Interview with Leon Byner, 5AA, Mornings

  • Transcript
Subjects: Australia-UK Free Trade Agreement, China
16 June 2021

Leon Byner: But in the meantime, I want to talk to the Federal Trade Minister, Dan Tehan, because what's happened is, and this is good news, that we in this country, is the first nation to secure a post-Brexit free trade deal with the UK in what's been touted a historic breakthrough. So, let's talk to the Federal Trade Minister, Dan Tehan. Dan, it's good to talk to you.

Dan Tehan: Good to be back on again, Leon. How are you?

Byner: Excellent. Now, tell me about how important this trade deal is? When it will execute in timing? And how the people listening will be affected.

Tehan: So, it's incredibly important for Australia because it means that we will get greater access for our exports into the UK market, and it also means that those products that we import from the UK that we like, we will get at a cheaper price as well. It will be finalised, all going well, in October, November this year. It will then need to go through the parliaments of both countries and come into force 1 July next year.

Now, in particular, for South Australia, what it enables us to do is to get our wine into the UK tariff free. So, from 1 July next year, all our wine will go into the UK tariff free. And we've seen a big uptake in our exports of wine to the UK, so this will be really beneficial to the grape growers and wine producers in South Australia.

Byner: What other things, apart from wine, are going to be big ticket items?

Tehan: So, when it comes to our beef, we will be able to get 35,000 kilo tonnes of beef into the UK market from year one, and that will grow over time until the tariff is completely liberalised. Sheep meat or lamb, we'll be able to get 25 000 kilo tonnes in immediately and then that will grow over time. For rice and sugar, we get immediate access, and then the tariff with regard to sugar reduces in eight years, and then for dairy all tariffs eliminated over five years.

So, right across our agricultural sector, this is a great outcome. And, in particular, when you think about what happened 50 years ago when the UK turned to the EU and really put us in the freezer, it made it very difficult for us to be able to export to the UK - this rights that historical wrong. And I know farmers with long memories will greatly appreciate the fact that we've been able to turn that around, right that historic wrong, and be able to get access to the UK market again.

Byner: I'd like to ask you about our trade relationship with China, because they've always been a very big customer. Has much changed? I know there is the, the issue with what's happening with Uyghurs and other things the Chinese don't like getting any world attention on. But how would you describe our relationship with China at the moment? Is it good?

Tehan: No. At the moment you'd have to say we're going through a difficult stage. There's obviously a number of goods that we export to China where we have currently trade disputes and we cannot engage at the ministerial level. Now, we're seeking that constructive engagement.

Byner: Won't they talk to you? If you rang them, would your, would your opposites talk to you?

Tehan: So, I wrote to my counterpart when I first was appointed Trade Minister just before Christmas. So, I wrote to my counterpart after Christmas in January - and he was newly appointed at the same time I was - seeking a meeting, seeking to engage, setting out all the ways that we could constructively engage, and also asking that if we could have a dialogue on all the current disputes, because I think it's important …

Byner: [Talks over] Sure.

Tehan: … we can sit down and discuss it all. I haven't had a response to that letter yet, Leon.

Byner: That's not very polite, is it?

Tehan: Well, look, our hope is….

Byner: [Interrupts] It's half- The year's half gone.

Tehan: Yes. Our hope would be that we will get a response and we can sit down and have a chat. But in the meantime, while we wait, we just get on with it. And that's why this UK free trade agreement's so important. It's why we're pursuing one with the EU. It's why, you know, we're trying to capitalise on opportunities in India. There's a lot to be done, and I said I'd be pro-active, principled and patient when I took on this job. And that's what we'll continue to be, in waiting for ministerial engagement with China, we're happy to be patient.

Byner: Is it that China doesn't like the fact that we're commenting on things that they would regard as being domestic interference, for example, treatment of Uyghurs? That's not the only thing, but it's high on the agenda. Is it something that we'd have a better chance if we shut up and didn't say anything, which I know we're not going to do, but that's really where it's at, isn't it?

Tehan: Well, we've made clear that when it comes to our national interests and our sovereignty, that we will put in place legislation that obviously protects our national interests and also where we think there are things that we need to make representations on, we will do so—and that's the right of every sovereign nation. And on some things, you've got to learn to agree to disagree. And our hope is that we'll be able to get to a stage where we will be able to have that meaningful dialogue, where we can agree to try and resolve certain issues, and there might be other issues where we just have to agree to disagree.

Byner: As Trade Minister, you'd be across this, but I know, for example, the last time I looked, we were exporting to the world $54 billion worth of coal. I mean, that's incredible, isn't it? And that would be paying for a lot. Then, of course, there's the other ores that we're doing very well with. So, would there be a trade balance where what we're sending them is much more than what we're importing?

Tehan: So, when it comes to coal, our coal, due to its quality, is in high demand. So we were sending it to China. Now that that has stopped as a result of the current dispute that we've got, but it's now going to India, it's going to Germany, it's going to France. It goes globally because of the quality of it. And look, our trade balances with various countries, so with the US we run a deficit, with China we run a surplus. It just depends on really the demand in each country for the various products and then the size of the exports and the price of the exports. So, what really happens is, in the end, your nation benefits overall from being open and being able to trade. And you'll have various arrangements where sometimes the balance is towards one country and sometimes you'll be in deficit to others.

Byner: We're getting a good price for our ore, aren't we?

Tehan: We're getting a very good price for our ore, and it's wonderful to see because that income that we earn from that goes into building schools and building hospitals and creating jobs here in Australia. And, you know, our economic success over the last 28 years, where we've had uninterrupted economic growth, has largely been on the back of the fact that we've got a very open economy. We're able to trade freely our exporters, and we've been able to get free trade agreements in place, covering with the UK now, nearly 75 per cent of all that we export.

Byner: Fantastic. Dan Tehan, good to talk to you. That's the Federal Trade Minister, with some good news for our country.

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