Interview with Chris Smith, 2GB

  • Transcript, E&OE
Subjects: Australia-India free trade agreement.
02 April 2022

CHRIS SMITH: Well, a significant announcement this morning with Australia and India set to sign a free trade agreement this very afternoon. Now, this is an historic deal with one of our largest trading partners, and it will see tariffs cut on more than 90 per cent of our exports to India over the next ten years. And this is all part of trying to fill the gap left by the breach of trade agreements with China. On the line to talk us through this agreement is Federal Trade Minister Dan Tehan. Minister, welcome to the program.

DAN TEHAN: Great to be with you, Chris, as always.

CHRIS SMITH: This is an important agreement for Australia in the Indo Pacific, isn't it?

DAN TEHAN: Yeah. This is an historic deal. This is something we've been trying to achieve now since 2011, and thanks to the very close relationships between our two prime ministers, we've been able to get this deal done. And it's a huge win for our exporters. It means they get access to the largest fastest growing economy in the world, market of 1.2 billion people. It will see our exports grow, we think, from 15 billion — the current rate — to 45 billion by 2035. So a huge win, especially when you think that one in five jobs in Australia are dependent on trade, and it's one in four in regional and rural Australia.

CHRIS SMITH: So how many tariffs are being cut on our exports to India?

DAN TEHAN: So 90 per cent of tariffs will be eliminated over time, immediately, entry into force, it's around 85% and in key areas. So, when it comes to wool, when it comes to sheep meat, when it comes to wine, when it comes to coal, when it comes to critical minerals and rare earths—all those very important components that are going into electric cars and e-batteries. So this is an enormous deal for us because it sets us up for the future. And we'll make sure that our two economies, the Indian economy and the Australian economy, continue to harmonize and grow together, which is exactly what we're looking for. And the Indian government were very keen to give the name of this free trade agreement a word that means unity in Hindu. And so it's basically going to become known as the unity agreement.

CHRIS SMITH: What are we giving them? Have we agreed to cut the same amount?

DAN TEHAN: We are giving them access to the Australian market. So, we're cutting tariffs for them for the Australian market, so they will be able to continue to grow their exports into Australia. And we hope also what we'll see is a greater exchange in the services area. So, there is an agreement here for around mutual recognition of qualifications so when it comes to engineering services, for instance, we'll see Australian companies being able to provide those engineering services into India, and vice versa. One particular area that India are very strong is in the IT area, in that important technology area, so I'm sure we'll see that relationship grow, and we need those IT skills and IT capability that India can bring as we seek to make sure we can fill all those cyber security jobs that we've got and build up our cybersecurity capabilities. So it's an important deal in many ways.

CHRIS SMITH: So tariffs are being eliminated entirely on some fruit and vegetables are they?

DAN TEHAN: That's right. So macadamia nuts, for instance, is a huge market there in India for us when it comes to macadamia nuts, when it comes to avocados, blueberries, raspberries, strawberries, all these areas will see tariffs slashed for us. And we'll be able to make sure that produce that we're the world's best at producing, our clean grain image, means that there is a high demand for all that produce that we make here in Australia — citrus, oranges, mandarins. We get access into the Indian market. So it'll be an enormous boom for our horticultural sector.

CHRIS SMITH: We deal with projects in the media in a very quick fashion. I cannot believe that you've had people on this since 2011, that would drive me nuts.

DAN TEHAN: It's been a long journey.

CHRIS SMITH: You're not wrong.

DAN TEHAN: The thing about it is though, with this, seven months ago I met with my current counterpart, Minister Goyal, and we had lunch for three hours without any officials in the room. And we set ourselves the goal of nailing this deal. We both agreed it had been going on far too long, and we set ourselves the task to be the two ministers who are actually going to deliver a conclusion to this agreement — and that's what we've done. And I've got to say, the Indian Trade Minister has been absolutely fantastic to work with. He's jumping on a plane and will be here Tuesday night to help sell the deal. He's bringing a delegation of business people from India with him because he understands how important this deal is. And I've got to say, the friendship I've been able to strike with him since I've been Trade Minister has just been terrific and really helped in us being able to get this deal across the line.

CHRIS SMITH: I've been watching what you've been doing, and it's about building a brick wall which was pushed down by the Chinese, and they're breaching of various trade agreements. This is a huge wall and a huge brick in that wall, isn't it?

DAN TEHAN: It is. It basically just gives us another market to diversify into and that is absolutely key. We want to make sure our exporters have as many options as they possibly can to send what they produce. And obviously a market of 1.2 billion. There are - a million Indians turn 18 every month, so it is a young market for us as well, and it's going to continue to grow. So being able to be an economy that has got access to this market, I can tell you the US, Canada, UK have all been following very closely what we've been doing because they want a piece of the action. The fact we're in first getting that preferential access really stands us in good stead.

CHRIS SMITH: Wow, that's an incredible statistic. Meanwhile, you've added 1000 new places for India on our working holiday program too, haven't you?

DAN TEHAN: That's right. So Indian backpackers will be coming here and there's 1000 places for them so that's wonderful also, for making sure that we can continue to build the strong tourism relationship that we have with India. It was our fastest growing tourism market as we went into the pandemic. Obviously, the Chinese were the largest market. We don't know what's going to happen there because of the zero covid policy. So, the Chinese aren't traveling. So once again reestablishing India as a fast-growing tourism market is going to be absolute key and that's why the thousand spots for Indian backpackers is another significant win in this deal.

CHRIS SMITH: Congratulations on all of this and you're about to tell me what day the Prime Minister will call the election, right?

DAN TEHAN: I can't tell you that.

CHRIS SMITH: It’s Thursday, isn't it? Or Sunday, what day is it? Come on, I can make money on Sportsbet Minister.

DAN TEHAN: Sportsbet. Well, I love a bet, Chris, as you know. But I won't go divulging that because, in the end, the only person who knows is the PM himself, so I think we can safely bet it will be in May though.

CHRIS SMITH: Okay. All right. We know that you're telling me nothing. You give me nothing. Dan Tehan, great to speak with you. All the very best.

DAN TEHAN: Always a pleasure, Chris. Thanks a lot.

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