This media release was issued with the annual report series, Trade and Assistance Review 1998-99, on 16 November 1999.

“Trade barriers impose costs not only on a country’s trading partners but also on its own community”, according to a Productivity Commission report released today.

The report — Trade and Assistance Review 1998-99 — contains the first of a new series of estimates of the effects of trade restrictions on service industries.

The new estimates cover restrictions (other than prudential requirements) in the banking, telecommunications and maritime sectors of more than 35 economies. They show that:

• Australia has liberal regimes in banking and telecommunications, and a moderately restrictive regime in the maritime sector;
• South American and Asian economies have the most restrictive trade regimes in the three service sectors studied; and
• barriers to trade in services can increase the price of services by more than 50 per cent in the countries which erect the barriers.

The report comes ahead of the World Trade Organization’s proposed ‘Millennium Round’ of multilateral trade negotiations, intended to be launched in Seattle later this month.

This year’s report also contains the Commission’s latest annual estimates of budgetary and other assistance to industry. These show that:

• Commonwealth budgetary assistance is steady at around $3.3 billion a year; and
• the ‘effective rate of assistance’ is low for most agricultural and manufacturing industries at around 5 per cent or less; but
• the dairy, tobacco, passenger motor vehicles, and textiles, clothing and footwear industries remain highly assisted — the effective rate of assistance being more than 200 per cent in the case of dairy.

Several recent developments and policy issues in the trade and assistance field are also outlined in the report.