Interview on RN, Breakfast, with Hamish Macdonald

  • Transcript, E&OE
Topics: Status of China as a Developing Nation; US-China Trade Dispute.
25 September 2019

Hamish Macdonald: Donald Trump is throwing his whole-hearted support behind Scott Morrison’s controversial push to strip China of a range of trade concessions. The US President has told the United Nations General Assembly that China has built its economic success on a range of predatory practices, including – in his words – massive market barriers, product dumping, and the theft of intellectual property.

[Excerpt]

Donald Trump: The United States lost 60,000 factories after China entered the WTO. This is happening to other countries all over the globe. The World Trade Organization needs drastic change. The second largest economy in the world should not be permitted to declare itself a developing country in order to game the system.

[End of excerpt]

Hamish Macdonald: That's Donald Trump, backing Australia's campaign for China to be designated a developed economy to try and level the playing field. The trade ball- brawl has sparked claims that Australia is spearheading - and this is a quote - an anti-China campaign. I spoke with Trade Minister Simon Birmingham a short time ago.

[Excerpt]

Simon Birmingham: Good morning, Hamish.

Hamish Macdonald: Scott Morrison and Donald Trump both taking down- taking on China over its status as a developing economy. Is this a coordinated strategy between Australia and the United States?

Simon Birmingham: No, Hamish. Not at all. Scott Morrison has for some time identified the economic miracle of our lifetimes, that is the growth of China and countries within our region, and that has lifted hundreds of millions of people out of poverty. But it's also created circumstances where, of course, China is now a much stronger, much more advanced nation than it was previously. And that means that consistent with the speech he gave at the Lowy Institute very soon after the election, it is now a great power, and with that great power comes great responsibilities, and in all areas of the international engagement, they - like the other great power, the United States - need to exercise those great responsibilities with responsibility.

Hamish Macdonald: But there are now accusations from the Chinese that the Prime Minister is showing the US view through his mouth, doing America's bidding, in other words. Isn’t that exactly what Anthony Albanese warned when he spoke to us yesterday, that there'd be a perception in China that Australia was being used to sort of front the US view?

Simon Birmingham: The only bidding Australia does is Australia's bidding. And it is in our interests to have a World Trade Organization that functions effectively and responsibly, and what we want there is that those countries who see it as developing nations into the WTO, as they grow, as they become more economically prosperous, well the terms of their ascension and the terms of their engagement with the WTO ought to better reflect that prosperity …

Hamish Macdonald: With respect Minister, this is a question about the Chinese perception of this. A visiting delegation of the Chinese Embassy in Canberra says – and this is a quote - the timing and place where Morrison said it, maybe it is not Morrison's view, it is President Trump's view. I mean, that's a dangerous situation for us to be in, isn't it?

Simon Birmingham: Well I reject that entirely. You know, it's not unusual for leaders to give speeches to foreign policy institutes around the world. When I was last in Beijing, I spoke at one of the major think tanks there, and I spoke in part about the US China trade dispute. And in that, I reflected on some of the areas of US engagement, such as the application of unilateral tariff hikes that are of concern to Australia. Just yesterday, Penny Wong spoke at a foreign policy institute in Jakarta, in Indonesia. So the giving of these speeches whilst we are overseas, undertaking trade or other diplomatic work, is not unusual. It's quite commonplace. And when we're doing so, we reflect very clearly Australia's position, our policy position, and what's in our national interest. And it’s our national interest for the US-China trade dispute to be resolved. Part of the resolution of that in the long term does require dealing with the sort of special and differentiated treatment that some developing countries, as they were at the time they joined the WTO, gained.

Hamish Macdonald: When you went to China and made that speech, did you tell them that they were no longer a developing economy? That in fact they were a developed economy?

Simon Birmingham: I did in fact in that speech ask for and extend the hand of friendship that Australia wanted to work with China, as we do on other- with other nations on WTO reform, including around the issues of change in status. Now, whether or not …

Hamish Macdonald: But did you say to them, you're no longer developing, you’re now developed. Because that's crucial. Did you say that?

Simon Birmingham: Well Hamish, those words were also not used by Scott Morrison either. What he did say was that their growth has been immense; that clearly they are no longer the country that they were when they acceded to the WTO a number of years ago and that we ought to see changes that reflect their development. I didn’t say that we’re getting into a debate – a binary debate about whether somebody is developed or developing; there’s clearly a spectrum there. Some countries are more developed than others …

Hamish Macdonald: Well I’m sorry, but the Prime Minister did say in his speech- the Prime Minister said that they were a newly developed economy.

Simon Birmingham: They have absolutely been on a path of development; they have developed a long way from way from where they were. Of course, they're not - they're not as prosperous as some other nations but we ought to see engagement that reflects, in the case of China, as in the case of many other nations that have grown significantly over recent years, engagement that reflects the new development status

Hamish Macdonald: But the question is whether we're saying the same thing to them to their face and another thing when we're somewhere else.

Simon Birmingham: Well you can't, in anywhere in the world, nowadays, Hamish, get away with expecting you can project different messages in different places and that is why Scott Morrison's speech, you can date it back to pretty much each of the foreign policy speeches he's given, especially since the election. And he's touched on these issues in greater detail.

Hamish Macdonald: So then why wouldn't you when you went to China use that term and say to their face you're a newly developed economy?

Simon Birmingham: Well Hamish, I did, as I said, touch on the fact that we welcomed the economic growth that we've seen that means ...

Hamish Macdonald: But you didn't say that, did you?

Simon Birmingham: … the need for engagement has changed.

Hamish Macdonald: But let's be honest, you didn't say that. You didn't say to the Chinese community when you went and spoke there, you're no longer developing, you're a newly developed economy.

Simon Birmingham: Hamish, the form of words I used were a form of words asking for and reaching out the hand of friendship to say we want to support continued growth but it's got to be an engagement through the WTO that addresses this very issue - this very issue of changed development status.

Hamish Macdonald: The Prime Minister and the President of the United States appear to want a complete deal. That's the language used by the President at least, one that's sustainable and durable. Doesn't that run contrary to repeated calls that you made even on this show, for the trade war to be resolved as quickly as possible?

Simon Birmingham: Well they've been at it for quite some time now in their talks. I don't think that for a sustainable and enduring deal it's impossible for it to also be now resolved as quickly as possible …

Hamish Macdonald: But if you’re talking about changing the global trading order, that's a much longer process.

Simon Birmingham: No, it’s not necessarily, Hamish. Any nation can simply make clear commitments that can be verified and held to account on in terms of how they engage at the WTO. You don't have to go and change necessarily the rules of the WTO to reach an agreement between two countries or indeed for a country to reach a consensus position with the rest of the world; that doesn't have to be to say they'll no longer use any concessions or that they'll no longer claim developing country status. It can be to redefine the type of concessions they would use, to reduce the type of concessions that they use to reflect, as I say, the growth that has occurred in their economy and that they are in a different position now to where they were a number of years ago. They also want to change …

Hamish Macdonald: But you’re- so you’re saying this is just about China and its view of itself but actually the Prime Minister in his speech said that global institutions must adjust their settings for China. That is something that takes longer.

Simon Birmingham: I'm addressing your question there which is can the US-China trade dispute move on and address these issues without spending years changing the rulebook of the WTO. Yes, it can because any country and we've seen some do this in recent times can either choose to change their status as a country at the WTO or they can seek to change the type of concessions that they seek at the WTO. Those things are within the power of an individual nation to choose to do that themselves.

There are issues that we are already pursuing through the WTO to update parts of the rulebook as to how the WTO works. And we'll continue to pursue those issues and we welcome every country to the party; we’ve co-sponsored motions with China; we’ve co-sponsored motions with the US and we want to try to find consensus points there. But the US-China trade dispute can absolutely have progress and some resolution without needing to wait for those types of WTO processes to conclude.

Hamish Macdonald: Back at home, Parliament will soon be asked to ratify the Indonesia free trade agreement. Labor and some of the crossbenchers seem to be worried that it will open the door to 5000 temporary workers. Is there market testing in the deal?

Simon Birmingham: There are no waivers to labour market testing. The 5000 visa category holders that are spoken of are working holiday makers; the same as Australia has received from the UK or Europe or other parts of the world for a very long period of time. Those working holiday makers are people aged between 18 and 30 so they are young working holiday makers. And just today coincidentally, I'm heading out with David Coleman the Immigration Minister to a horticultural producer near Virginia; the type of business that welcomes the fact that working holiday makers come; spend a few months of their time in Australia, they are working and they go about spending the rest of their money whilst they're holidaying in Australia. This is no paid- no means a creation of a flood of new workers to Australia as the ACTU seems to want to scaremonger.

Hamish Macdonald: We will leave you to get on with that field trip. Trade Minister Simon Birmingham thank you very much.

Simon Birmingham: Thank you, Hamish.

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