Interview - ABC News Radio with Ben McLean
Subjects: ASEAN Free Trade Agreement; attack on an Indian man in Melbourne.
Transcript - E&OE
4 January 2010
BEN MCLEAN: Australia's integration into Asia continues apace with our largest free trade agreement coming into force from the beginning of this year. The agreement between ASEAN and New Zealand will eliminate tariffs on most of Australia's exports to ASEAN nations by 2020. To explain how it will work and what effect it's likely to have on Australian manufacturing and jobs, we're joined now by the Trade Minister, Simon Crean. Minister, good morning to you.
SIMON CREAN: Good morning, Ben.
BEN MCLEAN: Now, what does Australia get out of this deal?
SIMON CREAN: Well, first of all, the 10 ASEAN countries, two-way trade between us already is $83 billion. That's as big as China now, Ben. So this free trade agreement, which came into effect from the beginning of this year, will progressively reduce tariff lines. So it means more opportunities to export into the fastest-growing region in the world, into an area that we already trade in a big way to but which the new openings will provide new opportunities and already over 40 per cent of our exporters are already in the ASEAN region. So this is huge potential going forward.
BEN MCLEAN: But presumably companies in these ASEAN countries will have the same opportunity, with no tariffs coming the other way, to send their products to Australia, competing with local manufacturers.
SIMON CREAN: Well, that's the nature of trade, and the competition with our local manufactures is at the low-wage end, not the higher-wage end. Take cheese products, for example. These ASEAN countries are not in the position to produce the same quality of cheese. They've got a growing middle class; obviously cheese going forward is a huge opportunity. Sheep meat, smart manufactures, services, education services - these are all areas of opportunity for Australian companies.
BEN MCLEAN: What about companies in Australia manufacturing things like textiles, clothing, footwear? Those sort of industries tend to suffer, certainly compared with labour costs to their Asian rivals. Might they struggle even further now?
SIMON CREAN: No, I don't believe they will. I think that we don't want to compete with the low-wage end of the scale. If we want to compete at that end, Ben, let's just throw up the white flag and say we want a low-wage economy. I think what our textile manufactures have demonstrated is that the strength of their market opportunities are in design, in the creative skills that go with textile manufacture, and with the marketing. It is the services dimension and the smart manufacturing techniques that are associated with logistic change, smart manufacturing, et cetera, not the low-wage end.
BEN MCLEAN: What about consumers? Will they see any obvious change in the price of goods when they go to the stores? And this is coming in, like what, over about 10 years?
SIMON CREAN: It's coming in progressively over 10 years because this is 10 countries we had to negotiate. They're all at different stages of economic development, so the tariff liberalisation will progressively be eliminated over that period. But yes, it will mean important opportunities for consumers, and that's the other aspect of trade, that consumers benefit from being able to get products that can be produced cheaper elsewhere but they - but the Australian manufacturers benefit on the basis of being able to get products that at the moment have a tariff barrier against them into markets because we're eliminating those tariff barriers.
BEN MCLEAN: Minister, on a separate issue, the murder of an Indian man in Melbourne on the weekend creating more damaging headlines for Australia in the Subcontinent, New Delhi warning it could potentially harm ties. Are you worried about yet another blow to the relations between the two countries?
SIMON CREAN: We are always concerned that the impact these attacks have, and this fatality is just dreadful; we condemn it in the strongest possible terms. But I'm not in a position to comment on the specifics of the attack because it's under police investigation…
BEN MCLEAN: It does seem a worrying trend though.
SIMON CREAN: I think that we have been aware of the trend of attacks. I mean, this is just horrendous in its own right because it is a fatality, it's a person that's killed. Whether it's an Indian person or Australian person - and there have been a spate of stabbings, as your news has been demonstrating over the summer period. But I think that …we've demonstrated our concern, particularly about the attacks and the safety on Indian students. We've taken active steps over the course of the last six to eight months to try and deal with this in a more concerted way. We're working closely with the Victorian police authorities to identify particular trouble spots. And the investigation into this will leave no stone unturned in trying to find the perpetrators.
BEN MCLEAN: All right, Trade Minister, thank you very much for your time this morning.
SIMON CREAN: Thank you, Ben.
BEN MCLEAN: Simon Crean, Australia's Trade Minister, speaking to us here on ABC News Radio.
ENDS
Media inquiries
- Mr Crean’s Office: (02) 6277 7420
- Departmental Media Liason: (02) 6261 1555