Interview with Ticky Fullerton, Global Food Forum

  • Transcript, E&OE
Subjects: China; Australia-UK Free Trade Agreement; Australia’s border closures.
01 June 2021

Ticky Fullerton: And joining me now for the Global Food Forum is the Minister for Trade, Tourism and Investment Dan Tehan. Minister, welcome.

Dan Tehan: Ticky, wonderful to be with you.

Fullerton: Now, six months into this really important job of Trade Minister, first of all, what are your credentials? And in particular, do you have any s**t on your boots as far as farming and agriculture is concerned?

Tehan: Well, I do have some s**t on my boots. I grew up on a family farm and one of the things my father did was put us to work very early on. So, I remember driving a Land Rover as a four-year-old while he was on the back, feeding out the sheep and feeding out the cattle, and if you went over too many bumps you'd get a big bang on the roof and say, ‘drive straight’ and other- unless you're avoiding the bumps – and it's put me in good stead.

When I became a diplomat, one of the team building exercises they did was they took all of the young graduates to a farm and they asked us to bring a mob of sheep in. And all the rest of the young graduates sort of ran all over the paddock trying to bring them in one at a time and I was able to say, ‘no, let's form a line, bring them up a fence line’ and put them in the gate very quickly. And the teambuilding exercise took place in about ten minutes when it was meant to take about an hour, so it has stood me in good stead.

Fullerton: Right. Well, you've got a lot of sheep to put in a lot of gates very quickly, I know. Let's talk about China first, because they are our biggest trading partner and the hit to our soft commodities, let me go through: I mean wine, cotton, wood, beef, grain. Now, we're taking China to the WTO on barley. Now, this is really important. We've just seen the Prime Minister over in New Zealand and we hear that New Zealand, Jacinda Ardern, is standing by us in that. How important is that really?

Tehan: Well, the important thing is that the New Zealand Trade Minister has come out and said that he wants to take this action because he wants to back the World Trade Organization and the rules-based system – and that's incredibly important for a nation like Australia. If the rules are governed by economic heavyweights, we get caught in the way, and we suffer damage. What we need is an independent body that sets the rules, sets new rules, but also is the independent umpire in Government.

Fullerton: But you would expect Government to do that, wouldn't you?

Tehan: Well, it's always good when we have countries, likeminded countries, coming out supporting the rules-based system, because we need a rules-based system, as New Zealand does. And the more we can all stand together to really make it, or put it in its pre-eminent place, the better. And the World Trade Organization has suffered a bit recently, and we need all countries coming together to make sure it has that paramount role when it comes to setting the world trade rules.

Fullerton: You've talked about looking at the wine sector to take that to the WTO as well. How strong is our case for wine? Is it as strong as our case for barley?

Tehan: Well, we're considering that at the moment. We've done a lot of consultation with the industry and can I commend the wine industry for the way that they've worked with the Government on this. And we're now actively considering our case. We think it is a strong case, but we want to make sure we've dotted every ‘i’, crossed every ‘t’ before we make a final decision, and that will come in the coming weeks.

Fullerton: Literally the coming weeks?

Tehan: In the coming weeks.

Fullerton: All right. Now there was, I think, quite a disturbing article in The South China Morning Post recently, supported by quite a lot of trade data, alleging that our great mates, the Americans, are opportunistically backfilling our exports in wine, in cotton, logged timber and wood. Those numbers have all dramatically increased with the Americans over the last year. Have you been in touch with your US opposite number to tell him to stand by things? I mean, I think, even Geoff Raby was concerned.

Tehan: Well, tell her – Katherine Tai – I've been speaking with Katherine Tai a couple of times since she took on the role. What happens with commodity trade is that you'll get demand flowing from a lot of various sources and you'll get supply flowing from a lot of various sources, and there's nothing wrong with that because if China seeks to buy from other countries, then …

Fullerton: [Interrupts] What about the alliance? I thought there was supposed to be- I mean, clearly, we have tensions with China. We are both on the same- have the same interests, America and ourselves. Why are they jumping in to fill our stress, I suppose?

Tehan: Well, countries are meeting demand, but what you've got to understand is where they're meeting demand for China that gives us opportunities elsewhere for our commodities – and that's what's happening. We're seeing a shift in where our commodities are going, and that's a good thing. You look at our coal exports, they're going to India, to Indonesia, to other countries.

Fullerton: Has agriculture managed to shift, in your view, in the same way?

Tehan: It has. You look at the success of barley and being able to find new markets and we will continue to help our agricultural exports to find new markets. At the same time, obviously, taking that very principled position, is where we think injury is being done and harm has been done for the wrong reasons, taking China to the WTO.

Fullerton: Right. Let's go to the FTA, the free trade agreement with the UK. Less than two weeks, I think, before Scott Morrison and Boris Johnson are in Cornwall for the G7, presumably to sign an agreement in principle. Now, British farmers are protesting on beef and lamb. Now, where are we going to go? How are we going to end up with this? It's always the last thing to be agreed in an FTA, isn't it? Do you think we'll end up hitting some sort of limit on price or volume?

Tehan: Well, what we've argued for from the very start with this agreement is that we want full trade liberalisation on all goods, and that's what we're seeking to achieve. If you remember what happened 50 years ago, and as a young boy growing up on a farm I remember it very well, and remember the stories of what it meant for Australian agriculture. In the end, we seized the opportunity, turned to the Indo-Pacific and have capitalised ever since. And British farmers have that opportunity now. Not only can we do this agreement between the UK and Australia, but also open up those opportunities for CPTPP for the UK as well if they can strike a very good deal with Australia. And that means that they can seek to pursue new markets, make sure they're competitive. So, I see this as a real win-win.

Fullerton: And so that's what you're arguing to them, Minister. But does that mean as well- it could be a 15-year transition period? But does that mean that we'll still end up a bit like how we are with Korea, that we will have caps at some level?

Tehan: Well, we're working through that at the moment and I'm in detailed discussions with Liz Truss almost nightly as we work through what the final deal will look like. So, I'm very keen to make sure that we end up with full liberalisation for agricultural products for Australia. She obviously has to deal with the sensitivities of her own agricultural sector but my aim is to get an outcome which ultimately will take us back to where we were 50 years ago when the UK turned to the European Union.

Fullerton: Now, what wasn't on the agenda 50 years ago was climate change. Obviously, the G7, Prime Minister Boris Johnson, wants to make that- emissions a very big deal. One way the British could put pressure on us is emissions in farming. What sort of things could our farmers be asked to do as part of this trade agreement?

Tehan: Well, what we will be seeking to do is see whether we can work on cooperation when it comes to addressing emissions reduction because our farmers are doing an extraordinary job when it comes to emissions reduction here in Australia and I think similarly in the UK. So, if we can find ways that we can cooperate in that area, that would be terrific. But this free trade agreement is all about liberalisation so we can have international cooperation occurring as well. But the hard negotiations on emissions reduction rightly needs to take place at the multilateral level. And you'll be aware that where we have committed, whether it be through Kyoto or through Paris that, not only have we committed to targets, but we've met them and that stands us pretty uniquely in front of the rest of the world.

Fullerton: You are both the Minister for Trade and Investment. A key part of this FTA will be mobility- skills, mobility. Our international borders, Minister, they are shut. What do you think that is doing now to our trade and our investment potential? And can we have a sign of a plan as to how we can get that unlocked? There's no point in having an FTA without it.

Tehan: Yeah. So, the first point I'd make on this is, having just been to Europe and the UK, Australia is seen by the rest of the world as having managed this pandemic in an extraordinary way. They all say to us, ‘wow, we wish we could have done what you've been able to do in Australia’. So, in terms of investment, I think the story that we've got to tell of how we've handled the pandemic is a very good one and investment-

Fullerton: But what about getting trade to and fro, and mobility?

Tehan: Well, all these things are going to be really important. Workforce shortages, especially for the agricultural sector, is a real issue. It's been a real issue for some time. So, one of the things we're looking to do through this free trade agreement is to see whether we can have a mobility chapter, which would enhance, especially, the ability of young Australians and young Brits to come to and from both countries.

Fullerton: But, if vaccinated, for example, could they be in some sort of priority?

Tehan: So, we're not looking at vaccinations. That will be something which will be done with the medical expert advice but what we're doing is looking, sort of, beyond the pandemic; how we can set up the arrangements so we get greater mobility between the two nations.

I want this agreement to be the best agreement we've done outside of the one we have with New Zealand. And so, when it comes to mobility, when it comes to investment, when it comes to services, when it comes to goods, market access, I want this to be the best agreement we've done outside of New Zealand. That's my aim, and that's what I'm seeking to achieve.

Fullerton: I hope you achieve it as well. Minister Dan Tehan, thank you very much for joining us.

Tehan: Ticky, thank you.

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