Interview with Kieran Gilbert, Sky News Afternoon Agenda

  • Transcript, E&OE
Subjects: Chinese sanctions on Australia wine, Australia-China relations, European free trade agreement negotiations.

Kieran Gilbert, host: Chinese sanctions on Australian wine are set to be removed, clearing the way for the Prime Minister to visit Beijing next month. An agreement by China to review its tariffs has been met with the suspension of a dispute at the World Trade Organisation in the latest diplomatic breakthrough with Beijing.

Let's bring in now the Trade Minister Don Farrell. Thanks so much for your time. When do you think the wine sanctions will be scrapped? Because they're being reviewed. When do you feel that they'll be gone altogether?

Minister for Trade, Don Farrell: Well, as you know, Kieran, we decided to use the template that we used for the resolution of the barley issue as our template for resolving the wine issue. If that process works the way it did with barley, then at the end of this five-month review, I'm very hopeful based on the process with barley that the Chinese government will then lift the tariffs on Australian wine. And in accordance with our free trade agreement, Australian wine can then go back into China tariff free.

Kieran Gilbert: You were with some of the producers earlier in the day in the Clare Valley – beautiful wine out of that part of your home state. Is there the chance to get – do you think it will get back to the $1.2 billion a year that it was before the tariffs were slapped on it in terms of the value of the exports?

Minister for Trade: Look, I'm hopeful that we will get back. What we know about the Chinese palate, of course, is that they really like big, bold Australian wines, particularly red wines. So we know prior to these impediments being introduced Australia was the largest supplier of wine into the Chinese market.

Now, there has been some changes to that market, particularly post Covid, but I would be confident that certainly the discussions I've had with companies like Penfolds, with Taylors Wines, with Seppeltsfield I'd be pretty confident that when we get our wines back on to the supermarket shelves that that demand that we had before we were – the tariffs were imposed, I'd be pretty certain that we'll be back to something similar to what we were before.

But, having said that, what I've been telling our wine producers is that they've got to take advantage of the new agreements that we've reached. We've reached a new agreement with India, a new agreement with the United Kingdom. With any luck we might get a new agreement with the European Union, and they've got to diversify their trading relationship so that we don't have all of our eggs in the one basket ever again and that we've got the opportunity to get our fabulous wine into a range of different markets.

Kieran Gilbert: The Prime Minister's landed in Washington. I want to ask you the question that a lot of security people are concerned about: that you were pursuing the economic relationship, yes, but can we do both? In the days of the Howard government, yes, we were able to build those trade relations while still having China as not so much a foe but a regional counterbalance to the United States. Can it happen in the modern world where we still have the US such a major security partner and ally and build those strong economic ties with China? Can that balance be achieved now?

Minister for Trade: Can we walk and chew gum at the same time? Kieran, I think we can. This government, particularly with Foreign Minister Penny Wong, has been very adept at ensuring that we focus on our security interests, as we always must – I mean, the first job of a Federal Government is to keep the country safe. And, you know, America has been one of our longest allies. It was a Labor Government that formed the alliance with the United States. It was Curtin in 1942 who established the relationship with McArthur.

We understand just how important security is, and in an increasingly unstable world it's more important than ever to have some friends. But at the same time China is our largest trading partner. Last year we did a record amount of trade - $299 billion worth of two-way trade with China, more than the United States, Japan and Korea put together. We can do both of those things.

The fact that the Prime Minister this week is meeting the American President and next week is meeting the Chinese President I think is an indication that we can play a significant role in trying to stabilise the region. We want peace. That's the objective of this government. We also want security. But we also want to improve our living standards by continuing to improve our sales to China and to the region.

Kieran Gilbert: So while things are precarious, you've said obviously we want peace. You believe that a dialogue, keeping those channels open, is the best way to get that. You'll be in China as well as I understand it with the Prime Minister. What's your focus going to be when you visit China?

Minister for Trade: Okay. Well, one of the things I undertook when I first met Minister Wang Wentao in person earlier this year in Beijing was that I would return for some trade events that are going on in Shanghai. So myself and the Prime Minister are heading out next week to Shanghai, and we'll be promoting Australian products at the biggest trade show in the world.

What I've noticed about my time in this job and my visits to China is that although we sell a lot of products into China – we have a very clean and green image up there – I think we can sell more. And so there'll be many, many Australian businesses who'll be up there. We'll be supporting them, promoting them, trying to expand our trade relationship.

Kieran Gilbert: On the wine deal, you said – you explained to us at the start of the interview how you're following a similar path to the barley arrangement where you suspended the WTO – the World Trade Organisation – efforts and then, in turn, those sanctions were scrapped. Was there anything else done by the Australian government in return for this review?

Minister for Trade: No, no, no. We've made it clear all along that we're not transactional. When we got Cheng Lei out of Beijing and back to her family in Melbourne it wasn't a transaction; it was us saying to the Chinese government, “Look, we believe this woman was wrongly incarcerated. We want you to release her so that she can come back and join her family.”

Our aim, I guess, here is to ensure that China complies with all of its free trade obligations. And one of those free trade obligations is no tariff on Australian wine. I mean, that was why we were able to sell so much wine, of course, into the Chinese market. We brought that in tariff free. All we're asking the Chinese government to do is honour their obligations under the free trade agreements that we've got with them.

Kieran Gilbert: Now, you've got another – you touched on it earlier – those talks with the EU. Today the outgoing president of the Farmers' Federation says that the current deal that's put forward – her name's Fiona Simpson, she's wrapping up – but she says don't sign a dud deal and that what they're putting up at the moment, the EU, is a dud deal in her view. You're going to be meeting with the EU counterparts in Osaka I think in the next few weeks as well. Are you going to heed that warning from the NFF?

Minister for Trade: Yes, yes. I walked away from what she would describe as a dud deal in July. If the offer on the table from the Europeans is the same offer that we got in July, I'll walk away again. I have no qualms about doing that.

Now, I'm going into these negotiations with a positive frame of mind. I would like to get an agreement with the Europeans. This is becoming an increasingly unstable world, as we see right around the globe at the moment. We need to have agreements with like-minded friends, and the Europeans fit that category.

I want to get a better deal for the Australian producers. That includes, you know, the farmers. And my objective in these negotiations will be to get a better deal. I was sitting with the NFF after the last lot of negotiations and I said, “Look, do you want me to breakoff these negotiations,” and they were emphatic – “No, we want you to keep talking with them.” So just as we're talking with the Chinese I'll continue to talk with the Europeans.

Kieran Gilbert: Trade Minister, we'll talk to you soon. Appreciate it.

Minister for Trade: Thanks, Kieran. Nice talking with you.

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