25 November 2008
Interview on ABC2 News Breakfast – Doha Round, Assistance to car industry
VIRGINIA TRIOLI: Well, APEC leaders have ended their weekend summit in Peru, with another endorsement of free trade. In a joint statement, all countries said they would not raise new barriers to investment in trade in goods and services over the next 12 months.
BARRIE CASSIDY: Federal Trade Minister, Simon Crean joins us now from Canberra with more on the meeting. Minister, good morning.
SIMON CREAN: Barrie, Virginia, how are you?
BARRIE CASSIDY: So I get that, that they won't raise new protection measures, but why then is there this suggestion around that - more than that, that it might actually help kick start the Doha Round?
SIMON CREAN: Well I think that is the significant development. I mean, not going for protectionist things, calling for a conclusion of the Doha Round, they're all standard fare at these meetings, I guess, Barrie over the last few years. But what this was, was a clear direction to trade ministers to get together next month to conclude it.
Why is that? Two things. One, trade is the big multiplier in terms of world economic activity. So, if globally, leaders are looking at what can stimulate economic activity, then clearly turning to trade and trade liberalisation is part of the solution.
World trade has historically grown three times faster that world output and every time there has been a successful conclusion to a world trade round, that multiplier has lifted.
The second point though is that we got so close in July to concluding the round. Now, there are a couple of technical issues that still remain. Those technical issues have been worked on, but without the political will, my judgment and that of my colleagues is that we wouldn't close the deal. So, what was significant was the G20 meeting, 20 leaders saying, conclude the round by the end of the year and that was amplified, if you like, at the APEC meeting because an extra 12 leaders added their name to that call, but directed trade ministers to get together next month to do it.
BARRIE CASSIDY: So you think they will close the deal this time?
SIMON CREAN: I am confident, if the political will that has been demonstrated by these leaders is carried out, and there's no reason to suggest it won't be, I'm confident that the technical solutions do exist, so long as the political will holds. Now what we have in addition Barrie, is not just a direction to trade ministers to participate next month, it is the world leaders themselves saying they stand ready to intervene to assist the conclusion. I think that is a very significant signal.
BARRIE CASSIDY: I read this morning, I think it was in The Australian editorial that - the fact that India has an election next year might be one impediment to a resolution.
SIMON CREAN: We live in democracies Barrie. There's elections every year somewhere in some country and I think these things are always looked to as to what might be impediments. I mean no-one's kidding themselves that there aren't impediments. If it were just elections that were impediments, I think we might have been able to solve it by picking the right window in between them all. There are other impediments. The challenge for us is to overcome them.
And the truth is that the Prime Minister of India participated in the very strong language that came out of Washington. And he's also indicated his preparedness to remain engaged.
Now, it's true that the talks broke down last July because India, amongst others, were not satisfied with their access to a mechanism when there were sudden surges. We believe there is a solution to that problem. What we've got to do is to get back round the table and close the deal.
BARRIE CASSIDY: Now, all world leaders agreed no new protection measures, but assistance of the car industry, that's a new protection measure. You got that in, just in the nick of time?
SIMON CREAN: Well that's your terminology for it, Barrie. The fact is the auto industry has to go through a major restructuring. And why is that? It's not only the price of fuel, it's because with the pressures of climate change, people are looking for lesser carbon footprint vehicles.
There is therefore going to be a massive retooling of the auto sector, and it will be done in a global way. Australia has to position itself to secure its niche in the area in which it has comparative advantage. That comparative advantage involves our skills, our design, all of the upper-end smart manufacturing, if you like.
But unless we get into the global supply chain, we will not be able to take advantage of that comparative advantage. It's the reason why the recently concluded free trade agreement with the ASEAN group of countries, why we were pushing so hard to get tariff barriers broken down on autos. Because if we can not only secure our strengths in the manufacturing process, but break down barriers to entry, then our car industry will have a very strong future.
BARRIE CASSIDY: Simon Crean, thanks for your time this morning.
SIMON CREAN: My pleasure, Barrie.
[Ends]
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