Former Minister for Trade
Australian Commonwealth Coat of Arms

28 August 2008

Interview - Sky News

Subject: Australia - ASEAN - New Zealand FTA

MIKE WILLESSEE: Australia and New Zealand have reached a tentative agreement with the Association of South East Asian Nations on a free trade agreement. Joining us in Singapore where the talks have wrapped up is the Minister for Trade, Simon Crean. Minister thanks for your time.

Firstly, today’s statement from the nations involved says that there are a small number of bilateral market access issues that must be resolved. What are they, and are they significant enough to potentially scuttle the deal?

SIMON CREAN: They are significant not only from Australia’s perspective, but from the automotive sector’s perspective. They involve Malaysia and Indonesia, but significantly in the conclusion of these negotiations today we have put in place a mechanism that will resolve those issues bilaterally but in the context of this agreement. So I have had detailed discussions with the Ministers concerned and have received commitments to progress those outstanding issues, but we took the judgement that because so much other progress had been made in so many other areas, it would be silly with all of the Ministers ready to sign off, not to lock in the benefits to the region.

This is the largest, most comprehensive trade agreement that ASEAN has ever signed. ASEAN represents the biggest free trade agreement that Australia has ever negotiated – it covers 16%, Michael, of Australia’s trade in goods and services, worth $71 billion dollars.

And it’s the first region-wide agreement that Australia has ever negotiated. So there are potentially significant gains in it, but we still need to resolve some outstanding issues, but importantly we have got a mechanism to do that.

WILLESSEE: Minister I am assuming that some of those outstanding issues are particularly tariffs in the automotive industry and the immediate cutting of those. That is likely to create a few problems domestically.

CREAN: No, I think there have been circumstances in which you get reciprocity for the commitments you make, it clearly creates an environment in which you can get more trade and more export opportunities.

Take the Australia-US Free Trade Agreement that has created the environment in which Australia is now exporting cars to the United States. So I think that what we have got to understand is that the auto industry is globally focused – and what we have got to do is to try and develop competitive and comparative advantage. Australia has significant push in this direction, what it needs is improved market access. But in asking for improved market access, it has got to concede more in its own area.

WILLESSEE: Do you envisage any problems in having this agreement approved domestically prior to final signing in December?

CREAN: Well we have got important discussions to have with the two countries in question – bear in mind with all of the other countries that we have negotiated, we have got significant reciprocity in their market access for our autos, so what we really have is a significant opening up of markets.

And if you look at the Bracks Report, I presume that is what you are referring to, it calls for conclusion of free trade agreements such as this one. Because opening up markets, liberalising markets in the fast growing areas within our region where we can export, so long as we can get through without the tariff barriers in those countries, that will position our industry for a much more sustainable future.

WILLESSEE: To what extent does this agreement make up for the recent collapse of the Doha Round of the WTO negotiations?

CREAN: Well this is a significant boost I think and a signal that multilateral agreements can be negotiated, that we can make progress in a comprehensive way across a whole lot of sectors with a whole lot of different levels of developed and developing countries involved.

I am confident that we can still conclude the Doha Round. We have had very good discussions over the past couple of days that add weight to the view that there is still the possibility of concluding the Round. But I know that this will send a very strong signal that such agreements can be negotiated and they are in the interests of all countries concerned.

WILLESSEE: Minister for Trade Simon Crean, we do appreciate you joining us on Sky News this afternoon, thank you.

CREAN: Thanks Michael.

ENDS

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