Thank you.
Bill has mentioned the brief rundown on what Australia did over the last 20 years, so I might skip that opening part covered in my paper. I'll cut to the chase and get straight to Australia's trade policy approach.
We've been supporting our exporters with the most ambitious trade policy agenda in Australia's history for the last 10 to 15 years. We're seeking to free up trade through the Doha Round of negotiations in the WTO. We want to free up industrial goods, services, and most importantly agriculture, which we see as the most distorted sector of world trade.
On average, agriculture tariffs are more than three times higher than tariffs on non-agricultural goods. Furthermore, prices that our exporters are receiving are depressed by the farm support programs run by many developed countries. Primary producers in the United States, for example, receive 16% of their income from government support. In the European Community they receive 33%. A good outcome for the WTO round would increase the value of our major agricultural exports by 15% in 2011, compared to the value of the existing trade barriers if they were to continue. It would also lift 32 million people in the developing world out of poverty.
As you know, the negotiations on the round are suspended at the moment because they broke down in agriculture in July. Australia's goal over the coming months will be to encourage the major players to get back to the negotiating table. This appears to be happening, with the director general lifting the suspension on technical discussions just this week, so we're quite optimistic about this.
Bill also mentioned the Cairns Group. We see that as a remarkable achievement over the past 20 years. It has really lifted an area of the trade negotiations out of the shadows and right into the spotlight. Agriculture never had rules until 1994. We're now hoping to expand the rules that apply to all other sectors and have those covered. The Cairns Group will continue to be very active in that respect, and its contribution on the technical discussions, as your negotiators know, is without peer. They will continue to play quite a major role in that.
I'll now speak about bilateral and regional free trade agreements. In addition to our multilateral trade efforts, we're also looking for results through bilateral and regional agreements. These can often get faster commercial results than the multilateral process, which tends to focus on rules rather than some of the major reductions in protection. They can also address non-tariff barriers like government procurement, competition, intellectual property, and investment controls, so we see that as an additional avenue.
We have successfully negotiated FTAs with Singapore, the U.S., and Thailand. We also have a closer economic agreement with New Zealand. When the U.S. free trade agreement came into effect, two-thirds of America's tariffs on our agricultural products immediately fell to zero. Our lamb exports have increased over the last couple of years by 19%, and dairy exports are expanding as well. We had an expansion of our cheese exports by 103% in the first year alone.
The FTA has also boosted our services exports. The Thai FTA has delivered benefits across the board, and last year exports to Thailand increased by 35%. Most of the tariffs faced by our fruit and vegetable exporters will be phased down to zero over the next four years in Thailand, and the tariffs on steel and copper products were immediately halved or eliminated altogether.
Our free trade agreement with Singapore has led to considerable gains for exporters of services such as education, and in 2005 our services exports to Singapore increased by 11.6%.
On our current free trade negotiations, we're focused on negotiating an FTA with Malaysia, the ASEAN countries in conjunction with New Zealand, and of course with China. One of the most important events at this time is China's major and rapid development. It's already the world's third largest trading nation after the United States and Germany. It is the third largest exporter to Canada, and I think it's about to become the second largest.
We're seeking commitments from China to remove its tariff and non-tariff barriers on Australian exports, including addressing its tariff rate quotas on our exports of wool, wheat, cotton, rice, and sugar. It's very much an agricultural focus. We wouldn't walk away from that.
We've also told China that negotiations on services and investment market access must start before the end of 2006, which China agreed to. China additionally agreed to include investment in government procurement. It's an immensely large task. Both areas are of significant commercial importance to Australia, but are very sensitive in China, as you would know.
We have a long way to go and the negotiations are difficult, but we will take as long as is necessary to achieve a commercially valuable outcome for Australian industry. Of course, as with all our free trade agreements, we expect that the one with China will be comprehensive. It will need to be completed as a single package, and we'll need to maintain the integrity of our manufacturing industry plans.
We're also carrying out feasibility studies into a possible FTA with Japan and analyzing the implications of an FTA with the Gulf Cooperation Council, which consists of the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia.
The third area I wanted to emphasize, apart from the WTO and our regional approach, is APEC. As you know, Australia will host APEC in 2007. The Australian government will soon begin outlining our plans on how we'll be building on the good work achieved in Vietnam. As many of you will be aware, in 1989 APEC was commenced. Australia is a founding member, and in fact we like to take credit for the idea of APEC. It involves all of the dynamic economies of Southeast Asia and the Pacific, which encapsulates 68% of our trade and I think 61% of the world's gross domestic product.
At last year's meeting in Korea, a road map was agreed on for APEC that will take the organization forward and promote new areas of work. One of the key elements we'll be stressing next year, which you would recall if any of you had gone to Vietnam—I don't see anyone here who I think has been, but I might not have looked at the back of the room—is support for the WTO multilateral trading system. You would have witnessed that there was a fairly strong statement that came out supporting the Doha Round, and that was cited by Lamy when he restarted technical negotiations this week.
The second aspect is the promotion of high-quality regional trade agreements and FTAs. We're doing this through our efforts, as I outlined, and Australia is carefully considering the future possibilities here.
Last but not least, in fact most importantly, is the engagement of business. In 2007 we'll be doing everything we can to assist business and we're having a high-quality 2007 business summit. We look forward to seeing everyone in APEC next year.
If there's anything I'd like to underline, Bill mentioned at the outset that we had a tyranny of distance. We've managed to overcome that through our reform efforts and through becoming competitive. We, like Canada and like New Zealand, left the Commonwealth preferences system in 1970 after the U.K. joined the European Community. Since that time the reform efforts and the pain that we put our economy through has really borne fruit. This is our 15th year of straight economic expansion. We've moved from 15th to 8th in terms in world competitiveness, and I think it's fair to say that we've really cut a course with many countries. So we're quite proud of our efforts.
I'll leave it there. Thank you.