THE TIME has never been better for Australian law firms to sink their teeth into global and regional trade and investment opportunities, according to two University of New South Wales (UNSW) academics.
The multitude of recently concluded multilateral, bilateral and regional trade agreements, along with bilateral investment treaties, will radically change Australia’s international trading relationships, argue Leon Trakman, dean of the UNSW law school and Bryan Mercurio, a senior lecturer at the university.
Yet “despite these excellent opportunities, Australian law firms remain ill-equipped to move into this exciting new area of law”, Trakman told Lawyers Weekly.
Australia’s resource-based economy has left firms lagging in their ability to perform in international trade and investment markets, Trakman said.
“It’s not an issue of not having the talent. It’s really a question of the area not being particularly well-developed to this point, largely because the business hasn’t been there.”
He believed that although there will be a strong inclination to partnering with specialist firms abroad, Australian firms need to seize the initiative in a significant manner over the next five or six years in order to compete internationally.
The challenge facing legal advisors is to provide adequate guidance for Australian and foreign investors or businesses into the regional and global market. In the case of a developing country, that would include advice on basic entry requirement issues and the particulars of that jurisdiction, he claimed.
Australia has already finalised trade agreements with Singapore, the United States and Thailand, in addition to the longstanding agreement with New Zealand.
Negotiations are now underway with China, ASEAN, Malaysia and the Gulf Cooperation Council, which includes Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia, Trakman noted. The government has also commissioned a feasibility study into a possible agreement with Japan, and called for public consultations into ties with Mexico, he said.
He argued that these agreements provide for increased export and import opportunities as well as improved investment access for Australian and foreign investors. Importantly, as well, the agreement with the US could help to lure foreign investors who see Australia as a gateway to Asia.
The potential benefit in drawing investment directed to Asia through Australia is limitless, the academic claimed.
For Western investors in particular, Australia is well placed to provide “a gateway in the sense of providing a stable highly developed legal system, [with] sophisticated lawyering, as an instrument from which one would move into the Asian market”, Trakman said.
“We’re not the only one — there’s Singapore [for example] — but we would certainly be a very sympathetic and known one with high calibre lawyering and servicing.”
The prospective free trade agreement with China, with its unlimited potential, should be particularly thrilling for Australian firms, he said.
“China is clearly a growing giant, and every industry supports that with a massive, booming economy. The opportunities there are in almost every sector, growing daily … and I think the law firms that are positive and opportunistic will make enormous inroads into that marketplace.”
Iain Sandford, deputy director of the international trade group at Minter Ellison and former legal officer with the World Trade Organisation in Geneva, agreed. “We see this as an area with really strong growth prospects, and over the last couple of years, the firm has brought together quite a strong trade law group.” With offices in both Shanghai and Hong Kong, Minter Ellison hopes to take full advantage of future trade business with China.
To seize these benefits, firms will need to build their trade law profiles, grow their contractual and business relationships with existing and prospective clients and gradually develop full service international trade practices, Trakman said.
He said that to this end, it is vital that Australian firms engage in specialised legal training on key trade and investment initiatives. Given the global nature of this development, much of the training should come from overseas academic programs, conferences or through partnerships with foreign firms, although Trakman believes a significant proportion could be provided by Australian experts, academics and members of government.
Yet how quickly can the Australian legal community respond to meet these challenges? According to Trakman, “there are a few firms who already have some basic servicing in the area. There isn’t … any significant all-round servicing in the form of the full meal deal.
“Certainly within the next year or so, I’d imagine that firms who are committed would be adequately prepared to be able to engage on some level on a comprehensive trade/investment strategy for clients in Australia and abroad.”