14 June 2008

Radio New Zealand National

Subjects: CER, Australia New Zealand Leadership Forum, Doha Round

Journalist: Obviously there was the suggestion, or call that the two countries should cooperate more closely in trade negotiations. I know we have got the joint negotiations with ASEAN. Do you see prospects for any further joint negotiations at all?

Simon Crean: There can be but I think that is too narrow a view of the significance of the relationship. I mean we have what is recognised in the WTO as world’s best practice FTA. If that is the case we should be trying to export it to the rest of the world. In other words to convince other countries, including those with which we engage, that the sort of comprehensiveness that is embodied in our agreement should be embraced by them. That is what we are trying to do in ASEAN and we are working very closely together on that and it is what we are arguing for in the WTO, that we should develop a mechanism for benchmarking FTAs into the future.

As for the question of the closer relationship between ourselves and New Zealand, if we are to take the relationship continually forward and to improve the model, I think it needs to embrace investment, because investment flows beyond services, goods and agriculture are really the new direction of trade and it is not as if there are real barriers to investment between our countries. In fact if you look at direct investment from Australia to New Zealand versus New Zealand to Australia, is really only two to one. New Zealand has significantly invested into Australia and that’s I think a good recognition of where this new direction of trade is going. But the FTA framework needs to create an environment for encouraging that. The model needs to up updated. So I think that there is important scope to develop the framework further but to work more closely together to advance its principles to underpin the importance of strengthening the multilateral system, the WTO, the Doha Round, the regional architecture.

Journalist: So on investment is there an initiative underway then to…

Crean: No we need to continue to have discussions. This something that we will continue to discuss with New Zealand and let’s see how it goes. But I mean here you have got the business community, the CER negotiations are government to government, this Forum is business to government and it is the two partnerships that are important. We are here to hear what it is that business says it needs by way of a more conducive framework. There is strong support for moving in the direction of the Single Economic Market. Investments protocols etc within CER would enhance that if we can get it. But that is purpose of having these dialogues.

I mean this is the first one that we have participated in as the new government. We have got the biggest and strongest ministerial representation ever in New Zealand. Australia and the new government, the Rudd Government, places the highest priority on this relationship, and why wouldn’t we? We shouldn’t take for granted for what has been recognised as the best in the world. We have got to continue to strengthen it as the best in the world and export it to the rest of the world.

Journalist: In terms of the rest of the world, what hope have you got of resolution to the Doha Round?

Crean: Doha is very difficult but it is doable. If it is doable, let’s do it. I think the circumstances of the meetings a couple of weeks ago in Peru followed by Paris, highlight the fact that with the political will…, we can make progress. Negotiators, as a consequence of those meetings and those directions, have been working this week and will continue to work next week. We want to see progress out of that to narrow the points of differences, so ministers can be brought together to try and finalise the round. I am not trying to pretend that there aren’t still considerable difficulties, there are. But there is also a great desire amongst many nations, a vast majority of nations, to want to conclude this round and actively are working to try and conclude this round. The trouble is that you have got to get consensus. It is not if you get a majority vote of 151, you have got to deliver the lot and that’s what makes these negotiations so difficult. But the political will, the determination, the persistence and the knowledge that we have made progress on agriculture, we still have to make progress on industrial goods. We have to make progress on services, that’s what the negotiators have been instructed to get on the task of. They are working over the weekend. They have got to burn the midnight oil. That is what we have told them. We have got to try and conclude elements of this deal before the European summer, and that means in the next few weeks.

Journalist: I mean from what I have read, both coming out of WTO and some of the other coverage, a deal does appear doable but probably at a lower level than both Australia and New Zealand would ideally want. I mean talking about trying to export the very best abroad, at what level to you compromise to get a deal?

Crean: You don’t go for a deal at any cost. But I think it has always been true that what New Zealand and Australia would ideally want was never going to be there out of Doha but what we have got to do is maximise the ambition. We think we can get a very ambitious outcome in agriculture but we can’t get it unless we have an ambitious outcome in industrial goods. That’s the simplicity of the [matter], all the moving parts. That is what it comes down to, but I make this point that if we do succeed in a successful outcome, it provides the platform, a better platform, a stronger platform by which we can engage the regional architecture. And if Australia and New Zealand have got a strengthened CER, the basis for them engaging together to strengthen the regional architecture to enhance the Doha outcome, is a very real prospect for us.

Journalist: So when you talk about the regional architecture in the trade sense is that the idea of regional free trade area?

Crean: Yes the trade area under APEC that is one option, the East Asia Summit, the ASEAN Plus Six; so obviously success in the ASEAN free trade agreement becomes an important building block for that. They are two obvious vehicles by which we can progress it, but to progress it off a more solid base, that is the rules-based system for delivering trade liberalisation. If we haven’t got improvement in the rules-based system for delivering trade liberalisation, we will revert to that spaghetti bowl of preferential agreements and inconsistencies and the strong doing well at the expense of the weak; that’s what will emerge and that is what we have got to try and avoid.

ENDS

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