Interview on 2GB Money News with Ross Greenwood
Ross Greenwood: Our Trade Minister Simon Birmingham joins us from Seoul. Many thanks for your time, Simon.
Simon Birmingham: Hello, Ross. Great to speak with you.
Ross Greenwood: Alright. So, in regards to your trip to Seoul and what you're doing there and what you're trying to do in terms of trying to make certain that our free trade agreements are robust and strong, just what's the purpose of that?
Simon Birmingham: Well, indeed. Korea is Australia's fourth largest trading partner in terms of our two-way trade between Australia and Korea. It's our third biggest export market to some $24.4 billion in Australian exports to Korea in 2018, and all of that is underpinned by the Korea-Australia Free Trade Agreement, which was struck by our government several years ago now. And we really want to make sure that this Australia-Korea trading relationship remains strong. Our visit here is off the back of negotiations taking place in Beijing about a possible new Regional Trade Agreement that brings together 16 Asian countries including Australia and New Zealand, and it's important that we keep opening up new markets in the face of this tidal wave of trade talks around the world and some of its protectionist sentiment. And it's really critical that we keep opening up our markets and new opportunities because that's what's allowed Australian exports to grow to record levels over recent years and for us to record trade surpluses as a country in 28 out of the last 30 months.
Ross Greenwood: So, the new trade tariffs that the US has imposed on China, and then, in retaliation, China launching a currency war against the United States. Is this helpful to the ambition of free trade in this part of the world?
Simon Birmingham: We would rather these sorts of trade tensions between especially some of our major trading and investment partners weren't happening. What we've seen as a result of global trade tensions and US, China is part of that, Brexit is another part of that. There are other disputes around the world. But what's occurred is that the rate of growth globally in trade volumes has slowed quite dramatically. In fact, the rate of growth for our global trade is now forecast by the OECD, to be down to 2.1 per cent in 2019, and that is the rate of growth, of course, we've seen since the global financial crisis. And what does it mean when growth rates in global trade slowed down? Well, it means that economic growth rate slowed down as well, which is bad news for everybody. So, that's why we would rather that parties in dispute sat down and talked and found a way to work through those disputes and got us back to the more even keel of opening up markets, reducing protectionism, which has served our region especially well over recent decades, growing more jobs, creating more opportunities in Australia, but also lifting hundreds of millions of people out of poverty across the region too.
Ross Greenwood: I was going to pick you up there and say: well, of those countries you've been negotiating with for this Regional Comprehensive Economic Partnership Agreement- I mean, there is China. We have a free trade agreement with China; Japan, free trade agreement with Japan; South Korea and one there; New Zealand, we have one there. The one that stands out to me – all the countries: in Thailand, we have one; Malaysia, we have one; Singapore, we have one – is India and the big issue here is, of course, people are concerned about what terms Australia might ultimately strike, either through this agreement or a bilateral agreement, to try and do a deal with India to bring them into the fold of free trade. Is this part of the sensitivity regarding these negotiations?
Simon Birmingham: Well, certainly there have been many attempts previously to try to strike a trade agreement that encompasses Australia and India, and those attempts have been unsuccessful. What we're seeking to do now through this agreement is to achieve a regional trade compact that probably won't be of the same level of ambition as, for example, the Comprehensive Trans-Pacific Partnership Agreement, which we brought into force at the start of this calendar year. That's a very high level and ambitious trade agreement. This regional trade pact, though, still has real value. And we hope it can achieve real value between Australia and India.
And now from the Australian perspective, we're already a reasonably open economy in terms of goods coming into Australia, and we have very settled laws in relation to work rights in Australia. And I know there's some speculation as to whether those work rights laws could be on the table, and that's not something that is occurring; they won't be rewritten to strike a trade deal with India, we're not about to have hordes of additional migrant workers coming and working in Australia. What we are going to do though is negotiate as to where our businesses can better cooperate, where there's opportunities in terms of our services industries, better recognising the qualifications of professionals across each other's countries, and hopefully secure some reduction in relation to the tariffs that India applied – particularly on raw minerals from Australia that go into India, and possibly some other goods which we hope can provide the same type of lift in trade volumes that we've seen with countries like Korea, Japan, China, in terms of the tariff eliminations that have occurred there under our trade agreements just several years ago.
Ross Greenwood: Okay, just a final one for you: has the Australian Government, or you as the trade minister, engaged in any negotiations so far with the UK post, of course, the new Prime Minister taking office there – Boris Johnson – and subsequently, trying to push forward the idea of a free trade agreement with the UK, which he has already heralded as being one potential accomplishment if he did become the Prime Minister, which of course he now is.
Simon Birmingham: Yes, Ross, the night before I left Australia for Beijing last week, I spoke with the new UK International Trade Secretary Liz Truss, and we had a very enthusiastic conversation about the possibility of striking an Australia-UK trade agreement in the events that the UK does leave the EU, which is clearly the intention of Boris Johnson and the government there. So we are ready, and ready to move as quickly as the UK are willing and able to do so to strike a trade deal between Australia and the UK, which we hope will be as comprehensive, as ambitious as possible. We'll virtually eliminate tariffs and quotas between the two of us if they are agreeable to do so. And in doing so, hopefully recover much of the ground that Australian exporters lost to the UK a decade ago when they entered into the European Common Market.
Ross Greenwood: Got a timeline on it? What would you imagine would be the timeline?
Simon Birmingham: We really hope we can do this quickly. We share common histories, common legal structures, and certainly high ambition. And if that ambition is shared equally on both sides in terms of true openness and an elimination of tariffs and quotas, then it's a deal that we should be able to work through within months, and then iron out the details to have it come into force. And you'd imagine sometime next year if we can get done within months. That all depends upon the UK actually exiting the EU.
Ross Greenwood: I'll tell you what, good to have you on the program. Simon Birmingham is our Trade and Tourism Minister in Seoul right now, for that significant agreement between those Asia-Pacific nations. But of course, then he's also hearing that a free trade agreement – a bilateral agreement with the UK – is likely maybe coming into force next year. Simon, appreciate your time on the program this evening.
Simon Birmingham: My pleasure. Thanks so much Ross, any time.
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