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Issue 02 Winter 2015

Innovation and collaboration: Hewlett-Packard in the South Pacific Celebrating 10 years of the Free Trade Agreement






10 YEARS OF FREE TRADE Welcome to the second edition of AmCham Access magazine.


This past 1 January didn’t just usher in a new year. It also marked ten years of the landmark Australia-United States Free Trade Agreement (AUSFTA). Since the agreement went into effect, it has been a win-win for both countries with increased levels of investment and trade despite the economic impact of the Global Financial Crisis.


In 2013, the United States was the 3rd largest export market for Australian goods and services, totalling approximately AU$15.5 billion. Australian imports in the USA are up approximately 23% from 2004, prior to the free trade agreement.
















American Chamber of Commerce Suite 9, Ground Level 88 Cumberland Street Sydney NSW 2000 Published by AmCham www.amcham.com.au nswamcham@amcham.com.au


Since 2005, as members of AmCham certainly know, American investment in Australia has also increased. In 2003, USA foreign direct investment in Australia totalled just over AU$80 billion. In 2013, that number approached AU$150 billion. That is an incredible increase. There are many factors at play when discussing import/export/investment levels between countries, but what the AUSFTA has been very successful at doing is reducing the number of trade and investment barriers between the two countries. In fact, on the tenth anniversary of the agreement earlier this year, additional tariffs for specific agriculture and non-agriculture products on both sides have been removed. Free trade is about more than just financial figures, however. It’s really a sign of the enduring partnership between the United States and Australia. As business leaders living and working in Australia, I firmly believe we need to embrace, support and encourage the growth of that important bilateral relationship. It’s good for business – and it’s good for the people of our two countries.

Maureen Dougherty AmCham President President, Boeing Australia and South Pacific


Minister Robb


s firm friends and allies Australia and the United States have also long enjoyed a most material economic relationship. We can look back to the migrant exchanges during our respective gold rushes of the 1840s and 1850s, or to the growth in significant two-way investment flows; through to the contemporary collaborations between our film industries or the exchanges of knowledge in areas such as ICT, health and scientific research. Trust and mutual respect are the cornerstones of our relationship, underpinned by a shared set of core values; a non-negotiable belief in freedom and democracy and in open market economies, driven by dynamic and successful private sectors. The Australia-United States Free Trade Agreement (AUSFTA) embodies these values. Its signing under Prime Minister John Howard and President George W. Bush in 2005 was indeed a significant leap forward in the relationship and this year we mark the tenth anniversary of this milestone. AUSFTA has provided greater certainty and confidence to businesses while also creating new levels of market access for goods and services; extending to investment, government procurement, competition policy and intellectual property. This landmark agreement has been a catalyst for greater economic integration with growth, jobs and greater prosperity the dividends. Over the last decade, we have seen two-way trade in goods and services between Australia and the United States increase from $40.1 billion in 2003-04 to $58.2 billion in 2013-14. While it has ensured greater access to the USA market for Australian products, AUSFTA

has also seen more affordable entry of quality American inputs into a range of sectors, leading to greater efficiencies and enhanced productivity. Our resources and energy sectors, for instance, have benefited greatly from the availability of cheaper, high-quality USA-made machinery and equipment, which have resulted in more cost-effective and streamlined production. The United States continues to be by far the largest source of foreign investment in Australia. Two-way investment has grown from $642 billion in 2004 to more than $1.1 trillion in 2013 and these flows have certainly not been all one way. The USA is Australia’s major investment destination abroad with total investment of $472 million in 2013. We must continue to build on these numbers, in areas such as resources and energy, food and agribusiness, infrastructure and across a range of services to name a few. Australia’s ambition to support further sustainable development across Northern Australia is an example of where AustralianUSA cooperation can be further harnessed. Australia, with our small population, open economy and thin capital markets has always relied on foreign investment and this remains the case today. While AUSFTA has not been solely responsible for every positive development in the relationship, it is fair to say it has had a powerful ‘head-turning’ effect on businesses in both countries; reinforcing our status as trusted and reliable economic partners. The USA strategic rebalance or ‘pivot’ to the Asia Pacific also gives the partnership new impetus. As the region’s middle class grows into the billions, Australia and the United States are extremely well-placed to capitalise on the unfolding opportunities that these

markets present. Given our geography and well established links throughout the Asia Pacific, Australia is a reliable gateway to the region around us. Trade and investment reform – whether bilateral, regional or multilateral – are the bricks in the wall of freer global trade, and Australia along with the USA share an active commitment to pursuing further liberalisation. Since 2008 for example, we’ve been involved with the United States and 10 other nations in negotiations for a region-wide FTA – the Trans-Pacific Partnership Agreement or TPP – which will support greater liberalisation in the Asia Pacific region. At the time of writing, the negotiations were at an advanced stage and we’re hopeful of reaching a conclusion that will not only afford new levels of market access for our goods, services and investment, but will also put in place the architecture, including a common set of rules allowing for more seamless trade between countries accounting for 40 per cent of global GDP. The remarkable dynamism of Australia’s economic partnership with the United States is no accident; it has come about as the result of deliberate effort and hard work in both countries over many years. To this end, the American Chamber of Commerce (AmCham) in Australia can be rightfully proud of the part it has played and I wish you well in your work in further fostering this most important alliance. Andrew Robb AO MP Minister for Trade and Investment


www.amcham.com.au Access Winter 2015


Ambassador Berry


he United States has no better friend than Australia. Our long friendship and alliance spans decades – and we have stood shoulder-to-shoulder in every major conflict since World War Ibut we also are partners in the conquest of space, in fighting disease, in scientific research, through cultural and educational exchanges, and in trade and investment. Over the past decade, the Australia-USA Free Trade Agreement (AUSFTA) has become the cornerstone of our modern economic relationship. But our economic links go back centuries.  In 1792, the Philadelphia was the first USA ship to sail into Sydney Harbour, with its cargo holds filled with rum, tobacco, and beef for sale to the new Australian settlers. Since then, we have built a trade and investment relationship that can be measured at more than a trillion dollars.

Our two countries have always been Pacific powers. We are, and will continue to be, major players in the region

More than just a trade agreement, AUSFTA is also a symbol of our common values – freedom and democracy, openness and transparency, and dynamic private sector-led economies that function for the benefit of the population as a whole. AUSFTA has been everything we had hoped it would be. Over the ten years since it came into force, it has helped fuel the trade and investment that have kept our economies humming.  USA exports of machinery for Australia’s agricultural, mining, and oil and gas industries, together with some of the United States’ biggest resources investments in the world, have supported the enormous growth in Australia’s exports to Asia and farther afield. Australia’s economy showed robust growth even during the recent Global Financial Crisis, and sizeable USA trade and investment flows can take some of the credit. The United States is a beneficiary of this relationship as well. Australia’s finest wines and superior beef and lamb have long graced American dinner tables, but that is hardly the extent of the benefits. USA exports helped keep our own economy afloat during the difficult recession.  Products exported to Australia support approximately 300,000 jobs back home, and Australian companies operating in the United States directly employ nearly 90,000 Americans. As the USA economy continues its broad recovery, we can credit our strong international ties for cushioning the downturn and powering its return to health.


During a trip back to the United States in March with my AmCham friends, we visited some of the top USA companies that have set up operations in Australia and talked to many other businesses – both large and small – that are exploring the possibilities of exporting to the land Down Under. In each city, we shared what makes Australia so attractive to investors.  I highlighted the prevalence of rule of law, the stable business environment, strong property rights protection (physical and intellectual), clear and transparent regulations, and an open approach to foreign trade and investment.  Hundreds of America’s top businesses have major operations in Australia, and I have no doubt that many more companies will soon follow. Australia and the United States are preparing to embark on the next phase of our economic relationship: We are negotiating, together with ten other Pacific Rim countries, the regional Trans-Pacific Partnership (TPP) trade agreement. The

that we intend to remain engaged in the Asia-Pacific, which will be the world’s engine of economic growth in the 21st century.

TPP will take the strong framework for trade and investment that we have enjoyed bilaterally and add new provisions on labor and environmental protection, a free and open Internet, and rules on how stateowned enterprises operate in the global economy. Our companies and workers do best when there are firm rules and protections, and the TPP will start us on a path where these rules are the norm and not the exception.

The American Chamber of Commerce in Australia has been a central part of our bilateral economic relationship. The immense trade and investment numbers that we have achieved are the result of the hard work of many people in the USA and Australian business communities, from large corporate members to the thousands of small businesses that are the backbone of our economies. We are proud of all you have accomplished and expect to look forward to many more decades of success together. John Berry U.S. Ambassador

Our two countries have always been Pacific powers. We are, and will continue to be, major players in the region. The TPP will send a clear signal to our friends and allies

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www.amcham.com.au Access Winter 2015

Global reach, local knowledge


DECADES OF COLLABORATION Innovation and collaboration is in HP’s DNA. Since 1967 when Hewlett Packard (HP) first opened its doors locally in Melbourne, we have been harnessing the brightest people and the best ideas to bring value to the Australian economy.


or our Australian operations, the ability to leverage innovation from across the globe means Australian clients have access to leading-edge technologies. In addition to the benefit of a corporate headquarters located in Silicon Valley, an annual investment of $3 billion USD in research and development, 36,000 patents and great minds working in HP labs, our Australian clients are assured of having access to a unique resource. With our significant local presence, we get to know our clients on a personal level, to understand the unique needs facing their business and share with them our deep understanding of the challenges and opportunities that exist in today’s fastpaced global business environment. An enduring partnership In order to adapt to today’s business landscape, organisations must become datadriven enterprises, they must compete on customer experience, they must enable the most productive workplace, and they must secure their digital assets and manage risk. Recently HP were privileged to host the former USA Ambassador, the Honourable Jeffery Bleich, to discuss cyber security and the USA’ approach to maintaining data integrity. Ambassador Bleich shared with several members of AmCham the latest thinking on addressing security concerns in an era of rapid digitalization, where an increasing amount of our

business transactions are conducted online. He provided valuable insight into the challenges facing both the USA and Australia and ways we can circumvent these, such as the evolution of password protocols, the value of educating citizens on the need for digital security in the virtual world, how businesses can work together to make their information as secure as possible, and the role of government in protecting its data both at home and offshore. These kinds of opportunities to meet and share knowledge are a valuable part of the relationship-building AmCham fosters. The importance of education As a business which employs thousands of Australians, we are proud of our American ties. It’s these American roots that make our expansion into Australia possible. Without those humble beginnings in a garage in Palo Alto in 1935, our Australian employees and clients would not have access to the rewarding careers and superior service delivery that they do today. But we also know that it’s not a one-way street. We have a collaborative relationship with our USA-based headquarters which involves both giving and receiving innovative products and programs. Project Dandelion, a program designed to utilize the unique skill sets of people with autism spectrum disorder, has been widely praised as the first of its kind. The pilot has been rolled out right here in Australia, in partnership with Danish firm Specialisterne and the


www.amcham.com.au Access Winter 2015

We have a collaborative relationship with our US-based headquarters which involves both giving and receiving innovative products and programs. Australian government Department of Human Services. Based in South Australia, Project Dandelion has been well-received by existing employees, particularly those who have family members or friends with an autism spectrum disorder. We recently presented the program to the UN as part of World Autism Day in New York City, and we hope this is the beginning of great strides being made in this area. In the Spring issue of Access, AmCham director Geoff Culbert said that Australia’s ability to compete globally in a connected, technology-driven future “lies in the strength of our knowledge economy.” He said that we need to invest more in STEM education to achieve this aim, and HP has done exactly that. In partnership with the University of SA and the state government we have co-authored a 4 year honours ICT degree – including paid placements within HP. We have also established an innovation and collaboration centre at the university for both students and the business community to collaborate, explore ideas and access a wide range of resources to conduct research, develop their products and grow their businesses. We have also partnered with the Club Kidpreneur program to educate primary


school aged children on how to develop business skills. Club Kidpreneur is a not-forprofit social enterprise seeking to foster entrepreneurial skills in children aged 8-12 by teaching them to build and launch their own micro-enterprises. Their mission is to inspire, educate and empower kids by fostering creativity and building confidence. The program uses interactive education programs to help kids to use business practices to engage with their local communities. Rather than simply providing monetary support, we are offering Club Kidpreneur access to our expertise. We have a wealth of talent within HP and this relationship represents an opportunity to give back to the community by sharing our skills and knowledge with the next generation. This partnership means so much to us because it is a great fit with HP’s aim to “make it matter” in everything we do. This focus on education in Australia flows on from HP’s worldwide commitment to creating a better future through action and innovation. People power HP was recently voted “Most Attractive Employer” in the ICT category as part of the annual Ranstad Awards. The Randstad Awards come from the world’s largest

survey into employer branding. Based on the perceptions of over 12,000 jobseekers locally, the research reveals how Australia’s largest 150 employers are perceived in the eyes of today’s jobseekers. Factors taken into consideration include strong management/leadership, interesting job content and a strong workplace culture. Local innovation – the impact of free trade What the AUS-USA free trade agreement does is broader than its remit on paper. As well as allowing investment flows it creates a broader sense of trust and camaraderie between the two nations. As investment opportunities have expanded over the past ten years, so too has the bond between the countries deepened. Nick Wilson Managing Director, Hewlett Packard South Pacific

The Australia–United States Free Trade Agreement

A LONG HISTORY AND A VITAL FUTURE The Australia-United States Free Trade Agreement (AUSFTA) was negotiated to strengthen economic integration with the United States across all sectors of the two economies. It is of huge importance to both Australia and to the United States, especially as the USA applies a more concentrated focus on the Asia Pacific region.


USFTA improves Australia’s access to USA markets (and vice versa) and boosts Australia’s attractiveness as a place of interest for USA investment. Apart from making it easier for Australian enterprises to compete in one of the biggest markets on the globe, it also ties Australia more closely to the most technologically advanced economy in the world. After much negotiation, the AUSFTA was signed off on 18 May 2004 and came into effect on 1 January 2005. According to Niels Marquardt, CEO of AmCham in Australia, “It has done exactly as expected. We’ve doubled trade and we’ve tripled investment in both directions. I think the investment issue is enormous, raising the threshold for approvals and making it a free market for investment. It has unleashed an amazing positive force in the economic relationship and created thousands of jobs.” Agreements covering economic relationships between nations are rarely simple and straightforward – yet they can be key linchpins in the multi-layered network of agreements that influence ongoing international relationships. The overall statement of good intent from the politicians has to be there, but as the saying goes, “the devil is in the detail”. And in this case there are reams of details. Negotiation is ongoing. Change is a constant due to the dynamic international landscape. Australia has a diversity of existing Free Trade Agreements, with countries including New Zealand, Chile, Japan, Korea, and Malaysia. The China-Australia FTA negotiations have been recently concluded and more FTAs are being negotiated. These


include the Australia-India Comprehensive Economic Cooperation Agreement, the Indonesia-Australia Comprehensive Economic Partnership Agreement and the Trans-Pacific Partnership Agreement among others. Such agreements are years in the making. For example, an FTA between the United States and Australia was talked about as far back as 1945. It surfaced again under the Hawke government in the 1980s, but was knocked back by Paul Keating. Under Prime Minister John Howard and President George W Bush in the early 2000s, an FTA finally started to look like a possibility. Earnest negotiations for the FTA began in April 2003 and it was agreed to in February 2004, being signed off by Australia and the USA in Washington in May 2004. Thereafter passed into law by the governments of both countries, the agreement came into force on 1st January 2005. Its significance is long term, far reaching and not to be under estimated. “It is not just the balance of trade or how much beef or how many tractors…it is a much broader piece,” Mr Marquardt says. “The economic facts are one thing, but I think that psychologically, there’s an even bigger effect. When we concluded this agreement with Australia, it was the first major economy we reached out to in order to conclude an FTA in the Asia Pacific Region… and it sent out a signal that there exists – between the United States and Australia – the best economic architecture to facilitate business between countries. “And that is exactly what it has done.”

Now, he says, Australians can do business in a much more unfettered way in the United States. “There are thousands of businesses that have set up there, and the same is true in this direction.” So called ‘simple’ trade agreements — for example, covering a particular commodity or service or industry sector — can very quickly become complex when it comes to a general agreement covering a wide range of activities between sophisticated modern states. There are inevitably many, many diverse interests to be taken into account. While there may be some losers, there are a lot of winners. Opportunities abound. However, such significant trade arrangements are not without their critics. Although according to Niels Marquardt they come from the margins. “There have been a few academics and others who were negative from the start and did not wish to see themselves proven wrong, and so have dug in their heels and have said it doesn’t measure up, or has been unbalanced or unfair.” In a complex world that never stays still, agreements often have to be implemented in agreed stages over many years. With AUSFTA, there are certain provisions that only come into effect on the 10th anniversary of the initial signing. That includes incremental reductions of tariffs on some products such as Australian wine to become zero on that 10th anniversary. The remaining USA and Australian tariffs on textiles and apparel have now also been eliminated.

The text of the Free Trade Agreement is divided into some twenty-three sections, addressing a broad complexity of issues, ranging from definitions, to types of goods included and excluded, services, financial matters, electronic commerce, intellectual property, environmental matters, customs administration, labour and the like. AUSFTA has been in many ways a landmark agreement. “Look at what we’re doing now… consider the Trans Pacific Partnership,” Mr Marquardt says.

The United States and Australia are the closest of partners in trying to expand the benefits we have to the entire region And in doing so create a template for free trade for any country that wants to belong to the Trans Pacific Partnership, including Korea, China and the Philippines – every country in the region. “Through the leadership benefit of that partnership, that agreement continues to pay dividends as we march into the 21st century.” It has been many years in the making, but AUSFTA is here to stay for a long time to come. In an uncertain world it is a vital international agreement that sets a standard for the international community. Dan Stojanovich

FORTREND SECURITIES PTY LTD, LEVEL 41, 55 COLLINS STREET, MELBOURNE VIC 3000, AUSTRALIA www.fortrend.com.au PHONE: (03) 9650 8400 accounts@fortrend.com.au FAX: (03) 9650 8740


www.amcham.com.au Access Winter 2015

MORE TRANSPARENCY, BETTER SERVICE Impact of Australia-USA FTA on Specialised Therapeutics Australia


inding innovative healthcare solutions is best achieved with an international approach, and Specialised Therapeutics Australia (STA), has dedicated itself to working with leading international pharmaceutical and diagnostic companies. The Victoria-based biotherapeutics firm provides patients with access to innovative healthcare solutions through its partnership with several leading USA biopharmaceutical and technology companies, allowing them to commercialise their innovative product portfolios in Australia and New Zealand. The 2004 Australia-United States Free Trade Agreement was dogged by media reports and public commentary that the FTA would result in substantially higher prices of USsourced pharmaceuticals on the Australian Pharmaceutical Benefits Scheme (PBS). Several reports projected that the Australian taxpayer would be liable for additional cost to the PBS of $1.5 billion or more for the same drugs at the same level of use and with no increase in health benefits to Australians. But this fear proved to be unfounded, said Carlo Montagner, chief executive of STA. “There were no aspects of the FTA that directly resulted in any immediate or subsequent increase in pharmaceutical pricing. In fact, the opposite has occurred,” Mr Montagner said.


The Government and Medicines Australia (which is comprised of many USA pharmaceutical companies) agreed to a Memorandum of Understanding that in the past five years has delivered several billion dollars in cost savings to the PBS.

“Furthermore, there is no evidence that the significant gulf in pricing between the USA and Australia that existed prior to the FTA has changed in the years since its implementation.” What the FTA provided to the pharmaceutical sector in Australia and STA were improvements in the reimbursement application process and transparency throughout the PBS on pharmaceuticals. The FTA formalized a process whereby substantial dialogue can take place between the pharmaceutical company and the government prior to reimbursement applications to the PBS. It further formalized Pharmaceutical Benefits Advisory Committee (PBAC) decisions to recommend the approval or rejection of an application. “STA has utilized this process many times and have found it invaluable in fine tuning our reimbursement applications by

better understanding the issues from the government’s and PBAC’s perspective,” Mr Montagner said. Importantly, the FTA specifies a data exclusivity period of five years for pharmaceuticals. While this was in line with Australian law at the time of the signing of the FTA, Australia is now unable to modify the data exclusivity period as it is now entrenched in the FTA. This particular component of the FTA has been utilized by STA in submitting new drugs for approval even though the original patents have expired. Without such protection, there would be no incentive for STA to incur the significant costs involved in bringing such medicines to Australia, Mr Montagner said. While the FTA has brought benefits to Australians, further improvements to the process of enabling more Australians to access new innovative medicines are required. The much anticipated Trans-Pacific Partnership agreement is one pathway that may help in realizing this outcome.



These bugs are an

orking in agricultural pest and There were delays for many international companies involved, vessels can cause wide shipping, we need were delayed off-shore while to navigate trade suitable treatments were spread damage flows, commodity identified at marine terminals. to fruit and prices, seasonal This had a flow-on effect with vegetable crops demands and the increased pressure on land ocean environment. based logistics companies to In late 2014 it was deliver the finished product the discovery of to consumers. Brown Marmorated Stink Bugs on cargo Government delegations from Australia originating from the USA to Oceania that and New Zealand (who also had major created an industry wide impact. concerns about the pest) visited the USA in These bugs are agricultural pests and can February to inform industry partners why cause widespread damage to fruit and pre-treatment was required and how. The vegetable crops. Although common in the meetings and the action items were focused USA, they had not yet reached our shores. on maintaining trade without jeopardizing our biosecurity regime. Given the high potential impact on the Agricultural industry, it was absolutely Clear directives regarding pre-treatment of necessary for the government authorities cargo to rid it of the bugs prior to loading to take all possible precautions. were issued and followed. All industry partners worked on ensuring that this Within a matter of days, shipping lines, unanticipated treatment was completed importers, brokers, and terminal authorities without causing an immense bottleneck became experts in the field of insects, at the USA terminals. fumigation techniques and treatments. A crisis such as this acts as a trigger point To everyone’s credit, all affected parties for improvements and contingency plans. worked with the government to ensure that We expect that next season (starting in the potential infestation was contained.

September) there will be a need for further quarantine directives and those involved are preparing for how best to facilitate this. The outcome overall has been positive. It showed how the industry worked together to support the Government in finding and implementing new solutions to ensure that the situation was contained. All rational ideas were considered and where it benefitted the entire industry were implemented. This allowed for clear processes to be put in place. It allowed affected parties to work with experts on fumigation – both in the USA and Oceania – in helping to control the spread of the bug. By acting quickly and working together, there was minimal disruption of trade to ensure business continuity both in the USA and Australia. This is no longer a crisis, it is now a known and manageable issue that we will continue to work through. Bryan McCausland Wallenius Wilhelmsen Logistics Oceania


www.amcham.com.au Access Winter 2015


Much has changed since Australia and America first committed to an alliance more than 60 years ago in San Francisco. Nowhere is that clearer than in the Indo–Pacific, where an emerging China and energised Asian economies are creating new opportunities and challenges for Australia and America to jointly face.


he challenge in a historically strong alliance, anchored in shared values and struggles, is to make sure it keeps refreshed and evolves in the best possible direction. For exactly that purpose, the Australian government set up the United States Studies Centre in 2006. A collaboration of the American Australian Association and the University of Sydney, the Centre is a hybrid university centre and think tank. Each year more than a thousand students receive postgraduate and undergraduate education, participate in study abroad programs, and complete internships — including internships with the United States Congress. After the 2011 visit to Australia by President Barack Obama, the Centre realised the


The program convenes policy events, including annual conferences in Washington and Canberra, to hone ideas and discuss issues from both American and Australian perspectives

need for more policy-oriented research to provide ideas and insights to governments in Canberra and Washington, as well as the broader public in both Australia and America. The Alliance 21 program, launched by Prime Minister Julia Gillard in 2011, was renewed by the Abbott government last year and re-launches this July. With the support of the USA and Australian governments, as well as corporate partners Northrop Grumman Australia, Boral, and Dow, the second phase of the Alliance 21 research program will examine defence and foreign policy issues, trade and investment, and the changing nature of the USA alliance system in Asia. The program convenes policy events, including annual conferences in Washington and Canberra, to hone ideas

and discuss issues from both American and Australian perspectives. It hosts the Alliance 21 Fellows: senior policy experts and scholars seconded from the United States to Australia and vice-versa to work on specific policy issues. Alliance 21 publishes a series of policy-relevant research papers, on issues ranging from the Trans Pacific Partnership to South China Sea maritime security. And in 2015 the Alliance 21 program will convene a week-long summer workshop designed to teach promising mid-career Australians from across government, the military, academia and business the strategic dimensions and challenges of the Australian–American relationship.

The program benefits from a wide and growing network of supporters in the United States and Australia, including prominent experts and senior political leaders who have addressed Alliance 21 conferences and taken part in program policy workshops. With the help of partners like the American Chamber of Commerce, we are making sure that the Australian and American alliance is set to endure for the next century. James Brown directs the Alliance 21 program at the United States Studies Centre, University of Sydney


www.amcham.com.au Access Winter 2015

FOUR TRUTHS for successful USA market entry

“If we can only sell one ice-cream to each Chinese consumer, we can retire early.”


The USA is not one market but many: Target market selection can create winners TRUTH TWO

Premium positioning creates room to move: Winners have a point of difference with margin to re-invest TRUTH THREE

Choice of distribution and partners are critical: Winners are clear on who they want to reach and how TRUTH FOUR

From little things big things grow: Winners manage from the ground and are invested locally.



he same can be said of all large markets – including the United States. As Australian business challenges itself to find new growth, we are continually presented with the appeal of internationalization. Casting your gaze overseas can deliver additional income streams from new and existing products and services. With its scale and potential upside, the USA, like Asia and Europe, has been on many ‘to do’ lists and remains a serious option for future growth. The attraction lies in the extensive cultural, language and trade links between the USA and Australia. What lessons can boards draw from the successes and failures, when deciding how the USA might provide future revenue growth? Over the past decade our firm has advised clients on ‘go to market’ growth strategies in the USA. Our experience suggests four long-held truths remain relevant. Graeme Chipp Managing Director of Growth Solutions Group GSG is Australia’s leading customer led growth consultancy. www.gsg.com.au



TRUTH ONE The USA is not one market but many: Target market selection can create winners.

TRUTH TWO Premium positioning creates room to move: Winners have a point of difference with margin to re-invest.

TRUTH FOUR From little things big things grow: Winners manage from the ground and are invested locally.

Few assume that China or Europe are each single monolithic markets, and neither is the USA. It may be demographically smaller than some of its peers, but the USA still has 16 times Australia’s population: 319 million people in 50 states. The Californian economy alone is almost 1.5 times larger than Australia ($2.2 trillion to $1.5 trillion).

The size and scale of the USA offers greater niche market potential, which is often difficult to find in Australia.

Outsourced distribution still requires servicing; Getting market selection, positioning and distribution strategy right allows focus on what support is needed.

National supermarket chains do not purchase centrally. Walmart still has regionally devolved purchasing decisions, while distributor groups are organised by region or state. Business regulations differ between states. If you look at alcoholic beverages for liquor and wine, each state is free to create their own regulations, governing everything from trading hours to distillery manufacturing methods.

While shifting exchange rates can squeeze margins or require businesses to increase prices, premium positioning builds a price margin buffer. TRUTH THREE Choice of distribution and partners are critical: Winners are clear on who they want to reach and how; Premium positioning demands alignment with choice of distributors. For example, premium wine should be sold through the right restaurants or retailers.

Success breeds success. Focusing on building depth in one market builds confidence, knowledge and a track record to underpin your plans for roll-out and scale into other markets. These four truths apply to the USA, as in any market. Drive focus from a deep understanding of who your customers are, who they can be and who is serving them. Then drive your positioning and focus on which market is right for entry as a first step to growth.

Ensuring you connect with your distributor’s sales force requires a clear strategy. Why will they sell your brand? Is there sufficient support? Partnering with like-minded organisations is a win/win.


www.amcham.com.au Access Winter 2015

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15年6月3日 下午12:50

Upcoming Events New South Wales Tuesday 28 July

Greg Hywood Chief Executive and Managing Director Fairfax Media Join AmCham at our Business Briefing with Greg Hywood, Chief Executive & Managing Director, Fairfax Media. Greg will discuss the changing face of Media Audiences – more interested and more engaged than ever before. Mr Hywood has enjoyed a long career in the media and government. A Walkley Award winning journalist, he held a number of senior management positions at Fairfax including Publisher and Editor-in-Chief of each of The Australian Financial Review, The Sydney Morning Herald/Sun Herald and The Age. He also held the position of Group Publisher Fairfax magazines.


Thursday 30 July Gillon McLachlan Chief Executive Officer Australian Football League

media interest – it is estimated to make a multi-billion dollar contribution each year to the Australian economy. Gillon McLachlan is the Chief Executive Officer of the Australian Football League. Gillon has worked for the AFL since 2000, initially as a consultant in strategic planning before being appointed General Manager Commercial Operations in 2003.

Western Australia Tuesday 4 August

Hon Mike Nahan, Member for Riverton Mike Nahan is the Western Australian Treasurer; Minister for Energy; Citizenship and Multicultural Interests. Dr Nahan was initially appointed to Cabinet as Minister for Energy; Finance; Citizenship and Multicultural Interests following the Liberal National Government’s electoral win in March 2013. He was then elevated to the position of Treasurer in March 2014.


Thursday 20 August Tracey Fellows Chief Executive Officer REA Group

AFL has been played for more than 150 years and the AFL now has 18 clubs located in five States, with matches held in world class venues across Australia. Not only does the code bring huge enjoyment for players and fans alike – whilst generating significant

Tracey Fellows is Chief Executive Officer of ASX-listed REA Group, responsible for the Group’s operations and investments in Australia and international markets.


inclusive board, and ensure that all AmCham members are represented at the Board level.

New Constitution A renewed focus on advocacy, access and information has led the way for AmCham in the last 12 months, with a new constitution signed off at the Annual General Meeting in Sydney at the end of March.

Trade Missions GASTECH 2015 27th to 30th October, Singapore AmCham is taking a fully escorted Trade Mission to Gastech Singapore. The Gastech Conference & Exhibition is the leading event for the international oil & gas industry and a global meeting place for energy professionals.

AmCham’s Board of Directors, led by President Maureen Dougherty, presented the year’s achievements to a full house of AmCham corporate members, who voted in a new Board, and approved a revised Constitution which will allow for one board member to represent AmCham’s smaller businesses. This will allow for a more

AmCham delegates spend five days in Singapore at the conference and exhibition, attending technical programs, topical sessions and taking part in pre-planned meetings, networking functions and site visits to Global Head Offices.

REA Group is a digital advertising business specialising in property. It owns and operates Australia’s leading residential and commercial property sites, realestate.com.au and realcommercial.com.au. Prior to joining REA Group in August 2014, Tracey was Executive General Manager of Communication Management Services at Australia Post, responsible for the physical and digital mail business which encompassed 13,000 employees. Born in Canada, Tracey holds a Bachelor of Economics from Monash University and a Postgraduate Diploma of Banking Management from the Macquarie Graduate School of Management.

South Australia

Wednesday 9 September John Berry U.S. Ambassador John Berry presented his credentials to Governor General Quentin Bryce on September 25, 2013, becoming the 25th U.S. Ambassador to the Commonwealth of Australia. As Ambassador, he seeks to strengthen the USA-Australia alliance, which has served as an anchor of peace and stability in the AsiaPacific region and the world for more than sixty years; to increase bilateral trade and investment; and to deepen cultural, scientific and environmental cooperation between the United States and Australia.

INNOVATION MISSION 2015 9th to 13th November, Silicon Valley USA AmCham’s CEO Mr Niels Marquardt will lead an Innovation Mission to Silicon Valley in November 2015. This mission will introduce Australian companies to the latest in thought leadership and innovative thinking, access to key executives in a number of companies both large and small will provide insights into future trends in technology, leadership and innovation.

If you would like further information on our Trade Mission program please contact AmCham at nswamcham@amcham.com.au


www.amcham.com.au Access Winter 2015

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Profile for American Chamber of Commerce in Australia

AmCham Access Magazine - Issue 2  

American Chamber of Commerce - Winter 2015 Issue of Access Magazine

AmCham Access Magazine - Issue 2  

American Chamber of Commerce - Winter 2015 Issue of Access Magazine

Profile for amchamau