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Tim Harcourt
Chief Economist
Australian Trade Commission
Sydney
Email: tim.harcourt@austrade.gov.au
13 November 2002
What has the Rugby World Cup in November 2003 got to do with the World Trade Organisation (WTO) meetings in November 2002? One is ‘the game they play in heaven’ – the other is surely a spectator’s living hell: watching a multilateral round of trade negotiations. Or are there Rugby World Cup lessons for world trade? Can Australian exporters learn from a high profile events like the Rugby World Cup? Let’s investigate.
In the next couple of days, the Olympics precinct at Homebush will host an important WTO meeting of world trade negotiations, led by the Australian Minister for Trade, Mark Vaile. The trade talks are deemed crucial to the success of the ‘Doha round’ of trade negotiations, which began last year. In a year’s time, Homebush will again be hosting a major global event - the finals of the 2003 Rugby World Cup. But the parallels between trade negotiations and Rugby politics go well beyond Homebush. It’s all about bargaining power.
We can draw the main lesson from the Rugby World Cup even before a ball is kicked. Look closely at how the rights to jointly host the event were taken off New Zealand and given to Australia alone. Why did this occur? As New Zealand economists Chris Nixon and John Yeabsley point out, New Zealand is a small player in the world of trade with little bargaining power. Similarly, for all the on-field heroics of the All Blacks, New Zealand has little power off the field in terms of TV audiences and commercial clout. New Zealand needs to make the most of what it does have and should be prepared to build coalitions (as do small nations in trade negotiations).
Australia has learnt this lesson – hence our professionalism in both sports politics and in trade negotiations. For instance, the Australian government, when frustrated by agricultural protectionism from the USA and the European Union, established the Cairns Group of agricultural exporters in the WTO. By building coalitions and trade policy expertise, the Australian Government has helped exporters gain crucial market access in their bid to break into world markets. In terms of sports negotiations, who can forget the important coalition building that brought the 2000 Olympics to Sydney? In the same way, the professionalism of the Australian Rugby Union enabled Australia to win the hosting of the Rugby World Cup.
So the world of rugby can learn from the world of trade negotiations. But can it work in reverse? Can exporters learn from Rugby? I can think of a couple of lessons.
First of all, there are clear benefits to reap by going global. In recent years, Rugby has gone professional and as a result, gone global. The professionalism of the World Cup and the development of the Tri-Nations and Super 12 competition is part of this story. Rugby has built its success on branching out beyond national and regional borders and has become a truly ‘global’ sport. By having regular open competition between nations, teams have the opportunity to benchmark themselves against the world’s best, to learn new skills, new tactics and develop their own core strengths and capabilities. The success of the Wallabies has been built on travelling the world to play the best - be it the All Blacks and Springboks in the Tri-nations or revitalised six nations teams in Europe or even the Pumas in Argentina (Buenos Aires is always a tough fixture for any visiting team – but on the last occasion there was ‘no try for me, Argentina’).
In the same way, Australian businesses that go global lift their standards too – just like the Wallabies. Austrade research shows that, on average, exporting companies are more profitable than their non-exporting counterparts. They also have better growth prospects, have highly paid, highly skilled, highly productive staff and tend to adapt technology and best practice management techniques faster. Playing away on a regular basis lifts your all round business performance. The bottom line is if you have the right attributes, going global pays off. The international stage brings global returns to rugby teams and exporters alike. In contrast, staying in the local league means being part of a smaller talent pool, with less pay, less resources and smaller crowds. Australian companies with the capacity to meet global demand should do so.
And the success of the World Cup has helped boost grass roots rugby too. The Australian Rugby Union (ARU) has ensured that international success by the Wallabies and the global popularity of the World Cup has translated into more participation in the sport. The ARU estimates there is a thriving base of 130,000 rugby players at school and club level. In the same way, Austrade wants to use major trade events – such as trade liberalisation in the WTO and bilateral trade agreements - to boost Australia’s number of exporters from 25,000 exporting companies to 50,000 by 2006.
The second Rugby World Cup lesson for trade is the importance of coaching. Many northern hemisphere sides have employed antipodean coaches of world-class coaches quality. (In cricket, England has tried the same thing with Rod Marsh.) Investing in skills, training and team building, and having the right preparation for the conditions at hand, are important to ultimate success. In the same way, Australian exporters tend to invest heavily in education and training to boost the skills of their employees. They also use a high degree of teamwork in their workplace practices and undertake extensive preparation through market research and research and development. According to Austrade research, countries that undertake export coaching and mentoring are also successful in building their export base.
Thirdly, there’s the importance of networks and resources. It has been important for Australian Rugby to build strong links with rugby confederations around the world and for the players to have regular contact with other talented teams and players. Operating in isolation domestically will not develop those relationships and help Australia benchmark itself sufficiently to prepare for the World Cup. The development of the Super 12s has helped, where Australian teams play regularly against the best provincial sides in South Africa and New Zealand and also learn from officials in those clubs. In the same way, exporters who get access to international networks and can benchmark themselves against the world’s best tend to be more successful over time. Austrade provides that network for small companies that are new to export – to help them get off the ground. Financial and human resources also help but they have to be carefully targeted in both rugby and exporting – developing networks and effective preparation are the keys to channelling these resources efficiently.
In order to leverage the networks of the Rugby World Cup, the Australian government has announced the establishment of Rugby Business Club Australia to organise business briefings and networking sessions around Cup matches. Austrade research shows 50 per cent of new exporters enter world markets ‘accidentally’ through a chance meeting or other ‘random’ events. Meeting on a plane or at social events can lead to international business deals – and many occur at the time of major sporting events. For instance, Business Club Australia, held in conjunction with the Sydney Olympics, was the showpiece of the Australian Government’s Olympic business programs. The programs generated $1.2 billion in associated trade and investment. Rugby Business Club Australia is designed to perform a similar role in 2003. This is a result of the growth of rugby as a professional sport. Remember that in the first Rugby World Cup, in 1987 the game was amateur. In 2003, the Rugby World Cup will be the third largest sporting event in the world after the Olympics and the Soccer World Cup. The 1999 Rugby World Cup in Wales was attended by 1.75 million people and broadcast to a further three billion people in 150 countries, generating 70 million pounds in revenue. In 2003, 20 countries will vie for the Cup in 48 matches across 10 Australian capital cities and regional centres over six weeks of competition. An estimated 60,000 international visitors will come to Australia to watch the tournament and 4 billion will be watching on television. No doubt there will be many opportunities for Australian exporters and potential exporters to meet international clients and customers with an event of this magnitude.
So there you have it. The WTO and the Rugby World Cup do have common characteristics. The main lesson is that in exporting, like in rugby, good coaching, intensive training, preparation, strong networks and resources and having a good grasp of your bargaining capacity in the global marketplace can earn you rewards that match your hard work and talent. So let’s hope for a good outcome in the Doha Round for the WTO and a good competitive Rugby World Cup...with a Wallabies victory!
*Thanks to Peter Fitzsimmons, Robert Samuel, Chris Nixon, Carolyn Boyd, Cleve Killiby, Michael McMillan, Michael Crawford, Peter Cripps, Tanya Lim and Kieran Gilbert for their assistance with this article and Gordon Bray for its inspiration!
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