,” Mr Tehan said.

Unlike foreign investment, exports held up well through the pandemic, with January’s $10bn trade surplus the highest on record. The government is still determined to push ahead with its trade diversification agenda, developing new markets and establishing new partnerships.

“With the shift in economic weight to the Indo-Pacific, re­invigorating our economic diplomacy has never been more important,” Mr Tehan said.

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“Trade has always been a tool of statecraft. As a middle power, it is absolutely key to protecting and enhancing our national interests. We have to build on our ­existing architecture.

“We have done well with our economic diplomacy through ASEAN, APEC and the Cairns Group (of 19 agricultural exporting countries), but the time has come for us to be looking at new partnerships as we navigate the increasingly complex region we not only live in but predominantly trade in.”

Mr Tehan said while the Quad had no formal trade agenda, his talks with Quad counterparts were aimed at “developing partnerships where key interests align”. “(The Quad nations) are going to be absolutely key partners in ensuring we can continue to operate in a free and rules-based economic trading system, in a free and rules-based region.”

He was realistic about the difficulty of securing an Australia-India free-trade deal following the recommencement of trade talks this year, but he said he was focused on expanding two-way investment opportunities between the countries even in the absence of an FTA. “It is still at the preliminary level, but anything we can do on top of that to further build trust and confidence is obviously very important.”

Australian negotiators concluded their 10th round of free-trade negotiations with EU counterparts in recent weeks, and their fourth with the UK.

The UK’s high commissioner to Australia, Vicki Treadell, told The Australian last week Britain wanted its free-trade agreement with Australia, which could become its first bilateral FTA since leaving the EU, to “set a gold standard” for those that follow.

This would include a high-level of environmental ambition, as well as support for free and open trade, she said. “We want to be innovative. We don’t want one of the first, if not the first, bilateral FTA we secure to be a bog-standard one like everybody else’s.”

The EU has also warned Australia will have to ramp up its climate change ambitions under the Australia-EU FTA.

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Original URL: https://www.theaustralian.com.au/nation/dan-tehan-hunting-28bn-in-lost-foreign-investment/news-story/e747d98f3a2a8c8c52c51ca652c68153