Interview on Sky Business News
Ticky Fullerton: It has been a very big couple of weeks on the trade front for Simon Birmingham, the new Minister for Trade, spending his first few days on the job making inroads with Indonesia. He is facing an escalating trade war between the US and China with President Trump last week threatening tariffs on another $375 billion worth of Chinese goods. But now the TPP is set to be ratified just today after the ALP agreed to support the legislation. The Minister for Trade, Tourism and Investment, Simon Birmingham, joins me now live from Canberra. Simon Birmingham, thank you very much and congratulations on your new position.
Simon Birmingham: Hello Ticky. It's great to be with you. Thank you very much.
Ticky Fullerton: A lot has been happening obviously in the last couple of weeks. Big victory – and I didn't really appreciate this about the TPP. I kind of thought that it was in the bag that Australia was supporting the TPP, but it was a big deal for you to get Labor across the line because of the protectionist crossbenchers.
Simon Birmingham: It is indeed very welcome news. It shows that the continuance of a largely bipartisan approach around foreign policy and trade policy issues is something that we can keep working on and keep enjoying success with. I do thank the Labor Party for putting the national interests first here; for listening to the various stakeholder groups who recognise that the TPP is of significant economic benefit to Australia. It was obviously a significant achievement in terms of Malcolm Turnbull and Steven Ciobo in negotiating it and negotiating it against the odds. Many people including Bill Shorten said at the time when the US withdrew that perhaps we should all just give up and walk away. They didn't. They secured that win. Recent modelling that was released just last week shows that it will by 2030 lift Australia's national income by around $15 billion per annum. And that's a good win.
Ticky Fullerton: Let's hope that recent modelling proves to be right. Labor is supporting this. Now Shadow Trade Minister Jason Clare is saying though that were Labor to get in, they would like to make a few changes and I'm just wondering how you feel about this. One is a tougher labour market test, making sure that if there's an Australian worker that can do the job, that would be preferable before importing a foreign employee as an alternative. He cites that side deals have been done with other countries in the TPP along these lines.
Simon Birmingham: We would say the types of thing that Labor is suggesting are unnecessary. The labour market testing arrangements in the TPP are not dissimilar to those that we have in current agreements with China, Japan or Korea for example. And in those agreements we've seen that they work perfectly well and there are also still very strong safeguards that ensure the type of testing of qualifications and skills is indeed not changed at all. So if an electrician is seeking to work in Australia, they're going to have to make Australian tests, Australian benchmarks and there is absolutely no movement in that regard under these agreements at all.
Ticky Fullerton: What about the ISDS which is this idea that international companies could actually sue Australia as a sovereign, as part of the TPP's Investor-State Dispute Settlement clause. Now certainly Jacinda Ardern in New Zealand has managed to wriggle out of that one. Labor wants to put us with them.
Simon Birmingham: Well ISDS provisions have existed for 30 years in Australia's investment agreements as well as more recently in different trade agreements; they are quite commonplace and throughout the 30 year history there's only been one case that's being made against Australia and that case was spectacularly unsuccessful. So this fear that is being run around ISDS is quite misplaced and unfortunately risks undermining the protections that are actually there for Australian businesses. We should realise that Australian businesses investing overseas benefit from these provisions because not all other investment destinations have the same calibre of legal frameworks and protections that Australia has for its investors. Our investors going overseas can absolutely benefit from having an enhanced protection regime that ISDS can provide.
Ticky Fullerton: Speaking of going overseas, the G20 is happening in Argentina, though Argentina is of course not a TPP member; wrong side of the continent. But you've got this trade ministers meeting. Now President Macri in Argentina is in all sorts of strife, he's got inflation there at 30 percent and he's got interest rates higher than that. Are you expecting a lot of protest and are you worried that this will all overtake what you're trying to do there?
Simon Birmingham: I hope not. And certainly from my perspective it's another opportunity for me in the early days of the job to connect with a number of my counterparts. I was able to do that through RCEP negotiations in Singapore on my second full day in the job. Now the G20 Trade Ministers' Meeting will be an opportunity again to connect on important issues such as: how we continue to strengthen the World Trade Organization; how we look at reforms around possible transparency measures; as well as dealing with emerging aspects of the digital economy. But importantly of course is engaging with other trade ministers about the importance, the critical importance of abiding by the long standing rules of international trade, and not allowing significant disruptions to occur.
Ticky Fullerton: Quite tricky with the emerging markets at the moment – they're really under the pump aren't they.
Simon Birmingham: Some emerging markets are, and of course in your introductory piece you highlighted some of the major powers commentary in relation to trade issues. We would always urge every country to abide by those longstanding rules and conventions to recognise that trade disputes – taken to extremes as are posed in some of the media commentary – would have damaging impacts on those countries and potentially on the economies of other countries and that really ought to be avoided. We ought to continue to work towards how we can ensure that the lowest cost goods and services, delivered in the most efficient way possible, are traded across the globe, because that is what has been so successful at lifting our prosperity in Australia and millions of others out of poverty around the world.
Ticky Fullerton: In that case you would be very unhappy about what Donald Trump is doing with China at the moment. He's ratcheting this up. It looks like a full blown trade war. Are you worried about knock-on impact on Australia yet?
Simon Birmingham: Our position is a principled one and it's consistently applied to everybody. So our approach is to urge all players to make sure they abide by those longstanding conventions; that they work within established WTO rules; that they cooperate collegiately to improve and enhance those rules because they have served us very well. [Indistinct] The best protection for Australia is exactly what the Coalition Government has been doing: a new agreement with Indonesia; the TPP; we are continuing negotiations with Hong Kong; and our future negotiations with the EU or the UK [indistinct]. These are all about protection for Australia .
Ticky Fullerton: You've got the free trade agreement with Indonesia in your first week and that's all very good. Just wondering about this issue of energy and how important it is in the election. Prime Minister is determined, along with Josh Frydenberg and Angus Taylor, that we are going to have lower electricity prices. If you do manage in the campaign to make sure that this is sorted as an election issue, other issues might crop up and one might be the live export issue. Now your free trade agreement with Indonesia obviously puts us at a very good relationship at the moment with Indonesia. As we all know, that relationship can turn sour very quickly if the wrong signals are made. What if you come under pressure in Australia with the groups that want to ban live export?
Simon Birmingham: Well that pressure has been about for a long period of time. Prime Minister Scott Morrison and President Widodo had a very constructive series of discussions whilst we were both in Indonesia the other week and I'm very confident that the agreement we struck there will deliver benefits to both of our countries.
We're on track to see it inked, signed, sealed and delivered by the end of this year. And in terms of the opportunities that are within it, one of the key ones is indeed in live cattle exports to Indonesia. They are important and they're important not just to Australia. They're important to Indonesia not only for their domestic food source and lowering food prices in Indonesia – just as we want to lower our power prices here – but they're also important in building their capability. Breeders stock will form part of that export chain to enable them to have higher capability in the export of feed grain that forms part of the dealers' world. Again, feed grain is critical towards ensuring they have a more productive chain, in terms of food production of red meats in particular. I'm very confident that as a government we will continue to work to ensure that our live animal exports are done to the world's best standards, or will have driven out of the export industry those who are doing the wrong thing. We are applying tougher penalties and making sure that we have clear and adequate supervision.
Ticky Fullerton: Minister, finally can I ask – you've come out and said you're against quotas when it comes to pre-selections in places like Wentworth. There is no doubt that there is a rising tide at the moment. There is real concern within the Liberal Party not just about the bullying issue but also about women and their ability to be properly represented all the way up to the top. Do you agree that there is a major problem in the Liberal Party at the moment with this?
Simon Birmingham: I agree there is a problem in terms of ensuring that we need to get more women MPs into the Liberal parliamentary party. I'm very pleased that last weekend we saw in pre-selections happening in Victoria, South Australia and Tasmania, four out of the five positions went to women. We need to see more outcomes like that. We can deliver that without quotas, but absolutely on the basis of merit, if we are determined.
Ticky Fullerton: Do you need a woman in Wentworth to…
Simon Birmingham: I would love to see a woman pre-selected in Wentworth. That would be for the local party members to decide on Thursday night but I would love to have a woman running in Wentworth to add to those four out the five recent pre-selection successes by highly capable women.
Ticky Fullerton: Simon Birmingham, it's been great to get your views as Trade Minister. Thank you so much.