Minister for State and Regional Development Ian Macdonald is encouraging NSW exporters to seek recognition for their international business success by entering the 2010 Premier’s NSW Export Awards.
The Awards was launched in Sydney this week. “The international marketplace can be very challenging and competitive, but many NSW companies are succeeding overseas in a range of markets,” Mr Macdonald said.
“The NSW Export Awards provide an opportunity to recognise their success, commitment and hard work and the contribution they make to our economy and community by creating jobs.
Mr Macdonald said the export awards acknowledged this contribution by exporters.
“The awards recognise and reward the achievements of individual companies and their staff, as well as providing greater credibility to further expand their business.
“The award winners become outstanding case studies for other companies that want to expand overseas.”
The Premier’s NSW Export Awards are open to all NSW exporters. There are several categories including agribusiness, services, small to medium manufacturer, emerging exporter and regional exporter.
The Keneally Government, through Industry & Investment NSW, is the major sponsor of the awards and sponsors the NSW Exporter of the Year Award and the Regional Exporter of the Year Award.
Previous winners of NSW export awards have represented a range of industries and include aussieBum, Bega Cheese, the Wiggles, Casella Wines, Servcorp, Namoi Cotton, BridgeClimb and Cochlear. National category winners represent NSW at the Australian Export Awards.
Entries in the 2010 Premier’s NSW Export Awards close on August 20 and winners will be announced in Sydney on October 28. For more information go to www.exportawards.gov.au/nsw or call 02 8243 7400.
Incoterms is short for ‘International Commercial Terms’. The International Chamber of Commerce (ICC) introduced the first version of Incoterms in 1936.
The current version of Incoterms is called Incoterms 2000. Incoterms are extensively used in international sales contracts as they are widely recognised and understood commercially. Incoterms determine critical issues such as who will pay for the carriage of the goods and the point that risk passes between the parties.
Even if you are not experienced with using Incoterms, you may be familiar with FOB, which is the Free On Board Incoterm. FOB is commonly misused by parties and often other Incoterms such as FCA or FAS are more appropriate. If you are presented with contracts that contain Incoterms and you do not understand the meaning of the Incoterms you should seek legal advice, as the use of the appropriate Incoterm can minimise your risks and obligations.
What are the proposed changes?
Incoterms 2010 are expected to be more user-friendly and the explanations of each Incoterm will be expanded to assist users of the Incoterms.
Some of the specific changes that are expected include:
• Clear distinction to be made between the multimodal Incoterms and Incoterms for marine use.
• Cargo security to be covered to the extent possible with differing regulatory systems.
• Elimination of some of the current 13 Incoterms. However, despite some speculation, Incoterm FAS is likely to remain. Import clearance obligations exist.
What do you need to do?
Incoterms 2010 are not expected to take effect until 1 January 2011 and the final version has not yet been settled. We will continue to update you on the progress of the revisions.
In the meantime, we recommend that you ensure, and if necessary seek education advice to ensure, that your commercial trading terms accurately reflect the transaction. The AIEX will be updating the export procedures course & the export handbook at the end of 2010 to reflect the new changes in 2011.
- This information was provided by Andrew Hudson, Partner, Hunt & Hunt
**Rising interest rates and exchange rate fluctuations impeding growth**
**One-third of Australian traders sees strongest growth in Greater China**
**Australia’s confidence in line with developed markets despite its emerging market prospects**
Despite a majority of trade-oriented businesses in Australia seeing the booming emerging markets in Greater China and Southeast Asia as the most promising regions for trade growth in the next six months, confidence has stayed flat as Australia’s traders remain stuck in a developed market mindset.
According to the latest HSBC Trade Confidence Index, Australian exporters and importers expect trading business conditions to marginally improve but their overall level of confidence has remained static since the second half of 2009, when Australia recorded the highest jump among the countries surveyed. Moreover, traders are increasingly concerned about the impact of rising interest rates and foreign exchange fluctuations on their businesses in the next six months.
Andrew Skinner, head of trade and supply chain for HSBC in Australia, said: “While Australia’s traders remain positive about the future, the survey suggests they are tentative in their outlook as the volatility of exchange rates and rising interest rates weigh on their minds.
“Australia’s confidence positions it among the developed economies, yet almost three out of five Australian respondents are trading with the booming emerging markets of Greater China and Southeast Asia and more than half cite these areas as the most promising for growth. This suggests a gulf between expectations and the positive economic reality.
“The evolving dynamics of intra-Asian trade has put Greater China at the centre of activity, with markets like Australia continuing to gear up for increased trade with this bloc. Last year, China became Australia’s largest trading partner and our largest export market with two-way trade reaching $83 billion.
“With China's economy set to grow at a rate of around 10 per cent in 2010, Australian businesses appear to underestimate the extent to which they will benefit as the shift of economic power from West to East grows apace.
“Australia’s trade-oriented businesses need to unshackle themselves from their developed market mindset and embrace the opportunities they have as part of the dynamic emerging markets region of Asia,” Andrew Skinner said.
The HSBC Trade Confidence Index is the biggest survey of its kind surveying over 5,000 trade-oriented enterprises in 17 markets.
While the overall Australian outlook remains firmly in positive territory, with a score of 107, it is the lowest confidence in Asia and the third-lowest level of confidence among the 17 surveyed markets, followed only by France and Germany. Australia’s confidence levels are slightly ahead of the developed market average of 106, but well below the emerging market average of 122. The UAE, India and Vietnam scored highest with 134, 133 and 132 respectively while Australia’s top trading partner, China, placed sixth with a score of 120.
Ian Murray, Executive Director of the Australian Institute of Export said yesterday that he applauded the Governments forecast to be in the black earlier than expected, but making exporters the “sacrificial lamb” was a highly risky way to go.
At the top end Mr Murray said the miners are being hit by the super tax, while at the bottom end, the EMDG scheme has been cut by $50M and the funding for Tradestart has been halved.
The successful Export Market Developments Grants Scheme (EMDG) will fall short this year by an estimated $30million and the budget cut will mean that it could be $80M short next year. This, Mr Murray said “will destroy the confidence of SME exporters who will simply stop spending on developing their overseas markets.”
“While Australia may have escaped the impact of the GFC, that’s not the case for exporters” he said. And let’s not forget the impact the dollar is having on remaining competitive. What the industry wants is a scheme that is fully funded. Lift the funding to $200 million where it was last year, instill certainty and build confidence back into a program that every piece of research supports. The Institute urges Mr Rudd to act or Australian exports will suffer well into the future.
To add salt to the wound the Austrade new exporter development program Tradestart has also been chopped in half in this year’s budget Mr Murray said. “It beggars belief that a program that costs so little and delivers so much can be slashed with the stroke of a pen”. “With one in five jobs being export related, the budget should be going up not down.”
In 2008 the Rudd government spent a considerable amount of money on a review of Export Policy and Programs. Both the Export Market Development Grants scheme and TradeStart received the tick of approval for their continuation. In the budget this week they were slaughtered.
“At a time when countries like the USA are putting serious money behind an ‘export driven recovery’ the Rudd government is abandoning the countries lifeblood”. “One should never forget that export delivers 22% to GDP” Investment in export would be a far better way towards a black bottom line than slapping on taxes and chopping programs that assist our SME’s.
The Australian Logistics Council (ALC) supports investment in nationally significant infrastructure that demonstrably increases the efficiency of the national freight task, CEO of the Australian Logistics Council, Michael Kilgariff, said in response to the Commonwealth Budget.
ALC is the peak national body for Australia’s freight T&L industry, and aims to influence government policy decisions to ensure that Australia has a safe, secure, reliable, sustainable and competitive freight T&L industry.
“Australia’s freight task will triple by 2050 – from 503 billion tonne kilometres to 1,540 billion tonne kilometres, with local demand for total freight movements increasing by as much as 60% by 2020”, said Mr Kilgariff.
“ALC supported the Henry Review proposal that road infrastructure provision should be judged against economic criteria comparable to other forms of infrastructure, which would ensure that appropriate road infrastructure is provided where the national freight task requires it most.
“ALC therefore welcomes the Government’s announcement that it will establish a new infrastructure fund, worth more than $5.6 billion over ten years, to help tackle capacity constraints.
“ALC supports rigorous national freight task criteria being applied to how Infrastructure Australia develops the National Infrastructure Pipeline and expends the funds.
“In the ALC submission to Infrastructure Australia on the National Freight Network Plan, 'A Seamless Economy - A Seamless Supply Chain', ALC said Nationally Significant Infrastructure should have regard to the size and importance of the infrastructure to the national economy.
“ALC also recommended that Nationally Significant Infrastructure should include inland ports or intermodal facilities. For that reason ALC supports the allocation of $70.7 million to progress the intermodal terminal precinct at Moorebank in Sydney.
“ALC agrees that Moorebank will provide an integrated freight transport solution in Sydney which should reduce costs and relieve bottlenecks.
“Rail is also an important component of intermodal facilities and the national freight task.
“For that reason, ALC supports the increase of $1 billion in the Australian Rail Track Corporation (ARTC) to upgrade even more of its 10,000 kilometre network, with a total investment in the network now $3.4 billion over six years.
“ALC has a policy objective of supporting appropriate nationally consistent regulatory frameworks and transparent markets, which will improve the efficiency of the national freight task.
“We welcome therefore the ongoing commitment by the Rudd Government to national regulation by providing an additional $8.3 million to ensure national regulators for heavy vehicles, and maritime and rail safety, meet the deadline of implementation by 2013.
“In line with this, ALC still supports the Henry Review recommendation for the Government to encourage COAG to develop a National Road Transport Agreement to guide governments in the use and supply of road infrastructure and to nominate a single institution to lead road tax reform”, Mr Kilgariff said.
The Australian dollar plunged to a three-month low against a soaring greenback as a late afternoon sell-off on Wall Street Thursday sent investors fleeing for safety. At one point, the Dow Jones industrial average had sank about 9% as escalating fears of a broadening European debt crisis continued to roil financial markets. The euro nose-dived to its lowest in over a year against the safe haven U.S. and Japanese currencies, while against the Australian and Swiss units, the single currency tumbled to new historic lows. A Thursday meeting of the European Central Bank failed to arrest the common currency’s slide which is down about 5% this week against the greenback, while on the year, it has tumbled more than 11%. As expected, the ECB stood pat on interest rates. Though up modestly against the Aussie dollar early Friday, sterling fell to a one-year low against the U.S. currency, with uncertainty about the outcome of Thursday’s UK election weighing on pound sentiment. A raft of market events on Friday will be highlighted by jobs reports in the U.S., Canada and Switzerland. Locally on Friday, market players will study the Reserve Bank’s statement on monetary policy. If Asian shares today slide in sympathy with the U.S. stock losses the day before, risk-sensitive currencies like the euro and the Aussie could experience a volatile session.
Ecotech was one of nine Australian companies attending the recent Austrade Mining Mission to Peru. We visited three mines operated by Newmont, Milpo and XStrata Copper. The visits enabled us to view the processes and also talk to the various managers at the site. The ability to talk face to face with the relevant manager was a rare and fantastic opportunity. It certainly would have been a lot more difficult to plan these visits individually and Austrade should be congratulated for their dedicated hard work in organising this mission. Midway through the week we also joined with another Australian delegation, the Queensland trade mission, in Lima for a networking evening.
These missions are important for companies wanting to break into new international markets. It offered an opportunity to make face to face contact with the relevant people and give a real headstart to doing business in Peru.
The group consisted of a broad range of suppliers to the mining industry:
The Middle East represents an important and growing market for Australian Exporters across a range of Industry sectors. With Australia currently in FTA negotiations with the Gulf Corporation Council (Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, and United Arab Emirates), the opportunities will continue to grow for Australian exporters. In addition to the cultural differences that Australian companies must consider when looking at exporting to the Middle East, many companies overlook the importance of export documentation & procedures. Failing to take into account the practical aspects of doing business with a new country - financial planning, risk management and supply chain is a common mistake and can be extremely costly when doing business in the Middle East.
If you are considering the Middle East as a new export region then before you even start your market research you should ensure that you not only consider the country risk, commercial risk and market risk but that you have planned ahead for these. How will you finance your product? Will your local bank support your transaction? Will you be able to obtain a Letter of Credit? Then at the top of the list, should be market entry. What are the regulatory requirements for certain products in the Middle East?
It is imperative to consider all of the above when doing business with the Middle East. With tight regulations on customs and export documentation and difficulties accessing finance, what are the things that you need to watch out for in this market? Mainly they are the same ones that you will come across in most other markets where Australian companies do business:
1. All documentation must be either on the export companies and or the issuers Letterhead and signed/stamped. Any corrections must be stamped and signed by the issuer.
2.All documentation must be in English.
3. All documentation must be correct – this is important for any country you are exporting to but especially in Middle Eastern countries.
4.Check that the country/buyer does or does not require a Certificate of origin and/ or Embassy Certification - this is a requirement to most Middle East countries.
5. Make sure you forward any documentation in time to allow for the import clearance process by the buyer- this generally takes much longer in the Middle East compared to other regions.
6. All documentation must be manually signed
7. Check with the buyer at negotiation time regarding their documentation requirements and to avoid loss of profit at time of shipment - DOUBLE CHECK that you won’t be required to pay for additional documentation for other destinations.
8. Check any labeling and marketing requirements as these will vary from Country to Country within the Middle East.
9. Original documents will be required at clearance point - allow for time and cost to courier documents to the buyer after shipment.
10. The documents required for all commercial shipments to the Middle East from Australia are: Commercial invoice/ Certificate of Origin/ Bill of lading (or airway bill)/ Insurance certificate (if goods are insured by the exporter) and a packing list.
Dubai is a great starting place; it is essentially a small, competitive market and a gateway to other markets for Australian exports. Dubai is a also a much easier market to enter in regards to the documentation requirements.
Getting paid
• Protecting your payment is important. Many companies trading with the Middle East want the security of a Letter of Credit to back-stop their export sales. It is not that local companies are not credit worthy, but that formal reporting for business is less strict and thus more difficult to ascertain the real financial position of a counterparty. Australian banks can also add confirmation to Letters of Credit from Middle Eastern based banks, eliminating then both buyer and country risk.
• Credit Insurance is an alternative to protect open account receivables, if the Credit Insurer is comfortable with your counterparty.
• To finance sales into the Middle East, your bankers should be your first port of call. They can provide guidance and support for your export sales, and it is recommended to contact them early in your negotiations.
Many projects in the Middle East will require Bid Bonds and Performance Bonds to support applications. Again, contact your bank, but also consider the services of Export Finance & Insurance Corporation (EFIC), which specialise in supporting project work offshore.
For over 50 years the Australian Institute of Export has assisted over 15,000 exporters to ensure that these mistakes are avoided. The Export Procedures & Documentation Course provides practical information, presented in a concise format, providing participants with current facts, regulations and advice on exporting tangible products from Australia. Whether you're considering the export option or upgrading your industry skills in export, you will greatly benefit from the expert industry presenters. The course covers: export procedures & documentation, packaging, export finance and payment, insurance, customs, contract negotiation, terms of trade/ Incoterms and practical case studies on export documentation.
For further information on the short courses run by the Australian Institute of Export please visit the website: www.export.org.au & remember that before you go places, get the right practical education.
- Article by Lisa McAuley, Peter Mace & Dianne Tipping; Australian Institute of Export
The Australian Logistics Council (ALC) has welcomed the release of the report of the Australia's Future Tax System Review (the Henry Review) and has called on the Government to guarantee no net increase in the tax burden on the Australian freight Transport & Logistics (T&L) industry.
ALC is the peak national body for Australia’s freight T&L industry, and aims to influence government policy decisions to ensure that Australia has a safe, secure, reliable, sustainable and competitive freight T&L industry.
Australia’s freight task will triple by 2050 – from 503 billion tonne kilometres to 1,540 billion tonne kilometres, with local demand for total freight movements increasing by as much as 60% by 2020.
In recognition of this, Prime Minister Rudd said in one of his Australia Day speeches in January that “In 2010, the transport priority for the Council of Australian Governments will be freight transport.” [1]
“Given 2010 is the year of freight transport, ALC is disappointed by the Government’s lack of certainty offered on sensitive freight pricing issues”, said ALC Chief Executive Michael Kilgariff.
“It is an issue of great concern to the Australian freight T&L industry that the Government did not give any indication on its position on congestion pricing or any of the other recommendations relating to road transport taxation contained in the Henry Review.
“It is important for the Government be transparent about its preferred method of road pricing, so that businesses can plan ahead.
“The Henry Review proposal that road infrastructure provision should be judged against economic criteria comparable to other forms of infrastructure, could ensure that appropriate road infrastructure is provided where the national freight task requires it most.
“ALC therefore welcomes the Government’s announcement that it will establish a new ongoing infrastructure fund, and supports rigorous national freight task criteria being applied to that fund.
“In line with this, ALC is disappointed that a Henry Review recommendation for the Government to encourage COAG to develop a National Road Transport Agreement to guide governments in the use and supply of road infrastructure and to nominate a single institution to lead road tax reform[2] was not adopted.
“Such an Agreement is considered necessary to prevent ‘silo thinking’ within Government – in particular, that any new road pricing mechanisms developed within the Treasury works in harmony with work being undertaken by the COAG Road Reform Plan (CRRP) project relating to mass-distance-location pricing for heavy vehicles.
“ALC is calling on the Government to indicate what components of the Henry Report affecting transport infrastructure are to be adopted by the Government and what transport initiatives will be proposed to COAG as part of the year of freight transport”, Mr Kilgariff said.Download a full copy of the press release here>
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**Rising interest rates and exchange rate fluctuations impeding growth**
Ecotech was one of nine Australian companies attending the recent Austrade Mining Mission to Peru. We visited three mines operated by Newmont, Milpo and XStrata Copper. The visits enabled us to view the processes and also talk to the various managers at the site. The ability to talk face to face with the relevant manager was a rare and fantastic opportunity. It certainly would have been a lot more difficult to plan these visits individually and Austrade should be congratulated for their dedicated hard work in organising this mission. Midway through the week we also joined with another Australian delegation, the Queensland trade mission, in Lima for a networking evening. 
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