2CC Breakfast with Mark Parton

Subjects: Trade with Indonesia and China.

Transcript, E&OE

27 April 2011

MARK PARTON: We join the jet-setting Federal Trade Minister, Dr Craig Emerson, who I'm sure is still suffering some jetlag. G'day Craig.

CRAIG EMERSON: G'day Mark. The jetlag's all over now.

PARTON: How long have you been back in the country?

EMERSON: Oh, about three days, yeah.

PARTON: Now I know that the Indonesians were not as progressive as you were on reducing trade barriers. They were a little cagey about the free trade deal that you wanted to move ahead with?

EMERSON: I think they were actually pretty positive about the free trade deal. I did raise the related issue of our beef exports to Indonesia, where our exporters are experiencing a few problems on the wharves in Jakarta. And, also, our live cattle exports: there's a limit, Mark, of 350 kilograms on the size of a cow, or cattle, that can be transported to Indonesia to then be fattened up by the locals. So, it's kind of a good way of doing things. They grow here and then get fattened in Indonesia. But with all the rain, we've got a lot of fat cows - a lot more than 350 kilograms.

PARTON: It's put a spanner in the works there.

EMERSON: It has, yeah. Look, there is an issue there - I'd put it at more than a little issue; it is problematic for our industry. But on the broader issue of a trade deal, what we want to do is broaden it beyond just trade to technical cooperation so that we can help the Indonesians, particularly those in poverty, start earning some more from the sweat of their brow. And that means it's a good deal for everyone, and I must say the reception of the business community and of the Indonesian government was very, very positive to those sorts of propositions.

PARTON: You were moving towards, or talking about moving towards, a formal economic partnership between Australia and Indonesia.

EMERSON: Yes.

PARTON: How does that differ from what's in place now?

EMERSON: Well, we have a regional agreement which is called the ASEAN-Australia-New Zealand Free Trade Agreement, and it's a pretty good deal. But this would broaden the relationship to include investment and the sorts of technical cooperation, animal husbandry and so on that I was just talking about. So it's not limited just to reducing each other's direct trade barriers, but to working in partnership with Indonesia so that they can satisfy their concerns that Indonesia gets something pretty valuable out of this, not just one country, namely Australia.

PARTON: I find it fascinating, and I think quite positive, that you want to link to trade this whole concept of spending, not spending money but ...

EMERSON: But economic cooperation...

PARTON: Yes, yeah, and I think to me it's a much better model than what we have in place at the moment. I know splashed all over The Canberra Times this morning there's another story about the fact that so much of our AusAid money is just not being well spent.

EMERSON: Well, this is an area where we are doing some really good work, and it will continue. There are so many people in Indonesia who are on an income of less than a dollar a day, and if food prices go up there they are in deep trouble. So, what we're trying to do is establish a food security arrangement with Indonesia where it can achieve a level of self-sufficiency, but that Australia - to the extent that it can't achieve self-sufficiency - is a reliable supplier. And that keeps a bit of the pressure off food prices, which is important for Indonesia because these benefits need to accrue beyond a couple of, or a few, large corporations to the people in general. Then they'll say, 'well this is good, we like Australia, we've got a good attitude towards Australia'. It's a country of 235 million people and at current growth rates the Indonesians reckon they can be in the top 10 economies of the world by 2020. And then, of course, before that I was in China, which has got a population 1,340 million people.

PARTON: Just crazy stuff, yeah.

EMERSON: There are cities in China, Mark, that you and I have never heard of and certainly have never visited that have got 10 to 20 million people in them.

PARTON: Yeah it's amazing, it's absolutely amazing. As Federal Trade Minister, obviously China is very important to you because they're very, very important to us. Do you put your head in your hands at any point when human rights are brought up, you know, by an Australian Prime Minister in China?

EMERSON: Well, the expectations are always that an Australian Prime Minister will raise human rights issues and that's not unreasonable; it's a matter of how you raise them and whether you consider that's the entire dimension of the relationship. And there is much more to the relationship than issues of human rights. China is our biggest trading partner by far.

PARTON: Oh yeah.

EMERSON: And over the last 25 years we have established ourselves as a very reliable supplier of mining and energy resources to China and established some real resource security for China. It's a very big country and we want to continue to work collaboratively with them because that means for Australians more jobs and higher-quality jobs because our export jobs tend to be much higher-paying than our non-export jobs.

PARTON: We all understand that, but does that mean as a consequence that we do tend to ignore some things that go on in China that perhaps are a little untoward, Craig, because it's in our best interests not to see them?

EMERSON: No, we don't ignore them but there, as I say, I think there are ways of raising these issues and the Prime Minister has indicated that she did raise two specific issues and, more generally, talked about human rights. But if you go to China to make that the whole purpose of the visit then you're not going to do the best for Australia as a whole. And then these matters are raised, but we don't actually go to China exclusively for the purpose of saying 'well we're here now and we're only going to talk about human rights and nothing else'. That would be absurd.

PARTON: Craig, thanks for your time, as always, this morning.

EMERSON: Thanks Mark.

PARTON: Dr Craig Emerson, the Federal Trade Minister.

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