Interview on Radio National, Breakfast with Fran Kelly

  • Transcript, E&OE
Topics: Tariff on Australian barley into China; Australia’s relationship with China; Impact of COVID-19 on tourism in Australia; Queensland potentially keeping borders closed until September.
19 May 2020

Fran Kelly: Trade Minister Simon Birmingham is with us now. Minister, welcome back to Breakfast.

Simon Birmingham: Hello, Fran, good to be with you.

Fran Kelly: Now, you couldn't get your Beijing counterpart to return your phone calls. Here we have China, overnight, putting in this 80 per cent tariff on Australian barley. Is this a failure of our diplomatic muscle?

Simon Birmingham: Well, this decision is China's decision and it is a reflection on China's processes. Australia does not believe that the decision China's made is justified or defensible in accordance with anti-dumping practices. And we’re reserving all our rights, we will go over with the farming sector and barley exporters all of the detail of this decision, and we'll work out the best pathway forward as to whether that is a World Trade Organization appeal, how we continue to make representations to China, noting that of course it's within their power and their gift to be able to remove these duties at any time within this five-year timeframe. And we would hope that they do decide to do so. And given the evidence is so clear that our farmers aren’t subsidised and don't dump their products.

Fran Kelly: I'm guessing you didn't get a call from your Beijing- from your Chinese counterpart — when did you first hear of this, did you hear about it at the same time as the barley growers?

Simon Birmingham: I heard about it overnight through official channels, and obviously the news broke through the media pretty much at the same time as those notifications. No, I haven't heard from the Chinese Commerce Minister, and that's disappointing. In the end, Australia is always up for conversations, dialogue with our international counterparts, even where we disagree, even where they might be difficult conversations. And we really think that others ought to reciprocate in kind, and it's certainly not a reflection on the Australian Government's approach to how we handle these things, because we'll have those difficult discussions.

Fran Kelly: Are you angry about this?

Simon Birmingham: Look, I am deeply, deeply disappointed. I'm not somebody who lets emotions cloud my judgment, though, we've got an issue to work through here and that means that we have to continue to defend the integrity of our farmers, we’ve got to work with them to find alternate markets for their product. And we've got to try to find ways to convince China to change their mind, and they're the task at hand, and that’s what we’ll get on and do.

Fran Kelly: Tony Mahar was pretty clear when he spoke to us earlier, he wants you to stand up to China and take this to the WTO — will you do that? You said you’d consider whether that's the best way — why wouldn't you do that?

Simon Birmingham: Well, we'll reserve all our judgments. The right thing to do- we'll reserve all of our options. The right thing to do is to get all of the details from Beijing and get it translated, go through it thoroughly and work out what the best approach forward is. I haven't been shy as Trade Minister in using WTO processes where required — we've got a sugar case against India, a wine industry case against Canada, they're great friends of Australia, and the fact we have a trade dispute with them doesn't change our cooperative relationship in a whole range of fields. And if we go down that path with China, it won't necessarily change the fact we want to cooperate there and on a whole lot of other areas too.

Fran Kelly: Is there a suggestion though, were you suggesting that you might hold off on the WTO and try and persuade China, you know, rather than take that action persuade China to give this up early?

Simon Birmingham: Well, I think regardless of- regardless of whether or not we pursue a WTO process, we will continue to lobby Beijing and to argue the case for our farmers, who are nothing but the most productive farmers in the world. They're not subsidised, they don't dump their products, they are simply producing high quality commercially priced goods. And whilst this is a blow for Australian farmers, it's also Chinese breweries and Chinese consumers who will pay a price through paying more for barley from other consumers or will end up getting substandard barley from other markets around the world.

Fran Kelly: Given all that, if it's not- if our farmers aren't subsidised and other barley is substandard, why do you think China's done this?

Simon Birmingham: Fran, that’s- that is a question for China, as to why they have undertaken this approach. They-

Fran Kelly: You must have a view. Do you think it is linked to Australia leading the calls for inquiry or something else?

Simon Birmingham: This is an 18-month process and we've got to keep that in mind that they initiated this investigation some 18 months ago. It came after some bumper crops that saw large growth in volumes going into China, which allegedly sparked the complaint and the investigation. But we reject the premise and the basis upon which these findings have been made and that's why we'll keep working hard to defend the integrity of our farmers and to make sure they find new markets. We've got a new trade agreement with Indonesia coming into effect on 5 July, that provides for some 500,000 tonnes of feed grains duty free access into Indonesia. It's not the same as malting barley and so it will provide some support for some parts of the industry and we’ll work with them in terms of other market opportunities.

Fran Kelly: Do you think this has anything to do with the US trade and China trade negotiations? Because under that deal, China has agreed to export much more grain from the US, and the US, we hear now, will be the US barley that goes in to replace the gap of the Chinese- of the Australian Barley. Do you think we've been done over because of that trade agreement?

Simon Birmingham: We'll watch what happens in relation to the China market very, very closely and where and how they source their future barley and grains. That US-China trade agreement is obviously one between those two countries. But anything within it that distorts markets outside of accepted trade practices and the general rules of the World Trade Organization would be a concern and that's why we've been monitoring what happens with barley flows, and certainly would take up any grievances with any party in that regard.

Fran Kelly: And Minister, you talked about, you know, looking for new markets but how realistic is it for Australian producers to turn away from China when 80 per cent of our wool clip is sold there. It's our largest market for dairy. China takes nearly 40 per cent of our wine and are you concerned that those markets are also at risk?

Simon Birmingham: China is an incredibly important economy within our region and it is the second largest economy in the world, it’s the biggest consumer goods market in our region. And that's how and why it comes to be our largest trading partner and the largest trading partner for many, many countries within our region. We want to make sure we maintain as positive a relationship with China as we can without compromising our values or changing our policy positions in any way. But we will continue to work to ensure that Australian farmers, Australian people, Australian businesses have the opportunity to access the Chinese market and to trade as is appropriate under the terms of our agreements.

I do note that just yesterday the Chinese Foreign Ministry was reported acknowledging the benefits of the China Australia's Free Trade Agreement that flow to both countries. And so I hope that they will keep that at the forefront of their mind, as we do with ours.

Fran Kelly: I’m sure our barley growers are thinking what value is a free trade agreement if this can happen. You’re listening to RN Breakfast. Simon Birmingham is the Federal Trade Minister, he’s also the Minister for Tourism. As Tourism Minister, Simon Birmingham, the tourism sector is the hardest hit probably of all sectors from this pandemic. Now the Queensland Premier is hinting that Queensland will keep its borders closed until September. Is that acceptable?

Simon Birmingham: Well these are decisions obviously for the states and territories but as the suppression of COVID-19 has been so successful and if that success continues whilst we have lifting of restrictions around hotels and pubs and those sorts of things over coming weeks and months, then we ought to also see a lifting of those interstate travel restrictions. That's only common sense. Tourism supports around one in 13 jobs in Australia. It is, Fran, as you said, one of the hardest hit sectors as a result of the COVID-19 restriction. And I want to see those businesses back to work, survive and giving Australians back their jobs as quickly as we can, so long as it's safe to do so.

Fran Kelly: Well the tourism operators in Queensland say they won't survive if the borders remain closed through winter because that's obviously a lot of the time when they get a lot of travel from down south, which can't happen now. Have you spoken to the Queensland Premier about this directly?

Simon Birmingham: I've not spoken with the Queensland Premier. The Queensland Tourism Minister and I have had regular conversations and I know she’s been working very hard-

Fran Kelly: I understand she was taken by surprise by the September deadline; is that your understanding?

Simon Birmingham: Well, look, I'll let her speak for her views there. But she's been very supportive of the Queensland tourism industry. If states keep these sorts of restrictions in place longer than is justified, then they'll have to be answerable to their tourism industry and in Queensland that is a very, very big industry, an employer of many people. The health advice comes first, but we have clear health advice and I saw the Deputy Chief Medical Officer yesterday making clear that whilst he and national health officials have never recommended border restrictions between states, he also acknowledged that they've served some purpose but when they were imposed we were having large rates of transmission. Now we have very, very low and negligible rates of new instances of COVID-19, and with those low rates, if we can successfully open economies within states, then there also should be an opening across those state borders to some of them.

Fran Kelly: Simon Birmingham, thanks very much for joining us.

Simon Birmingham: Thank you Fran, my pleasure.

Fran Kelly: Federal Trade and Tourism Minister Simon Birmingham.

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