Interview with Haidi Stroud-Watts, Bloomberg

  • Transcript, E&OE
Subjects: Australia-UK FTA.
16 June 2021

Haidi Stroud-Watts: Our reporter put it earlier that perhaps this is more symbolism than substance. Certainly, we were just saying this is the quickest agreement, even in principle, for a free trade agreement, certainly in my memory. Would you agree that it's more symbolic?

Dan Tehan: Oh no, there's real substance to this agreement, and in many ways it rights a wrong that occurred 50 years ago when the UK turned away from Australia to the European Union. So, we're able to get those trade flows back up and running again, especially for our agricultural producers, to similar levels to where they were 50 years ago, immediately, and hopefully we’ll be able to grow those. The UK will potentially get access to the CPTPP, this paves the way for that accession. So, for British farmers and other British exporters, potentially opens up huge markets for them as well as the Australian market. So, a deal of real, real substance. The outcomes on investment, the outcomes on services, the outcome on movement of people are all huge, huge outcomes in this agreement.

Stroud-Watts: So, I know it's important for you to get this in the bag, you know, formally first, but where does that leave EU negotiations? At what point are we in being able to get closer to a deal there?

Tehan: So, we've just concluded the 11th round of negotiations with the EU. They were taking place concurrently while we were finalising this agreement in principle with the UK. Those 11th round- that 11th round- went incredibly well; 12th round scheduled for October and then hopefully we’ll be in a position to move to the end game with the EU. So, my hope would be we might be looking towards the end of this year for the end game with the European Union Free Trade Agreement. Still a lot of water to go under the bridge, but we're making real and substantial progress with those negotiations as well.

Stroud-Watts: A lot of sticking points there, but one that I do want to address is the discontent that has been expressed from Europe when it comes to Australia's climate commitments. Is Australia's position when it comes to climate, when it comes to decarbonisation, something that is increasingly becoming an issue in global trade negotiations?

Tehan: Not at all. I mean, we've seen through the finalisation of this agreement in principle with the UK that we're able to have an environmental chapter. We've committed to work very well with the United Kingdom on international cooperation when it comes to dealing with emissions reduction. As another part of the visit of our Prime Minister to the United Kingdom was also to ink agreement on an emissions reduction technology partnership, which was a very good outcome as well. So, we'll continue to work with countries right around the globe to make sure that we're doing everything we can to reduce emissions but do so in a way which keeps our economy strong. And we've very much got an approach, which is let's use technology to reduce emissions, not taxes, because we think that's the best way to go. And we've also put forward very comprehensive arguments as to why we should be reducing all tariffs on environmental goods and freeing up movement when it comes to environmental services, because that way all countries can get access to the emissions reduction technology they need and the knowhow so that they know how to use that technology.

Kathleen Hays: Minister, let me add my congratulations to Heidi’s. That must feel really good to get this deal done. I want to ask you, is it especially important to have deals like this made and others, at a time when Australia has so many tensions, so many issues, right now, with China?

Tehan: Look, it's always important to diversify your trade, and that's what we've done since we came into government. We had about 20 per cent of our trade covered by free trade agreements when we came into office, we've now got over 75 per cent when we finalise this deal with the UK—and that could grow even further with the EU, EU Free Trade Agreement. So really, really important to be able to diversify our export base, in particular, for our farmers. The UK was a market where we had very restricted access. We’ll now be able to get good quality produce into the UK. So, this is a win for our exporters and especially for our export diversification approach that we've been taking- taken since we've come into government.

Hays: Well, I can certainly understand why the UK and many countries would like more Australian beef, no doubt about that. But you mentioned investment and services as areas where you think you can grow your exports. UK very strong when it comes to investment in services. Where do you think you can make inroads there?

Tehan: Well, we've freed up the ability for both countries to be able to invest in each other's nations. The UK is the second largest investor in Australia and we welcome foreign investment in Australia. It creates jobs, it boosts innovation, and we’re looking forward to that British investment in Australia. Likewise, Australia will be more freely able to invest in the United Kingdom and that will create jobs in the United Kingdom and boost innovation there. So, investment flows freeing those up is a win/win really for both nations and another substantial outcome from this agreement.

Stroud-Watts: We heard from the Prime Minister last week and, in fact, we've been hearing similar developments over the past few weeks about taking the wine tariff trade dispute with China to the WTO. Can you update us on where we're at? What's the hold up in terms of going through that process?

Tehan: Look, under active consideration at the moment, you've got to make sure that you've got the very best legal arguments and the very best legal case to do that. So, we want to make sure that we've done everything we can to show the strength of our case. We're working with our wine industry. I was- I had consultations again with the wine industry last week. So, it is under active consideration at the moment and we’ll be making a decision very shortly as to the next steps we take in trying to deal with this dispute on wine that we currently have with China.

Stroud-Watts: There's also media reports of a new scheme that would allow agricultural workers from 10 Southeast Asian countries to come and work in Australia. How crucial is a scheme like this potentially at a time when borders remain closed and we know there are certainly pressure points in the domestic labour market?

Tehan: Well, look, this is another great outcome from this free trade agreement. We've long fought for a standalone agriculture-agribusiness visa here in Australia. We've achieved that and we'll also look to expand that to other countries in our region. So, this is another really important outcome from this free trade agreement, and I think it's one that will be welcomed, especially around regional and rural Australia, because getting access to the workforce that we need to make sure that our rural economies remain strong is just so, so important.

Hays: We know one article written to look at this warns that sometimes the history of trade deals, free trade deals for Australia have not gone so well. Looking back to the ‘70s, the ‘80s, ‘90s, the so-called Australia-United States free trade agreement that didn't go so well. Why are you so sure that this new one is going to be as positive for Australia, for its industries, for its workers and businesses, as you say?

Tehan: Well, I wouldn't agree with the premise about the Australia-US Free Trade Agreement, I think it has worked incredibly well and it's helped grow the economic relationship between Australia and the United States. And I think this agreement will as well- 50 years ago we had a very strong economic relationship with the United Kingdom, especially when it came to the agricultural sector. We'll be able to resume that strong economic relationship and I think also grow those investment flows, service flows. Government procurement is another area where this will be a world-leading agreement. So, in many ways, I'm incredibly confident that this will be a gold standard free trade agreement because it is a free trade agreement of real substance. It will be the best free trade agreement we have done outside of the closer economic relations that we have with New Zealand.

Stroud-Watts: With this deal potentially under the belt, Minister, does that mean Australia is giving unequivocal support for the UK accession to the CPTPP and how quickly can we get that process wrapped up given- I know I've been covering these talks, you know, rounds and rounds back in Singapore for so long now.

Tehan: So, this does mean that the United Kingdom will get the accession approval of Australia for CPTPP and that's why we wanted to make sure it was a gold standard FTA. The process then will now be how the United Kingdom can negotiate with all the other CPTPP countries to get accession. But you have to remember the speed in which we've done this free trade agreement with the United Kingdom has been unparalleled when it comes to free trade agreement negotiations. To knock it over and get an agreement in principle in 12 months is unheard of, and we'll now move to finalise the complete legal text by the end of October, beginning of November. But this has been done at speed, but it's been done at speed to make sure that we've got a substantial outcome.

And I've got to thank my negotiating team, led by Elisabeth Bowes from the Department of Foreign Affairs and Trade, for the outstanding job they've done in working towards this outcome, which has been a great outcome for Australia and a great outcome for the United Kingdom.

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