QUESTION: Thank you, Minister. I enjoyed your speech very much and
I'm picking sort of in the last little piece that you said on the role of
I'd be interested to hear your views on which Australian bilaterals do you
think are in fact contributing to the multilateral objective that you said
should be the criteria and which are not.
EMERSON: I've had that question before and my answer is that there’s
a Productivity Commission report that’s in draft form now, and I know the
Department of Foreign Affairs and Trade and I'm sure many others will be
contributing a submission to the draft report. Then that will be completed
I think around November. I'd rather await the analysis of that report
before coming to any conclusions about that.
But as I reiterate, where they do genuinely contribute to global trade
liberalisation or to regional trade liberalisation, which in turn
contributes to global trade liberalisation, they are well worth having. I
think we need to move beyond the debate about labels. As I had occasion to
say recently, if all a bilateral agreement constitutes is an ornament on
the mantelpiece of the national economy, then it’s not worth having. But if
its content is pro-liberalisation, then it is worth having. Let’s have a
look at the work that’s being done by the Productivity Commission and then
I'll be in a better position to answer your question later in the year or
early in the new year.
QUESTION: My apology; I should have introduced myself. Malcolm
Holdsworth from the ANU.
EMERSON: No problem.
QUESTION: Minister, you speak about some of the differences without
dwelling on it too much between Labor and the Coalition’s approach to trade
policy. What are those main differences?
EMERSON: I think that the Coalition was unduly pessimistic about
multilateral trade negotiations. When I was the Shadow Trade Minister,
there were statements from the Coalition in government saying, effectively
saying that the Doha Round’s going nowhere and therefore we need to go into
the bilateral agreements.
As I say, I'm not against bilateral agreements in principle, but
essentially they seemed to pretty much give up on the Doha Round on
multilateral trade liberalisation. And as everyone in this room would know,
the big gains, the really big gains come from multilateral trade
liberalisation because they give full expression to full specialisation
amongst countries. Now, I think the Coalition would recognise that, but I
feel that they were unduly pessimistic about the prospects of completing
All these rounds are difficult to complete. I referred to my time when John
Dawkins set up the Cairns Group of Agricultural Fair Trading Nations. There
was a lot commentary around at that time saying the Uruguay Round would
fail, that it would not be completed. And it did come to fruition and it
did involve genuine liberalisation. So let’s give Doha a real chance and a
real push. And that’s what Julia Gillard is doing overseas amongst her
other duties while in Europe.
QUESTION: Minister, off the trade track, if I may take it there,
that’s still overseas. Tony Abbott has said that he was too jetlagged to
visit, or he was worried about being too jetlagged when he got to the UK to
visit the troops in Afghanistan with the Prime Minister.
Do you think that that’s a fair excuse, or has he put meeting members of
the Tory Party ahead of meeting Australia’s troops?
EMERSON: Look, I will - I don't want to stray very much beyond
trade. I'll simply say this, that Julia Gillard’s determination was that
the first visit that she would make overseas was to our troops in
Afghanistan. She regarded that as very important. Mr Abbott obviously has a
But I don't want to dramatise that. Julia’s working very hard in Europe
pursuing our trade interests and economic interests and also she’s met, as
you know, with NATO who have confirmed that we have the largest non-NATO
contingent in Afghanistan. So I think that’s where we should leave that.
But I think Mr Abbott’s travel plans are a matter for Mr Abbott, but Julia
Gillard certainly was determined, determined that the first visit that she
would make overseas would be to Afghanistan to visit out troops.
QUESTION: Dr Emerson, in your senior role, would you like to revisit
the parallel import [indistinct] again?
EMERSON: Well look, I think we've had that debate and I respect the
outcome of that debate. I think there will be ongoing competition from new
forms of books_ e-books and the various innovations that we are seeing on
almost a monthly basis. And that itself will ensure that the Australian and
international publishing industries producing the conventional books are
competitive because they have to be competitive against these new forms of
technology. So I think that'll sort itself out.
QUESTION: Dr Emerson, in which services industry do you think
Australia has the most comparative advantage?
EMERSON: Well, one way of answering that is in the sorts of
negotiations that have started in relation to clustering - let me just
explain the clustering concept.
Given that services are the dominant feature of all developed countries and
increasingly of course of developing countries as they move through the
stages of development, if we sought to negotiate on each and every service
at the same time, it would be a massive negotiation.
So what Australia has done has said, let’s look at clustering different
types or various types of services that work together. And the area that
we've been emphasising is in transport logistics; that is, when a product
arrives overseas at a port, it then needs to be transported efficiently to
a final market. And those barriers for those services; that is, transport
logistics, can be quite substantial. That’s why they're called
So the Australian negotiators have really emphasised those transport links
in getting physical goods from ports, whether they be seaports or airports,
into final markets, and that itself would obviously facilitate trade in
those goods but also give Australian businesses an opportunity to engage in
those services in developing countries and developed countries as well.
Another area which is clear that Australia has a strong comparative
advantage is in engineering services related to the mining industry. And
again, we have such strengths there because we've been so good at mining
here in Australia that we're already doing pretty well in that area. Any
liberalisation that is required there can only be to the good of both the
other country and to Australia.
And another area where we have some real advantage is environmental
services. And again, that’s an area or a cluster in which we're interested.
The United States, you should know, is pushing liberalisation of trade in
information and communications technology services. It shouldn't be a
surprise given the US creative role in ICT innovation.
So there are a few examples for you, John, of the areas where we think we
can make progress without biting off every possible opportunity if we can
cluster them and make progress in those areas. Add that to the arrangements
that were on the table in 2008 which can be further strengthened, then we
might have a very good package for governments to consider as the
conclusion of the Doha Round.
QUESTION: Dr Emerson, there’s been criticism that Australia’s trade
negotiations lags behind the Kiwi’s specifically in relations to a free
trade deal with China. Why aren't we able to achieve the same level of
trade liberalisation as that country, and doesn't it hurt our agricultural
sector considering [indistinct]?
EMERSON: Well I'm not sure that I accept that we lag behind New
Zealand. We work with New Zealand on trade liberalisation and I don't want
to return to history too much but it was Australia that actually formed the
Cairns Group of fair trading nations. We work with New Zealand and we'll
continue to do so and - but you're right that there are opportunities for
further liberalisation of trade in agriculture that we are pursuing and we
are pursuing them both bilaterally and regionally. And any progress that we
can make there we will do so on behalf of our primary producers.
QUESTION: So why have you failed to get the Chinese [indistinct]..?
EMERSON: Oh has New Zealand settled a full free trade agreement with
QUESTION: It’s my understanding yes.
EMERSON: Yeah well I think that there’s still some way to go there.
But we will keep working with various countries including with China to
seek further market access into China, into India, into other fast growing
countries of our region, while at the same term pursuing this
liberalisation through the multilateral forum, the Doha round.
EMERSON: Well there are potentially enormous gains from liberalising
arrangements with China and we will seek to pursue the liberalisation of
trade with China, consistent with our efforts to achieve regional and
multilateral trade liberalisation.
There’s a relatively new forum for trade liberalisation called the Trans
Pacific Partnership which we're keen on, the United States is keen on. It
happens that the members of the Trans Pacific Partnership arrangements are
all members of APEC. So it could be a force for regional trade
liberalisation in a smaller number of countries who are all very keen on
liberalisation. So you can see that we will seek to utilise those forums
that offer the potential for liberalisation of trade in agriculture,
manufacturing and crucially, in services.
EMERSON: Well the architects of WorkChoices have spoken out. The
member for Mayo is Jamie Briggs. He had a very important role working for
John Howard in preparing WorkChoices. He has spoken out saying that aspects
of WorkChoices need to be brought back.
The former Shadow Minister for Small Business who was my counterpart, Steve
Ciobo, who I think unjustifiably, has been demoted first by Tony Abbott to
the outer ministry and now to the backbench has also joined in that chorus.
And all that tells us is that WorkChoices is not dead. It’s just resting
and if Tony Abbott were able to get the - I think it was the blue parrot,
squawking again he would certainly do that. The Norwegian Blue I think it
was. If he can get that Norwegian Blue called WorkChoices squawking again
he'll certainly do it and there’s a fair bit of squawking going on the
backbench to try to get the Norwegian Blue up and flying again.
QUESTION: Minister, you talk about the strength of the services
sector but - or the good future it has, but [indistinct] survey shows a
further deterioration for the eighth time this year. How do you reconcile
EMERSON: Well I think in part - in part from what I was saying about
the exchange rate, the exchange rate has appreciated. I think it’s about 97
cents, in that order, high 90s. That is a challenge for the non-mining
sectors of the Australian economy.
And we will need to ensure therefore that for the service economy and for
manufacturing, that is the sectors that are not part - directly part or
even indirectly part of the mining boom that their competitiveness is as
good as possible.
And that’s why we've been pursuing this great endeavour of the seamless
national economy. And it was wonderful to see Penny Wong as the Minister
for Finance and Deregulation and Nick Sherry as the Minister Assisting on
Deregulation recommitting the Government to completing that task of
deregulation in 27 areas of business regulation, further competition policy
reforms; all of these are designed to restart productivity growth and if
you've got productivity growth in the service economy, you've got a more
competitive service economy. And that’s where we come back to the
Australian Services Roundtable. Even the 0.1 percentage point increase in
service economy productivity is well worth having.
QUESTION: Minister, what about an exchange rate? Is there a risk
that we might see a stronger push from service sectors in the economy for
indirect protectionism such as subsidies [indistinct]...?
EMERSON: Oh look I think businesses can speak for themselves. There
are always voices within the business community in Australia and overseas
who seek some sort of extra assistance.
I think that Mr Abbott has joined with Prime Minister Gillard in confirming
that we will not be increasing tariff protection in this country. Now I
know your question relates not only to tariffs but to subsidies. Of course
businesses under pressure will argue that competition from overseas is
affecting their viability. What we need to do is continue Australia’s
tradition as an open trading nation.
It’s through that trade, on both the export and the import side, that has
achieved the sorts of gains that were reported in that study by the Centre
for International Economics $3,900 per household. Now that study referred
to in my speech quantifies the gains not only from exporting more but also
from obtaining imports at lower cost than that which could - those which
could be produced domestically.
So trade liberalisation cuts both ways on the export side and the import
side. But it’s a free country; certainly businesses are entitled to put
their two bobs’ worth in but we will continue our commitment of Australia
as an open trading nation.
EMERSON: Well it’s really a step up in our engagement with Europe
from - to a formal treaty that is being mooted. I think Brendan Nelson
described the current arrangements as being engaged and wouldn't it be
better to be married. So I haven't seen the proposed content of a formal
treaty. The main reason probably is that it hasn't yet been drafted but
this is an idea of stepping up our relationship with Europe beyond that
which exists at the moment.
EMERSON: Well I would expect that it would contemplate the whole
economic relationship as well as non-economic dimensions of our
relationship with Europe.
EMERSON: Well it can always be improved but we do need to respect
the international accounting conventions. That is, we need to measure our
gross domestic product and the components of our gross domestic product in
a way which is statistically consistent with the way that other countries
do that. So I don't think we can just go it alone, but certainly there’s
always room for better information.
I think we should resist any thought that just more information is good.
Let’s ensure that if we can generate more information that it is quality
information that actually assists in such great tasks as lifting service
We can't in this nation really restart productivity growth that went
backwards in multi-factor productivity terms in the last four years of the
Coalition without getting service economy productivity growth up, because
it contributes three-quarters of non-public sector activity in this
country. So the key to getting productivity growth going again has got to
be in the service economy, it has to be. And I just think and lament the
fact that between 2004 and 2007, Australia’s multi-factor productivity
growth went backwards. In other words we were less productive in 2007 than
we were in 2004. We've got to do better than that.
EMERSON: You would have liked my sentiments about transparency?
QUESTION: Yes indeed. I wondered if it was possible to tell us the
role you envisage for the Cairns Group going forward. It seems to me that
in recent years it’s been dormant, that as a [indistinct] of Australia’s
effort, even Doha for example, you'd have to be rather disappointed in
EMERSON: Well I think what actually has happened is that other
groupings and larger groupings have been assembled. The Cairns Group has
been meeting but I won't say to you at the highest levels and on a highly
sustained basis. We think that further gains are available in agriculture
and that of course is the coherence of the Cairns Group. I'm thinking aloud
as to whether the Cairns Group would be the right forum for pursuing for
example liberalisation of trade and services.
But look I take your point, I think that more can be done amongst the
Cairns Group and you know I think Simon Crean has worked tirelessly in all
of the forums that have been available but if we can restart the stalled
Doha Round then there'll be a big role for groups like the Cairns Group and
anyone and everyone who has an interest in trade liberalisation, including
that Trans Pacific Partnership in which I have a reason to be fairly
QUESTION: Minister as a champion of the free market somewhat, how
relieved are you that you didn't have to rely on the support of Bob Katter?
EMERSON: Bob Katter is a lovely man and he and I play touch footy
and he makes me look good out on the touch footy field, which says
something about my touch football abilities. But Bob’s got a view and it’s
a view on trade and tariffs that is not shared by the Labor Government nor
is it shared by the Abbott-led Coalition.
But again in our parliament, irrespective of the numbers in the parliament,
I firmly believe that it is the right of every parliamentarian to put
forward a point of view, and sometimes we'll agree with that point of view,
sometimes we won't agree with that point of view. We don't agree with Bob
on his call to re-erect tariff barriers in Australia.
QUESTION: Minister on interest rates, if these rates do go up today
as expected, they'll still be lower than they were pre-global financial
crisis. Obviously when rates go up you see a lot of new stories where
people are complaining that they can longer afford their mortgage, are
those people just [indistinct] that haven't planned ahead?
EMERSON: We understand very clearly the cost of living pressures
that mortgage holders and householders more generally face, but I'm not
going to speculate about interest rate changes, I'm sorry about that.
I think we might just pretty much wind it up there and I thank you very
much for coming in such numbers. I think it’s been a great exchange and I
hope that everyone will take the opportunity of reading this report.
And as I mention in one line in that speech, if these sorts of reports were
produced in countries around the world such as the Peterson Institute in
the United States did for America, then that greater transparency
[indistinct] of the gains to the domestic economy from liberalisation would
help a lot, because if you're in a tradition of give and take as if when
one country liberalises this is a painful and an awful thing to do, then
that makes it so much harder. But if the country that is making the offer,
actually is doing so because it’s in the interests of that country
unilaterally to improve the flow of services in that country, then that’s a
good thing and it makes the negotiations easier. And you can't expect to
achieve that without this sort of shining a light through transparency on
the benefits to the country itself from doing that liberalisation, and
that’s why I'm so excited about this report.
It plays that role here in Australia. It’s been played in America, as it’s
played out around the world, I hope that the task of liberalising trade and
services will be easier and by bringing a much more fulsome package of
liberalisation of trade and services in the Doha Round, that might just be
what is needed to break the current impasse and get the real gains from
Thank you very much.
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