Interview with Matt Doran, ABC Afternoon Briefing
Matt Doran: Let's get straight into it this Monday, and the Federal Government is hopeful that China will be lifting its sanctions, its tariffs, on some of Australia's most lucrative and iconic exports, as the nation's trade tussle with Beijing continues to ease.
The Chinese Government has agreed to a five‑month review of the crippling tariffs it imposed on Australian wine almost three years ago. Exports of our top drops to China were worth around $1.2 billion when the tariffs of 220 per cent were imposed in November 2020.
Since then the market has shrunk to just $8 million. Don Farrell is the Federal Trade Minister, and he joins me now live in the studio. Senator, welcome to Afternoon Briefing. It seems like things are falling into place here with these sanctions or these tariffs now under review. You've had wins in the space when it comes to things like barley, but a couple of others still outstanding.
It's slow progress, or are you happy with how it's all going?
Minister for Trade, Don Farrell: Well, Matt, when we came to office almost 18 months ago now, we had about $20 billion worth of what we call trade impediments with China. Now that needs to be balanced against a trade relationship of $299 billion. So China continues to be far and away our largest trading partner.
From day one we have sought to stabilise our relationship with China so that all of those businesses in Australia that have been negatively affected by these impediments, have an opportunity to get back to trading.
Now one of the key ones, and sort of now at this point in time, we're down to about $1 billion worth of impediments, so we've reduced that figure by about $19 billion. But wine is very important in that, because unlike a whole lot of the other products that were the subject of these impediments, we weren't able to find alternative markets for wine.
Now what that's meant in Australia, of course, is that there's a surplus of particularly, red wine, but now that we have reached this agreement on a process to lift these terrible tariffs, then I think that's a very, very positive sign for the wine industry.
As you may know, I live in the Clare Valley in South Australia, so I know a lot about what goes on in the wine industry. My neighbours, lots of them simply didn't pick their red grapes this year, because their tanks are already full. So I'm hopeful that, given the process that we went through with barley, and the success with the Chinese Government in getting them to lift the tariffs there, we're going to have exactly the same result here with wine.
We're not leaving it to just getting back into China. As you will know, we've tried to diversify our trading relationships so that we don't have all of our eggs in the one basket. So we've got new agreements with India, new agreements with the United Kingdom. I'm hopeful as a result of some discussions that will take place over the weekend that we can get a breakthrough with the EU.
So it's important that we get back into the China market, but we're looking for alternatives as well.
Matt Doran: I want to pick up on the EU in just a moment. But sticking with this China dispute for the time being. This is a similar process to what happened with barley, and there's a review that's been launched with barley, of course China then dropped the sanctions it had in place. Going through the review process, is that just a face‑saving measure so that China can say they've looked at it and walked away from it rather than pulling up stumps straight away?
Minister for Trade: Look, we respect the Chinese processes. As you say, we did take a case to the World Trade Organisation. I was very confident that had we proceeded with that case, we would have got a very satisfactory result and a decision in our favour.
The unfortunate thing about the World Trade Organisation process is that, even if you get that first decision, you can in fact delay the processes by up to another two years before you get a resolution.
Matt Doran: So in this case a five month review is a more favourable outcome for you?
Minister for Trade: Very much so. Very much so, Matt. And of course it's a defined process now. We know what's going to happen, we've seen with the barley process that it can successful, and I'm particularly hopeful that particularly with myself and the Prime Minister going up there, that all of these things stabilise our relationship with China, and we can get back to the sort of trading relationship which we'd like.
Matt Doran: What did China get in return for this? The Ministry of Commerce has said that Australia as part of this has looked at the issue of wind turbines and has dropped some of its action there. I note the Prime Minister yesterday was asked whether or not there was a quid pro quo here, and say, "No, it's not transactional." So what's going on there?
Minister for Trade: No, no, the Prime Minister's absolutely right. This is not a transactional process. When the Foreign Minister was able to get Cheng Lei released from China, that was not a transactional process, that was us lobbying the Chinese Government for the release of Cheng Lei so that she could return to Australia with her family.
Matt Doran: So what China's talking about here with regards to wind turbines, is that something completely disconnected, that they're conflating with this?
Minister for Trade: What China's talking about there is, just as we've got some World Trade Organisation disputes with China, China has a range of World Trade Organisation disputes with us.
Our process for dealing with these issues is independent of government. We have an anti‑dumping body, and that body deals with those issues quite independent of government. So whatever might be happening, for instance, on wind turbines, would be something that would be occurring quite independent of our government decisions. We're not transactional.
Our arguments with China in respect of all of these disputes is that they are not consistent with our Free Trade Agreement. In order to make them consistent with our Free Trade Agreement, China has to lift these bans, and we're not stopping here. We still have to resolve the issue of lobsters, and a number of abattoirs who still can't get their products back into the Chinese market.
So bit by bit we are resolving, and I would hope, particularly after our trip to China next month, that we will see a way to get through all of these outstanding issues.
Matt Doran: On the issue of the European Union, you're having further negotiations, further discussions with the EU about a Free Trade Agreement there. I note today that many farmers, including the National Farmers' Federation, have come out and said, "Don't go down this track, it looks like it's a dud deal, and it's actually not going to be good for Australia's agriculture industry." Are you prepared to walk away from those negotiations if you don't get anything more appealing on the table?
Minister for Trade: Look, Matt, I've made it very clear that I was prepared to walk away from the deal that the European Union offered us back in July in Brussels. It wasn't a fair deal, it wasn't a good deal for Australia, and if the Europeans come to our meeting next week and make the same offer, I'm going to give them the same response. We're going to reject ‑ we're going to reject the offer from the Europeans.
Matt Doran: At what stage do you walk away entirely though? If you're rejecting an offer, but then as you did last time, but a couple of months down the track you are having further discussions with them, does that sort of keep the door open in the future and mean that the EU aren't going to negotiate and actually accept our tactic?
Minister for Trade: Well, very interestingly, I was at a meeting with the National Farmers' Federation after our last set of negotiations, and I said to them, "Look, do you want me to break off negotiations now?" And they said, "No, no, keep talking, keep talking with them." One of the reasons that I'm back talking with the Europeans is because the National Farmers' Federation said, "We don't want you to break off negotiations."
You have to understand this, Matt, that if we do break off negotiations right now - these discussions have been going for five years, we are getting closer, and you know, the number of issues between us are getting smaller and smaller - but if we were to break off negotiations this weekend say, we won't get a chance to come back with further discussions for two or three years, such as the way in which this process works in Europe.
So having said all that, I do want an agreement, I'm going into these negotiations with a positive frame of mind. I've met with the National Farmers' Federation. I note that they've got a big meeting on Thursday to elect their new President; Fiona Simpson, a terrific representative of the farmers is retiring, they're going to elect somebody to replace them.
I'll continue to talk with the National Farmers' Federation. I am a bit concerned though, having seen some of the comments by the Coalition, that they're undermining our negotiating position. We should have a Team Australia approach to these discussions.
You know, when the former government was negotiating with the United Kingdom, we backed them to the hilt. When they were negotiating with India, we backed them to the hilt. I'd like a Team Australia approach. That's the way we get the best result for Australia.
Matt Doran: Before we let you go, I do have to ask you briefly, you've come under significant criticism over the last week or so for appointing a former colleague in the Senate of yours to a plum trade post, former ALP Senator Chris Ketter, even though someone within Austrade was basically primed to take up that role, at a time when the Labor Government is saying that it's all about transparency and cleaning up the whole sort of environment of jobs for the boys, how does this pass the pub test?
Minister for Trade: I made that announcement three or four months ago, Matt, so I'm a little bit surprised that anybody is raising it now. But the truth of the matter is that he's the best person for the job. His skills both in negotiating and his government skills, which are always very important to any position in the United States, plus the fact that he's been working with the Defence Minister for the last five years. I think these are all key characteristics that what we need for that particular post.
Matt Doran: Better than someone who spent their whole career working in Austrade working their way up as an expert in this field?
Minister for Trade: The person who you're referring to has got a terrific job representing Australia in Singapore with our Southeast Asia 2040 program. She's going to do a terrific job there, and Chris Ketter will do a fantastic job for Australia in San Francisco.
Matt Doran: Got to let you go. Don Farrell, thanks for joining us.
Minister for Trade: Nice talking with you, Matt.
- Minister's office: 02 6277 7420
- DFAT Media Liaison: (02) 6261 1555