Beijing Doorstop

  • Transcript, E&OE
Topics: Trade War; US Tariffs; Free Trade Agreement; Hong Kong.
02 August 2019

Question: Minister, you're inBeijing to talk about free trade and opening markets, so what's your reactionto Mr Trump's tweet overnight that he will raise, by another 10 per cent,tariffs on Chinese goods in just four weeks?

Simon Birmingham: This is a disappointing potential further development in the trade war.Now we hope that it will be averted through the discussions that we trust willcontinue over the next few weeks, we continue to urge the United States andChina to engage in dialogue to try to resolve their differences in this tradedispute. We know from the IMF, the OECD, that the trade tensions and theescalation in protectionism in recent times has had a negative impact on ratesof global trade growth. That's had a flow on effect of a negative impact onrates of global economic growth and our fear would be that a further deepeningof that trade conflict and a further escalation of protectionist measures couldhurt those trade flows further, economic growth further and that'd be bad newsfor everybody.

Question:The Prime Minister's positioned Australia as a mediator between China and theUS. How do you mediate in this kind of environment where trust seems to havebeen eroded between both sides?

Simon Birmingham: Well Australia can play a role, as I will say in my speech latertoday, in terms of trying to resolve tensions through organisations like theWorld Trade Organization. We can't fix the bilateral issues between the UnitedStates and China. That is for those two countries to sit down and to resolvethemselves. And we will get on, as best we can, in the interim. We're seekingto ensure that we maintain the best possible trade and economic relationshipswith both China and the United States, as well as seeking to secure new opportunitiesas I'm doing here in China through the RCEP negotiations, by seeking a newregional trade pact that can better integrate Australia and the 16 economiesacross this trading bloc, and give us an opportunity to demonstrate thatalthough protectionism may be on the rise in some quarters, in our Asianregion, we are committed to continued economic growth using the levers thathave been proven to be successful in the past.

Question:What does Australia say to the United States though about things like goodfaith negotiations when it sees tweets firing off, announcing these 10 per centtariffs instead of negotiations that were being held between China and the USin Shanghai? Is that good faith negotiation?

Simon Birmingham: Well it doesn't matter which of our economic partners it is. We don'tseek to provide them with gratuitous public advice. In the end, they conducttheir negotiations according to their terms. Australia conducts ournegotiations in ways in which we seek to get outcomes and we've had greatsuccess in recent years of achieving significant trading outcomes, exportgrowth for Australia by securing new trade deals in our region and we want tokeep that momentum going.

Question:Can I ask you about sort of diversifying the relationship, the traderelationship with China. Our innovation ecosystem tends to be configuredtowards the US. Now we're trying to engage more with China in the innovationspace. The issues around Huawei might have a cascading effect to othertechnologies. What are you doing in government to try and to encourage thatrelationship and to get through the current difficulties?

Simon Birmingham: I was just speaking to our Austrade Commissionerfollowing my remarks in there about how the Landing Pad in Shanghai isprogressing and the work that is happening there to help new start-upbusinesses and the opportunities that are there, especially in the tech sector.We're backing Australian companies to continue to innovate and collaborate ontechnology platforms, such as for example agricultural technology. We co-hostedlast year, through Austrade, an ag tech event in Melbourne, that really was asignificant demonstration of the new innovations and breakthroughs that arehappening in that sector, which is a demonstration that a country likeAustralia can use historical comparative advantages to applying a new domain oftechnology spheres. You've been doing it now for a number of years in terms ofthe mining services sector. We don't just as a country export raw minerals andresources anymore, we also export expertise to help other countries in theirmining developments.

We can do the same in terms of agriculture where our productivity andenvironmental sustainability is amongst the best in the world because of theadvanced use of technology and we can make sure that we apply those techbreakthroughs as an export vehicle to integrate with countries like China andthe rest of the region, and do the same of course, in other sectors asidentified in my remarks such as medical devices, technologies that again, acountry with a high quality aged care and health care system like Australia canhelp to provide some of the services, but also technologies that are necessaryfor increased opportunities in the future.

Questions: When you speak to your Chinesecounterpart over the next two days, will you be raising concern about therestrictions on Australian coal and does the Government have any concern aboutpressure from Chinese steel makers to get the price of iron ore down?

Simon Birmingham: Well I will be thanking my counterpart for theassurances we've received that policies are non-discriminatory and I'll beseeking to better understand in relation to the additional checks andsafeguards that are apparently being applied around thermal coal, how ourbusinesses can get clarity as to what those checks are; how they can havecertainty around how long it takes to clear customs processes so that Chinesebusinesses and their customers can enjoy certainty of supply from thoseAustralian providers. So we'll continue to work to make representations onrelation to those issues of certain delays.

In relation to pricing in othersectors, we see and have seen over a long period of time significant pricefluctuations and variations. Australian business responds to that in anentirely commercial way.

Question: Last year China launched the anti-dumping investigation and is still in theprocess. Is there anything more you will address to the Chinese counterpart?

Simon Birmingham: Australian barley producers and their representativeorganisations are engaging thoroughly and constructively with Chineseauthorities in relation to the investigations there. Australian barley isproduced on an entirely commercial basis, without government assistance. Thegrowth in terms of barley sales to China have been because of the quality ofour barley and because of demand within China and ultimately, because they are-it is a product that can be delivered at a high quality market price. And wecontinue to reinforce those points whilst cooperating with the investigationthat's there.

Question: If the potential for long term supply deals between China and the US breaksdown, is there an upside for Australian exports like beef, like coal, likebarley?

Simon Birmingham: I'll pause for a second, just because I can- no.There are always possible short to medium term upsides in relation to tradeconflicts where purchase decisions from one country may be diverted to seekgoods or services from another country at a cheaper rate because of the tariffsthat have been applied elsewhere. So could there be some short or medium termupside for certain Australian industries? That's not beyond the realms ofpossibility. But we take a bigger picture view and a long term perspectivewhich is that increased protectionism, greater trade barriers have beendemonstrated to hurt global economic growth. That's not good news for Australiaor for China or for the United States or for anybody else around our region orthe world. And that's why we urge these two largest economies in the world tokeep talking, to keep engaging and hopefully to resolve the dispute.

Question: [Indistinct]… and criminal detention. Last time I spoke to his lawyer; he's notallowed to have visitor. Will you raise this question when you with Chineseofficial?

Simon Birmingham: Certainly if the opportunityarises, I will reinforce the points that have been made by Foreign MinisterPayne and our representatives here in China, which is that we urge that he betreated with respect and with transparency and be granted access to his legalrepresentatives.

Question: Just quickly, I mean, will you have any message forthe Chinese authorities in terms of Hong Kong. There's fears that China couldtake a more direct role in Hong Kong. Does the Australian Government have anyconcerns though?

Simon Birmingham: Australia respects the onecountry, two systems model and that's best evidenced by the fact that not onlydo we have now China-Australia Free Trade Agreement. But last year, I signedand cemented the Hong Kong-Australia Free Trade Agreement which reflects thefact that we engage with the two systems, whilst respecting the one country. Weurge and appropriate caution, restraint and respect for those two systems. Andcertainly that's the way we conduct ourselves in our activities.

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