• Home
• News feed
• Media releases
• Transcripts
• Speeches
• Photo gallery
• Biography
• Contacts
• Department

ROB YOUNG: So how big a part would you say trade played in saving Australia from the really extreme ravages of the economic downturn?

SIMON CREAN:  It was a significant factor for us because we are too small an economy, with 22 million people to simply produce and sell to ourselves. We have understood the importance of engagement with the rest of the world. That has involved a two pronged attack - one is seeking market liberalisation but making sure at the same time that we are competitive enough to take advantage of those market openings. So the structural reforms the floating of the dollar, the opening of our economy, the tariff reductions, all of these and significantly the investment in the drivers of economic growth, in skills formation, in infrastructure these have been important commitments that we have made and it paid dividends for us and were a fundamental factor in us avoiding the recession bullet. The only developed country in the world to have avoided recession in 2009.

ROB YOUNG: And how big a role did China play in that?

SIMON CREAN:  China was a significant factor but not the only factor. China of course is the fastest growing economy in the world and is likely to be for many years to come and we have a big trading relationship with China. But is also ASEAN, and the rest of north Asia, Korea, Japan. We have recently concluded a Free Trade Agreement with ASEAN and the ASEAN group of countries as a whole are equal to our two way trade with China. So we have not just concentrated on one country. It is also important to understand that with the global financial crisis came the call for fiscal stimulus, much of that fiscal stimulus went into infrastructure, what does infrastructure need – it needs resources, and energy, and Australia has been in that space and has been able to take advantage of it. But can I just say this, that trade itself is fundamental to economic recovery.  Trade has been hit by the global financial crisis but it was never the cause of it. If we reverted to protectionism it will cause further downturn. Fortunately, we have avoided that to date but trade, and trade liberalisation, is an economic stimulus because trade is a multiplier and importantly it is a stimulus that does not hit the budget. So this is why we continue to push the importance of concluding the Doha round.  If we are serious about global economic recovery, an important component of that must be trade liberalisation opening the markets, and concluding Doha.

ROB YOUNG: I hear what you say about having many other trading partners other than China, but it is China which is your biggest trade partner and the one which is the most controversial because you do have, I suppose, a pretty tense relationship with China.

SIMON CREAN: No I don’t think it is a tense relationship. I think it is an evolving relationship and given the fact that we come from a democratic open political, as well as a very open, economic model, to China - which is opening its economy but still in terms of a political sense has a different set of approaches to us. That always going to cause its differences and at times its tensions, but we have to be mature enough to understand them and manage them and I think that we are managing them pretty well.

ROB YOUNG: Such as the arrest of senior people in the mining sector?

SIMON CREAN:  Well I mean that has been a particular irritant and we continue to raise this in all of our dialogue with our Chinese counterparts. There is a system that needs to be gone through and we have treated this as one of our most active of consular cases. We will continue to make representations for the proceedings, if they are to go ahead, to be brought expeditiously and for them to be transparent and for there to be openness in the process.

ROB YOUNG:  There are some people who are worried that maybe Australia is putting too many of it’s eggs in one basket, particularly as China is your largest buyer of iron ore, and that Australia is becoming too reliant on China.

SIMON CREAN: No, I don’t think that we are too reliant on China. I think that if you look at it from the point of view of exports Japan is still our biggest export taker and up until recently Japan was the only country that had taken long term contracts in terms of gas. We are now in the position in which it is not only China, but also India, also Korea, that are prepared to enter long term contracts. So Japan has always been the bulwark, if you like, of our economic growth. It has been an important investor, it will continue to be.  China is the growth economy it is the place to have been, particularly over the last 12 to 18 months, and fortunately Australia had positioned itself well in advance of that to be in that place, as well as many others.

ROB YOUNG:  Prime Minister Kevin Rudd, as you all know, speaks Mandarin he is a great fan and a scholar of all things Chinese. Do you think that is the driving force behind this or is it just the cold economic reality that no matter how unpopular a particular regime may be back at home in Australia, that you just have to hold your nose and deal with them?

SIMON CREAN: Well no, I think it goes back a lot longer than that. Australia under the Whitlam government was one of the first countries to recognise China. They have never forgotten that. In progressive Labor governments coming to power we have always been able to, if you like, build on the fact that we were there when it mattered to them. But what we have got to try to do though is not to just look back but to build on the strength the foundation. To develop the relationship, to mature it.  Where we find tension from time to time, to really deal with that through the contacts through the personal relationships - rather than just through the media.

ROB YOUNG: Can I ask you something completely different. It has been almost a year since the G20 group of nations met to discuss what kinds of measures they should take to try to avoid the downturn, the likes of which most of the world has just emerged from. One of the things that the world leaders came up with was coordinating measures in terms of exiting extraordinary monetary policy and also the kinds of new rules that banks would have to abide by. Would you say that the G20 countries have lived up to that ideal of coordination?

SIMON CREAN: I think that the emergence of the G20 as one of the most significant geopolitical advances that we have seen in a long time. The fact that we get the leaders of key countries responsible for so much of the economic growth in the world together on a regular basis to deal with the crisis and map a strategy forward, itself is terribly significant. Now, of course, it is going to take time as these issues, and this need to the development of new financial architecture, whether it be regulatory, or whether it be competitive. But it is interesting that an important arrow in the quiver of the G20 solution is the conclusion of Doha. This in many senses, in terms of the global challenges, is the low hanging fruit. We have almost concluded the deal. What is now required is the political will to close it. Quite frankly, the political will in terms of the G20 is going to be crucial over this coming year, to see whether we can meet the timetable that the leaders of the G20 have set down, and that is to conclude it by 2010.

ROB YOUNG: Which country do you think is the biggest obstacle to a deal on Doha?

SIMON CREAN: Unless everyone is in sync it doesn’t matter who the obstacle is, it is a collective failure. What we have got to do is to not try and single out and apportion blame, that’s the easy task. The hard part is determination and commitment and belief that this is the correct path forward. And also, to ensure that we have not just got meetings of Trade Ministers committed to this as a solution, but the leadership, the world leadership. The significance of the G20 is that it has elevated trade to be an important component of global recovery, and as I said earlier in the interview the great thing about trade is not just the fact that it is low hanging fruit, and in the comparative sense easiest to achieve. I’m not saying it’s easy, but it’s easiest to achieve.  But it is also, if people are looking for global stimulus, and at the same time talking the coordination of exit strategies, trade is the global stimulus that does not hurt the domestic budget.

ROB YOUNG: Great thank you, thank you very much for your time.

SIMON CREAN: Thanks Rob.

ENDS

Media inquiries

• Mr Crean’s Office: (02) 6277 7420
• Departmental Media Liason: (02) 6261 1555