9 September 2008

Interview - Country Hour ABC Qld

PRESENTER: In a previous life, Simon Crean was the Primary Industries Minister, grappling with the disposal of the wool stockpile and the establishment of new meat marketing and promotions bodies. Well these days, he's the nation's Trade Minister, focusing on developing links with our overseas trading partners. And he's been here at the AMIC Conference on the Gold Coast. Despite what many think, Simon Crean says there is a future for multilateral trade agreements, and he says that we're 80 per cent there in terms of the Doha round of negotiations to free up market access and reduce trade distorting subsidies. The Country Hour's Robin McConchie caught up with him.

ROBIN McCONCHIE: We're talking about trade; you're the Minister for Trade. We're talking about market access. We're talking about trade negotiations. Before we start, is the Doha round of multilateral trade negotiations dead?

SIMON CREAN: No, it's not. And we made huge progress. We're 80 per cent of the way there, but we're not 100 per cent there.

The task now is to try and bridge that gap. That requires two things. It requires a technical solution to that issue that we ran into grief on - the special safeguards mechanism for developing countries. I think there is a technical solution to that, but that won't come together unless the political will is still there.

And we've been working very hard to not only shore up that political will, but to strengthen it. So, it's still doable Robin, but, these negotiations are difficult, because there's 153 countries. Eighty per cent is not good enough. It's not a majority decision. You need to get unanimity. But, the fact that these talks have been restarted so soon after they failed has never happened before in any previous failure of a round.

McCONCHIE: Do you believe that agriculture still will be the sticking block? I know you mentioned the developing countries. But, has agriculture got anything to get out of a finalisation of the Doha round?

CREAN: Oh huge. I mean, what's on the table already is 70 to 80 per cent reductions in tariffs, in subsidies, the elimination of the SSG - the mechanism that developed countries used to use to invoke protection if you like. There is a lot on the table.

Now, it's not the perfect outcome. They never are, because when you're negotiating with 153 countries, as distinct from Uruguay which was 100 countries, you've got to make compromises. But they establish the platform. The platform upon which we then build our regional trade agreements and our bilateral agreements.

So, there is already significant opportunity and market access improvements on the table. They in themselves will be beneficial to our agricultural producers, but they also provide a much better platform for negotiating in other fora the trade negotiations that Australia will continue to undertake.

McCONCHIE: You mentioned a heap of unilateral or bilateral agreements - Japan, Korea, China, Indonesia, India, Chile, United States - they just go on and on and on and on; what are we really getting, well, just even speaking about the latest one - ASEAN - I mean you see huge progress in ASEAN. It's a $71 billion two-way trade. It's a, bigger than China, bigger than US. What do we get out of it?

CREAN: We get out of it; if you remember when APEC was established, Bogor goals were established and they required the reduction, elimination of market, of barriers, the trade barriers by 2020. Under the ASEAN Free Trade Agreement, we've brought that date forward to 2015.

Now again, what we will see is the bindings of existing low tariffs for agriculture, which means that that gives certainty to Australian industry. But then the progressive elimination of them, over the next couple of years. We've brought the timetable forward. In the fastest growing region in the world, and in a country that has never, group of countries that's never negotiated as comprehensive a free trade agreement as this.

The nature of trade has also changed Robin. It's no longer about simply producing goods in this country, or services, and exporting them from here. It's also a significant component now whereby investment is going into overseas countries, because that's where the opportunity to access domestic markets really presents itself.

Direct investment out of this country now almost equates to direct investment into this country. That's why we've got to look at these behind the border issues; the issues that go to certainty for those investments, the regulatory framework, all of those range of issues. That's what the next generation of trade negotiations is going to involve.

McCONCHIE: But just finally, the non-tariff trade barriers - things like quarantine and sanitary conditions. I mean they seem to be taking a bigger and bigger place in our trade relations.

CREAN: They are, and they're the things that we've now got to concentrate on. They're what are referred to as the non-tariff barriers. And when you think of it, we've spent decades trying to reduce the tariff barriers. It is going to take us time to get the non-tariff barriers. But, we've got to start. And that's what the government has committed to. We have understood the changing nature of trade. We've also understood that the agricultural industry, as strong as it is, has the potential to export its services and its value-added product, and to make investments in a far more significant way than it's done it in the past.

So it isn't just sending the bulk commodity any more. It's the question of how we take the value add, and how we take our strength - whether it's in consultancy or services or investment or the value-added product. This is the exciting opportunity for this country.

PRESENTER: That's Australia's Trade Minister, Simon Crean, at the Australian Meat Industry Council Conference on the Gold Coast.

ENDS

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