Interview with Chris Smith, Breakfast with Chris Smith

  • Transcript, E&OE
Subjects: Australia-United Kingdom free trade agreement; AdBlue supply chain.
17 December 2021

CHRIS SMITH: Hey, this is good news. Australia and the UK are set to sign a historic free trade agreement this morning. It will remove tariffs on 99 per cent of our exports. This is worth almost $10 billion, and don’t we need it? Not only that; it’s expected to save Aussie households $200 million a year on British imports. It will open up the UK job market, deliver a boost to the farming exports, and it will even give a boost to the Aussie wine industry. The agreement is the very first free trade agreement that the UK has made since splitting from the EU. We got in front of the US, which says something. And the Federal Trade Minister Dan Tehan is on the line. Minister, good morning.

DAN TEHAN: Morning, Chris. How are you?

CHRIS SMITH: Very well, thank you. This is the first free trade deal with the UK and the first one that they have signed since leaving the EU. How did we beat the US to that?

DAN TEHAN: Oh, well, hard work, Chris. Hard work of all our negotiators, hard work of our industries right across this country, and making sure that we continued to travel during this pandemic to be able to go and negotiate this agreement. And it’s the quickest we’ve done ever, and we’ve done it in a pandemic. So, to everyone who has helped and supported in this effort, my hat’s off to you, because it is truly historic what we’ve achieved and it’s wonderful news for our country.

CHRIS SMITH: Give us an idea – like, you’ve got an entire department of trade officials. The UK no doubt has even a bigger department of trade officials. How many individuals are involved in getting all this done?

DAN TEHAN: So, there are teams that work on all the various areas. So, whether it be on goods, so on your sheep meet, your beef, your dairy, your rice, or on services like your legal services, your health services, your accounting services, on investment. There’s procurement, government procurement. Australian businesses can now offer to provide services to the UK Government. There are individual teams, often 10, 20; that work, they were working because of time differences sometimes overnight.


DAN TEHAN: So, it’s been quite something. I think I’ve probably spoken with my UK counterpart – initially Liz Truss and then Anne-Marie Trevelyan – at least once a week, if not two or three times a week, as we really pressed to just get this done. And we’ve done it in record time, which is fantastic. And it’s wonderful because as you’ve said, we’re first in the queue now. We’ve got access to the UK market ahead of New Zealand, ahead of the US and everyone else who’s lining up to get access post-Brexit.

CHRIS SMITH: Okay. So when is pen hitting the paper and does it mean the agreement comes into instant force?

DAN TEHAN: So, pen hits the paper today at 9.30 your time. We then have to get it through both Parliaments, which we will obviously expedite, and the aim is to have it in force by

1 July next year. And that’s when immediate benefits will flow here in Australia and in the UK.

CHRIS SMITH: Okay. So, it saves us $10 billion of tariffs on our exports to England and for those who love their British teas, maybe a Terry’s Chocolate Orange, the deal will also save Australian households $200 million on imports from the UK, right?

DAN TEHAN: That’s it. That’s it. So, you will be able to get that lovely tea that you like so much in, and it won’t have a duty on it whatsoever. All those duties are eliminated. So, it basically means we will be able to get those goods that we love from the UK here cheaper and we will be able to sell our goods into the UK cheaper, and that benefits both countries and it will create jobs in both countries. It will lead to greater investment flows. And for us to be doing this at this time while there are protectionist forces out there, really showing the rest of the world that this is the way for countries to go, is quite historic.

CHRIS SMITH: Yeah. So, for my teenagers, if they wanted to go and work in the UK, will it be a little easier from the middle of the year?

DAN TEHAN: It will be, and they’ll be able to go and work in the UK for three years up until the age of 35. So, this is a significant change for young Australians. They will be able to set off overseas knowing that they can work in the UK for up to three years. So, this is fantastic and, likewise, for young Brits, they will be able to come here and work for three years. We’ve got an unemployment figure with a 4 in front of it here at the moment. We need those skills to fill some of those labour shortages, and the fact that young Australians will be able to do that in Britain, where they’ve got similar issues that we have in terms of skill shortages, and we will be able to have young Brits come here is also great, and that just enhances that wonderful partnership that we have between our two nations.

CHRIS SMITH: And I guess from here on in, just about every week the Australian wine producers will be sending you a crate of wine every single week!

DAN TEHAN: Well, $43 million in annual customs duties removed, which is wonderful news for them and it’s great to be able to deliver this for them because they’ve obviously been hurt by the trade dispute with China and we committed to finding other markets for them. We’ve already seen, before this agreement comes into force, a 30 per cent, 30 to 40 per cent increase, in Australian wine sales to the UK. This will help again. It’s a wonderful Christmas present for our winegrowers and we’ll be looking for other markets for them as well.

CHRIS SMITH: What role did Tony Abbott play in getting this over the line?

DAN TEHAN: Well, Tony, as you would understand, is an adviser to the UK Government on trade issues. So, I’m sure that he provided advice into the UK system on the importance of free trade, because remembering under his Government we signed the free trade agreements with China, Japan and South Korea, and I’m sure that experience would have helped him provide very wise advice to the UK system.

CHRIS SMITH: Okay. On another subject, AdBlue, we’ve been covering it prolifically on the program all this week and a lot of truckies ringing up and a lot of people concerned and people paying lots of prices and all of that. You have been instrumental in trying to source more AdBlue from around the world, and you’ve set up a taskforce, have you?

DAN TEHAN: That’s correct. A taskforce has been set up. We’ve been engaging with our international counterparts. I’m very confident that we are going to be able to source supply from Indonesia. I’ve spoken directly with the Indonesian Trade Minister and I’m very confident that we’ll be able to get supply from Indonesia in the coming weeks. We’ve also had discussions with Japan. We’ve had discussions with Saudi Arabia, with the United Arab Emirates, with Qatar, and we’re doing everything we can to make sure that supply will continue well and truly into next year. And we’re also looking, and this is incredibly important, in what we can do to increase domestic supply here in Australia, and we’re doing more work on that. Angus Taylor is leading that work and we’ll have more to say on that over the coming weeks.

CHRIS SMITH: So, increase AdBlue manufacturing from Australia?

DAN TEHAN: Absolutely. That’s one of the keys. What the COVID has shown with some of these supply chains is that they can be very easily fractured, and one of the things we’ve got to do is boost our manufacturing capability here in Australia, and we’ve got our Modern Manufacturing Initiative, which is in place. We’re doing that and when it comes to AdBlue, we’re looking at how we can do that and do it quickly so we can not only get more supply coming in from overseas but boost our domestic supply.

CHRIS SMITH: You will be looking forward to the break at Christmas time. You’ve had a frantic year. Thank you very much on behalf of our listeners. All the best.

DAN TEHAN: Thanks, Chris, and merry Christmas to you and all your listeners as well.

CHRIS SMITH: All right. Federal Trade Minister Dan Tehan. There you go. Some good news. We need some good news. There it is. And some terrific breakthroughs when it comes to trade with the UK both in the short, medium and long term.

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