27 February 2009, Hua Hin, Thailand
Interview - ABC
Subject: ASEAN FTA
KAREN PERCY: Simon Crean, what is the Free Trade Area Agreement with ASEAN, Australia and New Zealand going to mean?
SIMON CREAN: It will mean significantly increased opportunities for trade with the ASEAN group of countries and Australia and New Zealand. From Australia’s perspective, there is already $80 billion in two-way trade with ASEAN. In comparative terms, that is larger than any two-way trade we have with a single country. It’s bigger than China, bigger than Japan, bigger than the US. So, this is a big market opportunity for us in what is already our largest group trading partner. What the FTA does it to provide improved market access. That means better opportunities for our exporters. It means increased job opportunities in Australia
PERCY: In what sectors in particular will Australia be able to gain better market access in this region?
CREAN: It covers all of the sectors. That’s the other good thing about this agreement, it’s a comprehensive agreement. It covers goods, and it’s not just agriculture and food products – its manufactured products, its services and its investment.
PERCY: Who do you think are going to be the main players I guess within the ASEAN group? Where do you see the main upside among those ten member nations?
CREAN: I think all of them are going to play an increasingly important role with us. And whilst this agreement itself is a significant breakthrough because it’s the largest FTA Australia has ever signed, it’s the most comprehensive that ASEAN has ever signed, but it is a platform for going forward again with our bilateral arrangements. Already, last week in Australia, we agreed with Indonesia to move forward on an FTA to build upon the arrangements that this agreement provides for us with Indonesia. We want to do the same with Malaysia; we want to do it with Vietnam; we want to do it with the Philippines, etcetera. This is a platform from which to move forward the bilateral arrangements as well.
PERCY: If trade between Australia and ASEAN nations is already $80 billion, what do you anticipate this might bring in terms of additional dollars.
CREAN: Well, I wish I could predict that in the state of the global financial crisis. But that’s turned everything on its head and trade flows have been impacted, even though trade is not the cause of the global financial problem. In fact, trade is very much a solution to stronger economic growth going forward because trade is a multiplier. Trade grows faster than domestic output. But it is interesting that, despite the grim economic forecasts, ASEAN is still projected to grow positively, as is Australia. We are doing a lot at home to put fiscal stimulus packages in place that continue to go for growth. So there is the opportunity for Australian exporters to take market share given the relative strength of the Australian economy vis-à-vis other parts of the world, but into what is still projected to be a growing area of economic activity.
PERCY: Given the concerns about the economic crisis, it’s often a time when countries look inwards rather than outwards. Are you confident this deal with the ASEAN nations and the member nations will follow through given already the economic crisis is biting hard in this part of the world?
CREAN: Well, the significance about this agreement is that not only does it commit to improved market access in the region for goods, services and investment, it is a binding agreement. People can’t go back on the agreement, so whatever the tendency is to revert to protectionism, this agreement will provide certain insurance in a number of areas that that can’t happen.
PERCY: How do you reconcile Australia’s position against Burma with some sanctions and the fact that Burma is a major member of the ASEAN countries and you’re now signing a free trade area agreement with ASEAN?
CREAN: Well, we’re signing an agreement with ASEAN as a group. ASEAN functions as a group. But by far the greatest area of concentration has been with the other nations.
PERCY: But Burma is likely to benefit from this, is it not? And how does that sit with the fact Australia wants to punish the junta leaders?
CREAN: Well, to the extent to which liberalisation and trade flows benefit them, they have to be seen against any other restrictions that may be taken in the future. But we have to deal with this from the point of view of the reality of what constitutes ASEAN, despite the difficulties we have with the regime within Burma.
PERCY: Business, trade and human rights can often blend. In this part of the world, in particular, you see people dislocated when exploration or land development leases are granted for example, or illegal migrant workers put in factories. What kind of representations does Australia make in the business trade forum on those human rights issues, particularly now as ASEAN is committed to a human rights forum?
CREAN: Obviously, they can’t be ignored and we make our representations through the appropriate political channels. Now that being said, we seek to use the strength of the economic relationship and the importance of it to, in turn, strengthen the representation of our concern on the human rights front. That’s the way we did it when we were last in government, when the Labor Party was last in government. It’s the way we’ll continue to do it under the Rudd Government’s approach now.
PERCY: What is the significance of the discussions you’ve been having with Vietnam?
CREAN: Well I think very significant is the fact that we will be reaching agreement with them today to recognise their market economy status. This has important implications so far as WTO dispute mechanisms, particularly anti-dumping. But I think it’s the broader relationship and the strengthening of that that we’re making with Vietnam that is important. We have welcomed a number of their economic liberalisations that have been undertaken. They have indicated an interest in participating in the Trans-Pacific Partnership initiative for wider liberalisation in the Asia-Pacific. The fact that they have been very strong supporters and active contributors to this agreement is a very welcome sign. We look forward to building on that platform in terms of our bilateral relationship with them.
[ENDS]
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