Interview on ABC Radio Adelaide, Drive with Jules Schiller

  • Transcript, E&OE
Topics: Tariffs imposed by China on Australia’s wine market.
27 November 2020

Jules Schiller: But look, we're going to have to start with some bad news. And quite frankly, I'm sick of bringing you bad news this year. It feels like if it isn't COVID, unemployment, lockdowns, panic buying, it's something else. But there is some bad news around today. Some news that will have a significant impact on many hard-working people in this state. Today, the Chinese Government has announced that it will place tariffs on all Australian wine imports from tomorrow. And these tariffs are significant. They will range from a 107 to 212 per cent, which is simply just going to be devastating. Now this move comes after a preliminary anti-dumping investigation into our wine exports launched a few weeks back. Now wine is a $1.2 billion industry in this country. So if these hold, this is going to have a significant fallout, and you don't need me to tell you that it's also going to affect a lot of people right here in South Australia. So a wider question also remains with China: where is this going to end. Firstly, let's talk to the Minister for Trade Tourism and Investment who's been very kind to join me this afternoon, Senator Simon Birmingham. Welcome, Senator.

Simon Birmingham: G'day, Jules. Thanks for the opportunity.

Jules Schiller: Did you see this coming?

Simon Birmingham: Well sadly, yes, in terms of the fact that China did announce a little while ago that they were beginning this investigation and given the pattern of behaviour that we have seen from China this year and the accumulation of negative decisions that have gone against Australia, and have hurt our trade relationship with China, it was probably not of a surprise that having launched the investigation, they followed through. But it makes it nonetheless impactful and very distressing, I know for many wineries. My pre-parliamentary life was spent for a good number of years working with the wine industry, and so I know a number of the players involved and I feel very much for them. They have done nothing but act in good faith in growing a market, in building a loyal customer base, and in selling their product contrary to what China claims in an entirely commercial manner, free of dumping, free of subsidies.

Jules Schiller: Are you able to talk to your counterpart in China?

Simon Birmingham: Well, I'm happy to talk to him. But unfortunately, the willingness from Chinese authorities to participate in ministerial level discussions has been absent for some period of time now. That's well-publicised. We absolutely stand ready and willing to have mature discussions about points of disagreement and to work through those. In no way will the Australian Government change in terms of vary our foreign investment laws, or change our critical infrastructure, our national security settings in response to any other nation. But we'll of course always be willing to sit down and engage in respectful dialogue try to work through difficult issues. And in this case, what we would like to see is respect, not only for the many hard-working Australians who have built this trade relationship, but for their many hard-working Chinese counterparts who are their distributors, customers, and others who have also built up a strong relationship and whose businesses will also be hurt by this decision.

Jules Schiller: Do you have any recourse, Senator, through the World Trade Organization, or are there back channels we can use? I mean do you think- I mean they've announced a 10-day review of these huge tariffs today. Do you think that they're going to hold or is there something Australia can do to protest this?

Simon Birmingham: Ultimately, there are challenges that we can take through the WTO. In the short-term, we have to keep working through the processes that are there, and China is using a tool that is part of their disposal, their armoury. Australian has an anti-dumping system, just as does China. They have applied these tariffs, as you say, with the 10-day review period. And there is then an ongoing period for the investigation to conclude because these are interim decisions they've made around the dumping decision. So we have to work our way through those different steps that the Chinese process before we can get to the point of WTO appeal. But we certainly reserve all our rights in relation to those appeals and that is what we're looking at very closely now with barley industry who faced the same type of trajectory, but are a little further along the line and where we can now look to that WTO process. 

Jules Schiller: But Senator, as you said in your statements a little bit earlier, this is more than just about wine or barely, I mean, this seems to be about China trying to make an example of Australia or punishing Australia. We have called for an independent review into the virus in Wuhan, and we have also just signed a defense agreement with Japan, I mean surely what's happening with our trade exports is tied up in that?

Simon Birmingham: Well, we had the highly unusual event around this time last week, Jules, where the Chinese Embassy in Canberra apparently distributed a list of 14 grievances that they have with the Australian Government and that list was topped with complaints about the way we operate our foreign investment system the way we protect critical infrastructure like our communications networks, and the like. Now, we do all of those things on a non-discriminatory basis. They're not targeted at any one country. They apply in a manner that is consistent to all in terms of the way we apply our foreign investment or our national security protections. And frankly, we will not be, as a country, changing those in response to any one country either and we should recognise that other countries including China adopt exactly the same approach. We don't ask them to change their national security settings. We respect that and they ought to reciprocate.

Jules Schiller: Do you think it's going to end at wine? Or are you expecting further tariffs, or further retaliations from China?

Simon Birmingham: It has been a year where there has been a real accumulation of impacts, and they are very distressing for the businesses involved and they do require us to step up in terms of helping those businesses to access the other markets that we've cracked open new opportunities to. And I guess the message to all the Australian businesses whether you are part of those like barley or wine, who have been impacted this year, or whether you have been so far unscathed, is that the risk profile of trading and doing business with China has changed. The risk is increased, the potential for these sorts of hits is, unfortunately, much greater. And that's something that is not just a message for Australians. It's a message potentially for businesses right around the world. And this is one of the things that I think is damaging to China, that it hurts their reputation and their standing with other countries and with other businesses around the world as well. But we will be looking to encourage Australian businesses to choose to make better use of the Japan Free Trade Agreement, the one we've done with Korea, the trans-pacific partnership that opens up new opportunities in Vietnam, Canada, Mexico, new trade deal with Indonesia. The diversification options that we've negotiated and it's up to business to now go out and try to see the build upon those.

Jules Schiller: I'm talking to Senator Simon Birmingham, he's the Minister for Trade, Tourism and Investment. We're talking after some pretty significant news today that China are posing tariffs which will range from 107 to 212 per cent on all Australian wine imports, and this will kick off from tomorrow. Senator Simon Birmingham, you said you'd like to have mature discussions with your counterpart in China, are you implying that China are acting immaturely at the moment, with these announcements?

Simon Birmingham: Well, it's more that they won't come to the table. And so in that sense, we are urging mature discussions to actually take place.  The worst thing, in a sense, is to shut off the avenues to be able to discuss when you have points of disagreement or problems. So at least being able to get to that point of having those discussions. Now, our diplomats are very hardworking and certainly we pursued all manner of officials and other levels engagement in in some of those areas that is continuing in a positive way and we want to make sure that it does. But my concern is that the absence of a willingness from China to come to the table for this dialogue does make it very hard to find an off-ramp and to be able to have the type of frank exchange necessary, if it is, to be able to move on from these sorts of issues.

Jules Schiller: Senator Simon Birmingham, I know it's been a pretty big day for you, and a hot one here in Adelaide, so I thank you for your time this afternoon.

Simon Birmingham: Thanks Jules, my pleasure.

Jules Schiller: That's Senator Simon Birmingham, Minister for Trade, Tourism and Investment.

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