The Victorian division of AIDN, the nation’s peak defence small and medium enterprise (SME) industry body, has presented a submission to the parliamentary inquiry into access to free trade agreements by SMEs raising questions around the degree of government support for Australia's defence and dual-use SMEs.
AIDN-Victoria believes that Australia's recent free trade agreements (FTA) and preferential trade agreements (PTA) with China, Japan and Korea will provide Victoria's SMEs with additional avenues for business growth and development into these major trading partners and their rapidly growing markets.
As part of the submission, AIDN-Victoria has highlighted a number of areas it believes the government needs to clarify and improve in order for Victoria's defence and dual-use SMEs to thrive given the new trade relationships with these countries.
- Given the exclusion of sensitive industries (e.g. defence, advanced manufacturing, high technology and telecommunications) from participating in FTA or PTA with certain 'high risk' export nations, confusion surrounds SME involvement, particularly given the assumption that as there has been direct government involvement the risk has been mitigated;
- SMEs tend to be largely unaware of the applicability of FTAs to their business, with the perception being that FTAs largely benefit multinationals and industry primes;
- Non-tariff barriers remain a hindrance to SMEs and are not adequately addressed or outlined in the FTAs;
- 'Certificates of Origin' are burdensome and complicated for SMEs to manage effectively;
- Procurement of goods through foreign defence organisations are often managed outside of negotiated trade pathways included in FTAs; and
- The need for greater industry/business involvement in the development of future FTA throughout the pre- and post-negotiation stages to ensure that all commercial wants/needs are adequately accounted for – this is of particular concern for SMEs given industry perception of FTAs.