Interview on 2GB Afternoons with Joe Hildebrand

  • Transcript, E&OE
Topics: Australia-China trade relations; foreign interference; tourism industry; cruise industry
15 December 2020

Joe Hildebrand: Another big thing in the news, of course, is the trade war with China appears to have escalated again. The Chinese-English language newspaper, The Global Times, which is basically just a propaganda sheet for the Chinese Communist Party, has reported that every- it is really amazing. Every coal fired power station in China can buy its coal wherever it wants without having to get approval, without any restrictions, except, of course, for Australia. So China has blacklisted Australian coal. They'd already blacklisted Australian wine, barley, beef by slapping those ridiculous tariffs on them. And now it appears that they have blacklisted Australian coal.

And to find out what we can do about this. Is there anything we can do about this? We have the man at the centre of all this. The Trade Minister, Simon Birmingham, on the line joining us now. Senator Birmingham, how are you? Welcome to Afternoons .

Simon Birmingham: Good day, Joe. Good to be with you. Thanks for the opportunity.

Joe Hildebrand: Thank you very much for coming on and talking to us. This is a serious issue, isn't it? This is a big problem for us.

Simon Birmingham: Well, it is. It is another problem piled on top of a series of them in relation to the actions that China has taken throughout the course of this year and indeed, dating back a little bit further than that, if we look at the beginnings of the barley dispute, for example. So we are very concerned about that. We do see a concerning pattern of behavior here from China. Now in relation to our coal exports, we have a number of markets that we are active in. China is not actually the biggest one, but it's a significant one.

Joe Hildebrand: It's the third biggest. So it's a lot.

Simon Birmingham: That's right. Although we will continue to work across the Japanese, Korean, Indian markets, we're seeing strong growth in Vietnam, it is obviously a concern, particularly a concern that it appears to be an action being taken, if we are to believe the media reports in quite an opaque way, that makes it challenging to be able to take it up to China through WTO or other means.

Joe Hildebrand: So what can we do? The World Trade Organization obviously has rules that are meant to stop this sort of thing from happening. But can China effectively just flip the bird to the WTO and say, well, what are you going to do about it?

Simon Birmingham: No, it can't entirely. And so, if we look at the range of different actions that have been taken, some of them, such as barley and wine, as you mentioned, have been taken into anti-dumping measures going through very full processes. Now, we dispute the way in which those processes have been conducted. We don't think the evidence stacks up and supports the findings that have been made. But it does enable us to then look at appealing those decisions of China through the WTO, seeking the ruling of the independent umpire and then seeking to have that enforced. And if it's not enforced, there are steps that can be taken in terms of retaliatory or recourse by some means or other.

Joe Hildebrand: What would that look like? Would that mean that other countries that were party to WTO agreements would then put in place economic sanctions on China? Or I suppose I'm imagining China's response is going to be, well, you and what army? How are you- who is going to actually enforce this?

Simon Birmingham: Well, firstly, the type of recourse if we got to that end point of a ruling in our favour and China then refusing to comply with that ruling and rectify the circumstance, it's then about us being able, within the rules of the WTO, to apply potentially our own tariffs or sanctions in areas that we deemed appropriate as a response and in a proportionate way similar to what China's doing in those sectors.
There are, sort of, set out processes there that we can do in those sectors because the actions China has taken are clear and defined at least, even if we dispute the validity of them.

Joe Hildebrand: And would other WTO members like the USA, obviously, and the EU perhaps, would they also then be obliged to apply sanctions or similar tariffs to China if they are going to be party to the WTO agreements, or would it just be us lonesome?

Simon Birmingham: So what would happen is those other countries could become party to the dispute on the way through. That's obviously a matter for them but many have a very strong interest in whether or not China's management of an anti-dumping system is sufficiently evidence-based and transparent. So we would expect there would be some interest in that from other countries.

But in terms of then the application of penalties, if you like, the WTO system is, geared first and foremost to try to ensure that countries actually, if they have a finding against them, rectify that. Now, it can be a long process and so we shouldn't expect that's going to provide any solutions quickly in terms of the next couple of months or the like. It is more likely to take a couple of years to work through those sorts of processes.

And so, in the meantime, it's important that we work with our exporters, especially in those sorts of sectors, to get into other markets, to help them take advantage of the many other trade deals that we've done as a government. We haven't just secured a trade agreement with China in the last six, seven years. We secured trade agreements with Japan, Korea, Canada, Mexico, Vietnam, Indonesia. We have negotiations underway with the EU, the United Kingdom. So we really do want to make sure that all of our businesses are seizing the opportunities that exist in many other markets where we have also been seeing strong growth in recent years.

Joe Hildebrand: It's fair to say our relationship has deteriorated a lot with China since that groundbreaking free trade agreement a few years ago? Do you think this is retaliation for one of the suggestions that your colleague in the Senate, Matt Canavan, made in the last 24 hours or so that we should play China's game? We should, if they're going to slap ridiculous tariffs on stuff that we want to export to them, then we should slap tariffs on the one thing that they want from us more than anything, which is iron ore. Obviously, that suggestion has come. It's got a lot of support from, certainly listeners of 2GB. And as soon as that's suggested, then we've seen reports of what is effectively a blacklisting of Australian coal. Do you think this is a clear and simple case of payback?

Simon Birmingham: Joe look, a couple of things there. I mean, you started out the question with an observation about the state of the relationship, and obviously these decisions that China's taking are very, very concerning. Now, I'd want to stress that Australia's approach and position hasn't changed. We remain true to defending our values, our sovereignty, our security, our interests as any other country does, including China. But we've also been very consistent in saying that we want to and welcome China's growth, we want to continue to be a partner in that and to do so according to our principles and values which include the principle of supporting a rules based approach to trade around the world. And we do that because it gives investors and businesses certainty.

And the problem with propositions that, that we would respond to these types of actions by just whacking our own tariffs on different products is that we then start to tear up that rule book. Now, is it working in relation to the way China's behaving at present? No, it doesn't seem to be constraining their behaviour. But, as a mid-sized economy, if we simply walk away from all of those rules then it threatens very much a might is right approach applying of the time, everywhere. And what we want is to rally the west- rest of the world around those rules, and to seek to have them enforced and applied in ways that can give all business greater long-term certainty.

Joe Hildebrand: Well, certainly little guys need rules much more than big guys do – you're right about that. But do you think, though, that this is clear and simple payback for the suggestion that Australia might do that? Because it seems to have- nothing else really has changed? China has - and I'm not suggesting the Australian Government has been reckless at all in handling its relationship, I think clearly China has become more assertive and aggressive in its diplomatic, strategic and trading behaviours. But I mean, it doesn't seem- China- either, either this coal ban has come from nowhere, or it's in retaliation to suggestions that we might turn the tap off or jack the price up of iron ore. Wouldn't you say so?

Simon Birmingham: The issues, the issues in relation to coal have been apparent for a little while now. We've had reports of dozens of shipments of Australian coal stuck off the coastline of China, waiting to be unloaded in, in those different ports. And so it's not a new issue necessarily…

Joe Hildebrand: It, it has, it's escalated a lot, and suddenly, hasn't it?

Simon Birmingham: It is a new report in a state owned newspaper about state owned companies meeting and agreeing on a purchasing strategy which, if it's true, would be highly discriminatory and, and in breach of some of those undertakings China has given - not just to us, but to the rest of the world - which is why we want to call it out if it proves to be true.

But I don't think that we should conflate it with events necessarily of the last 24 hours when we've seen a pretty clear pattern and trend on this issue and others over a period of time now.

Joe Hildebrand: Okay. On a similar note how concerned are you about the reports of Chinese Communist Party infiltration of the Australian consulate in Shanghai, and other multinational organisations, and also the US and British consulates? Should we be worried about this?

Simon Birmingham: Well, any, any potential areas of foreign interference into our systems are of concern - it's why we take all of these issues so seriously. It's why the Government, we've, we've enacted a number of things to better protect Australia from the threat of foreign interference, from threats of cyber disruption and the like as well. And of course we work carefully through our security agencies, to protect all of our interests at all of our diplomatic posts right around the world.

There is often a combination of Australian based staff who work there and locally engaged staff, they obviously perform very different functions and have very different access to the types of informational materials that are there. But we work closely with the security agencies to ensure the protection of Australian knowledge, information and intelligence at all times.

Joe Hildebrand: I understand from reports that ASIO is, is looking into. This is your department, DFAT - Department of Foreign Affairs and Trade - also conducting its own audit into its hiring practices to, to make sure? Because it seems as though the- effectively the labour hire company that, that provides these employees to foreign consulates, at least in the ones in Shanghai, is, is using CCP members as plants, or is providing CCP members to work in those consulates. Are you- is DFAT reviewing its own hiring practices, or auditing its own hiring practices to make sure that doesn't happen anymore?

Simon Birmingham: For pretty obvious reasons we don't, we don't comment a lot on, on national security issues and how they handled it in terms of practices in different embassies or missions around the world. But I'd assure your listeners that DFAT works very closely with the national security agencies to make sure that we can have confidence around not only hiring practices but the security of compounds, the security of information and intelligence that pass through our diplomatic missions. And, and that, of course, that's a constant work in progress – it's never set and forget.

Joe Hildebrand: Great. And, of course, Minister, as well as the Trade Minister, you are also the Tourism Minister and you've done some excellent work encouraging Australians to go out and holiday in their own country - because obviously, we can't go overseas - and to get out and about, plough their money and have their fun in local communities that really need it. But the cruise industry has been a giant black hole, has been a giant exception to this. We can drive around into the country, we can fly now between states, but we can't take a cruise ship between states. So, we can't even go on domestic cruises, or even just sail around in a circle, or sail around the country and come back again. Will you, as Tourism Minister - and I understand that your colleague, Greg Hunt's, calling the health matters – but will you, as a Tourism Minister, put- just close this ridiculous loophole, this reverse loophole that lets everyone else holiday in Australia except if you want to do it on a cruise ship?

Simon Birmingham: Joe look, we have seen a great enthusiasm from Australians to, to get out and holiday here in Australia, and that is a testament to Australians desire to support the local industry. And, and I do encourage people to - not just take the short drive get away for a, for a long weekend - but plan over the coming month or year to take a couple of weeks, as you ordinarily would, to, to get on a plane and head across the country and to support different industry.

But the cruising sector, of course, faced particular problems coming into, into the period of COVID, and in those early days a number of real issues in that sector.

Joe Hildebrand: We certainly understand, but everyone, everyone faced problems though - there were problems in every industry, every industry that had people moving around. Surely, this is something the industry says we can fix really easily? We're in a bubble, we're not calling for overseas arrivals to get off like it was in the Ruby Princess. This is something, surely, that is just a difference between how you actually travel?

It's a- look, you could be a hero, Birmo.

Simon Birmingham: Well, I'm not after hero status, I'm after good outcomes for the tourism industry and Australian jobs, and protecting them. And so…

Joe Hildebrand: Yep. And a couple of billion dollars spent over the summer, over the summer season. A couple of billion dollars is going to waste because these boats aren't operating in the high season. Come on, you can do it.

Simon Birmingham: Well look, I am and have been happy to talk to the industry and continue to do so, and to really try to get them and the health authorities to, to find the right safe point for, for operation. And that may just be initially some of the smaller vessels operating in some of the premium markets, such as up around northern Australia and so on, that, that operate traditionally only between, or within one jurisdictional state or territory.

I think there's room to talk about these issues and to try to find a breakthrough. But I think it's some distance before we're going to see the huge cruise vessels shifting large volumes of people again. And there's, there's a lot of steps to go before we get to that point.

Joe Hildebrand: Well, I have no doubt that a Minister as passionate, as capable as you are, Birmo, will stop at nothing until that happens and you'll be leaving no stone unturned.

Simon Birmingham: Joe, we're always doing all we can to save Australian jobs in the Australian tourism industry. And that's where I want to see Australians spend their money over the next year.

Joe Hildebrand: Well, if you can get cruises started before March, before February, while its still summer, you will have the thanks of all of our listeners. You will have a slogan that I don't think anyone would ever expect a Coalition Government to ever utter – start the boats.

Simon Birmingham: In a COVID-safe way.

Joe Hildebrand: In a COVID-safe way. God, it's so boring. All right. Thank you very much, Minister. Really appreciate you coming on the show.

Simon Birmingham: Thanks, Joe. My pleasure.

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