I acknowledge that we are on Gadigal land and pay my respects to elders past and present.
Thank you to the McKell Institute for continuing the progressive work of Bill McKell to build a better nation and improve the lives of Australians.
Bill McKell began his working life as a boilermaker.
His early career was important in his approach to our state’s post war reconstruction. He understood that key public works programs like the Snowy Mountains Hydro Electric Scheme, massive public housing construction and water conservation initiatives had to benefit all communities including the regions.
Equity and fairness were the key to his government’s successful post war building program that lead to better living standards across our state.
Eighty-plus years on, we are still working to build Australia, and that commitment to economic equality is still so important, particularly when it comes to international trade.
The international trading system is under intense pressure, but the rules-based system continues to improve the lives of Australians and grow our economy and it is a system that is worth defending.
Free trade drives competition and innovation and can improve productivity.
Australian exporters have gained access to more markets through global trade.
Companies engaged in global trade generally pay their workers more, and most importantly the free movement of goods and services around the world has delivered access to better, cheaper goods and services for Australians.
Australians have benefited from free trade
In 1975, Australians began to purchase one of the greatest inventions of the era…the colour TV.
But that purchase would set your family back a bit.
At that time a standard colour television was about $890.
That cost was equivalent to about 6.1 weeks of average weekly earnings for a male worker.
But fast forward fifty years, and the retail price of a standard 55 inch colour TV these days is about $800.
$890 in 1975 – and $800 in 2025.
In 2025, $800 isn’t 6.1 weeks of average weekly earnings – it's 0.38 weeks, or a little less than two days of work.
Australian consumers can buy many items today for a fraction of the price you would have paid for equivalent goods, if they existed, back in 1975.
There are a number of reasons why household appliances like TVs are more affordable for everyday Australians in 2025 than they were in 1975.
In 1975, TV components were mainly imported.
But they were then assembled locally into units by companies’ beloved by Australians over the years – like AWA, Pye, Thorn and HMV.
These companies were protected by tariffs of 40 to 50 per cent on finished sets – a protectionist approach that dominated Australian trade for decades.
Protection – high tariff walls - made goods for everyday Australians much more expensive.
Around this time, Japanese TVs – what we would now recognise as iconic brands like Sony, Panasonic and Sharp – began to be imported.
This lifted quality and provided cheaper alternatives for consumers.
It made no sense to keep protecting industries with high tariffs when import competition was driving innovation and providing cheaper products.
Over time, Australian governments gradually removed such tariffs.
Products became cheaper and a wider range became available for consumers.
In short, Australians benefited from the reduction in trade barriers that transformed our economy in the 1980s and onwards.
There are other parts of the economy where real prices have come down since the 1970s.
In the 1970’s overseas travel was a pipedream for most working-class Australians.
In 1975, an economy class ticket from Sydney to London on Qantas would set you back around $700 for a return trip on the Kangaroo Route.
That translates to over $6000 in modern dollars, according to the Reserve Bank's inflation calculator.
But if you were headed to London on a flight at the end of this month, these days you’d be paying more like $2,000-$2,400 for economy.
There are of course a lot of reasons why it’s cheaper to fly internationally in 2025 than it was in 1975.
Clearly, competition has increased greatly – there are a lot more options out there today.
And regulation at the border has – in general – been streamlined.
I appreciate that not everything in Australia is now cheaper.
There is no more real example of that, of course, than the cost of housing facing so many Australians, particularly younger Australians.
But most Australians and citizens of our trading partners appreciate that international trade has improved their lives.
And around 72 per cent of global trade still flows under a set of baseline rules administered by the World Trade Organization.
But the global trading system that helped deliver these benefits to Australians is experiencing intense stress.
Tariffs were a policy tool that traditionally we would have associated with governments more in Bill McKell’s time than our own.
But incredibly tariffs are still being used by certain countries, and some are imposing new and higher tariffs on imported goods including Australian exports to those economies.
Those nations justify tariff barriers as a means to encourage local consumers to buy more locally made goods and boost investment in local manufacturing.
The Australian Government is taking a different approach.
Australia’s prosperity has and continues to be, underpinned by open trade and the dynamism of Australian companies in global markets.
So, I want to offer some evidence for how trade builds national prosperity.
And I want to explain why it’s so important that we defend the system that supports free trade.
Now I realise that across many sectors, prices have not gone down since the 1970s.
But particularly when we are talking about internationally traded goods and services, what we can see is that freer trade can bring prices down.
Freer trade means Australian exporters get better access to overseas markets.
And that access is delivering tangible results.
Over the last five years, Australia’s goods & services exports have grown on average 8.6 per cent annually.
As well, lower trade barriers mean more jobs, and better jobs, for Australians.
1 in 4 people are in jobs supported by trade.
Miners, tour guides, truck drivers, port workers, all the support services and finance folks; and even workers at Bing Lee selling TVs.
Trade is supporting almost 3.5 million jobs in Australia,
Export related jobs also pay more.
Jobs directly associated with exports received nearly 9 per cent higher annual average income ($101,700) than the national average income ($93,500).
Free trade encourages competition and innovation.
And Australians understand the benefits trade brings.
According to Lowy Institute polling last year, 80 per cent of Australians believe that free trade is good for our standard of living.
International attitudes to free trade
If free trade is so beneficial for our national economy – and if Australians understand that it is why is there growing skepticism across the globe about the WTO and its ability to deliver free and fair-trade outcomes?
Why, if trade has objectively been beneficial in countries like Australia, is there such strong criticism of free trade and the World Trade Organization in certain parts of the world?
To answer this question, we need to understand the transfer of traditional manufacturing in industries such as steel production or automobile manufacturing from advanced economies to developing economies over the last half a century.
In 1970, advanced economies such as the US, Japan, and Western Europe accounted for nearly 80% of global steel production.
By 2024, China alone produced over 55% of the world’s steel, with India, South Korea, Brazil, and Turkey collectively contributing another 20%.
The OECD economies - notably the US, Japan, and Western Europe - dominated auto manufacturing through the mid-20th century.
Since the 1990s, production has surged in China, India, Mexico, Turkey, and Southeast Asia. China’s total vehicle output grew from 500,000 vehicles in 1980 to over 28 million in 2023, making it the largest producer with nearly 32% of global production.
Over the same period, US vehicle production stagnated around 9–11 million vehicles annually, while Germany and Japan saw modest declines.
The offshoring of traditional manufacturing jobs and the decline of communities around those industries has created structural adjustment challenges for developed economies and their governments.
The concentrated decline of opportunity and community prosperity has been acutely felt by those in traditional manufacturing areas.
In Australia, our economic growth has benefited from the growth of manufacturing in the broader region - that increased demand for our exports – be it mining resources, agriculture or education.
Our manufacturing industries have adapted and focused in specialist high-tech manufacturing, such as biomedical and defence.
And our production has tended to be less geographically concentrated than in other nations, helping people adapt to a changed economy.
The structure of our social safety net is also more comprehensive.
It is a combination of access to education, structural adjustment packages, and welfare.
These all help communities adjust to changes in the economy.
We have long recognised we have a small population, so if we want to lift living standards, we need to find a global market to sell to.
In Australia, the benefits of freer trade – higher export prices, cheaper imports like appliances, the ability to develop services exports like our huge international education sector – have been more widely distributed.
Domestic settings
In the 21st century, Australia enjoys the benefits of open and predictable trade and investment, which support our prosperity and high standard of living.
Trade is underpinned by WTO rules, and investment is regulated by Australia’s Foreign Investment Review Board, which helps support community confidence in that investment.
As the world’s 14th largest economy, Australia has a strong track record as a high-performing and flexible economy.
Australia has been successful at making changes to our economy and responding to opportunities.
We still lead the world in exports of wool, but it no longer makes up a third of our exports.
70% of our economy is employed in services – we don’t just dig stuff up.
But we cannot be complacent.
Technology will continue to advance and drive economic changes.
We produce complex and sophisticated products.
Australia ranks 13th globally in technological complexity and fourth in research complexity.
The Government’s Economic Reform Roundtable reflects the need to best position our people and businesses to seize opportunities presented by change in the global economy.
We must ensure our population has the skills to adapt.
By 2031, mmore than 9 out of 10 new jobs (around 92%) are expected to require post-secondary qualifications. This requires quality education.
We also need to attract international investment to support new industries.
The government recognises the importance of supporting investment in new and emerging industries of future job creation.
This is the logic behind the Future Made in Australia agenda.
And we must work to preserve and reform the free trade system including the bilateral, regional and plurilateral trade agreements that are such an important part of our work, like the FTA we are pursuing with the European Union because collectively, it has been the bedrock of our exports and national wealth.
Defending the system
Because of economic displacement in certain traditional industrial communities across the globe many nations are questioning the value of the WTO architecture and its ability to ensure trade is fair and free across the globe.
As everyone here knows, the global trading system established after World War II first through the General Agreement on Tariffs and Trade but later through the WTO is under immense threat.
Traditional industries that were the backbone of certain economies such as the steel industry have faced competition and have been unable to compete with cheaper imported steel produced in countries by firms receiving government support such as land grants, subsidies, and tax breaks… all produced by workers earning a fraction of their international counterparts.
The WTO system is supposed to promote a fair market-based approach to international trade. But the non-market based approach to manufacturing by some members of the WTO has triggered workers – and influenced political leaders - to question the integrity and value of the WTO system, particular its inability to discipline practices such as flooding international markets with cheap steel.
So WTO member nations want changes to a system they see as unfair and lacking integrity.
Some nations approach to combat such practices has been to impose blanket tariffs on products being exported into their country.
Other nations have retaliated, and imposed reciprocal tariffs on imported goods and instituted export controls on trade in important goods such as rare earths. Our government has expressed our concern about this approach.
Our government is deeply concerned by the increasingly protectionist approach to international trade.
No one wins from trade barriers or tariffs, and they are likely to increase the cost of goods and services for consumers around the world and risk raising global inflation.
However, international concern regarding the inability of the WTO to discipline non-market policies and practices leading to excess capacity are reasonable and legitimate. Australia and many other WTO member nations share these concerns.
In recent years, significant challenges have emerged in the WTO with respect to its dispute settlement system which is an essential part of any rules-based system that seeks to provide a forum for its members to hold other members to account and resolve their differences peacefully in accordance with international rules, instead of by force or raw power.
Some nations have blocked appointments to the WTO’s Appellate Body which has made it very difficult for this aspect of the WTO’s functions to work.
That’s why Australia and others established a new interim mechanism to handle appeals at the WTO – so that disputes can still close and WTO rules can remain enforceable.
From an Australian perspective, being a forum for settlement of trade disputes is a key part of the WTO’s work and it is certainly the case that the WTO dispute settlement system played an important role in resolving the trade impediments we faced in our bilateral relationship with China in recent years.
In the end, the WTO system is the foundation on which most of global trade occurs.
The WTO and its rules and norms have been the best guarantor of openness and predictability in the global economy.
It is not an overstatement to say that the system has underpinned decades of economic growth and prosperity for Australia. So, the system is worth defending.
But we know the WTO has to evolve if it is to stay relevant and meet the economic challenges of our time.
An organisation which cannot secure the interests and confidence of all its Members is simply not one that is sustainable in the long-term.
This is why Australia is pushing hard for broad and ambitious reform of the WTO.
We need to improve the WTO’s consensus-based decision-making practice so it does not act as an effective veto that one or two Members can use to block all progress.
With multilateral rulemaking blocked, we need to reaffirm plurilateral rule-making among subsets of the WTO Membership as a viable alternative pathway to negotiate new rules and bring them into the WTO rulebook.
With the dispute settlement currently dysfunctional, Australia is a leading advocate of expanding participation in the Multi-Party Interim Appeal Arbitration Arrangement, or MPIA, which provides a mechanism to finalise disputes between participants.
We are encouraging as many Members as possible to join the MPIA to further bolster the enforceability of WTO rules.
The MPIA now has 57 Members covering 57 per cent of total two-way global trade and just under 54 per cent of global GDP.
Finally, we need to discuss how to make the WTO’s one-size-fits-all provisions for developing countries work better for the smaller, more vulnerable developing economies that need help the most.
The fourteenth WTO Ministerial Conference in Cameroon in March next year is an opportunity to tackle these big issues of WTO reform.
Thankfully all the member nations have maintained their membership of the WTO.
This provides an opportunity for Australia and likeminded nations to work on substantial reform of the WTO to ensure the organisation can address pressing trade concerns and deliver fair and open, rules-based trade in the future for all Members.
We are calling on all Members to use the remaining time before the 14th Ministerial Conference to help set the organization on the right path to modernisation.
Conclusion
In the 1970’s the Whitlam government began the process of removing the shackles on Australian trade with the globe.
Successive governments have continued that process because it has strengthened our economy and delivered better living standards for Australians.
As some nations seek to reverse the freeing up of trade between countries, we must resist the temptation to join them and work collaboratively to reform the international trading system.
We need to amend not annihilate the global trading system.
The fact is trade is helping deliver better lives better lives for Australians, and better lives for our partners around the world.
That’s a system that’s worth defending.
Thank you.