ABC Radio National with Patricia Karvelas
Patricia Karvelas, Host: In an increasingly complex geostrategic environment the new government is looking to put its fingerprints on Australia’s trade policy. The main focus is our largest trading partner – China. The Prime Minister is hoping for a meeting with Chinese president Xi Jinping when the G20 gets underway in Bali this week.
The Minister for Trade and Tourism is Senator Don Farrell, will lay out the government’s road map in a speech later today, and he joins me now - welcome back to Breakfast.
Minister for Trade, Don Farrell: Nice talking with you, Patricia.
Patricia Karvelas: The first pillar of this strategy is to diversify and to lower our reliance on China, which is currently our largest trading partner. Now, around one-third of our exports go there. Should Australian businesses and Australia’s economy be so reliant on China?
Minister for Trade: Look, I think we've learned from bitter experience that in the trade space it's dangerous to have all of your eggs in the one basket. So part of our strategy is obviously to continue that trading relationship with China but reduce our reliance on it. So, what that means is finding new markets for our goods and ensuring that we don’t find ourselves in a situation where we’re in a relationship with only one purchaser.
Patricia Karvelas: The 30 per cent of exports figure is a big drop from 42 per cent a year ago. Where would you like to see that number?
Minister for Trade: I’d like to see it back where it was, in the sense that obviously we want to sell as much of our produce and our products as we can into China. But we have to have other markets. We have to improve our sales to Japan. We have to improve our sales to Korea. We’re about to endorse a free trade agreement with the United Kingdom. We need to sell more products to the United Kingdom. We’re having discussions with the Americans about a new trade agreement. We’ve got to get more of our products over there.
Over the weekend we renewed our agreement with the ASEAN nations. They’re a big, growing part of the economy. We need to get more of our products into the ASEAN region.
Patricia Karvelas: You mentioned China and improving the trade relationship there. If Anthony Albanese secures a meeting with the Chinese President, what will his message be specifically around the trade ban?
Minister for Trade: I spoke to the Prime Minister yesterday in Cambodia, and he’s hopeful of getting a meeting with the President. His message will be a pretty simple one – we obviously want to have a stabilised, sensible relationship with China. But part of that means that the trade blockages that we currently have on things like wine, in barley, in meat, in crayfish, for instance, the Chinese have to lift those bans so that we can get back to a normalised relationship and that both countries can benefit. We can sell our products into China but, more particularly, the Chinese consumer gets the advantage of wonderful produce that Australia can produce.
Patricia Karvelas: And what’s the likelihood that a meeting will lift all of those bans?
Minister for Trade: Look, I think the Prime Minister – well, I’m not sure that one meeting will solve all of the problems that have existed over the last five or six years. But there’s been good meetings between the Foreign Minister Penny Wong and her equivalent. They’ve met on a couple of occasions and spoken on a couple of other occasions. That’s obviously a very positive sign.
If we do get the meeting with the Chinese President, I think it starts the ball rolling in putting these problems behind us and starting a new relationship that will get us back to where we want to be in terms of our trading relationship with our largest trading partner.
Patricia Karvelas: And are we willing to offer anything in that negotiation, or is it just, you know, return it back, open up the trade again, or are we going to offer something?
Minister for Trade: No, it’s a very simple proposition that the Prime Minister will be putting to the Chinese government. They’re the ones that imposed these trade blockages. Things aren’t going to get back to normal until they lift those bans. We’re not negotiating as such; we’re simply explaining to the Chinese President that these are problems in our relationship, and in order to get things back to a stabilised, sensible relationship - which is what we want with China - then those bans are going to have to be lifted.
Patricia Karvelas: Australia is challenging China’s duties on barley and wine in the WTO. And in a speech today you’ll say Australia is keen to discuss possible off-ramps. What does that mean? What are you looking at?
Minister for Trade: Well, it’s exactly what the Prime Minister will be saying to the Chinese government if the meeting goes ahead – that we would much prefer to sort out our international trading disputes with China, and any other country for that matter through negotiation and discussion rather than through the World Trade Organisation.
Anybody with a dispute, Patricia – it’s much better to sort out disputes by discussion rather than through the courts. For these sorts of issues, the World Trade Organisation is the arbitrator, and it’s the court that decides these things. We’d much prefer to sit down face to face with the Chinese government and sort out our problems that way rather than through using the legal processes that are available to us.
One of the problems, of course, with these processes, is that they’re very lengthy. They can take in some cases years to resolve, so that even if you get a good result – and we a very confident of the strength of our legal argument – it takes years to get that result.
Patricia Karvelas: I want to circle back to something you mentioned a little earlier – and that’s the UK free trade agreement. Free trade agreements with the UK and India are still being negotiated and finalised. Can you provide an update on when those will be in place?
Minister for Trade: Yes, I can. The UK free trade agreement was signed about 12 months ago, but under our legal system, it has to be approved by the parliament. So, when that wasn’t done in the last parliament that whole process had to start over once again. As soon as parliament resumed in August, I sent the agreement up to the treaties committee. I’m expecting next week that the treaties committee will hand down its report and recommend the approval of that agreement.
In anticipation of that, I’ve prepared all of the legislative changes that we need to things like customs rules in order to implement that agreement. So when parliament resumes next week I’m very hopeful that we can push those through and that from our side of the ledger we’ve got that all approved by the end of November.
Now, it also requires the United Kingdom to do the same. They’ve started that process. I’m hopeful that just as we’re going to finish it in the next week or two that they’ll also finish their side of the processes.
With India, very similar situation. We had to start that process when parliament resumed, and it’s been I think this week about six months since the government was first elected. We had to start that process and, again, this week I’m hoping that the treaties committee will recommend the approval of that agreement and, once again, we’ve got all of the legal processes in play. I’d be very confident again by the end of November that we’ve done everything we can to implement that India free trade agreement.
Patricia Karvelas: We were talking earlier about this all-important potential meeting with the Chinese President. You said you spoke to Anthony Albanese yesterday. Is the Prime Minister – or do you think the Prime Minister should be raising human rights issues, and particularly the treatment of two Australians – Cheng Lei and Yang Hengjun?
Minister for Trade: Look, once again, with our relationship with China obviously we want a mature, sensible and stable relationship. But we’re never going to do anything that either affects our national interests or our national security. And, more importantly, we’re not going to stop talking about those issues which, you know, we believe in as a democratic country – and that is human rights.
Patricia Karvelas: So should the Prime Minister raise those particular Australians and their ongoing detention?
Minister for Trade: Look, just exactly what the Prime Minister raises with the Chinese President, of course, is up to him. But we have certainly raised those issues with the Chinese government and will continue to raise those issues with the Chinese government. I know Foreign Minister Wong has regularly and routinely raised those issues with her counterpart, and we’ll continue to raise issues of human rights with any country where we believe there are currently difficulties.
Patricia Karvelas: You’re vowing to strip future trade agreement clauses that allow Australian companies to sue foreign governments over decisions that may harm their businesses. Now, the Australian government is also facing potential legal action over any gas market intervention, like price caps or windfall taxes under existing trade agreements. Are you hoping that other countries might reciprocate your clause or intervene to stop Australia potentially being sued?
Minister for Trade: Those provisions are two-way agreements. In the past what they’ve been used to do is allow, for instance, big tobacco companies to try and overturn laws where we’re trying to reduce cigarette consumption in Australia. So, we see them in a very, very negative light.
If you have a problem with another country it’s much better to sort those things out by discussion, by negotiation, again without taking these matters to the courts. So, we think there are other ways of resolving these sorts of disputes, and that’s by discussion and negotiation.
We see it as being counterproductive to allow these provisions in agreements, and in the new agreements that we’re negotiating – the European free trade agreement, the IPEF – the Indo-Pacific agreement with the United States – we don’t believe these clauses are necessary and we’re not going to be including them.
Patricia Karvelas: Minister, thank you for joining us this morning.
Minister for Trade: Thanks, Patricia. Nice talking with you.
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