Australian Grains Industry Conference Webinar

  • Transcript, E&OE
Topics: Australian barley industry; trade relationship with China.
30 July 2020

Hugh Riminton: Thank you very much, Minister, for your time. Thank you for taking a couple of questions. I note the figures you have there of having over 50 countries so far that have applied subsidies that are related to the COVID crisis. Do you fear that we are now at the point of a stage where there will be a retreat into protectionism which will outlast the pandemic, that the mood has change on trade?

Simon Birmingham: As we entered and the pandemic, there was absolutely a step up in in certainly some nationalistic sentiment around the world, and probably some protectionist sentiment. The pandemic has only increased elements of that rhetoric. But does it mean that it is translating into actions that will have long lasting consequences? I think the jury is still out on that. We have seen, yes, a lot of temporary measures, but also a lot of support for commitments to keep them as temporary measures. I'm hopeful that we can, working with our many partners, convince the rest of the world of the reality which is that the economic strength that has been achieved over recent decades, the rising of hundreds of millions of people out of poverty and achieving better education and health and standards of living across much of our region has been a result of more open markets and more open trade. That we have actually achieve great things coming into this pandemic by opening up to one another and that if there is an economic lesson to be ever mindful of as we come out the other side of it – it's not to put up barriers, and put up walls, and restrict the free flow of trade or goods or services, because that will only lead to greater inefficiencies and only lead to a circumstance where getting economic recovery back on track will be so much harder.

Hugh Riminton: A question from one of our attendees – very much on theme here – is what more can the government do to help industries diversify their markets, given China?

Simon Birmingham: Thanks, Hugh. Firstly, as I said in the speech, creating those new market access opportunities is important. The old approach of needing to break down tariffs, and quotas, and trade barriers remains crucially important to opening up new markets, as we've done in Indonesia, as we've done successfully over recent years with a range of countries, and as we aspire to do with many others.

But we know that it's not been just about opening up those markets. Business, industry, traders, they need to be able to walk through the door and seize those opportunities. It's why with Indonesia, the Grains Partnership's important, and the investment we're making in terms of informed strategic analysis of demand in that market to help inform planting decisions, marketing approaches, all of the different things that will be necessary to get the most out of that FTA. And that what we also need to do, and I've given a big call to arms to Austrade and DFAT officials, embassies, high commissions around the world to make sure that in responding to the challenges the barley sector faces, I expect everyone to be working hard to seize and find new opportunities. That won't come about instantly. I know that means that the sector may see challenges over the next couple of years in terms of being able to shift product for the same premium prices that they were receiving into the China market. But I'm confident, given the quality of our product, the reliability of Australian producers, that we can absolutely win those contracts, get more shifted whether it be into the Middle East, into Thailand, or Singapore, or Vietnam all of which we see as prospective markets. And I've got interesting leads that have been followed by the industry together with the Austrade and associated teams.

Hugh Riminton: While we work on that diversity, a lot of questions coming in. As you might expect, it's still essentially related around the issues of China and barley. I'll try to paraphrase it, one suggesting that perhaps Australian led with its chin in pushing early and hard for an international independent inquiry into the virus that had emerged out of Wuhan. Obviously, that was perceived by some as the reason why China then hit the barley exports. But the concern also that as these- not just trade tensions but essentially the strategic tensions appear to be growing, involving China. The United States now calling the Chinese Government the new tyranny. We have had the AUSMIN meeting this week, this may be a rebinding of our connections with the United States into what is an increasingly fractious area. What are the dangers: a) did we lead with our chin? And secondly, what are the dangers that it's not going to end in barley, that the grain industry and other agricultural industries are going to be collateral damage in an increasingly fractious strategic contest?  

Simon Birmingham: Thanks Hugh, there’s lot to unpack in that summarising of the question there. I think firstly we should be very mindful of the fact that the processes that started around the barley anti-dumping dispute were initiated more than 18 months ago. China started its investigations then, and it always had a fixed end date. And nobody could have predicted that that the fixed end date after the 12-month process and six-month extension was going to be in the middle of a global pandemic or a debate about what was going to happen at the World Health Assembly. I don't think it’s right to join the dots automatically between a debate about those health matters and the conclusion of that anti-dumping process. We have seen that China has cited, in some cases, Australia's use of anti-dumping measures in its justification for the barley decision. That's an erroneous proposition put forward by China. Yes, Australia's used anti-dumping measures, but all the evidence is there for the world to see, including China, as to why we've done that in a range of steel products in particular. But China has shown a lack of credible evidence to justify what it's done with our barley industry. It's why we will ultimately proceed, if we have to, with the World Trade Organization appeal on that position around barley. And the same rights and opportunities are there for China in relation to any of the dumping matters that we've resolved in Australia about steel and other products. And I note they've not gone down that path at this point in time.

It is viewed more broadly – important though – as I said in my remarks, that we are true to our values, and that means that we engage in multilateral fora, in institutions like the World Health Organization, around what's in Australia's overall long term interests and firmly in our interests to have made sure that there is a transparent, as much as it can be, inquiry and investigation into the pandemic and how we learn the lessons to stop this type of devastation to our economy and to the lives of people from happening again. Australians would expect no less, and we shouldn't tread down what would be a slippery slope of compromising what we say or do in relation to our values or our interests because we think that will appease some other nation. That type of approach only leads potentially to further requests for appeasement. We want to see China continue to grow, continue to succeed. As I spoke about in my remarks, it's lifted hundreds of millions out of poverty. It's had a huge impact and a positive impact in terms of its growth. We don't adopt a containment strategy of others. The Foreign Minister was very clear, when questioned about things in the US, that we make decisions firmly and squarely in Australia's interests. We see China's economic engagement, openness as good, and we want to continue to urge and encourage that. But we also see the US’ engagement in terms of values of democracy, respect for the sovereignty of other nations, as also being a good that we continue to encourage and particularly as part of our alliance there. And it is about being true to ourselves and making sure that all of our partners, in their different spheres, understand that's what we will continue to do.

Hugh Riminton: And just a final question if I may, it may seem flippant but really it isn't. Does the Chinese Trade Minister now take you phone calls?

Simon Birmingham: Well no. Look, it is correct. We have not spoken directly for some time. I think that's disappointing. We are very willing, as a country, to have conversations where they might involve points of difference or have them openly, forthrightly and directly, but that's how you work your way through those differences. It doesn't mean you change positions but it means you at least understand the interests of the other side. But it doesn't mean that all dialogue-

Hugh Riminton: So if trade minister to trade minister, if there’s not a phone call that can be had, how do we advance the interests of the grain industry and other industries on trade matters if it's not through the relevant trade ministers?

Simon Birmingham: So it doesn't mean that all dialogue is off and it certainly doesn't mean that all processes are at a cessation. Obviously, we're advancing interests around the rest of the world as actively and aggressively as we can. But also in relation to China, have been working with the grains industry to support them in advice and information around the appeal to the anti-dumping decision that's been made. We continue, through diplomatic and other channels, to make all the representations that we can. China is adamant that the decisions it made in relation to anti-dumping dispute are process-driven decisions rather than political decisions. So they’ve detached that from the political conversation in any way. People can assess that as much as they choose to, but what we are trying to do at present is show respect to their processes by supporting the domestic appeal. If that's unsuccessful, then we will work through the WTO processes. In the meantime, whether it's on barley or other issues, as I said, we are open to have the conversation. I think it speaks more of others who are unwilling to reciprocate.

Hugh Riminton: Alright. I can't help but try and sneak in one quick one. Mathias Cormann is retiring from the Senate. It’s widely expected you’re going to become the government leader in the Senate. Whether you are or not, you’re already the Deputy Leader of the Government at the Senate. In a time that National Cabinet is dealing with global crises, much of conflict and haggling over legislation comes into the Senate. Is it your sense that you have a constructive Senate, that the Opposition has been constructive, and that sensible policies will get a good run through the Senate in these difficult times?

Simon Birmingham: On the whole, yes. The political cooperation this year has been strong, be it from- and between federal and state governments or indeed within the Australian Parliament, to be able to do the essential things that were necessary to get us through the crisis. The battle will lie in terms of the enormity of economic recovery that lies ahead and whether, similarly, consensus can be achieved through the Senate and the political system to support some of the things that may be necessary. We have embarked on the process with trade unions and the business community of looking at whether there are simplifications that can be had to the industrial relations system. Ultimately, if there are, that will come to the Senate. I hope if we've managed to get positive outcomes from that process that we won't then see impediments put in place. Similarly, as a result of the review of the Environment Protection and Biodiversity Conservation Act, we've put proposals to states and territories about how we can reduce red tape and duplication in relation to environmental protection, not reduce standards but certainly make sure that there are fewer duplicative hoops for farmers and businesses to jump through, and I hope again that we can actually see progress on those sorts of things, particularly when Labor states are also willing to join with us in looking at that. We want to see the Senate support that, rather than put in place barriers that make us less efficient. And there may be inefficiencies that we, as a country, could handle before in good times but we can't afford any inefficiencies in what are now challenging times, and we need to sort of put our best foot forward everywhere for economic success.

Hugh Riminton: You’ve been generous with your time. Minister, thank you so much for taking our questions and for giving us that update and overview. We have your fellow South Australian Alexander Downer standing by to have a chat with us. So we better get onto him and move the agenda along. But thank you so much for joining us today.

Simon Birmingham: Thank you Hugh. Thanks again to everybody, particularly across the grains industry who are such great advocates for Australia and wonderful partners to work with too.

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