17 January 2008

CNBC TV interview

TV journalist (Vivin Mathew): Thanks very much Minister for joining us today on CNBC TV 18.

QUESTION: It is one of your first visits as Minister to a foreign country. What is the larger vision really that your Government has, because when you were campaigning there was lot of emphasis on relationships with China and India, trade relationships. So what's the larger vision really? Where do you see India in the Australian scheme of things vis-à-vis trade?

MINISTER: We want to give a key priority to the relationship and strengthen and deepen that relationship. Obviously, India's growth rate has been incredibly impressive. You couple it with China in terms of the region and there are huge opportunities. Opportunities, obviously for Australian businesses; but importantly opportunities for strengthening synergies between the two countries. India's needs again are going to be intrinsically linked to its ability to meet its energy needs, for example. Australia is in a very good position to assist in that regard and I think it is also interesting to note that the Indian and Australian economies are very heavily based around their services sectors. Big opportunities in world trade really present themselves in the services sector and in capital flows. I think that's where big opportunities for the future come. And so it is not just about building bilateral relationships to develop these synergies. It is understanding the importance of injecting, as renewed partnership if you like, ambition into the stalled WTO talks, the Doha Round. And whilst there are issues with agricultural liberalisation and trade liberalisation and manufactured trade liberalisation, critically we have to get services liberalisation in there as well - that would benefit both our countries.

QUESTION: You spoke about energy requirements. Would you be encouraging Indian companies to come in, either to set up facilities in Australia for energy or would you be more interested in selling, for example, gas. I was recently reading a report that a consultancy put out. So is it one of your key agendas as well to promote that kind of trade?

MINISTER: It is and Australia has large reserves of gas in particular; it is a cleaner energy source and in the context of the climate change debate; it is user friendly; it is planet friendly. But investment in LNG development is huge. It requires long-term commitments. There has been reluctance on the part of India to enter into long-term contracts in the past. If they do see their future being secured and the prospects for growth and sustainable growth, maintained in the future. I think the time is right to try and develop that longer term relationship in helping address their energy needs. If businesses choose to take equity in Australian resource companies that are positioned and are able under our laws, they are able to do that at the moment. I think it is interesting that a number of companies that we have already spoken to here are looking actively; some have already taken strategic stakes-if you like in a vertical integration back down the supply chain. So I think that a number of companies here have already started to realise the opportunities. We would be keen to encourage them.

QUESTION: Sure. It is not just gas. There are other controversial issues as well. Recently one of our top officials in came down to Australia, but the Australian media was full of reports that he had being rebuked in his attempts to get uranium. Is that what actually happened?

MINISTER: Well, I think it is interesting to know that the envoy that came from India, Mr. Saran did not come to argue the case that Australia should supply India with uranium. The Labor Party's position, both before the election and enunciated since the election, is quite well known, in terms of who we supply to and who we do not supply uranium to. The issue that Mr. Saran came to Australia for was to give a deeper understanding of the issues behind an agreement that India is seeking to achieve with the United States in terms of their civil nuclear agreement. That is an agreement that still has to go through a number of stages. It has to get the tick from the International Atomic Energy Agency; it then has to be supported by the suppliers' group of which Australia is a member. It then has to go through the US Congress. So it is a completely separate issue from the supply of uranium. What Australia has said is that we have taken active note, very detailed note of what the envoy had to say. We have not determined our position in relation to the suppliers' group as yet, but we do understand the importance of this agreement both to India and to the United States. We do not have to take a decision in relation to that at this point in time until those other steps that I have already mentioned have been addressed. That was the purpose of the envoy's visit. The other issue really emerged as part of the restatement of what the Labor Party has always argued.

QUESTION: So you are saying that a decision hasn't yet been reached, it doesn't yet need to be made on whether or not India would be a beneficiary.....

MINISTER: Our position on the supply of uranium is not an issue that it would influence ... it is not an issue in itself that is a determinant of our position in relation to the agreement between India and US, if it were to come about. That agreement stands in its own right; it has to go through a number of steps. Australia has not yet determined a position in relation to it but it has taken very active note of what the envoy has to say. There was no rebuff in terms of that issue in relation to India's representation to Australia.

QUESTION: But if the deal does go through, would Australia then be happy to supply?

MINISTER: Well, that's an issue that the government still has to take. I can't pre-empt that but the fact that the envoy Mr. Saran came to Australia to make India's case, I think was an important recognition of the engagement with Australia; the deeper understanding of the issues themselves; and obviously it will be an important factor in Australia determining its attitude at the appropriate time.

QUESTION: Moving onto some other issues that Australia might be happy to engage with India ... infrastructure, which seems to be a big concern for India. A lot of countries are expressing interest in participating in India's infrastructure sector. Would be something that Australian companies would want to invest in India as well?

MINISTER: It already is ... I mean Australian companies up here in India are actively involved in infrastructure ... Leightons, for example, amongst them. Obviously, it is one of the key areas in which Australia has an expertise and India has a need. As I understand the situation, India has important constraints and limitations on its infrastructure. It has got an active programme to address them. Australia would be very keen to assist in meeting those needs. I think it is just one of a number of areas in which we see our ability to forge and deepen that relationship that I talked of before. Other areas are obvious: in the services sector in particular, financial services. I think the energy sector, the education sector... and also food, particularly processed food. I think these are all areas that Australia will have an interest. We will continue to have discussions, both at the bilateral as well as in the regional sense.

QUESTION: And would you prefer multilateral relationships to bilateral. Is that the way you look at it?

MINISTER: In trade terms, our priority is to give emphasis at the multilateral level. By far the biggest opportunities in world trade and for countries to participate, for countries to alleviate poverty .... by far the greatest opportunity is greater liberalisation in a global sense. Global trade is growing far greater than global product; so the opportunities are in trade. What you have got to do is to improve access, liberalise some trade flows to encourage that to happen. And that is only one side of the equation; if a country's infrastructure is falling behind; if its skill base hasn't kept pace with the needs of development on its innovation base. These are all important drivers of economic growth within a country and are necessary complimentors, if you like, or they are important to approach as much as trade liberalisations.
QUESTION: So does that mean that you will not be pushing for any bilateral agreements or free trade agreements?

MINISTER: No. It doesn't mean that. We have undertaken to respond positively to the development of the feasibility study between our two countries. India has put the free trade agreement on the agenda with Australia previously. We are very happy to advance that. From our point of view, we want it to be a comprehensive agreement but I think the feasibility study will determine the opportunities for both countries. Our argument isn't against free trade agreements or bilateral agreements; our argument is that they should be consistent with and supportive of multilateral principles; not detractors from them. That's why we argue very strongly for the comprehensive nature of free trade agreements. But it is not only at the bilateral and the multilateral level that we are keen to engage India, I think that the other level is the region, and the new Government is a very strong supporter of India's membership of APEC. This was put on hold previously; this is something in our view that should be advanced. It doesn't make any sense to us that a nation of the size of India with its growth potential. India should be within the broader APEC family. Now, there are other regional structures that have developed. The East Asia Summit, for example, which I know India is actively involved. But APEC is quite a unique body. It is the body for the fastest growing region in the world. It involves both developed and the developing countries; so it has the appropriate mix. But importantly it engages the leadership of all of the countries on an annual basis. The Australian Government believes that it is important for India to be in APEC; so one of the discussions, one of the points of discussion that we will be having with the Government in New Delhi, is the question of their interest in joining APEC.

JOURNALIST: Wish you all the best for all the meetings. Thanks very much.

MINISTER: I am looking forward to it and I am delighted to be in this lovely country.

ENDS

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