Interview on Sky News Live First Edition with Peter Stefanovic
Peter Stefanovic: Australian cotton and wheat farmers are liked to become Beijing’s next targets in a string of trade attacks. China is hoping to fill its $14 billion agricultural buying commitment to the Trump administration which is straining its relationship with China. The Morrison Government has been briefed on expected hits to Australia’s cotton and wheat industries worth about $568 million and $611 million respectively.
Let’s go to Canberra now and joining us live is Simon Birmingham, the Minister for Finance, Tourism and Trade. Minister, good morning. Thanks for your time. So I guess we’d all been wondering which of our exports was going to be next when it comes to our trade dispute with China. Is it now wheat and cotton?
Simon Birmingham: Good morning, Peter. Well, look, there’ve been reports for quite some time, particularly in relation to the cotton industry. What we have seen through the course of this year is a completely unacceptable pattern of behaviour, it seems, from China, where different Australian sectors appear to have been targeted without merit and without proper reason. And this is of deep concern, which is why our Government has been clear in terms of calling that out, both first and foremost in our contact with the Chinese Government and authorities, but acknowledging it publicly here in Australia and also raising these issues through the appropriate foras of the World Trade Organization.
Peter Stefanovic: So is this actually happening? Is it actually happening when it comes to wheat and cotton?
Simon Birmingham: Oh look, in terms of in terms of wheat, we don't have any clear evidence that there are issues in in that sector. Now, global grains industry is a significant commodity, traded across a range of platforms and from Australia, traded into many different nations.
Cotton sector, we know there have been some reports of purchasers in China, apparently receiving instructions not to buy Australian cotton. Now, these types of interventions, if true, are of genuine concern and really do go against both the letter and the spirit of China's commitments and undertakings under our free trade agreement, but more broadly, the type of commitments they've made to the World Trade Organization.
Now, Australia’s not the only nation to have seen these types of measures put in place, but we certainly, certainly are monitoring the situation closely and we know that other countries are as well in terms of the heightened risk that these types of practices mean not only for Australian businesses trading with China, but for all businesses around the world in doing so.
Peter Stefanovic: So is there a chance, though, that this might not relate to our ongoing trade stoush with China and might in fact be a part of the deal that Donald Trump signed with China in recent months that asked for them, China, to buy more agricultural products from the US? So it may well be something separate? Is that a chance?
Simon Birmingham: We've seen very, very little, if any, evidence of that from the time that deal was signed right back at the start of this year, right through the course of 2020. Now, that deal, we need to remember, has an uplift factor in terms of commitments China is making to the US around additional purchase of American goods. But the scale of that is actually relatively small when you compare it to the total growth of imports that China undertakes anyway.
So in that sense, we've always seen that deal as one where with growth in the Chinese economy, with growth in the imports that China takes from around the world, they could easily absorb the types of commitments they've made to the US without having any impact on any other nation effectively around existing trading volumes. So I don't think it's accurate to conflate the two. And of course, there's absolutely no clarity or certainty that China is necessarily honouring that agreement with the United States in any of it.
Peter Stefanovic: Why not just go to the WTO on every single export that we're getting caught up in at the moment? I mean, there's the threat of taking it to the WTO, but why not just go to the WTO on wine? Why not go over barley? You know, every single expert- export, as I say, why wait?
Simon Birmingham: So I guess there are a couple of different approaches there. We have absolutely taken everything to the WTO and the same list of things that I mentioned in the Senate yesterday, we had already raised through the trade in goods committee at the World Trade Organization as real concerns and called out the different behaviours and practises we see of concern.
When it comes to actually using the umpire mechanism, if you like, the dispute resolution mechanism of the WTO, you need to make sure you've got your case all lined up, just like any type of legal challenge or battle. So we are doing that methodically, carefully, and we will make sure that when we launch those cases, if they do end up being more than one, and barley is certainly the first in queue there, that we have all of the evidence to demonstrate that Australia's producers are nothing but world-class, market competitive, driven by those market principles and certainly not into practises like dumping or being subsidised by Government.
Peter Stefanovic: Okay. Just one more before I move on. The Chinese embassy says Australia’s concerns about Beijing not playing by the rules of ChAFTA and WTO are unfounded. What’s your response to that?
Simon Birmingham: Well, I think the evidence speaks for itself. There’s a pattern of behavior. There is disruption there and clearly, we now have a range of Australian exporters and the idea that this is somehow coincidental just doesn’t pass the sniff test.
Peter Stefanovic: Okay. Mark McGowan, Minister, isn’t coming to National Cabinet because reportedly, he doesn’t want to be in the same room as Steven Marshall. What’s your reaction to that?
Simon Birmingham: Well, it sounds a little bit ridiculous, to be honest, Peter. Every Australian state has done an outstanding job now, of getting themselves into a position of suppressing and basically eliminating COVID, aside from returning international travellers. And I would have hoped that at this first opportunity to set an example, essentially, for Australian business and Australians overall, that we can get back to degrees of normality in travelling around our country, in meeting together, that state premiers would set that example, a positive example rather than a bad example. Because as the Tourism Minister in particular, I am keen to see not just Australians get back to having holidays and supporting our tourism industry, but we want to see a return of corporate travel, of business travel, of people actually supporting the industries that generate thousands of jobs in our airports, our airlines, our hotels, our convention centres or the like. And in the end, Mr McGowan's decision is acting contrary to the interests of all of those jobs and Australians whose livelihoods depend upon people actually travelling.
Peter Stefanovic: Sounds like schoolyard stuff.
Simon Birmingham: Well, it's- it is for Mr McGowan to explain. I know that, of course, his approach appears to have been very popular in the West to date. But I really do think that these types of decisions set a poor example in relation to the type of work practices that we want Australians to get back to. Yes, operating COVID-safe way, ever being mindful, of course, any symptoms go and get tested, demonstrate all of the relevant hygiene practices, be careful in relation to social distancing. But, as a country, we can get on with our lives. We should be getting back to work and we should be doing so as normally as possible, and that includes travelling across the country.
Peter Stefanovic: Okay. Well, talking about getting back to work. You need more Kiwis to come to Australia to help pick fruit. I'm not sure how appealing that might be at the moment, Minister, given that it's- they're only getting three dollars an hour in some parts, including Coffs Harbour, to pick fruit.
Simon Birmingham: Look, those examples of abuse and malpractice by certain employers ought to be called out. And we would encourage anybody who sees that occurring to get in touch with the Fair Work Ombudsman. There are additional resources there to make sure that then there’s follow through, there’s prosecutions where appropriate. And to any employer engaging in such practices, you should expect to be caught out. You should expect to face severe punishment. But for the vast majority, the right thing occurs and the vast majority of working holidaymakers who come to Australia, have a positive experience. And ordinarily at this time of year there'd be around 135,000 working holidaymakers across our country, doing a lot of different seasonal jobs in the agriculture sector, in the tourism industry. That's now down to around 50,000. New Zealand, where we have our borders open for Kiwis to be able to come into most states without facing quarantine arrangements is an obvious place. But we hope that some New Zealand people and some young people in New Zealand will choose to take a working holiday in Australia, to take their gap year here. And in doing so, they spend every dollar they earn usually, they spend a few dollars they brought with them. Sometimes they'll ask mum and dad back home to send them a few more dollars to spend. So great for our economy, but it also fills important jobs in our agricultural sector, especially, but also in parts of the tourism industry who really need it.
Peter Stefanovic: Okay. Trade Minister Simon Birmingham, appreciate your time today. Thanks for joining us, talk to you soon.
Simon Birmingham: Thanks Peter. My pleasure.
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