Indigenous Exporters Part of Australia’s Economic Recovery

Indigenous Exporters Part of Australia’s Economic Recovery

Indigenous businesses can grow much more and make even more significant contribution to the Australian economy, including by engaging in international trade and expanding their markets overseas. They just need some extra capacity-building, supportive networks and a conducive trading environment. Recognising this potential, the Export Council of Australia (ECA) and the Indigenous Network for Investment Trade and Export (IGNITE) have formed a strategic partnership.

DAP-Delivered At Place Incoterms® 2020

DAP-Delivered At Place Incoterms® 2020

Article 8 in our series of Incoterms® 2020 – In each article we will identify the responsibilities of the seller and buyer in the transaction at different points in the shipping journey.

What are Incoterms used for?

Incoterms® are primarily used for determining how the sale of equipment for delivery across international boundaries will be handled and who will pay for what in the transaction. They will not address the consequences of a breach of contract or exemptions of liability. Incoterms® 2020 relate to the terms between the exporter and importer.

Incoterms® 2020 cover the following broad points:

Delivery – Incoterms® 2020 specify when seller delivers to buyer:

Risk – Incoterms® 2020 specify when risk transfers from seller to buyer. Risk passes from seller to buyer when seller has fulfilled his obligation to deliver the goods

Costs – Responsibility of costs passes from seller to buyer at a point up to which the seller is obliged to pay transport (and insurance) costs

Our seventh Incoterms® is DAP, Delivered At Place – Incoterms® 2020

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.

The seller bears all risks involved in bringing the goods to the named place 
DAP can be used in any transport mode, and the risk transfers from the seller to the buyer as soon as the goods reach the named place of destination.

In DAP, Delivery at Place, the sellers is responsible for moving the goods from origin until their delivery at the disposal place agreed with the buyer ready for unloading at destination. The seller bears the risk until delivery of goods to the named place and should obtain a contract of carriage that matches the contract of sale until the agreed delivery point. If there is an extra fee for unloading the goods, the seller cannot charge it to the buyer. This term can be used for any mode of transportation.

Quick overview

What are the seller’s obligations?

  • General

The buyer must pay the price of goods as agreed.

  • Taking Delivery

The buyer takes the goods at the destination point.

  • Risks

All risk of loss/damage from the time or end of the period agreed for delivery. If the buyer fails to clear import customs or notify time/period, the risk is under the buyer.

  • Carriage

No obligation to contract a carrier.

  • Insurance

No obligation to insure the goods.

  • Delivery/transport document

Accepts the proof of delivery

  • Export/Import clearance

Assist with export clearance. Pay for import clearance and formalities (licenses, security, official documentation).

  •  Checking

No obligation.

  • Allocation of cost

Pay from the time goods delivered. Unloading. All costs for assistance. Pay duties and taxes for imports. Any additional cost if does not notify the shipment date or period.

  • Notices

Time or period for receiving the goods and name the point of receiving the goods.

Important points to note

DAP Incoterms® can be used for any mode of transport as well as for multimodal transport.

Buyer is responsible for import clearance and formalities (licenses, security, official documentation) including payment of duties and taxes if applicable unless otherwise agreed differently between seller and buyer.

Whilst there is no obligation for seller to insure the goods it is recommended that whilst under the seller’s responsibility and control that insurance cover is taken out.

MSM Milling: We have to value our local food production more than we have done

MSM Milling: We have to value our local food production more than we have done

MSM Milling, our featured member, transforms Non-GM canola seed bought directly from more than 1,000 local farmers, into value-added oil, meal and stockfeed products at its fully integrated oilseed crushing, oil refining, packaging and stockfeed manufacturing operation in regional NSW.

MSM Milling is a recognised and awarded exporter that ships high quality, ready-to-use products directly to end-users in more than 15 countries around the world. MSM Milling company shares its story on how their business has been impacted by COVID-19:

We’ve seen a tremendous surge in demand for locally grown, pressed and packaged Australian auzure Canola Oil, both domestically and internationally.  Our agility to respond to the sharp increase in demand, coupled with our location alongside major transport routes, meant we could quickly upscale production and deliver additional products to our valued retail, foodservice and food manufacturing customers.

MSM Milling is based in the middle of the canola growing area of regional NSW so our location again proved its advantage during this unprecedented time. Being based in a small community, coupled with the implementing of stringent measures, has enabled us to keep producing around the clock to keep up with domestic and export demand.

There’s a concerted move by many Australian buyers to support Australian farmers and manufacturers. Director Peter Mac Smith said: “One of the positives of COVID-19 is that there might be a mature debate about food security, where we come to value our local food production more than we have done. I hope onshoring becomes one of the most spoken words as we look to the future.”

2019 Women Trading Globally participant promoting Indonesian artisan design and craftsmanship to the world

2019 Women Trading Globally participant promoting Indonesian artisan design and craftsmanship to the world

2019 Australia Awards Women Trading Globally Program participant, Dian Elvira Rosa, established Kemala Home Living, a producer of high-quality, functional, and consciously-made home goods because she believes in Indonesian design and craftsmanship.

Kemala works fairly and ethically with artisan partners across Indonesia. Dian is driven by seeing the difference that her business is making for her staff and artisan partners; how they are growing together alongside the growth of the business.

Noticing the local market becoming more saturated and aware of the need to diversify risk, Dian wanted to try expanding Kemala’s sales to niche international markets. Before participating in Women Trading Globally, a short course supported by the Department of Foreign Affairs and Trade, she had read some articles and literature on best practices in exporting for small businesses, and tried to gain further insights by talking to friends who have export experiences.

For Dian, the Women Trading Globally program reaffirmed the importance of a strong USP and brand/product story. She has always known this is important, but realised it is especially true when competing internationally since “you’re trying to appeal to a new market that does not know your brand yet.” Dian also benefited from learning about building a message map, Incoterms, and export/import requirements.

After the program, Dian revisited her business plan and made revisions using the knowledge she gained from the program in order to strengthen Kemala’s operations internally. She was also selected by the Indonesian Ministry of Trade to participate in the largest annual trade fair in Indonesia – Trade Expo Indonesia 2019.

In 2020, Dian shares that at the onset of COVID-19 Kemala’s retail sales dropped significantly, and all local B2B as well as international orders were postponed or cancelled. She and her team therefore decided to:

1. focus exclusively, for the time being, on the retail domestic market;

2. strengthen presence on social media;

3. advertise on Instagram and Facebook (which they hardly ever did before);

4. join one of the biggest marketplaces in Indonesia in order to increase domestic outreach.

Sales are starting to stabilise again (even if the numbers are not as high as previous years) and for the past few months or so, Kemala Home Living has started receiving local B2B orders again.

Dian looks forward to increasing her domestic and international sales into the future, and her thoughtful approach to business along with an ethical supply chain puts her in good stead to reach her goals.

Reflecting on her Women Trading Globally experience, Dian stated:

“The WTG programme has definitely increased my confidence in exporting because I am now more equipped with the necessary knowledge and I have established connections that I know can assist me if and when necessary… I have done a few successful collaborations (participation in local trade and corporate events) with fellow WTG delegates Indonesia. I have also made new business thanks to introductions from fellow WTG delegates.… I now have more contacts from the ECA, Australian business owners, DFAT, and other WTG delegates whose knowledge and experiences I can tap into if I have any questions or when executing my export plan.”

NSW Strengthening business and community ties with India

NSW Strengthening business and community ties with India

Trade, investment and collaboration with one of the world’s most dynamic economies will be the focus of a COVIDSafe Australia-India bilateral awards initiative coming to Sydney in 2021 under a three-year partnership with the NSW Government.

Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres said the India Australia Business and Community Awards (IABCA) would complement other activities designed to promote greater links with the Asia-Pacific giant.

“Sustainable trade and investment are vital for jobs and prosperity in NSW,” Mr Ayres said.
“India’s rapidly expanding economy remains one of the world’s most promising sources of growth and continues to generate immense opportunities for Australian firms.”IABCA founder Sonia Sadiq Gandhi said the IABCA was designed to celebrate bilateral exchange across agriculture, education, energy, financial services, healthcare, infrastructure, resources, science and innovation, sport and tourism.
“The state of NSW plays a significant role in Australia’s rapidly developing economic ties with India, accounting for $1.8 billion of trade revenue annually,” Ms Gandhi said.
“This promising relationship has been well-illustrated through the IABCA platform.”

The IABCA, scheduled for next March, will form part of the NSW Government’s broader engagement, including initiatives such as the recently concluded, 12-month long Access India program, supporting firms to connect with the country’s fast-paced technology sector.

Trade and investment with India will also be supported under the Government’s Going Global program, part of a $12 million package launched last month by Deputy Premier John Barilaro and Treasurer Dominic Perrottet.
Going Global will provide export coaching, networking and in-market assistance through 15 tailored programs covering ten sectors and nine markets, including India, targeted at market-ready NSW scale-ups and fast-growth SMEs in a variety of sectors, including food and beverage, MedTech, advanced manufacturing and Cleantech.

“Exports accounted for 16 per cent of the total state economy before the effects of last season’s bushfires and COVID-19,” Mr Ayres said.
“Diversifying our markets to spread risk and create new sources of growth will be more important than ever as we emerge from the global pandemic.”Further information about Going Global and other assistance is available global.nsw.gov.au/nsw-export-assistance-package.global.nsw.gov.au/nsw-export-assistance-package..

Indigenous exporters part of Australia’s economic recovery

Indigenous exporters part of Australia's economic recovery

Talking-up the Indigenous share of the Australian Economy

Governments at every level and across Australia are looking for ways to recover from the current economic crisis. They don’t have to look far for a solution.

There are over 12,000 Indigenous businesses in Australia, that contribute as much as $6 billion to the economy. While these numbers are growing, they are not growing fast enough.

Indigenous businesses can grow much more and make even more significant contribution to the Australian economy, including by engaging in international trade and expanding their markets overseas. They just need some extra capacity-building, supportive networks and a conducive trading environment.

Recognising this potential, the Export Council of Australia (ECA) and the Indigenous Network for Investment Trade and Export (IGNITE) have formed a strategic partnership.

Under a recently signed memorandum of understanding, both have committed to support Indigenous entrepreneurs and businesses in their efforts to undertake international trade and attract investment.

ECA and IGNITE will work together to deliver export readiness courses, establish supportive ecosystems, provide ongoing mentoring and access to relevant up-to-date information to boost Indigenous businesses’ competitiveness and sustainability.

Also, with government partners, ECA and IGNITE will urge relevant international organisations to incorporate Indigenous issues in their agenda, so that Indigenous peoples everywhere can participate in and benefit from international trade.

There are opportunities, including from trade agreements, such as the Australia-UK FTA currently under negotiation. The UK is a huge market. For example, the e-commerce segment of ‘food & beverages’ alone is expected to reach a revenue of US$8.5 billion in 2020. Just a small slice of that would be more than satisfying for Indigenous Australian businesses.

Indigenous Australian businesses with the potential to make their mark on the global stage, include manufactured goods that feature Indigenous botanicals and active ingredients, design and fashion labels, international aid contractors into the region, as well as defence industry contractors.

Enterprises exposed to international markets tend to be more innovative and competitive. So, we applaud and encourage the success of Indigenous businesses here and overseas. The pay-off can be significant – new jobs created, skills upgraded, and incomes increased.

Authors:

Darren Godwell, a/Executive Officer, Indigenous Network for Investment, Trade and Export Arnold Jorge, Executive Director, ECA Edge, Export Council of Australia

Resilient Supply Chains May Depend on Trade Single Window

Resilient Supply Chains May Depend on Trade Single Window

Ongoing restrictions to contain Covid-19 and adverse competition between major trading economies are pushing Australian businesses to reconsider their global supply chain strategies. As they contemplate alternative operational locations and new sources of supply, they are looking to Government for supportive policies and programs. The Export Council of Australia therefore welcomes the 2020-21 Budget allocation of $28.6 million to implement a simplified trade system.

Resilient Supply Chains May Depend on Trade Single Window

Resilient Supply Chains May Depend on Trade Single Window

Ongoing restrictions to contain Covid-19 and adverse competition between major trading economies are pushing Australian businesses to reconsider their global supply chain strategies.

As they contemplate alternative operational locations and new sources of supply, they are looking to Government for supportive policies and programs. The Export Council of Australia therefore welcomes the 2020-21 Budget allocation of $28.6 million to implement a simplified trade system.

The Export Council of Australia therefore welcomes the 2020-21 Budget allocation of $28.6 million to implement a simplified trade system.

This includes the establishment of a ‘Trade Single Window’, which will require streamlining of processes and interoperability of systems across agencies, and between the public and private sectors.
As the costs of trade increase, especially transport costs, trade facilitation initiatives become critical for Australian businesses engaged in international trade.
For small and medium sized exporters, especially those operating with thin margins, any reductions in costs would make a meaningful difference.
These initiatives will also help in the decision-making processes of firms reassessing their supply chains.
On top of the reduced paperwork, the technological and digital advancement may provide alternative approaches to managing logistics. It will provide confidence in the efficiency and integrity of systems and boost Australian competitiveness.
Moving forward, the leadership by Home Affairs Minister, Peter Dutton, and Australian Border Force, will be crucial in ensuring there is a clear ‘Team Australia’ approach.
We encourage Government agencies to think less about why things can’t be done and think more about potential innovative and strategic solutions. We encourage agencies to be flexible and seriously consider the views of industry.
In addition, we encourage the Government to reach out to key trading partners to identify coordinated action to secure supply chains. We understand this may in part be happening under the Australia-India-Japan Economic Ministers’ forum.
We look forward to seeing progress on these various fronts, based on strong public-private dialogue and concerted effort.

Economic Recovery Requires Export Focus [Budget 2020-21]

Economic Recovery Requires Export Focus [Budget 2020-21]

This Budget mostly delivers the right ingredients for SMEs to keep functioning in the short-term, the next phase will be to ensure they become competitive and successful in the global context. Exports make a significant contribution to the Australian economy, generally representing more than 20% of Australia’s GDP, but they have been impacted by Covid-19.

Economic Recovery Requires Export Focus [Budget 2020-21]

Economic Recovery Requires Export Focus [Budget 2020-21]

Exports make a significant contribution to the Australian economy, generally representing more than 20 per cent of Australia’s GDP. But as with other parts of the Australian economy, Australian exports have been impacted by Covid-19.

Australian exports by value (of both goods and services) fell by 4 per cent in the month of August. That drop, however, does not fully capture the difficult struggle many small and medium sized exporters are currently facing.

So along with encouraging business investment and consumer spending, the Government needs to put sufficient attention on international trade.
If the Government seeks strong economic recovery, it needs to ignite all economic engines.
The 2020-21 Budget Statement delivered by the Treasurer, Josh Frydenberg, last night mostly achieves that.
The Export Council of Australia welcomes the announcement of the JobMaker hiring credit to encourage businesses to hire young people, the JobTrainer in support of training places, and write-off for the full value of eligible assets purchased by businesses.
We are supportive of the Government’s proposed investments in the manufacturing sector, which include the Modern Manufacturing Initiative, and the Supply Chain Resilience Initiative. The focus on recycling and alternative energy, as well as the boost in R&D funding, are forward-looking initiatives that would lay useful foundations. As a comparatively small domestic market, Australian manufacturers’ longer-term growth and success will require them to look overseas.
In addition, we welcome the proposed infrastructure investments, such as the Wheatbelt Secondary Freight Network in Western Australia, and the support package for regional areas which include funding for agricultural exporters. The Busting Congestion for Agricultural Exporters Package announced by the Agriculture Minister, David Littleproud, can be a game-changer.

Earlier announcements, such as the Digital Infrastructure package, which includes rollout of 5G and commercial testing in sectors such as agriculture, logistics and manufacturing, as well as the initiative in support of fintechs for financial services exports, should have a positive impact on Australian exporters.

We are pleased with the extension of JobKeeper. This is keeping many SME exporters afloat. However, we are now hearing of businesses being questioned by the ATO, seeking to distinguish whether their decline was due to Covid or otherwise. This is an additional stress businesses do not need and is counter to keeping people employed.
We had hoped the Treasurer would make international trade a key component of the Budget economic recovery narrative, because consumer spending could remain subdued in the immediate future, and manufacturing success will depend on exporting for growth.
Nevertheless, in a separate media release by the Trade Minister, Simon Birmingham, he highlighted the crucial role of international trade to Australia’s economic recovery. We particularly welcome the $317.1 million extension to the International Freight Assistance Mechanism until next year, and the establishment of a Joint Ministerial Taskforce on Simplified Trade.
We look forward to working with the Trade Minister and the rest of the Government to developing a clear plan that would help get goods moving again across borders in an efficient and affordable setting.
Such a plan should in the least involve expedited clearance processes for exports as well as imports, modernisation and interoperability between government and industry logistics ‘single windows’ systems, and coordination between key trade partners in enabling transport corridors, including travel bubbles.
Such a plan would give more than 46,000 small and medium sized Australian exporters (of goods) clarity and confidence as to when they can restart their livelihoods.
This Budget mostly delivers the right ingredients for SMEs to keep functioning in the short-term, the next phase will be to ensure they become competitive and successful in the global context.