Transcript
14 May 2009
Transcript of Parliament House press conference
Subjects: Budget funding boost for exporters, Budget clean energy initiative, visit to China, China FTA, the Mortimer Review, Chinalco-Rio Tinto deal, Korea FTA negotiations, Japan FTA negotiations, Cairns Group meeting.
SIMON CREAN: ...in terms of the Budget for the portfolio from the trade perspective and also talk about the observations from the recent trip in China. Obviously, an important decision in the Budget to ensure the full funding for the EMDG this year. This was looming as a major problem for exporters but not a problem of our making, because the previous government had gone to the last election promising to relax the guidelines and haven't funded it. These people were going to potentially face payouts of between 30 and 40 cents in the dollar at a time that we're really urging them to grab market share. Now, we could have blamed the previous government but that wouldn't help the exporters. So, we've agreed to fund it and we obviously have the $50 million in the Budget for next year's activities so they can plan with confidence for that too.
Clearly, the whole question of going forward is a matter for deferral to the next budget process but I've spoken with the bodies and they can confidentially plan going forward. There's also the commitment to establish a clean energy unit within Austrade. This is a terribly important opportunity for us because it's not only the space we are in as part of the climate change issue generally, if you like, taking the positives and opportunities from climate change as distinct from just the threats, the argument about green jobs. So having a strategic focus within Austrade to develop the framework for that going forward terribly important. And given that I've now been part of two separate business delegations into China in this space, our ability to enhance the capacity to do those sorts of things in the future is going to be significant. In China they're got huge urban development. What they're looking for is clean energy and smart building solutions to meeting their housing needs into the future. They're going to be the largest urban population in the world and all of their discussions about how we can cooperate with them are predicated on the fact that they want environmentally friendly design, construction and running - functioning of the housing infrastructure.So, I think it's an important space to be for it - for us and they're the two initiatives in the Budget .
As for China, it is quite incredible the economic activity taking place on the ground in the regions of China. I visited the Yunnan Province which is in the south-west of China. I visited the Hubei Province and Shanghai. Shanghai, of course, because the expo next year will be the show piece for Australia as well as other countries to some 70 million visitors that they expect through it. But we have a return visit from the party secretary, a delegation led by the party secretary of the Hubei Province in July/August. He will be bringing with him the vice-mayor of the city of Wuhan as well as key business people, business people in the automotive sector where there are opportunities for strategic partnerships.
What the visits to the region convinced me was not only the level of economic activity that's taking place but that it reinforces the two track strategy to dealing with opportunities in China. The first track, of course, is concluding the FTA. And I was in Beijing some weeks before this last visit to try and generate - continue to generate - the political will needed to conclude it. But at the regional levels there are huge opportunities for commercial partnerships and in the two regions that we visited we now have developed, or agreed to establish, frameworks by which those commercial agreements can be better facilitated. They're not trade agreements as such, they're MOUs, they're framework strategies but they're designed to bring a better connect between the challenges and the issues that these regions are confronting and the opportunities they're confronting with the huge domestic growth and stimulus that's taking place within that economy, how Australian can partner better.
We've got the meeting coming up of MCIT which is the Ministerial Council of International Trade, a new COAG structure that seeks to get better coordination from Australian states as well as the Commonwealth Government to help us focus and better target these strategic opportunities.
China will be the fastest growing country in the world this year and next year, I suspect the year after, probably for some time to come. China, for us is the place to be. We need a bigger slice of the action. And we are well positioned. It's why the Budget put in place important measures to encourage our exporters to see the opportunity, to grab market share, and to work with us in developing the strategic way forward in which we can take advantage. That's not to say that China is going to be the only focus of our attention but, it should be an important focus of our attention. I think you'll see from the document that was tabled yesterday in the Parliament, the extensive coverage of free trade agreements that we're already engaged in.
So I think that there are opportunities despite the difficulty. If you look at Australia's trade performance we are doing far better than practically any other country. We have strong growth in terms of our exports last month, a lot of it attributable to China and it is an important cushion for us, along with a number of other cushions, as we try to get through this difficult stage of the global economic recession, but also lay the basis for securing a more active and a more sustainable basis to our trade performance going forward.
QUESTION: On the EMDG scheme, you said that businesses can plan with confidence because there was commitment to the money this year and there's a commitment to money next year but there's nothing after that. Does there need to be - I mean has the Government taken that in principle position to maintain that funding at $200 million over the long term?
SIMON CREAN: No, it hasn't taken a decision and it won't be able to take it and I've explained this to the groups that I was speaking with in the - you know, in all of the discussions around the EMDG and the problems. There's acceptance that the Mortimer processes have been deferred or the decisions on Mortimer have been deferred because of the global financial crisis. But I've indicated to them that we've demonstrated two significant acts of good faith. The payment this year and the payment base for next year.The intention is to consolidate that going forward but it's a process that we have to compete for in the Budget exercise next year.
QUESTION: When will the Government formally respond to Mortimer?
SIMON CREAN: Well, again, it's difficult. I mean in a sense the EMDG is an important marker in that exercise but I think that the Government's had a lot of other things on its plate. Clearly the focus of our activity has been to get the stimulus package right here. I think there are encouraging signs that, you know, that is having some impact. The problem, of course, is that unless globally there's recovery we just can't do it on our own, but we are weathering the storm better than most on practically all fronts, including the export front.
What I'm keen to do is to get the perception that we are developing our strategy on all fronts, it's not just consumption. It isn't just investment, it is stimulation for the private sector and it is trying to improve our net export position. That's what determines your GDP. And I think that we are concentrating on all of those four areas aggressively and that's why we do have confidence in the Treasury forecast going forward.
QUESTION: Isn't it slightly short sighted to defer Mortimer at the moment, though, because isn't trade going to be one of the things that'll help get us out of a bind rather than...
SIMON CREAN: I don't think we've deferred Mortimer as such. What we haven't done is give the comprehensive response to Mortimer. I think what you're seeing is us acting on a number of different parts of Mortimer and, you know, there may be the opportunity to pull that together in a comprehensive way. But EMDG is part of that, the focus in terms of the FTAs, the ministerial dialogue I'm having in Europe in June. What we're doing commencing the FTA with Korea this coming Monday. We've got the Trade Minister coming down, so we're commencing the FTA negotiations that were announced when president - the president and the minister came a couple of months ago.
So, there's a lot of activity and if you look at the clean energy focus, the job opportunity, the green jobs that Mortimer talked about, this clean energy initiative is part of it. Now yeah, it would have been nicer to have announced it as a big package responding to Mortimer, yes. But given that we can't actually do that at this stage I'd far prefer to be getting on with the bits that we can announce and develop the strategic way forward more comprehensively.
QUESTION: On the China FTA I think you mentioned last week that it was technically stalled?
SIMON CREAN: No, I said it was stalled - in our view it was stalled at the technical level.
QUESTION: Yeah...
SIMON CREAN: That's because we won't go into the next round until we get the solid indication that there's seriousness about moving forward. We're not going to go in and negotiate with ourselves. We've been doing that for all the rounds up until now.
QUESTION: But given that there's support at the highest political level, both the Prime Minister and Hu Jintao whenever they've met they've spoken of the need to move it forward. If the leaders of the countries can't help to break this impasse where do you go from here?
SIMON CREAN: Well they are working to break the impasse because what's needed on their part and this is what we're awaiting the outcome of is they're getting the different agencies that have their difficulties and their sensitivities with the FTA to get a better coordinated response on the basis of sending the political will, political determination message.
But they're got to do that. What they've undertaken to do is to do it. But they've got to do it.
QUESTION: Have you got any time-frame of when...
SIMON CREAN: No, I keep saying I'm not trying to put timetables on them. They've committed to do it, I've taken them at their word. They've been honourable in all of our dealings with them. These things take time. I mean that it frustrates me as much as it frustrates you but they do take time.
But, I'm saying I went back to China not to have that discussion. I went back to see the dimension of what we could do at the regional level. And, what we can do at the regional level is quite significant. We've therefore got to try and capture the opportunities.
QUESTION: Minister, is it fair to conclude the China is using the FTA negotiations to leave us a more favourable outcome regarding Chinalco?
SIMON CREAN: No.
QUESTION: It's not?
SIMON CREAN: Not at all.
QUESTION: Have they specifically excluded it? The way...
SIMON CREAN: Excluded?
QUESTION: The way - linking the two, the way you have.
SIMON CREAN: We have made no link between the FTA and the Chinalco deal and neither have they. No link. Absolutely no link. I can say it time and time again no link. And they accept, importantly, we're not making a link and I accept that they're not.
QUESTION: Has there been - is much discussion or what was the feedback from them about what's happened with Chinalco...
SIMON CREAN: I think there's the broader question as to they want confirmation as to what our position is - clarification, confirmation as to what our position is on foreign investment. They want to be assured that we don't have a discriminatory approach with China compared to everyone else. I have assured them that we are open to foreign investment, we do not apply discriminatory procedures country by country. We do require of all significant proposals FIRB processes that subject them to the national interest test.
I've had these discussions at senior levels, not just with my counterpart but with senior members of the Politburo, the NDRC. All of them accept that position on our part. I don't think that there is any doubt on their part that our political will is to engage not just in trade liberalisation and trade improvements between the two countries but also on investment.
But I also take the opportunity on every occasion to say that investment isn't just a one way street, that we have interests in getting opportunities to further and better invest in China. And that's why I'm arguing, quite apart from the FIRB process and the case by case analysis, let's try and include within the FTA a new framework that covers the new economic reality called investment flows.
QUESTION: Must be hard to separate everything out when everything is happening at the same time, though?
SIMON CREAN: It's hard. But it's not impossible. So you've got to have determination and persistence and I've got that in spades.
QUESTION: How do you explain to people that you're meeting in China about what our national interest test is? I mean is that - do they comprehend that...
SIMON CREAN: Yes, they do. And they fully accept the national interest test and they accept the fact that it's for us to judge what our national interest is.
QUESTION: Have you had any contact from any of the countries that were named in the document that was tabled in Parliament yesterday or do you expect there to be any negative feedback from those countries given this confidentiality has been breached?
SIMON CREAN: I haven't and I don't expect I will because in the case of the information that was put out on the trade negotiations there's nothing in that document that isn't already in the public domain.
QUESTION: What about on the bilateral deals though? Isn't some of that quite damaging, it's supposed to be confidential?
SIMON CREAN: There's nothing in the - in what's there in terms of the countries that we're having dealings with that people don't already know about.
Now, if, I don't expect that I will get concerns because I've had a look at the details. I don't think it will raise concerns. But if there are concerns we'll deal with them. I mean, after all, look, the fact that we're negotiating doesn't mean they have to conclude. They only conclude if they're satisfied that their interests are best - have been accommodated. That's what a negotiation is.
So, all that's put out there, it seems to me in the public domain yesterday, is the fact that we're having these negotiations with these countries.
QUESTION: But isn't it also the issue that the document specifically states that it's not meant to be made public unless it's by agreement...
SIMON CREAN: That's the embarrassment.
QUESTION: It doesn't...
SIMON CREAN: So it shouldn't have been tabled. It hasn't been tabled in the past. But, you know, I take the view - I'm actually one of those people that actually supports more information being in the public domain. We've actually got a policy position, Labor Party policy position, that's why I've been making so many ministerial statements on our trade intentions. So that we're putting on the record and opening for public engagement and inviting public comment in accordance with what the party's platform is.
We've got nothing to hide with it. I mean what's the point of hiding something that you believe is going to be in the national interest. You've got to bring the public with you. So you may as well have it out there in the public domain...
QUESTION: But details can be extraordinarily sensitive though can't they and if...
SIMON CREAN: Detail of negotiations, of course they can but that's not what's in this.
QUESTION: So you don't think - so you think in hindsight actually perhaps it was a good thing that it was tabled?
SIMON CREAN: Well, I don't think it's a good thing that you table something that says, shouldn't be tabled.
But that's - you know that's the frontispiece. I'm saying look at the substance, if that's your question. I don't think on the trade front it is embarrassing for us. I don't expect any comment or concern and if there are, then because I have established very good personal relationships with all of the people that I've been negotiating with I'm sure we can deal with it.
QUESTION: What about on the foreign affairs front, though? Do you expect any embarrassment on that front?
SIMON CREAN: I don't, but they're questions that you should direct to Stephen.
QUESTION: Did you have any concerns raised with you while you were in China about the Defence white paper and the fact that it nominated China as a…
SIMON CREAN: No, I didn't.
QUESTION: No-one raised it at all?
SIMON CREAN: No, no, it wasn't raised with me. And again it's interesting because China has the view about investment from the point of view of what's reported in the papers, and there was a fair bit of reportage on the white paper but it wasn't raised with me in the context of my discussions.
QUESTION: Just on the FTA, I mean, as you said, you're starting the process of negotiating with Korea on Monday. Is it fair to characterise the situation as moving from one to the other because there's so much frustration with the China situation?I mean, are you in any sense turning away from China because of that and hoping for you know, better luck with Korea in other agreements?
SIMON CREAN: Well, we're certainly looking for a faster conclusion with Korea than China because China aren't exactly your benchmark for speed. But we've only picked it up in the last 18 months and quite frankly, it had been stalled and I - you know, I was critical of the previous government for conceding market economy status without getting anything in return. But that's what we inherit.
QUESTION: Is that an opportunity that you've lost though?
SIMON CREAN: No. I don't think so. In fact I think the market economy status at times helps, especially when they want us to intervene in prices because my simple recount, you wanted us to recognise you as a market economy; we have, now act like one.
But you inherit those. You have to pick these things up and decide how to manage in the best way forward. What we've had to do is to kick start it and what there's a realisation of - which I think was the point of the question is - that if we just leave it at the technical level, we won't make any more progress. We'll end up negotiating with ourselves so therefore you've got to go to the political level. And I suppose if anything, all of the range of negotiations that I've had, that it's not just born out of them, it comes from 40 years of negotiating one way or the other. You've got to engage the key players.
Of course there's got to be a technical level because this is such complicated stuff and you've got to have the officials engaging but you have to drive it from the political level. These things won't happen if the politicians don't want it to happen.
So - and that's where the hard choices from time to time have to be made but it's also where you've got to try and find the common ground, the win-win.
And I believe there's huge win-win between us and Australia. That's why I want to - us and China. And that's why I want to strengthen the relationship, not just through an FTA but to get out there and actually engage regionally, engage commercially, identify the issues that we can help them meet their challenges. They understand our strength in a whole range of skills areas. Our new comparative advantage is our innovation and our skills. That's why this Budget invests so heavily in them.
We've got to keep building here but applying them not just here and that's where we should be confident about our ability to engage with the rest of the world anywhere on our strength and beat our competitors. That's what we've got to do.
And in the case of agriculture and resources, as important as they are as commodities and we have to get improved access particularly for agriculture, it's the services dimension of both of those key sectors that we have huge opportunity in: land management, water management, clean energy, renewable energy, abatement in the context of climate change.
We talk about having to get China into the climate change debate. The most effective vehicle to get them engaged first is abatement measures, and joint ventures, technical co-operation, solving their problems.
Both economies are going to be heavily reliant on coal. We've therefore got to be both heavily into clean coal technologies.
Both economies are going to - certainly the Chinese economy is going to be a huge demander of energy. We've got to help them diversify their energy base. That's why we've got to supply them with uranium because they are going to build nuclear plants.
And we're in the position because we've got the strict safeguards, we're in the position in which we can use our position as a significant supplier, to strengthen the safeguards.
This is how we've got to trade wider off our comparative advantage.
QUESTION: Talking about speed, the Japanese FTA seems to have fallen off the radar a little bit.
SIMON CREAN: It has - well, it hasn't fallen off the radar. In fact our exports to Japan have been quite strong. The difficulty we've got in Japan of course is their political situation. Only they can resolve that but if you accept my argument about the pace of these things and the movement forward requiring the political will, you can understand how difficult it is in elections to stall that process.
That's true in India at the moment; true in Japan. That's the great thing about democracies; there's always lots of elections around. It might be frustrating in terms of trade negotiations that they stall things from time to time but it's a fact of life.
But we've got plenty of eggs in different baskets. So the fact that something's not happening doesn't mean that nothing is happening. What we've got to do is to keep as much going as we can and I think you'd have to admit, by any standards, you look at the activism in this area over the last 18 months and it's a hell of a lot more significant than anything the other mob was ever doing.
QUESTION: What you were saying about the Chinese wanting information about anti-discrimination in terms of foreign investment and the national interest test; is it fair to say that that's something that they raised with you on this most recent trip?
SIMON CREAN: No, they - it was raised with me in Beijing. It was certainly the case though in the two - the three provinces that I went to. Whilst they didn't raise it, I did.
QUESTION: Okay.
SIMON CREAN: Because I think it's important that we're sending not just a message to Beijing but we're sending a message to the regions because their levels of government have key responsibilities and key decision making in terms of what investments go ahead.
QUESTION: Given the negotiations with China and Japan are effectively stalled at the moment for various reasons and Mortimer, as we talked about this morning, and we are learning about it more in an ad hoc way rather than as a whole - and one of Mortimer's recommendations was an increased focus on Asia - when can we see negotiations start ticking with India and Indonesia?
SIMON CREAN: Well, Indonesia I think you'll see start pretty soon. I think that - let's take the ASEAN region first. I think that the huge breakthrough in terms of signing AANZFTA has given us not just important trade liberalisation in the area across all sectors; it has also given us an important new platform to engage the bilaterals.
And it was very interesting that when the Indonesians came here in February, they were very keen to advance the FTA off the back of AANZFTA. That's important for us because as you know, we've still got outstanding issues with them on autos.
It's also true with Malaysia. I spoke the other day to the new Malaysian trade minister. We haven't been able to do much with Malaysia in the last few months because they've had a big change in their government but Muhyiddin, the previous trade minister is now Deputy Prime Minister. We had established very good engagement with him, we were keen to take the issue forward and now the new minister - he was former agriculture minister - he's been down to Australia, he is very keen and he is coming in July? I think he's coming in July. Anyway, he's coming in the middle of the year so Malaysia has the potential to go forward.
QUESTION: What's the time-frame on Indonesia?
SIMON CREAN: No, I don't want to put time-frames on any of them. I think it's a fundamental mistake to put time-frames because that becomes the agenda that everyone focuses on. I'm interested in the content. And if it takes time, we'll take time. What I'm not interested in doing is wasting my time.
So working out whether something can proceed; whether that's going to be constructive - that's important to commence negotiations - the judgment one has to make is whether you continue them.
QUESTION: Have you got close to considering whether you're wasting your time with China?
SIMON CREAN: No, we're not wasting our time with China. We have to put every effort in to China, to India, to Japan, to Indonesia because these are a significant part of our future.
And you know, you look at the global financial crises. What have you got? You've got Australia projected to have negative growth but nowhere near what any other developed country in the world is projected to have. That's the first point.
The second point is that the focus of our trade and the importance of our trade in our region, we have got lots of options of countries that are all forecast to have positive growth: China, India, Indonesia. They're huge markets.
What are we trying to do? We're trying to grab market share, because we're in a better position than the Europeans or the US, quite frankly, who are recessed, no activity. We're in a better position provided we can maintain the confidence and give confidence that we can get market access and market opportunities and we can encourage people to stay in the game. Not only will that be important for job numbers and employment but hugely important for confidence.
QUESTION: ....China on the Clean Energy Initiatives. Do you get the sense that China is prepared to pay any constructive role in the next round of climate change negotiations or do you think it's a mistake to focus on that issue; instead be focusing on these abatement and investment measures?
SIMON CREAN: No, well I think abatement is an important part of the climate change talks and to answer your question about China being prepared to engage in the climate change, I'm convinced they will.
The big issue of course is this targets exercise. But if you go back to Bali, the Bali Conference, it was really the developed countries that were committing to targets and whilst effort had to be committed to by the developing countries, no one was arguing they had to commit to the same sorts of targets.
Now, they've got to commit to something. They've got to ensure that they're making their contribution to lowering greenhouse gases but we've got to look at all of the options by which that contribution can be made because in a global problem, it requires a global solution.
China accepts that they have to be a huge part of that global solution.
What I'm encouraged by in terms of the discussions in China in the last 12 months, in the five visits that I've made there, is that they are constantly talking and unprompted saying that they need to do things cleaner and greener.
QUESTION: Any movement on the WTO?
SIMON CREAN: Yeah, we got important movement to engage the political will.
I had another good conversation with Ron Kirk a couple of weeks ago, the USTR. The president off the G20 has got a strong commitment to trying to conclude Doha and that's the instruction that has been given so we're working around that. Ron Kirk is coming as a guest to the Cairns Group Meeting which has been scheduled for Indonesia. Indonesia are hosting it.
So that is a significantly important meeting. It's the Queen's Birthday weekend, whatever that is; 7 to 9 June. So that's a good opportunity, not to negotiate Doha. I don't want - because that's not the Cairns Group mandate but it provides an informal basis to test the political will and to engage collectively.
A number of us have had a number of engagements one-on-one with the new US administration. What we haven't had is the collective one.
Following that there will the meeting that I'm hosting, the informal meeting on the sidelines of the OECD meeting in Paris at the end of June. And we also are getting very strong - not just interest - but commitment to attendance at that, and that will provide another important opportunity to test the political will.
So we'll take stock out of those sorts of meetings but part of the difficulty with Doha this year has been, you can't move without the US, you can't solve the thing without them. But at the same time, we have got to try and put - get them to understand that we can't wait for a timetable that just suits them. We - in us accommodating their transition to government, it can't be indefinite.
So we've been trying to get this message through that there needs to be engagement; there needs to be commitment and I think we're getting very positive signs in both those regards, so we've now got a couple of engagements in the next couple of months that, you know, hopefully we can progress things around.
QUESTION: Sorry, has that been a position that they've put, that the reason they can't put their mind to it is because they're still in that transition period?
SIMON CREAN: No, but they - he just got sworn in four weeks ago. Pretty hard when he's not sworn in and he has to go before the House - the advise and consent process. Because he can't go out there negotiating someone. Someone might ask him a question and say, well, you've gone out there without authority, we're not voting for you.
So that's the nature of the US system. We all knew that. So we've simply had to not so much mark time, but we've had to accept that they are entitled to settle themselves in. Of course they are.
QUESTION: He's not coming to Australia for a bilateral conference?
SIMON CREAN: I've invited him. He's due to come this year because we're hosting AUSMINTT, the Australia US Ministerial Trade talks. I've expanded with the previous administration, the nature of that engagement beyond just a review of the FTA, to a broader discussion about common ground in strategic approaches to all of the trade negotiations there: Doha, the regional stuff, the Trans-Pacific partnership and APEC.
They're hosting APEC in two years time. We want to develop an agenda. I already set up the meeting last year in Peru of convening an informal gathering of the next three chairs - Singapore, Japan, the US and us - to map forward, to map out a strategy for the sorts of issues we want to take forward in APEC.
So we're trying to engage globally; we're trying to engage regionally; we're trying to engage bilaterally.
Very busy agenda. Very active agenda. Lot of overlap but in all cases they're platforms on which to build.
QUESTION: What about there's still been some - so many sort of stallings with Doha? Do you think at this APEC meeting there will be any more movement on the free trade area of the Asia Pacific?
SIMON CREAN: Again I think that there was strong commitment in Peru last year to develop the TPP.
I think the interesting question is if there is not only the position of the new administration - and all the signs so far is that they're positive about it - but the extent to which that mechanism not just proceeds, but whether it's capable of attracting more interest.
I think it can. We know that there have been informal expressions of interest that countries that are not in a position to formally declare, so we'll engage them informally and try and build the framework for a new regional structure, which would be a good thing.
QUESTION: Thanks very much.
SIMON CREAN: Okay. Thank you.
ENDS
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