19 December 2008
Interview - Australia Network’s Business Today
Subjects: Doha, conclusion of FTA preparatory talks with Korea, ASEAN Australia and New Zealand Free Trade Agreement
WHITNEY FITZSIMMONS: Well, one of the big stories of the year was international trade, and the downfall of the Doha round of free trade talks. Recently, there was a failed push to restart those talks before the end of the year.
One of the staunch supporters of the talks is Australia's Trade Minister, Simon Crean. I spoke to him recently about the future of global and regional trade, and asked him if he sees the recent breakdown in trade discussions as a collective failure.
SIMON CREAN: No. I think it was the collective failure to actually have confidence that, by sitting around the table, we would resolve the differences. I think we will. The only time we've made progress, in a political sense this year, is when we've sat around the table.
Now, it's true that there are outstanding issues, both on agriculture and product, that these aren't unable to be solved. They can be solved, but it does need the political will.
The other important thing, Whitney, is that as distinct from July, when the talks failed, we have had since that time, not just the global financial crisis, but the determination by all G20 leaders ge... calling on trade ministers to physically meet to conclude modalities.
So, it's not just trade ministers that have got a stake in concluding this, it's also global leaders.
FITZSIMMONS: Well Minister, you do mention quite a bit - political will and there needs to be political will. However, President-elect Obama has been very opaque in his comments about trade. On one hand, he talks about FTAs and free trade being a good thing, but he also talks about protectionism, and protecting America's interests. So how confident are you?
CREAN: Well, in all of the lead up to the campaign, there was never any mention of rejecting Doha. The concerns associated were in relation to free trade agreements; that's the first point. Secondly, the economic team that he's assembled to date, all of them have strong commitments to multilateralism and to the benefits of trade liberalisation.
Thirdly, it's an administration that has sent a very strong signal that it wants to have the United States re-engage again in a global sense, and which - what better position to start than in a - an early conclusion to the Doha round.
FITZSIMMONS: Let's look at India. I think you'll have to be quite persistent with them. They - you've said in the past that they have the potential to move the round forward, but really, New Delhi has been quite persistent in sticking to these agricultural issues. How likely is it that they will budge?
CREAN: Well, I think India needs to understand [indistinct] what they're looking for is a special safeguard mechanism for their agricultural products. We acknowledge that they can have one. What we say is, it can't interfere with normal trade. So, therefore, the technical solution is how to devise such a formula, and, in our view, such a formula is capable of being devised.
But you've got to ask the further question, in the absence of a Doha round, India has no special safeguard mechanism, and, surely, it's in their interests, if they express these concerns in terms of their agricultural community, it isn't in their interest to try and find a formula that actually establishes one.
So I think that there is the basis in a negotiating sense of trying to find that ground with India.
FITZSIMMONS: All right, let's move on from the Doha round. Now, let's look at the region. What are the most positive aspects for trade in the region over the next 12 months?
CREAN: Well, I think that there are a number of important developments despite the frustration of Doha. The first is the conclusion of negotiations for an ASEAN-wide free trade agreement between Australia and New Zealand.
This is the most comprehensive free trade agreement that ASEAN has entered into, and it is also collectively Australia's biggest market. The ASEAN region is bigger than the US, it's bigger than China, and it's a comprehensive FTA.
Now, unfortunately, this was an agreement that should have been signed this week in Thailand. Obviously, we understand the circumstances why that meeting couldn't go ahead. It's now rescheduled for February, and that will be an important milestone.
A couple of other areas that are important. We indicated in APEC the preparedness to participate in negotiations for a trans-Pacific free trade agreement. There are already seven countries, and we have the potential for more. This can be an important bridge to a wider free trade agreement for the Asia-Pacific. Again, comprehensive, quality outcome.
On the bilateral front, there are some important developments. We have unfrozen the talks, the stalled talks with China, and we've had important progress. Still not as much as we'd like, but I've recently, together with Wayne Swan, just been up to Beijing, and we are hopeful very early in the new year of trying to move that agreement along.
And finally, we've just concluded the preparatory talks with South Korea, and that will provide the basis, in my view, in which we can move very early in the new year to start the serious discussions about an FTA with South Korea.
Now, this is a terribly important development in its own right. These are big markets of opportunity for both countries. We're looking for comprehensive FTAs in all of these cases. Because as much as the issues of agriculture and product markets still have some sensitive areas to deal with, the big opportunities, quite frankly, going into the future is services and capital flows. This is where the new trade direction is going to take us, and we have to be active on all fronts. But, by far, the most significant openings come from the global outcome, then the regional outcomes, and then the bilateral outcomes, all of them complementing each other.
That's our strategy, and I am determined to pursue it with the - to the utmost over the coming year.
FITZSIMMONS: All right, Minister. Now, you mentioned the deal with ASEAN sh... slated for February, and also the preliminary talks with South Korea for an FTA. What sort of sticking points though do you anticipate, or are you anticipating?
CREAN: Well, I think we all know the sensitive areas in all of these economies, Whitney. But the point I make is that if you were simply looking at it from the point of view of difficulties, you'd never start.
I operate on the basis that, provided we understand the sensitivities, they are capable of being worked through. There's none that I've inherited, or commenced, since we've - I've had this job in the last 12 months where I say to myself, well, this is an impossible call, we can't do it.
I think we need to try and find our way through the sensitivities. In many cases, it de... it is a timing dimension. The ASEAN free trade agreement does demonstrate that we can negotiate with 10 different countries, all at different stages of development, and different sensitivities, and find different timing solutions for implementation for each of those countries.
If we can do it in that collective environment, I'm convinced that we can do it in the bilateral environments.
FITZSIMMONS: All right, Minister Simon Crean, we'll have to leave it there. Thank you for your time today, but no doubt we'll want to check in with you next year to look at the progress on these deals.
CREAN: Yeah, I'm happy to keep you informed on every occasion, Whitney. Thank you.
ENDS
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