Austrade shifts its focus to emerging markets
AUSTRADE chief executive Peter Grey is used to the complex world of international trade negotiations after a career as a senior trade diplomat.
Now he sees his job as guiding Australian companies into some of the more difficult but higher growth economies of the world -- from Mongolia to Central Asia, and Latin America to Africa.
After taking over as chief executive last year after a stint in Geneva as Australia's ambassador to the World Trade Organisation, Grey commissioned the first major review of Austrade's operations in 20 years.
Last week, federal Trade Minister Craig Emerson announced a comprehensive reform of Austrade, whose annual budget of almost $200 million will be focused more on emerging markets.
"We want to end up with a more contemporary version of Austrade, one which is focused on those markets which are important for Australia in 2011 and onwards," Grey told The Australian in an interview at Austrade's Sydney headquarters on Friday.
"We are looking at emerging markets, frontier markets.
"As a government agency we have to look at where we can add the most value -- and that is in the more difficult markets, where there are cultural or linguistic differences."
Austrade has operations in 100 cities in 55 countries, serviced by 70 Australia-based executives, assisted by many more locally.
The changes announced last week will rationalise Austrade's presence in developed markets in the US and Europe and cut some of its operations in Australia to allow greater focus on up and coming markets where on-the-ground government assistance can make a much bigger difference to Australian exporters.
"Europe and North America may provide potentially greater opportunities -- and business should and will continue to exploit those opportunities," Grey says.
"But Austrade can add less value there because businesses themselves can navigate their way around Europe and North America.
"They can do much better there than they can in western China or parts of India or Mongolia, or even throughout Southeast Asia.
"So it is a question of the combination of market potential and of trying to focus very clearly on where Austrade, as an organisation, can add the most value."
Resource-rich Mongolia, a new hot spot for big miners, including BHP Billiton and Rio Tinto, is a case in point.
Austrade has serviced the country on a fly-in, fly-out basis during the summer months.
Now it plans to boost its commitment to help Australian companies benefit from business opportunities in the rapidly growing economy.
"There is huge potential in Mongolia," says Grey.
"A lot of it will be driven by mining, but there will be opportunities for education services, law firms, financial companies and the engineering and construction companies, which will follow on behind the mining companies which are now up there."
Grey is also keen on extending Austrade's footprint in Central America, where he spent a lot of time as part of Australia's negotiating team for the Uruguay Round of world trade negotiations.
"Brazil is one of the BRIC economies -- one of the major emerging markets which the rest of the world is focusing on," he says.
"We have one trade commissioner in Brazil, which doesn't seem appropriate in 2011.
"We will seek to strengthen our activities in Brazil with one or two more trade commissioners."
Austrade will also seek to open more offices in other Latin American countries, yet to be announced but likely to include Colombia.
Grey also wants a bigger Austrade footprint in Africa. Now it has only one person, based in Johannesburg, covering the whole continent. "Africa is predicted to grow by 6 per cent a year over the next 10-15 years," he says.
"We are not going to have a wholesale shift in resources to Africa, but we can certainly have a better representation for Australian companies in a part of the world which is growing quite rapidly."
Grey also wants to boost Austrade's presence in Central Asia and China, particularly the growing western part of the country.
"Some people won't be happy with us," he says, "because we won't be providing the same level of assistance in some markets as we did before. But in a few years time, you will see us well established in a number of these frontier markets."
Now he sees his job as guiding Australian companies into some of the more difficult but higher growth economies of the world -- from Mongolia to Central Asia, and Latin America to Africa.
After taking over as chief executive last year after a stint in Geneva as Australia's ambassador to the World Trade Organisation, Grey commissioned the first major review of Austrade's operations in 20 years.
Last week, federal Trade Minister Craig Emerson announced a comprehensive reform of Austrade, whose annual budget of almost $200 million will be focused more on emerging markets.
"We want to end up with a more contemporary version of Austrade, one which is focused on those markets which are important for Australia in 2011 and onwards," Grey told The Australian in an interview at Austrade's Sydney headquarters on Friday.
"We are looking at emerging markets, frontier markets.
"As a government agency we have to look at where we can add the most value -- and that is in the more difficult markets, where there are cultural or linguistic differences."
Austrade has operations in 100 cities in 55 countries, serviced by 70 Australia-based executives, assisted by many more locally.
The changes announced last week will rationalise Austrade's presence in developed markets in the US and Europe and cut some of its operations in Australia to allow greater focus on up and coming markets where on-the-ground government assistance can make a much bigger difference to Australian exporters.
"Europe and North America may provide potentially greater opportunities -- and business should and will continue to exploit those opportunities," Grey says.
"But Austrade can add less value there because businesses themselves can navigate their way around Europe and North America.
"They can do much better there than they can in western China or parts of India or Mongolia, or even throughout Southeast Asia.
"So it is a question of the combination of market potential and of trying to focus very clearly on where Austrade, as an organisation, can add the most value."
Resource-rich Mongolia, a new hot spot for big miners, including BHP Billiton and Rio Tinto, is a case in point.
Austrade has serviced the country on a fly-in, fly-out basis during the summer months.
Now it plans to boost its commitment to help Australian companies benefit from business opportunities in the rapidly growing economy.
"There is huge potential in Mongolia," says Grey.
"A lot of it will be driven by mining, but there will be opportunities for education services, law firms, financial companies and the engineering and construction companies, which will follow on behind the mining companies which are now up there."
Grey is also keen on extending Austrade's footprint in Central America, where he spent a lot of time as part of Australia's negotiating team for the Uruguay Round of world trade negotiations.
"Brazil is one of the BRIC economies -- one of the major emerging markets which the rest of the world is focusing on," he says.
"We have one trade commissioner in Brazil, which doesn't seem appropriate in 2011.
"We will seek to strengthen our activities in Brazil with one or two more trade commissioners."
Austrade will also seek to open more offices in other Latin American countries, yet to be announced but likely to include Colombia.
Grey also wants a bigger Austrade footprint in Africa. Now it has only one person, based in Johannesburg, covering the whole continent. "Africa is predicted to grow by 6 per cent a year over the next 10-15 years," he says.
"We are not going to have a wholesale shift in resources to Africa, but we can certainly have a better representation for Australian companies in a part of the world which is growing quite rapidly."
Grey also wants to boost Austrade's presence in Central Asia and China, particularly the growing western part of the country.
"Some people won't be happy with us," he says, "because we won't be providing the same level of assistance in some markets as we did before. But in a few years time, you will see us well established in a number of these frontier markets."
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