PERSPECTIVES ON PROSPERITY
The Future of Trade
ARE WE READY TO EMBRACE
THE OPPORTUNITIES?
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PERSPECTIVES ON PROSPERITY
Foreword
Despite current uncertainty for global
trade in the future. Policy makers will
trade, it will continue to be critical for
need to consider how to mitigate risks
the future prosperity of Australia and
and maximise the potential benefits of
New Zealand. Trade has evolved beyond
trade. It is also important to consider
exporting and importing. The effects
how we communicate changes and
of globalisation and technology have
benefits for businesses and what it
meant that trade is not only a business
means for the public.
exchange, but a cultural exchange
as well. We see this particularly in
the changing landscape of policy on
domestic and international levels
regarding trade and political positions.
We have also seen trade shifting from
goods to the exporting and importing of
services, including professional services
We are in an environment where trade
is continually evolving – new models of
trade have emerged online, allowing
more people and businesses to
participate in trade, including the direct
dealing to consumers.
Business will require agility and flexibility
such as accounting.
to meet the changing needs of trade.
The appetite for trade has increased
new markets participating, buyers and
and so has the ability of businesses to
trade. However, globalisation has seen
We have exporters becoming importers,
sellers connecting directly – the effects
of globalisation, policy and technology
attitudes towards trade change. Recent
will continue to shape trade. But the
events such as the Brexit vote in the
future of trade is bright if we embrace
United Kingdom and President Donald
the opportunities it offers.
Trump signing the order to remove the
US from the Trans-Pacific Partnership
might be seen as signs that the days
of free trade are over. The costs and
benefits of trade are questioned – as
well as the fairness, equality and the
impacts of trade distribution. These
questions have influenced political
choices and raised uncertainties about
charteredaccountantsanz.com/futureinc
Lee White FCA
CEO, Chartered Accountants Australia
and New Zealand
PERSPECTIVES ON PROSPERITY
Contents
Executive Summary 01
02
2
Introduction6
05
How will technology
change the future of
trade?36
Looking forward
The megatrends
shaping the future
8
Globalisation10
06
Technology12
Policy context
03
04
The role of industry
in trade
Looking forward
The changing
intermediary42
Looking forward
45
14
To trade or not to trade? 18
Looking forward
40
24
07
The ethical consumer
Looking forward
48
52
Conclusion55
28
References60
34
charteredaccountantsanz.com/futureinc
Executive Summary
International
trade is essential
to our modern
economy
Trade has recently come under greater scrutiny, with the US election
and Brexit highlighting voter opposition to integration into the global
economy. Yet international trade is essential to our modern economy.
It gives us access to a wider range of goods and services, stimulates
competition and allows us to focus on areas of comparative
advantage. Exports currently account for close to 30% of world
GDP.1 In Australia and New Zealand, exports alone account for 20%
and 28% of GDP respectively.2 With 98% of the global economy
beyond the shores of Australia and New Zealand, international trade
presents exciting opportunities for businesses seeking to expand.3
PREDICTIONS
Trade will be growing rather than slowing over the next five years
for Australia and New Zealand.
Services exports will become increasingly important for Australia
and New Zealand.
Technology is set to facilitate even more trade.
2
The Future of Trade: Are we ready to embrace the opportunities?
While there are significant opportunities
ahead, the rate of growth in international
trade has slowed in recent years.
Between 1985 and 2007, international
trade was growing, on average, twice
as fast as world GDP. This was spurred
by rapid growth in industrialising Asian
economies, driving increased demand
as well as introducing new global
producers. Reductions in the costs
of trade – especially transport and
communication – greased the wheels
of trade, enabling new business models
and the shift to global supply chains.
Liberal trade policies proliferated and
further strengthened trade flows, as
many countries saw trade as a means of
bolstering economic growth.
But since the Global Financial Crisis,
international trade has slowed, keeping
pace with global GDP growth, rather
than growing at double the rate. And
in 2016, trade growth was the slowest
it has been since the GFC; a result of
slower growth in China’s industrial
capacity, as well as the appetite for
services, which continue to grow as a
share of spending.
But the tides are turning. 2016 saw
improvements in container volumes,
rising orders of manufacturing globally,
and an increase in the number of
businesses going global – all good early
indicators for trade. And while services
are generally less trade-intensive than
goods, technology and policy mean that
the volume and value of trade in services
are also likely to increase.
Green shoots are already appearing in
Australia, which recorded AUD32.6 billion
in exports in December 2016, the highest
level ever in Australian history. This
represents an AUD7.9 billion increase on
the previous December.4
Looking forward, globalisation,
technology and policy will be key factors
in determining the future rate of growth
in international trade. We may not return
to the heyday of trade growing at on
average double the rate of GDP growth,
but there are many signs that there is still
a strong future ahead in international
trade for Australian and New Zealand
businesses.
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3
Policy
Technology
Globalisation
On the policy front, businesses would prefer small changes over wholesale shifts in
trade policy. Indeed, in both Australia and New Zealand, businesses thought that no
change to existing trade policy settings would be the best for their business.
Businesses see consolidating existing trade agreements as the best route for
government. Our survey found that 64% of Australian and 72% of New Zealand
businesses thought that free trade agreements had no impact on their business, had
a neutral impact with the positives and negatives balancing each other out, or they
were not sure of the impact.5 And when we asked businesses about what actions
government should take, more preferred faster speed at customs than further free
trade agreements.
Overseas, a rising tide of economic nationalism has begun influencing political
choices that impact on trade policy – from the US election to Brexit. Yet further trade
liberalisation in Asia could be a powerful counterbalance to these international
sentiments for global trade.
Historically, trade has been driven by strong demand for primary goods and
commodities. In 2015, primary goods (in particular mining commodities and to a
lesser extent agricultural goods) accounted for over 80%6 of Australian exports;
in New Zealand, meat and dairy products accounted for nearly 40% of total
merchandise exports by value.7 But advances in technology mean that our export
composition will begin to shift to more closely mirror our economic composition. We
forecast that Australian service exports will grow by an average 5.8% per annum to
2026 and reach nearly a quarter of total exports within five years.8 Meanwhile New
Zealand’s service exports are predicted to grow an average 1.76% per annum over the
next five years to almost a third of total exports.9
Online platforms will play an increasingly important role in facilitating trade. Our
survey found that three in every four businesses think that technology will have
a positive impact on their ability to achieve their business goals over the next five
years. Further, nearly one-fifth thought that online platforms would be their main
means of reaching consumers in the next five years – almost double the proportion
who are using them today.10
4
The Future of Trade: Are we ready to embrace the opportunities?
But the impact of emerging technologies on trade could be mixed. On one hand,
driverless cars could decrease transport costs by up to 40% as well as decreasing
transport time. This would be a boon to exporters in Australia and New Zealand, who
could transport goods to a port or airport (and thus to a final customer) at lower cost.11
3D printing could make local manufacturing for some products a viable proposition.
But it could impact on our demand for imports, as manufactured goods currently
represent 95% and 80% of total merchandise imports to Australia and
New Zealand respectively.12
Strongly growing Asian economies provide a key impetus for Australian and New
Zealand trade to also grow. China is already Australia’s largest export market and our
forecasts suggest it will continue to be so. Further, by 2025, we predict that China will
have overtaken Australia to become New Zealand’s largest export market as well.
The rapid economic growth seen in other developing economies and increasing
access to more markets represents an opportunity for trade to flourish. Developing
economies accounted for 42% of world merchandise trade in 2015.13 This share is set
to continue to rise and represents an important opportunity that businesses can’t
afford to miss. Closer integration and connectivity within Asian economies are likely to
be a key spur to trade growth.
IMPORTANCE OF TRADE
It’s clear that trade has been an important contributor to our economic prosperity, and it has the
potential to keep growing. Trade provides a growing source of income for Australian and New Zealand
businesses, and will be a factor in the broader economic growth over the next five years. Indeed, we
forecast that our exports will increase by AUD80 billion14 and NZD16 billion15 respectively between
2016 and 2021. This is despite the increasing protectionist rhetoric overseas in key trading partners.
But government facilitation – like reducing barriers to trade and improving speed at customs – will
help businesses to more fully access the benefits of international trade.
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5
1. Introduction
Every day, we make scores of transactions – whether it is buying a
coffee, online banking or catching a bus. We exchange goods, services
and money with individuals, businesses and even with government.
Trade gives us access to a wider range of goods and services, stimulates
competition and allows us to focus on areas of comparative advantage.
The same is true across borders.
International trade – the focus of
this publication – is an important
feature of our global economy.
Indeed, sales across national
borders (exports) account for
close to 30% of world GDP.16
And, just like domestic
transactions, international trade
has generated economic and
social benefits for Australia and
New Zealand, as both buyers and
sellers. International sales of goods
and services were worth nearly
AUD312 billion17 in Australia and
NZD70 billion18 in New Zealand in
the 2015–16 financial year.
But increasingly, there is a negative
voter sentiment about trade. On
the 200th anniversary of David
Ricardo’s theory of comparative
advantage, votes such as Brexit and
the US election suggest change in
6
The Future of Trade: Are we ready to embrace the opportunities?
popular opinions towards trade, as
individuals and businesses feel that
they are losing out.
Sometimes, a domestic individual
or business who might have sold
a product will be out done by an
overseas competitor. Those who
are displaced from transactions
can lose market share, or need to
transition to other industries.
This process is critical to
economic growth and progress.
Competition spurs innovation,
better products and better prices
for consumers. It also helps us
to allocate scarce resources
more efficiently throughout
our economy. It’s important to
remember that trade is a net
positive for our economy and our
society. But it does create winners
– and losers.
In this context, the future of trade
in Australia and New Zealand will
be determined by the interplay of
three powerful forces – globalisation,
technology and policy. These are detailed
in the next section.
These can be understood in the context
of historical analysis – the rise of Asia,
the evolution of trade policy globally, and
the revolutionary impact of the internet
on our ability to transact and interact
across national borders.
But although historical analysis can help
us to understand trends in trade over
time, the future of trade in Australia and
New Zealand will be determined not
just by the past. Business aspirations
and plans for tomorrow will be just as
important – if not more so – than what
is happening today. To understand the
perceptions of businesses on these
key themes, Chartered Accountants
Australia and New Zealand conducted
a survey of over 1,500 Australian and
New Zealand businesses that currently
engage in or plan to engage in trade.
The results of this survey are presented
throughout this document, in tandem
with other evidence. A summary of the
survey methodology is provided below.
SURVEY METHODOLOGY
Chartered Accountants ANZ conducted a survey of Australian and New Zealand businesses,
asking 27 questions to understand the characteristics of trading businesses, how and with
whom they trade currently, and their perceptions of trade in the future. The survey was fielded in
October and November 2016 by Research Now.
Survey respondents were senior staff members of businesses with a presence in Australia or
New Zealand, where an Australian or New Zealand office made decisions about the office or
region. Responses were accepted from staff members representing businesses who either
are currently trading (selling to or buying from overseas) or intend to be trading in the future.
Over 1,500 respondents met these criteria and are included in the results presented in this
publication.
Most of the businesses surveyed were currently trading (either exporting, importing or both), and
around 61% of survey respondents were located in Australia. The businesses represent a range
of industries and sizes.
Currently export
Have plans to
export and import
New Zealand
Australia
14% 9%
39%
Currently export
and import
39%
38
%
61%
Currently
import
future[inc]
7
02
The megatrends
shaping the future
Looking forward, globalisation,
technology and policy will be key
factors in determining the future
rate of growth in international trade.
8
The Future of Trade
future[inc]
9
Technology, policy and changing consumer preferences have all contributed
to eroding geographical barriers over the last two centuries, combining with
globalisation to encourage the growth of international trade. The businesses we
surveyed see these trends as the main drivers of change, as seen in Chart 1. This
chapter explores how these megatrends may play out in Australia and
New Zealand in the future.
30%
Current exporters
Current importers
% of business
25%
20%
15%
10%
5%
Changing
industrial
composition
Environmental
change
Ageing
population
Availability of
cheaper cost
inputs
Globalisation
Government
policy and
regulations
Changing
consumer
demands
Technology and
digital trends
0%
Chart 1: Top ranked drivers of change for businesses19
Globalisation
Whether it is popular culture, news,
tourism or trade, it is clear that we are
much more interconnected than ever
before. This connectivity has boosted
world trade and vice versa. Chart 2
shows that world trade has increased
steadily since the 1960s – a result
of greater international economic
cooperation and integration.20
Trade liberalisation has brought
significant economic benefits. Wacziarg
10
and Welch (2008) found that countries
which had liberalised their trade regimes
between 1950 and 1998 experienced
average annual growth rates that were
about 1.5 percentage points higher than
before liberalisation.21 And OECD
analysis found that a 10% increase in
trade (including both exports and imports)
as a proportion of GDP is associated
with a 4% increase in output per
working-age person.22
The Future of Trade: Are we ready to embrace the opportunities?
35%
30%
25%
20%
15%
10%
5%
0%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Chart 2: Exports as a percentage of global GDP23
There still is substantial potential for
more benefits. Modelling by the Centre
for International Economics found that
removing some barriers to service
exports would provide an annual GDP
boost of around AUD116 billion for
developed countries and AUD238 billion
for developing countries to 2025.24
Beyond the value of trade, globalisation
is changing who trades. It has enabled
corporate structures like transnational
corporations to thrive; and with
production processes located across
the globe, extensive international trade
(often within the one corporate structure)
can be required just to produce a final
product. For example, parts for a Boeing
787 are made in ten different countries,
including the wings constructed in
Japan, the landing gear assembled in
the UK and the engine built in the US.25
trade. But this is starting to change.
Developing economies accounted for 42%
of world merchandise trade in 2015; a 9
percentage point increase since 2005.26
Asia will continue to be a strong spur for
trade with policy reforms to address and
encourage investment creating a firm
base to encourage future growth.
This shift is likely to intensify in coming
years, as Asian economies continue to
grow and mature. We predict that China
will continue to be the biggest trading
partner for Australia through to 2025,
and India will jump to third spot by 2025
(as seen in Chart 3). Indeed, China is also
expected to overtake Australia as the
top export destination for New Zealand
by 2025 (as seen in Chart 4). This is
reflected globally, with China overtaking
the United States as the largest trader of
goods in the world in 2013.27
1980
Historically, developed economies have
been the major players in international
future[inc]
11
Chart 3: Australia’s top five export markets28
Rank
1995
2005
2015
2025
1
Japan
Japan
China
China
2
United States
China
Japan
Japan
3
Korea
United States
United States
India
4
New Zealand
Korea
Korea
United States
5
Singapore
New Zealand
India
Korea
Chart 4: New Zealand’s top five export markets29
Rank
1995
2005
2015
2025
1
Australia
Australia
Australia
China
2
Japan
United States
China
Australia
3
United States
Japan
United States
United States
4
Korea
China
Japan
Japan
5
China
Korea
Korea
Korea
This trend, combined with economic
growth in the Asia-Pacific region, as well
as Australia and New Zealand’s proximity
to Asia, has contributed to a shift in the
composition of our trading partners.
Since 1995, Australia and New Zealand
have increasingly traded in the Asia-
Pacific region. Even now, survey results
show that 40% and 50% of Australian and
New Zealand businesses respectively had
suppliers located in Asia, and over 50%
and 60% respectively had customers in
the region.30
Technology
The impact of digital technology is
underpinned by its ability to remove
barriers – whether they be to innovation,
access, choice or efficiency. From
products and services to information
and communication, we now have
unprecedented access to a broader range
of products and services, and this access
is becoming more convenient, faster
and cheaper.
12
New Zealanders spent an estimated
NZD743 each online in the 12 months to
April 2016,31 while Australians spent an
estimated AUD856 each online in the 12
months to September 2016.32 This spend
is underpinned by increased access
and convenience.
Direct sales are only one part of how
digital tools are changing the way
organisations engage with both current
and potential future consumers.
The Future of Trade: Are we ready to embrace the opportunities?
Volume of data downloaded monthly (Tb)
800,000
Australia
New Zealand
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
June 2011
June 2012
June 2013
June 2014
June 2015
June 2016
Chart 5: Growth in demand for data33
700
Number of businesses
600
500
400
300
200
100
Cryptocurrenies
Augmented/
virtual reality
Artificial
intelligence
3D printing
Process
automation
technologies
Faster modes of
transportation
Internet of
things
Mobile
payments
Cloud
Social media
0
Chart 6: Technologies with the largest impact on business objectives34
future[inc]
13
Around 90% of marketers have reported
that social media is important to their
business for engaging with customers.35
Engagement via social media is also the
preferred method for almost one-third
of customers.36
growth in the digital economy, which is
expected to be worth nearly AUD140
billion by 2020 in Australia alone.37
These technologies will disrupt markets
and businesses globally. They will
support new business models, some of
which may support trade through the
import and export of new products,
while other technology may make
some elements of trade obsolete or
less significant.
Other emerging technologies may also
have a significant impact on trade. 3D
printing, robotics, drones and driverless
cars will all contribute to significant
Policy
After the devastating impact of World
War II, the General Agreement on Tariffs
and Trade (GATT) was signed in 1947 as
a way of promoting international peace.
MID 1970S
WORLD ECONOMY
– FALLING
GREW QUICKLY
COMMODITY
BETWEEN 1950 PRICES AND RISING
AND 1973
INTEREST RATES
1944
Bretton Woods
1 st Conference
– establishes
post-war financial
arrangements
(including
International
Monetary Fund &
World Bank)
1945
World War
II ends –
begins trend
towards
international
economic
cooperation
Late 1940s
Emergence of Cold
War – puts vision
of new global
economic order
on hold
1971
End of Bretton
Woods system
of fixed
exchange
rates, transition
to floating
exchange rate
INCREASE IN
ECONOMIC
CONTROLS AND
RESTRICTIONS
1989
Fall of the Berlin
Wall – restored
vision for global
economic
cooperation
1947
GATT – 23
signatory
members
1948
International Trade
Organisation
formed
1991
Collapse of the
Soviet Union
Figure 1: The evolution of international trade from 1944 to 201638
14
1994
Creation of the
World Trade
Organisation
and
implementation
of the North
American
Free Trade
Agreement
(NAFTA)
The Future of Trade: Are we ready to embrace the opportunities?
1993
European Union
formed
2007–08
Global
Financial
Crisis
2016
Brexit,
Trump as
presidentelect
The GATT represented the beginning of
a global policy focus on enabling trade
through multilateral agreement, with
signatory countries espousing:
…that their relations in the field of
trade and economic endeavour should
be conducted with a view to raising
standards of living… contributing
to these objectives by entering into
reciprocal and mutually advantageous
arrangements directed to the
substantial reduction of tariffs and
other barriers to trade…39
With an ever-increasing number of
countries involved and ever-widening
scope, it has become increasingly
difficult and time consuming to agree
on multilateral trade policies. Further,
as progress was made on reducing
tariffs through forums such as the World
Trade Organisation (WTO), “behind-theborder” barriers, which are often more
effectively negotiated bilaterally, have
received increasing focus. As a result,
the 1990s and 2000s saw a proliferation
of bilateral agreements and regional
trade agreements, as seen in Chart 7.
As opposed to multilateral agreements
that sought to include as many countries
as possible, both bilateral and regional
agreements seek to arrange preferential
treatment between trading partners,
without the requirement to extend these
preferences under most favoured nation
(MFN)i clauses. Today, there are more
than 250 free trade agreements in
force globally.40
300
Number of FTAs in force
250
200
150
100
50
2012
2015
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
0
future[inc]
15
Chart 7: Number of free trade agreements (FTAs) in force worldwide41
i
MFN clauses ensure a country’s trading partner will not be treated less advantageously than any
other trading partner with MFN status by the promising country. Members of the WTO accord MFN
status to each other.
However, the proliferation of free trade
agreements needs to be viewed in a
broader policy context. In particular,
while many accept the benefits
of specialisation which arise from
trade, there are concerns about the
distributional impacts of trade. While the
pie is generally agreed to be bigger, how
well is it being shared?
In a more economically open world,
it can be more difficult for high wage
countries to compete in some product
manufacturing, because developing
countries with lower wages can often
produce goods at a lower cost. This has
led to increasing concern about the impact
of trade on employment, job security,
wages and income inequality – both within
and between countries.
The tide of economic nationalism is rising.
More free trade agreements are being
pursued by Australian and New Zealand
governments. Yet in the last 12 months,
we have seen strong popular reactions
against some aspects of trade – as seen
in the votes for Brexit and President
Trump. These results were not expected,
at least by mainstream media. This shows
that concerns about inequality and job
security are real, and there are aspects
of trade which are now at the forefront
of the policy agenda (rather than just
occurring in the background as has
previously been the case). Over the next
couple of years we will see the extent to
which these concerns are reflected and
implemented in trade policy changes.
With rising concerns about the costs to
the domestic economy of activity which
has been displaced through more open
trade regimes, polls suggest increasing
reservations from the public about the
benefits of trade. In 2015, nearly a third
of Australians viewed the free trade
agreements with Japan, Korea and China
as bad for the economy.42 Although not
directly comparable, this is a significant
change to a decade ago when only
one in five believed that a free trade
agreement with China would be bad for
the Australian economy.43
This wariness about the distributional
concerns over trade has led to a
conflicting rise in trade-facilitating
measures, despite the number of traderestrictive measures in force increasing
over the last six years.44
Chart 8: Opinions on free trade agreements45,46
16
Positive
Negative
Neutral
2005
51%
20%
29%
2015
48%
30%
22%
The Future of Trade: Are we ready to embrace the opportunities?
SPOTLIGHT ON AUSTRALIAN BEEF AND NEW ZEALAND DAIRY
INDUSTRIES
Various factors have come together to intensify trade. This can be seen in the
Australian beef and New Zealand dairy industries. In 2015, Australia was the world’s
largest beef exporter – exporting 1.29 million tonnes.47 Meanwhile, dairy is the
highest valued export for New Zealand at NZD11 billion in 2015.48
A number of key drivers contribute to the success of these exporting industries.
Consumer preferences – The rapid increase in incomes in Asia, especially from China,
has led to increased demand for high quality dairy and beef products.
Free trade agreements – A number of recent agreements have improved market
access for Australian and New Zealand exporters. Australian agreements with
ASEAN in 2010, Japan in 2014 and China in 2015 have led to reductions in beef
tariffs for those countries. New Zealand dairy exporters have also benefited from
agreements with China in 2008 and ASEAN in 2010.
Technology – New vacuum seal packaging can be used to extend product shelf life
for Australian beef exports being shipped to Asia and prevent freezer burn that
occurred with previous packaging.49 Meanwhile, recent refrigeration developments
have created the potential for New Zealand to export fresh milk as opposed to
powdered milk.50
Intermediary shifts – Dairy products from New Zealand’s Fonterra use e-commerce
platforms to connect directly with customers in Asia.51 In late 2015, Bindaree Beef
Group used online platform JD.com to be the first to offer Chinese customers
chilled, retail-ready Australian beef directly online.52
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03
To trade or not
to trade?
A rising tide of economic nationalism
overseas has begun influencing
political choices that impact on trade
policy – from the US election to Brexit.
Yet further trade liberalisation in Asia
could be a powerful counterbalance
to these international sentiments for
global trade.
18
The Future of Trade
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19
Australia and New Zealand have sought to increasingly engage in trade through
WTO membership, with ten and eight trade agreements in force respectively, as
well as membership in other trade-promoting and regional agreements. The bulk of
these agreements are with countries located in the Asia-Pacific region (as pictured in
Figure 2 and Figure 3).
USA
2005
Chile
2009
China Thailand Singapore
2015
2005
2003
Malaysia
2013
Korea
2014
Japan
2014
Figure 2: Australian trade agreements in force53
20 The Future of Trade: Are we ready to embrace the opportunities?
ASEAN-Aus-NZ
2010
New Zealand
1983
China Thailand Taiwan Hong Kong Singapore Malaysia Transpacific Strategic ASEAN-Aus-NZ Australia
2008 2005
2013
2005
2001
2009 Economic Partnership
2010
1983
2006
Figure 3: New Zealand trade agreements in force54
These trade agreements mean that
many of the traditional barriers to
trade – like tariffs and subsidies – have
already been removed or substantively
reduced. This has led to Australia and
New Zealand having low average tariff
rates over all goods of 1.83% and
1.38% respectively.55
and behind-the-border trade barriers.
Various multilateral organisations
and agreements, such as the Trade
Facilitation Agreement, World Customs
Organisation, and the currently under
negotiation Trade in Services Agreement
have also helped facilitate reductions in
non-tariff barriers.
As the political environment and the
nature of trade have changed, trade
agreements have also evolved. They
have gone from multilateral to bilateral
and regional, and their focus has moved
from merchandise and tariffs to services
But other barriers – like lack of
internationally recognised accreditation,
intellectual property protection and
domestic regulations – remain. These
behind-the-border barriers to trade can
be significant but hard to address.
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SPOTLIGHT ON THE BENEFITS OF BILATERAL AGREEMENTS
Various groups, including the Productivity Commission, have called into question
the benefits of the Australian Government’s focus on pursuing bilateral trade
agreements. One particular concern is that some sensitive industries may be
omitted from consideration during trade agreement negotiations to ensure an
agreement is reached.56
The Commission has stated that the benefits promoted from previously proposed
trade agreements were sometimes “exaggerated” before negotiations were
concluded. In addition, complex rules of origin in Australia’s preferential trade
agreements are likely to impede the ability of businesses to use the agreements.57
The Productivity Commission has argued that multilateral negotiations (such as the
existing Doha Negotiations facilitated by the WTO) could create greater benefits,
and that many of the gains from trade agreements can be achieved through
unilateral action.
For example, estimates suggest the
benefit from removing barriers in the
Trade Facilitation Agreement could
reduce trade costs by between 12.5%
and 17.5%.58 The New Zealand Institute of
Economic Research found that non-tariff
measures impose a cost of USD5.9 billion
on New Zealand exporters for trading in
the APEC region alone.59
Trade agreements are seeking to
address these issues, and typically
include sections and various side-letters
promoting trade in services, and the
encouragement of mutual recognition
arrangements for professional services.
For example:
• the China-Australia Free Trade
Agreement includes reducing barriers
to market access in services and longerstay business visas.60
• the Singapore-New Zealand Free Trade
Agreement includes terms which reduce
business costs and red tape associated
with customs processing, competition
law, and technical and quarantine
standards.61
Until recently, governments have sought
further reductions in barriers to trade,
largely with the popular support of
their communities. For example,
the Trans-Pacific Partnership (TPP)
was aimed at reducing barriers to
international trade and investment, with
the bulk of the agreement focused on
reducing non-tariff barriers, such as
intellectual property enforcement, as
well as consumer protection
and privacy.62
22 The Future of Trade: Are we ready to embrace the opportunities?
But there has been a change in popular
opinion – and policy. Increasingly,
governments and individuals are
questioning the benefits of trade (and
trade agreements), and noting the costs.
In the USA and the UK, this is starting to
be reflected to some extent in policy. One
of President Trump’s first actions in office
was to sign an executive order removing
the USA from the TPP.
that free trade agreements have had an
impact on their business, most thought
that the impact was positive. However,
of those surveyed, 64% of Australian and
72% of New Zealand businesses thought
that free trade agreements had no impact
on their business, a neutral impact with
the positives and negatives balancing
each other out, or they were not sure of
the impact.63
But obviously, trading businesses think
differently. Of the businesses who think
PRESIDENT TRUMP’S STATEMENTS ON TRADE
The recent election in the USA marked a noticeable shift in tone away from the
benefits of trade in both major party candidates’ remarks. President Donald
Trump stated during the campaign:
“Our politicians have aggressively pursued a policy of globalization, moving our
jobs, our wealth and our factories to Mexico and overseas. Globalization has
made the financial elite, who donate to politicians, very, very wealthy.”64
President Trump’s policy platform included significant changes to US trade policy,
including promises to:
• withdraw from the Trans-Pacific Partnership (enacted on day one in office)65
• tell NAFTA partners that the USA intends to immediately renegotiate the terms
of that agreement to get a better deal for its workers, and if they don’t agree to a
renegotiation, the United States will submit notice that it intends to withdraw from
the deal66
• instruct the Treasury Secretary to label China a currency manipulator.67
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64%
Australia
72%
New Zealand
0%
Negative
20%
40%
Neutral (no impact, neutral impact, not sure)
60%
80%
100%
Positive
Chart 8: Perceived impact of trade agreements 68
This might be due, in part, to a lack of
understanding about the free trade
agreements in force. A separate
survey of 227 Australian businesses
found that two-thirds of businesses
did not understand or use free trade
agreements.69
The declining enthusiasm for trade
agreements is also evident in New
Zealand, where support for free trade
agreements with Asia fell 5% last year.70
However, New Zealand has higher
overall levels of support for free trade
agreements, with 79% of New Zealanders
in favour.71
Looking forward
There has been increasing concern
about sharing the benefits of trade.
A greater focus on inequality in both
developed and developing countries
has called into question aspects of
24
how gains from trade are shared, and
the structural employment impacts
of trade agreements have attracted
greater attention, particularly in
times of economic hardship. Indeed,
even the WTO recognises that trade
can contribute to increasing rates of
unemployment in selected areas and
increasing income inequality.72
Evidence suggests that there is an
increasing use of non-tariff barriers
that restrict the capacity for trade. Of
the 2,835 trade restrictive measures
recorded for WTO members since 2008,
only one-quarter had been removed by
mid-May 2016.73 This trend towards less
liberal trade policy is likely to continue
in key trading partners over the coming
years.
Businesses and individuals are
increasingly uncertain about the
benefits of trade agreements. This
The Future of Trade: Are we ready to embrace the opportunities?
can be seen through survey results
shown in Chart 9, where over twice the
number of businesses currently trading
preferred the current policy settings
compared to those wanting further
free trade agreements. The President
of the European Council reflected this
sentiment when he stated that the EU
would be unlikely to initiate any further
trade agreements unless the European
people were convinced of the benefits of
these agreements.74
In considering future trade agreements,
it is important for governments to weigh
the time and expense associated with
negotiating free trade agreements
against the proportion of businesses
and individuals who will benefit from the
agreement, as well as the value of these
benefits. Post-Brexit there is potential
for both Australia and New Zealand to
negotiate a free trade agreement with
the UK.
No change to current settings
Faster speeds at customs for goods
Subsidise local industries
Pursue more free trade agreements
Introduce tariffs
Greater movement of foreign workers
Government-led trade missions
Greater control at customs for goods
Amend domestic regulations
Remove existing trade agreements
Restrict movement of foreign workers
0%
2%
4%
6%
8%
10%
12%
14%
16%
18% 20%
Chart 9 Desired policy by businesses 75
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SPOTLIGHT ON BREXIT
The decision in June 2016 by the British public to leave the European Union will
affect the UK’s trade relations, including trade with Australia and New Zealand.
Two-way trade between the UK and Australia was worth AUD27.0 billion in 2015–16
and is Australia’s third largest service export destination.76 Meanwhile, the value
of trade between New Zealand and the UK (including imports and exports) was
NZD2.5 billion in 2015–16.77
Brexit provides an opportunity for both countries to negotiate a free trade deal with
the UK once formal notification for the withdrawal from the EU is provided. Bilateral
negotiations are expected to be more attainable than negotiating a regional trade
agreement with the entire EU bloc.78
Also, the possibility of a free trade agreement not being reached between the UK
and the EU means there could be an increased demand for Australian and New
Zealand exports.
However, Brexit has created and will continue to create uncertainty in the UK
economy as conditions on trade, immigration and investment are negotiated.
As trade agreements stall, countries
continue to pursue other methods of
trade facilitation that can be achieved
outside of negotiated trade agreements,
hence avoiding some of the political
difficulties of those agreements. For
example, authorised economic operators
(AEO) programmesii are being used by
countries to reduce non-tariff barriers
to trade at the border, while mutual
recognition agreements for professional
accreditation are being pursued by
industry bodies, benefiting from the
support of governments and other
regional bodies.
As an example of the benefits available
from such initiatives, in 2013, almost
a third of all New Zealand exports
originated from authorised exporters
under AEO programmes. As a
consequence, New Zealand exporters
were three and a half times less likely to
see their goods held up for examination
at a port in the US than Australian
counterparts, despite Australia having a
free trade agreement with the US.79
Australia started its own AEO
programme, Australian Trusted Traders,
in July 2016. By 2020, Department
of Immigration and Border Protection
modelling predicts there will be over
1,000 businesses participating in the
programme, representing 30% of
Australian trade by volume and 50% by
value.80
Developing countries are also likely to
play an increasing role in international
trade as incomes rise, leading to
higher demand for products and also
developing infrastructure necessary to
engage in trade.
iiAn AEO programme is a partnership between government and industry in which the accredited
entities receive faster processing time at customs in exchange for accredited transparency in the
supply chain of the product.
26 The Future of Trade: Are we ready to embrace the opportunities?
QUESTIONS FOR POLICY MAKERS
1. How can you support and encourage multilateral agreements, including those
which are currently under negotiation, such as the Regional Comprehensive
Economic Partnership (RCEP)?
2. How will you enforce consumer protection, intellectual property and other
standards in a more globalised economy?
3. Which industries are most likely to be outcompeted by international
businesses? How could transitions to other industries be managed?
QUESTIONS FOR BUSINESSES
1. How will recent shifts in trade policy in the UK and USA impact on your
business?
2. Where will your most important customers and suppliers be geographically
located in ten years’ time? What steps will you take to access new suppliers
and/or customers?
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04
The role of
industry in trade
The trend towards trading in services
will continue to intensify, facilitated
by new technologies and delivery
methods.
28 The Future of Trade
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29
The value of trade in most countries has increased over time, with exports and
imports representing an increasing proportion of world GDP.81 Similarly, international
transactions have been increasingly important to Australia and New Zealand’s
economies, as shown in Chart 10.
40%
Australia
New Zealand
35%
30%
25%
20%
15%
10%
5%
0%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Chart 10: Exports as a share of GDP, 1960–201582
This is the result of a number of factors
– like increasing wealth, improved
infrastructure and decreasing trade
barriers in many countries. But the
industrial and economic composition of a
country can also be an important factor
in shaping the importance of trade to an
economy. It can impact on the demand
for a country’s goods and services (as
well as the country’s demand for foreign
goods and services) in the global market.
In trade, both Australia and New Zealand
have benefited from increasing global
demand for primary products – mining
commodities, dairy and protein. Much
of this growth has come from China – a
result of the need for fuel to support
its rapid industrialisation, as well as
premium quality food to meet the
demands of a growing middle class.83
Both Australia and New Zealand also
have relatively high wages. This has
impacted on our ability to compete in
product manufacturing where labour
costs tend to be a high proportion of
overall costs – like textiles, electronics
and cars. With domestic demand for
these products increasing, the result
30 The Future of Trade: Are we ready to embrace the opportunities?
Australia’s total exports: A$312.3 billion
Services
Goods
22%
78%
Australia’s GDP composition
Services
Goods
New Zealand’s total exports: NZ$70.9 billion
Services
30%
70%
New Zealand’s GDP composition
Services
Goods
20%
23%
77%
Goods
80%
Chart 11: Goods and services share of exports and GDP for Australia and
New Zealand, by value, for year ended June 201684
has been a growing rate of imports
of manufactured items as a means of
satisfying consumer preferences for
more products at lower prices.
As a result of the increased
competition in these areas and shifting
demand patterns, both Australia
and New Zealand have diversified,
with knowledge-intensive services
constituting an increasing share of
our economies.
But this hasn’t been fully reflected in
our trade composition to date. Service
exports currently represent only 22%
and 30% of Australian and New Zealand
exports respectively.85 This may be due
to a number of factors, such as behindthe-border issues, which can restrict
trade in services. As an example, mutual
recognition of international qualifications
remains a barrier that can prohibit the
movement of some professionals, such
as doctors and lawyers.86
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SPOTLIGHT ON BORN GLOBAL
Technology has also developed the possibility for businesses to be born global,
exporting from their inception. These firms are different from domestic small firms
and conventional international firms, in that born global firms selectively invest in
projects that are designed to use resources and produce goods and services on a
large scale in multiple countries. For example, Orca NZ, Skype and Cochlear are all
born global companies.
The number of born global companies is growing, and studies show that firms
that originate in industries with higher levels of international competition and high
levels of global integration are more likely to be born global.87 This is true for the
technology sector, where digital technology has streamlined geographical markets
and enabled the development of an international market. As a result, more than
80% of technology start-ups worldwide are born global.88
Another factor is that services, with the
exception of tourism, were historically
seen as difficult to provide overseas.
But this is changing. Innovative digital
technology is helping to break down the
geographical barriers to service delivery.
Interactive lectures can be delivered
online in real-time, and virtual reality can
make classes come to life. Organisations
can use a peer-to-peer marketplace
to find a designer to create a logo or
infographic. Back-office functions can be
done remotely and integrate seamlessly
into existing systems. Assisted by the
proliferation of high speed internet, there
has also been strong growth in “born
global” businesses. It is now possible to
trade a whole range of business services
across borders.
This is supported by our survey results
– shown in Chart 12 – as businesses see
technology and digital trends as one of
the main drivers of change over the next
five years, especially for service-oriented
sectors such as finance and insurance.
For open economies like Australia and
New Zealand, managing a competitive
services export sector is important
for supporting our terms of trade and
reducing the influence of commodity
prices and currency volatility on our
income from trade.
The Productivity Commission noted
that rising incomes in Asia, alongside
the average annual 12% growth in the
value of service exports from Australia
to China over the ten years to 2014,
represent an increasing source of
demand that will continue to drive
Australian service exports.89
New Zealand’s shifting industrial
structure is starting to be mirrored in
trade statistics. As the services sector
has grown, so too have service exports.
In 1951 service exports accounted for just
5% of New Zealand’s total exports; by
2016, they had grown to represent almost
a third of exports.90
32 The Future of Trade: Are we ready to embrace the opportunities?
Information, media and telecommunications
Professional, scientific and technical services
Finance and insurance
Electricity, gas and water supply
Education and training
Health care and social assistance
Transport, postal and warehousing
Construction
Retail trade
Rental, hiring and real estate services
Public administration and safety
Manufacturing
Administration and support services
Mining
Wholesale trade
Agriculture, forestry, fishing and hunting
Accommodation, cafes and restaurants
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Technology and digital trends
Government policy and regulation
Changing consumer preferences
Other
Chart 12: Top ranked drivers of change over the next five years by industry91
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SPOTLIGHT ON BORDERLESS LEARNERS AND THEIR ECONOMIC
IMPACT
The market for international education has grown dramatically in recent years,
spurred by demand from an expanding middle class, both in Asia and globally.
Australia and New Zealand are well-placed to capitalise on these opportunities.
Our well-developed education systems, proximity to Asia, multicultural societies,
price competitiveness with key competitors and lifestyle, all make Australia and New
Zealand sought-after providers of international education.
Indeed, international education is Australia’s largest service export and fourthlargest export overall, generating AUD18.8 billion export revenue in 2014–15.92
International education exports are also important to New Zealand, contributing
NZD4.2 billion to the economy in 2015–16.93
Technology has opened up a whole new range of delivery options which do not
require any movement of students or teachers. Online-only courses, partnerships
and massive open online courses (MOOCs) are reshaping how education and
training services are designed and delivered. These new delivery modes may entice
more students to enrol in domestically provided MOOCs, but as the students
remain overseas this limits the economic impact of this key export on the
domestic economy.
Education is likely to continue to be Australia’s largest service export, with the
sector’s contribution to export earnings projected to double to in excess of AUD33
billion by 2025.94 While Australia’s key onshore markets (China and India) will
continue to be important over the next decade, there are also great opportunities
from the borderless market that will require the industry to be diversified and
innovative to capture the opportunities.
Looking forward
Services will continue to dominate the
Australian and New Zealand economies.
Our forecasts suggest the importance
of services will persist. Around four in
five Australians are employed in services
currently, and this will grow to 2025.95
This trend towards trading in services will
continue to intensify, facilitated by new
technologies and delivery methods. We
forecast that Australian service exports
will grow by an average 5.8% per annum
to 2026, reaching nearly a quarter of total
exports within five years.96 Meanwhile,
34
New Zealand service exports are also
expected to see solid growth. This will
bring new opportunities for businesses
and greater access for local consumers.
Continued growth in demand for
services such as education and tourism,
will create opportunities for Australia
and New Zealand. However, there are
also opportunities in other industries
such as professional services, and
legal and intellectual property-related
services. These are not only important
in themselves but also for supporting
growth in the export of both goods
and services.
The Future of Trade: Are we ready to embrace the opportunities?
However, this is not to diminish the
continued importance of trade in primary
goods. As growth in Asia continues there
will be continued high demand for some
of our core exports. Imports will also
continue to dominate the provision of
many manufactured goods in Australia
and New Zealand, while offshoring will
increasingly be used as a method to gain
access to skilled labour overseas.
SPOTLIGHT ON OFFSHORING
Offshoring has become increasingly important to Australian and New Zealand
service sectors. In 2015, Australia imported over AUD4 billion in business services,
while New Zealand imported over NZD4 billion.97
The 2015 What is the Future for Offshoring? publication found that 50% of
businesses thought that developments in big data, hosted virtual desktops and
cloud computing would increase outsourcing in the future.98
Another factor increasing outsourcing is the burgeoning middle class in Asia
(expected to reach 3.2 billion people by 2030) 99 with increased rates of higher
educational attainment. This means that the scale and complexity of tasks that can
be outsourced has increased.
The pool of skilled workers globally is expanding and it is increasingly easy for
business to access this pool as offshoring becomes more common. The potential
for adding value through offshoring is large for both Australian and New Zealand
businesses in knowledge-intensive industries. It also provides an opportunity for
businesses to shift operations where there are comparative advantages.
QUESTIONS FOR POLICY MAKERS
1. How can you better work with business to understand the barriers to trade
(such as customs processes) in each industry and with each trading partner?
2. What barriers to service export growth in key industries still exist (such as visas
for education in Australia and tourism in New Zealand)? Should these be reexamined?
QUESTIONS FOR BUSINESSES
1. What will be the level of global competition in your industry and where will it
come from? How will you navigate through this?
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05
How will
technology
change the
future of trade?
The impact of emerging technologies
on trade could be mixed. Driverless
cars could decrease transport costs
for exporters where as 3D printing
could make local manufacturing a
viable option for some products.
36 The Future of Trade
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37
Technology is now fully embedded in the fabric of business strategy and operations.
It’s no longer just a tool but a critical part of business infrastructure. Harnessing
this potential can help businesses become more efficient and competitive. A clear
majority of the businesses surveyed were optimistic about how technologies would
assist in reaching their business goals.
Neutral/Not sure
22%
Negative
6%
Positive
72%
Chart 13: Impact of technological change on businesses’ ability to meet their goals100
Digital technology has significantly
changed what gets traded, how trade
occurs and the direction of trade. Trade
has already been revolutionised by the
internet; for example, nearly 20% in
Australia101 and 45% in New Zealand 102
of online spending is directed to an
international retailer.
And globally, more is yet to come, with
new technologies being introduced and
adopted. For businesses in Australia and
New Zealand, these technologies could
be transformative. They can create more
efficient production processes, enable
businesses to reach new customers, or
reduce the tyranny (and cost) of distance.
Beyond helping businesses to be more
productive, these disruptive technologies
could shift the composition of trade, by
changing what it takes for a business to
be competitive.
38 The Future of Trade: Are we ready to embrace the opportunities?
ALL BUSINESSES ARE DIGITAL BUSINESSES
The adoption and potential of new technologies in business is not limited to
white-collar workers or start-ups.
Deloitte Access Economics’ 2015 report, The Connected Continent II, found that
the digital economy is changing from a standalone industry to being embedded
in the core operations of businesses across the economy – from traditional areas
such as retail and manufacturing, to services such as banking and business
services.103
And having digital technology embedded in the fabric of the business model
makes businesses more likely to trade. For example, digitally advanced small and
medium sized businesses are seven times more likely to be exporting compared
to those that rely on traditional means of marketing, and product and service
distribution.
3D printing has developed significantly
since its earliest applications in the
1980s.104 Today, it allows designers,
architects, manufacturers and retailers
to produce increasingly complex objects
on demand. And the materials that
can be printed are expanding – from
traditional plastics to metals, porcelain
and new thermoplastic composites that
contain carbon nanotubes and fibres.105
3D printing helps reduce the need for
labour – and thus costs – in producing
manufactured goods such as cochlear
implants (see box below). Instead
of requiring a plant, expensive capital
equipment and a production line, some
goods will be able to be produced in
an office or home, with nothing but
a computer, printer and the
printing materials.
CASE STUDY – COCHLEAR IMPLANT 3D PRINTING
The medical industry has been using 3D printing to help millions of people
worldwide to regain their hearing. Unwanted inflammatory side-effects
are associated with implanting cochlear devices produced using traditional
manufacturing techniques. Researchers have used 3D printing technology to
reduce these side effects. 3D printing enables the production of a polymer
scaffold, mixed with anti-inflammatory medication that is able to be implanted
along with the cochlear implant to treat the initial swelling. The scaffold then
gradually breaks down in the body.106
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SPOTLIGHT ON DRIVERLESS TRUCKS
The first driverless trucks are already being used by Rio Tinto in the Pilbara to move
iron ore. These trucks were imported from Japanese multinational firm Komatsu,
underscoring the international nature of the industry.
Market commentator Giuliano Sala Tenna explained that “what they are really
looking at is what is going to be required for the next decade to stay profitable.
This is one of the things they need to do in order to stay profitable through the
entire cycle.”107
Self-driving smart trucks completed a trip from Sweden to the Netherlands in
2016.108 Because they can operate 24 hours without the need for rest breaks,
estimates suggest they could reduce costs by up to 40%.109
For high wage economies like Australia
and New Zealand, this could represent
a significant opportunity. By allowing
manufacture of the required inputs
in-house, 3D printing could reduce our
reliance on imports for manufactured
goods, and potentially reduce the
involvement of labour required in the
production process. With a lower local
production cost, this technology may
have significant implications for trade.
On the other hand, some new
technologies can be seen as greater
facilitators of trade. Drones and driverless
cars could provide some efficiencies to
exporters in Australia and New Zealand
by reducing the time needed to deliver
goods to ports and airports – and thus
to final customers. In both Australia
and New Zealand, getting goods to a
port or airport can take days. Improved
transport speed is particularly important
for primary goods, where delays can
impact on quality and freshness.
With car makers globally pumping
billions into research and development,
driverless cars could soon become a
reality. Indeed, Volvo, Toyota and Honda
all plan to unveil fully driverless car
models by 2020.110
Looking forward
This section has highlighted some
“blue sky” technologies coming over
the horizon. Technologies like these
will enable new business models,
reduce transaction costs and open
up access to new global markets. This
offers significant opportunities for
businesses. 3D printing could reshape
the competitiveness of manufacturing in
high wage countries. Technologies such
as these will affect selected industries
and potentially divert current trade flows.
40 The Future of Trade: Are we ready to embrace the opportunities?
SPOTLIGHT ON DIGITISING CUSTOMS
Digital technology has already accelerated trade through the online transfer of
customs documents, and this trend will continue to grow. However, many stages in
the customs process require physical presentation of documents, manual transfers
of data from paper into systems (such as permit applications) and visual matching
of data (like permit numbers), all of which can slow trade.
Australia and New Zealand are seeking to address these barriers. For example,
Australia has introduced a single point of data entry for numerous agencies such as
customs authorities, quarantine authorities and meat producers.111
The increased efficiency from the digital transfer of customs data could provide an
increased incentive to buy and sell overseas. Estimates suggest that decreasing
the mean shipment time from 23 to 20 days increases the probability of any one
product being exported by 0.13%, and that every added day in transit is equivalent
to a tariff of 0.6% to 2.3%.112
There will be new opportunities for
domestic firms to take part in global
production services as technology
allows work to take place across further
distances. For instance, Nighthawk
Radiology Services relies on broadband
technology to employ radiologists in India
and Australia to provide diagnostic
interpretation of CT images taken in
the US.113
But these benefits won’t come
automatically. Businesses will need
to embrace and harness these
technologies in order to more specifically
meet customer needs in a changing
competitive landscape.
QUESTIONS FOR POLICY MAKERS
1. What existing trade processes (such as customs procedures or import
permits) are still manual or paper-based? How can these be automated or
digitised?
2. Should government play a larger role in assisting entrepreneurs to connect
with international markets?
QUESTIONS FOR BUSINESSES
1. What technologies will most significantly affect your ability to compete
internationally for customers and suppliers?
2. Are you able to access overseas suppliers directly at a cheaper cost? What
activities would be more cost effective if offshored or outsourced?
future[inc]
41
06
The changing
intermediary
New technology will shape how and through whom - goods and
services reach their final destinations.
Intermediaries will play an increasing
role in international trade, with
significant growth in the use of
online platforms.
42 The Future of Trade
future[inc]
43
Today, any business or individual can be an exporter or importer. Global shipping and
postal companies – like TNT, DHL and FedEx – mean that an individual or business
can easily and directly transport goods overseas efficiently to customers. Of the
businesses surveyed, more than half delivered goods directly to customers.114
Other
Direct to customer
Online platforms
(such as eBay)
12%
Traditional
intermediaries
5%
24%
59%
Chart 14: Businesses methods of delivery115
But this was not always the case.
Traditionally, international trade required
the involvement of a specific type of
intermediary – a “pure trader”. These
companies were not transporters or
producers of goods – their sole business
activity was buying from and/or selling
to overseas. Local producers would sell
goods to an exporter, who would then
sell on to a foreign importer, before the
goods reached a foreign consumer.
Sometimes the role of importer and
exporter was consolidated – like in the
case of the British East India Company.
And in some economies, intermediaries
are still the dominant means of
exporting. Around 20% of China’s trade
goes through an intermediary.116
44
These pure trader intermediaries play
an important role in supporting global
trade. Establishing an export network
and directly exporting goods can be
associated with high establishment
costs.117 These can be prohibitive for
firms which do not have sufficient
scale.118 Intermediaries can help firms to
overcome these costs, by closing the gap
between buyers and sellers119 through
transport and repackaging.120
But more change is coming. The
dominance of traditional intermediaries
is being eroded. Online marketplaces
for goods and services – like eBay,
Alibaba and Airtasker have become a
feature of international trade. Using new
infrastructure – including high speed
The Future of Trade: Are we ready to embrace the opportunities?
78%
6%
7%
Chart 15: Proportion of businesses selling overseas: ebay.com.au sellers versus
Australian and New Zealand retailers121
internet – they are competing with
traditional intermediaries to facilitate
trade.
These new digital platforms directly
connect buyers and sellers. By facilitating
transactions where sellers arrange the
transport and terms of transactions,
these platforms can support low value,
high volume international trade.
And this facilitation seems to be
encouraging more businesses and
individuals to expand their platforms
and trade internationally. In 2014,
78%122 of retail sellers on ebay.com.au
sold their products directly overseas,
compared to only 6% of Australian retail
businesses123 and 7% of New Zealand
retail businesses.124 That said, Australian
and New Zealand retailers have been
rapidly expanding their online presence
more recently.
Looking forward
Clearly, new technology will continue to
shape how – and through whom – goods
and services reach their final
destinations. This is particularly true
for internationally traded goods, where
intermediaries can play an important
role in helping businesses reach their
target markets.
And exporters see this importance
increasing over time. Of those surveyed,
nearly one-fifth thought that online
platforms would be their main means of
reaching consumers in the next five years
– almost double the proportion who are
using them today, as seen in Chart 16.
While this will not overtake the dominant
method of delivering direct to customer,
the survey results suggest that online
platforms will be a growing trend.
Propensity to use intermediaries
appears to be correlated with business
size: smaller businesses are more likely
to sell directly to customers than larger
businesses. However, more businesses
of all sizes are expected to be reaching
their customers primarily through
intermediaries – whether traditional or
online – in the next five years.
future[inc]
45
200+
100–199
10–99
1–9
no
employees employees employees employees employees
Current
5 years from now
Current
5 years from now
Current
5 years from now
Current
5 years from now
Current
5 years from now
0%
10%
Direct to customer
20%
30%
40%
50%
Traditional intermediaries
60%
70%
80%
90%
100%
Online platforms (such as eBay)
Chart 16: Changing methods of delivery125
This suggests that intermediaries will
play an increasing role in international
trade in coming years. Use of traditional
intermediaries will remain a significant
delivery method, yet the most significant
growth will be in the use of online
platforms. This growth will continue to
challenge the dominance of direct-tocustomer methods of trading.
46 The Future of Trade: Are we ready to embrace the opportunities?
QUESTIONS FOR POLICY MAKERS
1. How will the trade-facilitating infrastructure needs of business change in the
future and is there a role for government? How can these needs best be met?
2. What are the consequences of global value chains and increasing use of
online platforms for taxation revenue?
QUESTIONS FOR BUSINESSES
1. How can you use online platforms to more cost effectively explore the
potential of new markets?
2. If you are selling directly to a business, how can you tap into your customers’
overseas networks and affiliates?
future[inc]
47
07
The ethical
consumer
Whilst traditional considerations,
like price and quality, will continue to
dominate consumer decision making,
businesses will need to be increasingly
mindful of the growing awareness and
value of ethical and environmental
considerations by consumers.
48 The Future of Trade
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49
Individuals, businesses and governments have always considered a range of factors
when deciding what to purchase and from whom. According to the businesses
surveyed, traditional considerations – like price, quality and customer service –
remain key to consumer decision making. For example, more than two-thirds of
businesses think that quality is the key factor that consumers consider when choosing
whether to purchase their products or services.126
Quality
Price
Fit for purpose
Customer service
Availability
Brand
Design
Ethical or environmental standards
Local content
0%
Rank first
10%
20%
30%
Rank second
40%
50%
60%
70%
80%
Rank third
Chart 17: Top ranked drivers of change over the next five years by industry127
But as consumer preferences have
changed, so too have the factors
influencing purchase decisions. Ethics
and environmental concerns can play an
important role in decision making.
Consumers around the world are saying
loud and clear that a brand’s social
purpose is among the factors that
influence purchase decisions.128
– Nielsen
For example, nearly one-quarter of
New Zealanders see climate change as
an important problem facing the world
in the future.129 And this is influencing
purchasing decisions – over one-third
of New Zealanders are likely to boycott
companies that are not environmentally
friendly.130 Similarly, nearly one-third of
Australians are more likely to switch to
green cleaning products and grow fruit
and vegetables to reduce their personal
impact on the global ecosystem.131
50 The Future of Trade: Are we ready to embrace the opportunities?
Asia-Pacific
Latin-America
Middle East/Africa
North America
Europe
Global average
64%
63%
63%
42%
40%
55%
Chart 18: Proportion of consumers willing to pay more for products and services from
companies committed to social responsibility, by world region132
Many consumers claim that they are
willing to pay more for products and
services produced by companies that
are committed to positive social and
environmental impact.133 By region, the
propensity to pay more for a brand known
to be socially responsible is strongest
in Asia-Pacific (64%), suggesting that
ethical considerations may be more
highly valued than in other regions.134
Despite the sentiment, evidence shows
that many consumers choose not to pay
a price premium to purchase ethically in
practice. A study of consumer purchasing
behaviour across 26 stores of a major
United States grocery chain found a
remarkable variability in consumer
willingness to pay higher prices for goods
which are more socially, ethically and/or
environmentally responsible.135
This variation can also be across
different goods. For example, shoppers
are willing to pay a price premium for
Fair Trade certified coffee of 23%136 to
38%.137 In comparison, shoppers are only
willing to pay a low premium for other
Fair Trade labelled goods, such as honey,
tea, wine, sugar, nuts and oilseeds.138
With increasingly diversified supply
chains, however, ethical sourcing can be
hard to implement. Even organisations
who are committed to minimising
environmental and social impacts
may find it difficult to verify the ethical
performance of their direct suppliers,
let alone those further back in the
supply chain.
Ethical and environmental standards
can offer businesses a way to
differentiate their products and brand.
But for businesses who get it wrong, the
damage can be significant.
future[inc]
51
SPOTLIGHT ON CONSCIOUS CONSUMERS: THE COSTS OF GETTING IT
WRONG
In a globally connected marketplace, brand reputation plays an increasingly
important role. The ubiquity of social media means that one negative voice can be
heard – and repeated – worldwide. Unethical or unsafe behaviour – even when it is
by a supplier, rather than the business itself – can have big consequences.
In the early 1990s, Nike faced extensive criticism around its treatment of factory
workers. As a result, Nike’s earnings fell by 69% in the 1998 fiscal year, forcing the
company to lay off workers and reconsider its strategy.139 Nike created the Fair
Labour Association, a non-profit group with representatives from industry, and
human rights and labour organisations. They set up an independent monitoring
system for the minimum age of workers and a 60 hour work week. In 2005, Nike
became the first company in the industry to publish a complete list of factories
it contracts.140
Similarly, the 2013 collapse of the Rana Plaza factory building in Bangladesh drew
global scrutiny on dangerous workplaces in the local garment industry.141
This led to the development of the Accord on Fire and Building Safety – a legally
binding agreement including trade unions and retail fashion companies. As a
result of the Accord, almost 2,000 factories in Bangladesh have been inspected
to check for structural, electrical and fire safety. Retailers who are signatories to
the agreement are required to stop sourcing from factories that fail to make the
required improvements.142
Looking forward
Traditional considerations – like price,
quality and customer service – will
continue to dominate customer decision
making. Yet ethical and environmental
considerations will become increasingly
important to consumers.
Businesses will need to be increasingly
mindful of the growing awareness and
value of ethical and environmental
considerations. Less than 3% of
businesses currently trading believe
that ethical considerations are the top
consideration for their customers.143
Looking to the future, this share is
expected to marginally rise over time.144
52 The Future of Trade: Are we ready to embrace the opportunities?
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
Current traders
Future traders
Current
Five years from now
Chart 19: Ethical and environmental considerations as the primary driver of consumer
decisions (as % of businesses)145
While customers are not currently very
willing to pay more for ethically sourced
goods, the cost of getting it wrong is
only likely to be magnified over time. In
an increasingly globally interconnected
world, brand and reputation are
more important. The value of brands
was estimated at AUD125 billion for
Australia’s top 100 companies.146
Anything which threatens this could
be devastating, so businesses will be
increasingly sensitive to information that
may impact on their brand.
Complex supply chains make it
challenging for consumers to assess
and verify the ethical claims made by
different products or brands. However,
new technology such as blockchain
could make supply chains increasingly
transparent, helping consumers and
businesses to make informed sourcing
decisions which may reflect ethical and
environmental factors. Independent
labelling and certification will also play
an important role in assisting consumer
decision making and cutting through
the noise.
future[inc]
53
SPOTLIGHT ON BLOCKCHAIN
Blockchain is a type of distributed ledger technology which keeps a log of
transactions by a number of different players, without requiring the intervention
of a trusted third party. The recently released paper The Future of Blockchain147
explores how, among other benefits, blockchain is offering some organisations an
alternative decentralised method of tracking goods and services through the supply
chain, meaning customers and businesses can verify the provenance of the goods
and services they are buying.
Sydney-based company Full Profile is piloting distributed ledger technology in the
grains industry. The goal will be to provide field-to-plate provenance tracking, so
that buyers and consumers can be certain of where their products come from.148
These benefits rely on widespread uptake and good governance. However, clearly
the technology has significant potential in addressing some of the difficulties
associated with ethical sourcing at present.
QUESTIONS FOR POLICY MAKERS
1. What is the role of government in creating and maintaining a national brand?
2. Should government re-examine remaining local content requirements in
procurement decisions, such as in infrastructure or defence?
QUESTIONS FOR BUSINESSES
1. How important is ethical sourcing to your consumers and staff? What are the
implications for your business operations?
2. What is your plan for managing an unexpected negative incident on your
brand or reputation?
54
The Future of Trade: Are we ready to embrace the opportunities?
Conclusion
Trade will continue to be important in
driving economic growth in Australia
and New Zealand.
The rate at which Australia and New
Zealand agree and ratify new bilateral
and regional free trade agreements
may slow over coming years. But
benefits will continue to flow from those
which are already in place. By pursuing
other trade-facilitating measures – like
authorised economic operators (AEO)
programmes – governments could still
generate significant benefits as mutual
recognition agreements are reached
with top trading partners.149
Primary goods and commodities will
continue to dominate exports for
Australia and New Zealand. But new
opportunities for exports in services,
particularly in Asia, will mean that the
composition of our trade will start to
more closely reflect the composition
of our domestic economy. We forecast
that Australian service exports will grow
by an average of 5.8% per annum over
the decade to 2026.150 This growth
will be driven by key industries, such as
education and tourism. For example,
export earnings from education in
Australia are projected to double, topping
AUD33 billion by 2025.151
Technology will continue to reduce
barriers to trade. New delivery methods
will mean that a broader range of
goods and services can be traded. For
example, 50% of businesses think that
developments in specific technologies
will increase outsourcing in the future.152
Costs of transport will be reduced as
driverless cars and drones help to reduce
labour costs and get goods overseas in a
more timely way – which can improve the
value of exports.
But it could also disrupt the current
composition of trade and challenge the
status quo on some countries’ fields of
competitive advantage. For example,
widespread adoption of 3D printing
could significantly reduce manufacturing
costs, making onshore manufacturing a
more attractive proposition.
future[inc]
55
We can expect the transaction costs of
trade to continue to fall, as manual and
paper-based processes are digitised.
Moreover, online platforms – like
eBay, Alibaba and Airtasker – will be
increasingly important as facilitators,
making it easier for consumers to find
what they are looking for, and creating
new ways for businesses to access
their target markets. The proportion
of businesses expecting to use these
platforms to reach consumers in five years
is double those using them today.
Despite this, purchasing decisions will
become more complex for customers.
Traditional considerations will remain
key – for example, more than threequarters of businesses think that
customer decisions will be driven by
price, quality and fitness-for-purpose in
five years’ time.153 But in an increasingly
informed and interconnected global
marketplace, other factors such as
ethical and environmental considerations
will become more important.
For businesses, buying and selling
overseas continues to be a great
opportunity. It can provide access to
bigger markets and sales growth, as well
as new suppliers and products. And with
more participants in the global market,
online platforms for trade and new
delivery models enabled by technology,
more businesses have the ability to trade
than ever before.
For government, rising tides of economic
nationalism abroad introduce concerns
about the future of trade. Overall,
international trade delivers a significant
national benefit, and therefore should
be encouraged and facilitated. However,
the benefits do not accrue evenly across
society; government should consider how
best to support those who are hurt by
international trade.
There are justifiable concerns about the
best way to facilitate trade. In particular,
bilateral free trade agreements can
be complex and opaque – and there is
little evidence on how many businesses
actually use them and benefit from
them. Beyond free trade agreements,
though, behind-the-border trade
facilitation – like mutual recognition and
digitising customs processes – could
bring significant commercial benefits.
The current landscape – with new
technology and more participants in the
global market – is conducive to more
trade in the future.
Ultimately, international trade has
delivered net positives for our economy,
businesses and society. To fully seize its
potential, though, we need to continue
a conversation about how to fully
facilitate, embrace and encourage trade
and the opportunities it offers.
56 The Future of Trade: Are we ready to embrace the opportunities?
QUESTIONS FOR POLICY MAKERS
1. How could you support and encourage multilateral agreements, including
those which are currently under negotiation such as the Regional
Comprehensive Economic Partnership (RCEP)?
2. How will you enforce consumer protection, intellectual property and other
standards in a more globalised economy?
3. Which industries are most likely to be outcompeted by international
businesses? How could transitions to other industries be managed?
4. How can you better work with business to understand the barriers to trade
(such as customs processes) in each industry and with each trading partner?
5. What barriers to service export growth in key industries still exist (such as
visas for education in Australia and tourism in New Zealand)? Should these
be re-examined?
6. What existing trade processes (such as customs procedures or import
permits) are still manual or paper-based? How can these be automated or
digitised?
7. Should government play a larger role in assisting entrepreneurs to connect
with international markets?
8. How will the trade facilitating infrastructure needs of business change in the
future and is there a role for government? How can these needs best be met?
9. What are the consequences of global value chains and increasing use of
online platforms for taxation revenue?
10.What is the role of government in creating and maintaining a national brand?
11.Should government re-examine remaining local content requirements in
procurement decisions, such as in infrastructure or defence?
future[inc]
57
QUESTIONS FOR BUSINESSES
1. How will recent shifts in trade policy in the UK and USA impact on your
business?
2. Where will your most important customers and suppliers be geographically
located in ten years’ time? What steps will you take to access new suppliers
and/or customers?
3. What will be the level of global competition in your industry and where will it
come from? How will you navigate through this?
4. What technologies will most significantly affect your ability to compete
internationally for customers and suppliers?
5. Are you able to access overseas suppliers directly at a cheaper cost? What
activities would be more cost effective if offshored or outsourced?
6. How can you use online platforms to more cost effectively explore the
potential of new markets?
7. If you are selling directly to a business, how can you tap in to your customers’
overseas networks and affiliates?
8. How will you reach your customers and suppliers in five years? Will you need
to change your method of delivery in the face of international competition?
9. How important is ethical sourcing to your consumers and staff? What are the
implications for your business operations?
10.What is your plan for managing an unexpected negative incident on your
brand or reputation?
58 The Future of Trade: Are we ready to embrace the opportunities?
“International trade is an engine for inclusive
economic growth and poverty reduction, and
contributes to the promotion of sustainable
development.”
source: The 2030 Agenda for Sustainable Development, United Nations
future[inc]
59
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63 Chartered Accountants Australia and New Zealand (2016) Survey results.
64 Trump, D. (2016) “Donald Trump’s Speech on Trade” Time Magazine. 28 June.
65 Trump, D. (2016) “Trade”. From www.donaldjtrump.com./policies/trade
62 The Future of Trade: Are we ready to embrace the opportunities?
66 Trump, D. (2016) “Trade”. From www.donaldjtrump.com./policies/trade
67 Trump, D. (2016) “Trade”. From www.donaldjtrump.com./policies/trade
68 Chartered Accountants Australia and New Zealand (2016) Survey results.
69 Australian Chamber of Commerce and Industry (2016) National Trade Survey Report Summary.
70 Brunton, Colmar (2015) New Zealanders’ Perceptions of Asia and Asian Peoples – 2014 Annual
survey Asia New Zealand Foundation.
71 Brunton, Colmar (2015) New Zealanders’ Perceptions of Asia and Asian Peoples – 2014 Annual
survey Asia New Zealand Foundation.
72 World Trade Organisation (2013) World Trade Report: Factors Shaping the Future of World Trade.
73 World Trade Organisation (2016) World Trade Statistical Review 2016.
74 The Sydney Morning Herald (2016) “European Council president Donald Tusk gloomy on new free
trade agreements”, 21 October 2016.
75 Chartered Accountants Australia and New Zealand (2016) Survey results.
76 Department of Foreign Affairs and Trade (2016) “United Kingdom country brief” from
http://dfat.gov.au/geo/united-kingdom/pages/united-kingdom-country-brief.aspx
77 Ministry of Foreign Affairs and Trade (2016) “United Kingdom” from https://www.mfat.govt.nz/en/
countries-and-regions/europe/united-kingdom/
78 Di Lieto, G. (2017) “Brexit, Trump and the TPP mean Australia should pursue more bilateral trade
agreements” The Conversation. From https://theconversation.com/brexit-trump-and-the-tpp-meanaustralia-should-pursue-more-bilateral-trade-agreements-71330
79 Humpries, N. (2014) “Global value chains, border management and Australian trade,” Lowy Institute.
80 PriceWaterhouseCoopers (2016) “Australian Trusted Trader: a necessity for modern business” from:
http://www.pwc.com.au/tax/taxtalk/assets/monthly/pdf/trusted-trader-necessity-business-dec16.pdf
81 The World Bank (2016) Trade (as a % of GDP). From http://data.worldbank.org/indicator/NE.TRD.
GNFS.ZS
82 World Bank (2016) Trade (% of GDP). From http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS
83 [1] ABS Cat no. 5368.0. International trade in goods and services, Australia, Tables 2, 3 and 11a.
[2] Statistics New Zealand. National Accounts (Income and expenditure): year ended March 2016.
[3] Statistics New Zealand. International trade in services by service type, year ended June 2016. [4]
Statistics New Zealand. Overseas merchandise trade, year ended June 2016.
84 Zhang, V. (2009) “The evolution of New Zealand’s trade flows”. New Zealand Reserve Bank.
85 [1] ABS Cat no. 5368.0 Table 11a [2] Statistics New Zealand. (2016). Data on Balance of Payments
and international investment position and Expenditure on Gross Domestic Product.
86 Productivity Commission (2015) Barriers to Growth in Service Exports.
87 Taylor, M. (2016) Born global firm internationalisation: the influence of industry factors.
Contemporary Management Research, 12(3):289–308, September.
88 McKinsey & Company. (2016) Digital globalisation: the new era of global flows, March.
89 Productivity Commission (2015) Barriers to Growth in Service Exports.
90 New Zealand Treasury (2016) Half year Economic and Fiscal Update.
From http://www.treasury.govt.nz/budget/forecasts/hyefu2016/hyefu16-addinfo.pdf
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91 Chartered Accountants Australia and New Zealand (2016) Survey results.
92 Deloitte Access Economics. (2015) Growth and opportunity in Australian International Education,
a report prepared for Austrade, December.
93 National Research Bureau and Infometrics (2016) The economic impact of international education in
New Zealand 2015/16 – for Education New Zealand, October.
94 Deloitte Access Economics (2015) Growth and opportunity in Australian International Education,
a report prepared for Austrade, December.
95 [1] ABS Cat no. 6291.0.55.003 [2] Deloitte Access Economics modelling.
96 Deloitte Access Economics (2016) Business Outlook, December.
97 [1] ABS cat. 5302.0 (2015) Balance of Payments and International Investment Position, Australia (2)
Statistics New Zealand. (2016). Data on Balance of Payments and International Investment Position and
Expenditure on Gross Domestic Product. [2] Statistics New Zealand
98 Chartered Accountants Australia and New Zealand (2015) What is the Future for Offshoring?
99 OECD observer (2012). An emerging middle class. From http://oecdobserver.org/news/fullstory.php/
aid/3681/An_emerging_middle_class.html
100 Chartered Accountants Australia and New Zealand (2016) Survey results.
101 National Australia Bank (2016. NAB Online Retail Sales Index, September 2016. From http://
business.nab.com.au/wp-content/uploads/2016/11/20161102-NORSI-Sep-2016-FINAL.pdf
102 Bank of New Zealand (2016) New Zealand Online Retail Sales – monthly updated for September
2016. From http://www.bnz.co.nz/assets/business-banking-help-support/online-retail-sales-index/
pdfs/NZ-Online-Retail-Sales-in-September-2016.pdf
103 Deloitte Access Economics (2015) The Connected Continent II – how the internet is transforming the
Australian economy, a report prepared for Google.
104 Micallef, J. (2015) Beginning design for 3D Printing, Technology in Action. Accessed online via Google
Books.
105 D’Aveni, R. A. (2015) “The 3-D Printing Revolution”. https://techcrunch.com/2016/04/25/the-
driverless-truck-is-coming-and-its-going-to-automate-millions-of-jobs/ Harvard Business Review, May
2015.
106 ARC Centre of Excellence for Electromaterials Science website. BioPrinting: Cochlear implant. From
http://www.electromaterials.edu.au/case-studies/case-studies/case-study-2/
107 Diss, K. (2015) Driverless trucks move all iron ore at Rio Tinto’s Pilbara mines, in world first. ABC
News. Available at: http://www.abc.net.au/news/2015-10-18/rio-tinto-opens-worlds-first-automatedmine/6863814
108 Petersen, R. (2016). The driverless truck is coming, and it’s going to automate millions of jobs.
Techcrunch. Online via https://techcrunch.com/2016/04/25/the-driverless-truck-is-coming-and-itsgoing-to-automate-millions-of-jobs/
109 DHL (2015). SELF-DRIVING VEHICLES IN LOGISTICS: A DHL perspective on implications and use
cases for the logistics industry. Online via http://www.dhl.com/content/dam/downloads/g0/about_us/
logistics_insights/dhl_self_driving_vehicles.pdf
110 Betters, E. (2015) “Self driving cars: 14 automakers betting on driverless vehicles”.
From http://www.pocket-lint.com/news/136208-self-driving-cars-14-automakers-betting-ondriverless-vehicles
64 The Future of Trade: Are we ready to embrace the opportunities?
111 World Bank (2016) “Trading Across Borders: Technology gains in trade facilitation”. Doing Business
2017.
112 Hummels, D., & Schaur, G. (2012) Time as a trade barrier (No. w17758). National Bureau of Economic
Research.
113 International Centre for Trade and Sustainable Development (2016) Maximizing the Opportunities
of the Internet for international Trade. Policy Options Paper. From http://e15initiative.org/wp-content/
uploads/2015/09/E15_ICTSD_Internet_International_Trade_report_2016_1002.pdf
114 Chartered Accountants Australia and New Zealand (2016) Survey results.
115 Chartered Accountants Australia and New Zealand (2016) Survey results.
116 Ahn, J., Khandelwal, A. K., & Wei, S. J. (2011) “The role of intermediaries in facilitating trade”.
Journal of International Economics, 84(1), 73–85.
117 Bernard, A. B., & Jensen, J. B. (2004) “Why some firms export”. Review of Economics and Statistics,
86(2), 561–569.
118 Ahn, J., Khandelwal, A. K., & Wei, S. J. (2011) “The role of intermediaries in facilitating trade”.
Journal of International Economics, 84(1), 73–85.
119 Dell, Michael (1999) Direct from Dell: strategies that revolutionized an industry. Harper Business,
New York.
120 Roberts, R. (2008) “Munger on Middlemen” http://www.econtalk.org/archives/2008/10/munger_
on_middl.html
121 [1] ABS Cat no. 5369.0. [2] Deloitte Access Economics calculations. (2016).
122 eBay (2014) eBay Celebrates 15 Years in Australia. From http://media.ebay.com.au/ebaycelebrates-15-years-australia
123 ABS Cat. no. 8167.0 (2016) Selected Characteristics of Australian Business.
124 Statistics NZ (2009) International Engagement by New Zealand Businesses.
125 Chartered Accountants Australia and New Zealand (2016) Survey results. Note: Responses which
had ‘other’ as their method of delivery have been excluded.
126 Chartered Accountants Australia and New Zealand (2016) Survey results.
127 Chartered Accountants Australia and New Zealand (2016) Survey results. Note: Responses which
had ‘other’ as their top driver of change have been excluded.
128 Neilson (2014) Global consumers are willing to put their money where their heart is when it comes to
goods and services from companies committed to social responsibility. June 17, 2014.
129 Horizon Research (2014) New Zealanders’ climate change actions and attitudes – prepared for
Motu Economic and Public Policy Research and the Sustainable Business Council, September 2014.
From https://www.horizonpoll.co.nz/attachments/docs/2014-10-20-new-zealanders-climate-changeact-1.pdf
130 Horizon Research (2014) New Zealanders’ climate change actions and attitudes – prepared for
Motu Economic and Public Policy Research and the Sustainable Business Council, September 2014.
From https://www.horizonpoll.co.nz/attachments/docs/2014-10-20-new-zealanders-climate-changeact-1.pdf
131 CSIRO (2014) Climate adaptation: What it means for Australian consumers – consumer survey –
2014 results. From https://publications.csiro.au/rpr/download?pid=csiro:EP148832&dsid=DS2
132 Neilson (2014) Global consumers are willing to put their money where their heart is when it comes to
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goods and services from companies committed to social responsibility. June 17, 2014.
133 ibid.
134 Neilson (2014) Global consumers are willing to put their money where their heart is when it comes to
goods and services from companies committed to social responsibility. June 17, 2014.
135 Hainmueller, J., Hiscos, M.J., S, Sequeira. (2014) Consumer demand for the fair trade label:
Evidence from a multi-store field experiment.
136 Hiscos, M.J., Broukhim, M., C, Litwin. (2011) Consumer demand for Fair Trade: New evidence from a
field experiment using eBay auctions of fresh roasted coffee.
137 Grankvist, G. (2012) Consumer attitudes to ethically labelled products. A report prepared for the
Swedish Retail and Wholesale Development Council.
138 Hiscos, M.J., Broukhim, M., C, Litwin. (2011) Consumer demand for Fair Trade: New evidence from a
field experiment using eBay auctions of fresh roasted coffee.
139 Forbes (2012) Building sustainable and ethical supply chains, March 9, 2012.
140 Nisen, M. (2013) “Why the Bangladesh factory collapse would never have happened to Nike”.
Business Insider, 10 May. From http://www.businessinsider.com.au/how-nike-solved-its-sweatshopproblem-2013-5
141 Avaaz, (2016) “Our clothing kills” from https://secure.avaaz.org/en/benetton_pay_up_loc/
141 Kamat, A. (2016) “We are nothing but machines to them”. Slate, December 15,
From http://www.slate.com/articles/business/the_grind/2016/12/bangladesh_s_apparel_factories_
still_have_appalling_worker_conditions.html
143 Chartered Accountants Australia and New Zealand (2016) Survey results.
144 Chartered Accountants Australia and New Zealand (2016) Survey results.
145 Chartered Accountants Australia and New Zealand (2016) Survey results.
146 Brand Finance (2015) Australia 100: Annual report on Australia’s most valuable brands.
147 Chartered Accountants Australia and New Zealand (2017) The Future of Blockchain: Applications
and implication of distributed ledger technology.
148 Weston, E. (2016) “Blockchain solutions for the Australian grains industry” from
http://www.fullprofile.com.au/news/2016/7/11/blockchain-solutions-for-the-australian-grains-industry.
149 Department of Immigration and Border Protection (2016) “Australian Trusted Trader” from
http://www.border.gov.au/Busi/cargo-support-trade-and-goods/australian-trusted-trader.
150 Deloitte Access Economics (2016) Business Outlook, December.
151 Deloitte Access Economics (2015). Growth and opportunity in Australian International Education,
a report prepared for Austrade, December.
152 Chartered Accountants Australia and New Zealand (2015) What is the Future for Offshoring?
153 Chartered Accountants Australia and New Zealand (2016) Survey results.
66 The Future of Trade: Are we ready to embrace the opportunities?
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