Former Minister for Trade
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Former Minister for Trade

Interview - Doorstop at Parliament House

Main Topics: FTA with China, trade relationship with China, beef imports

Transcript - E&OE

24 February 2010

SIMON CREAN: Our trade relationship with China is the largest trading relationship we have, and Australia is one of the very few countries to have a trade surplus in our trading relationship with China. So therefore, furthering our interests in that trading relationship is a terribly important part of the Government's agenda. It's therefore pleasing that today we see the commencement of the fourteenth round of talks between the two countries to try to conclude an FTA. This is the first round of negotiations for more than 12 months and it reflects the desire on the part of both countries, reflected seriously at the highest levels, to try and bring about a conclusion to this trading relationship. The nature of the relationship between our two countries is very interdependent. There's a simplistic view that all China requires of Australia is its resource base. That's true, but it's not the complete picture. Australia has a diversity and a depth of opportunities and assistance that it can provide to China as it goes through its important development phase. In a funny sort of way, the hiatus in the talks has enabled all countries to reassess their circumstances coming out of the global financial crisis. One of those reassessments has significantly taken place in China whereby they are seeking to move to a more consumer-driven economy, one that's less reliant simply on exporting to the world. For that to happen there has to be a development of, within the country, important industries and services that see the development of that consumer driven-economy - urban development, logistics, infrastructure, retailing, financial services - these are all important spaces in which Australia can play. And that's why in terms of the FTA, as difficult as the issues of agriculture are that still remain, the great opportunities are in services. Clearly the investment equation also is going to be terribly important. China has interests in investing in Australia. We've seen that over the last couple of years. We need a new framework that reflects that interest but a framework that reflects the importance of investment as a two-way street because Australia, too, has significant interests in getting greater investment into the Chinese economy. On agriculture; I said it remains sensitive and difficult. We understand the sensitivities in China but we keep pointing out that we have been able to negotiate those sensitivities with other developing countries. We have made it absolutely clear, and we still remain committed, we are not going to settle for less than was extended on agriculture to New Zealand. The final point that I would make is the dynamics that are emerging, not just in China and our trading relationships, but in Asia as a whole. And it's very interesting that we have actively, at the moment, not just free trade talks going with China, we have concluded a Free Trade Agreement with the whole of South East Asia, the ASEAN nations, and we have active negotiations in place, amongst others, in Japan and Korea. And so for North Asia, the sphere where China operates, I think it is also an interesting dynamic as to the pace and the progress of our Free Trade Agreements between Japan, Korea and China. At the moment, Korea is leading that race, but we're happy to be in the position in which not only are all of these trading relationships important to us, we have some competitiveness in the race.

QUESTION: Are these talks today a sign that Australia's relationship with China is on track and that issues like Stern Hu and foreign investment are now - you know, are not disrupting the bilateral relationship?

SIMON CREAN: Well, I don't believe either of those issues have ever themselves disrupted the trading relationship. In fact, we've seen the trading relationship go from strength to strength. The Stern Hu case - we continue to make representations as a consular case. The matter is now before the courts. The timetable needs to run its course. But so far as the trading relationships are concerned, both countries understand the interdependence of each country on the other and I think that there is a genuine desire to deepen and diversity that interdependency. That's why the talks are back on track. They will be difficult but we are determined to try and see them through.

QUESTION: How big is the gap on - how difficult is the task in front of you? I mean, is the gap huge or are they sort of narrowing down? How do you see the hurdles in front of you?

SIMON CREAN: The opportunity is enormous and in those circumstances I don't think we need to be deterred by the gap. All negotiations are difficult. All countries are going to have defensive interests. We have defensive interests. That's the nature of negotiations. But I think the real challenge is to try and find the way through that argues that the opportunity that's there can come through mutual interdependency. And I say to you that the services and investment front by far opens up the biggest opportunities. And I think if we can get a saner and more relevant identification of those circumstances then I think we will be able to deal with the sensitive issues in a mature way.

QUESTION: Is there a certain urgency needed for the investment framework now?

SIMON CREAN: Well, I think there's an urgency for the conclusion of the FTA. I think the conclusion of the FTA can provide a basis for a new framework for dealing with investment. I don't - I put it in the broader sense of urgency, not the imminence of urgency. I mean, it's not as if, if we don't get this agreement in the next month or the next year or the next two years for that matter, that the trading relationship is going to diminish. It won't. It's just that we can expand it better and in the context of an understanding and a framework that realises the opportunities that both countries have in their development by drawing more on each other. That's the real opportunity. And I cast the argument in terms of the opportunity and failure in terms of opportunity cost, not in terms of urgency.

QUESTION: Do you think it could be another …

QUESTION: Minister Crean, how far off do you think this FTA is? It's been nearly five years since both countries agreed to start negotiating towards a deal, so when do you think it might be concluded?

SIMON CREAN: Well we've only been in office two years and we inherited this in a stalled state. We unfroze it and then it stalled again. I think that highlights the difficulties and the sensitivity. But, in the meantime, we've had a global financial crisis that's turned the globe - the world on its head. It's forced all countries to understand the importance, not just of taking stock and - of the importance of stimulus to generate economic activity. It's the question going forward as to how we sustain that economic recovery. Now, what was the cause of the global financial crisis? It was the sub-prime collapse and the failure of the banking systems, in particular in the US and Europe. Australia has one of the safest banking systems in the world. It's also one of the most innovative and as China is looking to develop its economic base and diversify it, it's going to have to develop its financial services market. Shanghai knows this. It's positioning itself for it. Australia is the best placed of any country to offer support, investment opportunities, joint ventures and assistance in terms of a range of innovative safe product. Australia needs to be confident of what the strength and the breadth of its product base is. And that's why the China circumstances really provides a practical example of where we can demonstrate the broader brand of what Australia has to offer - the range of product that Australia has to offer - other than just resources.

QUESTION: Minister, shouldn't the Government agree to an import risk analysis of the risks of importing beef in countries that have been hit by mad cow disease?

SIMON CREAN: Australia has the strictest protocols in place, reinforced by the protocols that have come out of the decision of the Government to open up the market from March 1. This will ensure that all beef that's imported into Australia will be BSE free.

QUESTION: Can you guarantee...

SIMON CREAN: ...so why do you need a risk analysis to …

QUESTION: We have one with apples, pears …

SIMON CREAN: ...because we weren't importing them in the first place.

SENATOR HEFFERNAN: You bought beef in from…

SIMON CREAN: Hang on. Now, Bill you can have your chance after. If you can't get an audience on your own, don't cop in on others. Wait politely. You're known for your impoliteness and then apologising for it to everyone afterwards so please let me have a go. The circumstances are this. That the head of Food Standards Australia has said there is 100 per cent certainty that no beef will be imported into Australia that has BSE. We also have protocols in place, so that's from the point of personal consumption. So far as the impact on the herd, we also have protocols already in place that does not allow the import of live cattle and doesn't allow imported food to be fed to cattle. Now, they're the only two bases on which a herd can contract it. So if it's safe on the consumer front 100 per cent, there is no new risk to the herd, what is the problem?

QUESTION: Trade Minister, can you then promise the Australian people that we won't have mad cow disease in Australia?

SIMON CREAN: I can promise you that as a result of this decision, that won't create the circumstances for mad cow in this country. Now, Australia is quite capable - for example, we do not have the same restrictions on New Zealand as we have on the US or Canada at the moment. What if a contaminated product from New Zealand were to come into Australia? At the moment, if that happened, we would have to take all of the beef from Australia off the shelves. Imagine what that would do to our export industry. Similarly, if in fact there was an outbreak in Tasmania at the moment - if there was an outbreak in Tasmania at the moment, under the standards that we apply to the US we would have to apply to ourselves. We would have to treat the whole of the nation contaminated. What's proposed in terms of this change is that instead of treating the US as a whole, we can look to the disease-free areas and we can take product from them provided we are satisfied that it has no BSE and they're the protocols in place.

QUESTION: What about our labelling laws, though, Minister? Consumers at the shop won't know what they're buying.

SIMON CREAN: Well, the labelling laws are a different question, so let's just - well, and I hear not only is he behind me, he's laughing. Let me just remind you when those labelling laws came into place - 2006. Senator Heffernan was a member of the Government that bought them in. Now, I didn't hear him …I didn't hear him protesting then. What has the Labor government done? It's undertaken an inquiry because we understand that there are inconsistencies on the labelling laws. There will be a discussion paper produced next month that will go to the issues and we are determined to work on the basis of that discussion paper to address any deficiencies in the labelling laws.

QUESTION: Will there be action though? How long will that take?

SIMON CREAN: It depends on the discussion paper. But let me also make this point in terms of timing, because the discussion paper is coming out next month. Even with this change of laws that we've introduced in terms of making ourselves internationally consistent, there will still be on average, according to the experts, a five months' process before decisions are taken to allow the beef from a particular area in. I think the timetabling is something that people should not get overly concerned about but they should be conscious of the fact that at the same time as we've taken the decision that we have, with all of the protections in place, 100 per cent certain that we won't be importing beef with BSE, we are also addressing the labelling laws as well.

QUESTION: Minister, can I just switch back to the FTA for a second? Have you received any news, is there news on a trial date for Stern Hu yet?

SIMON CREAN: No, we haven't got specifics on the date. We continue to urge expedition and transparency in the - in his case.

MALE SPEAKER: We might make this the last question.

QUESTION: Will you keep eating beef from the supermarket under the new system?

SIMON CREAN: Well, I don't eat much meat from supermarket - I rely on my local butcher, down at the market.

QUESTION: Will you keep eating beef?

SIMON CREAN: Of course, I eat …I'm a great beef eater, but Australia has got natural produce. I might say, as a result of this decision, I do not expect a great influx of imported beef. And the reason I say that is because I have confidence in our beef industry. It is a quality product. We export most of it. The rest of the world wants it, not just us. And I think those who are raising these issues ought to have regard to the concern that organisations like the Cattle Council raise, that the issues being raised wrongly, in my view, are hurting the beef industry. Now, that's the beef industry's words. If the science supports what we're doing, if the beef industry supports what we're doing, if reciprocity in terms of our trade obligations requires we do it and we can give the 100 per cent guarantee, what's wrong with that? Thank you.

ENDS

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