Transcript
25 May 2009
Interview with Chilean TV Network, Canal 13
Subjects: Australia-Chile Free Trade Agreement, Global Recession
QUESTION: In the middle of the global economic crisis, what will the Australia-Chile Free Trade Agreement do to help the two economies?
SIMON CREAN: Trade liberalisation is actually a stimulus to economic growth. World trade grows faster than world output. So if we're trying to get ourselves out of the global financial crisis quicker, we've got to engage in more trade, and so agreements that liberalise markets, open markets up are going to be an important benefit to those nations engaging in them.
QUESTION: And in Chile there's a lot of pessimistic voices about the crisis. How, in concrete terms, can this free trade agreement with Australia help the Chilean economy?
SIMON CREAN: It helps the economy by providing the stimulus. It sends a very important signal that we're not going to revert to protectionism. And interestingly enough, it opens up huge new opportunities to position both countries for the challenges beyond the crisis. Everyone believes we'll get out of the crisis, it's a question of when. But the bigger challenges coming up are climate change, renewable energy - those sorts of issues. Australia and Chile have great complimentarity in these areas. What we want to do is to strengthen the bilateral relationship, not just dealing with trade and trade flows and services and investment, but also meeting the challenge of the environment and climate change.
QUESTION: So in the middle of the crisis, how are the exports to China holding up, and how is this impacting on Australian families?
SIMON CREAN: Exports to China from Australia are actually holding up very well. Australia's exports to China, in fact, increased by close to 50 per cent. And that's because China is involved in massive stimulus internally - both in terms of fiscal stimulus as well as monetary policy easing. A lot of infrastructure being built, big demand for our resource base.
The fact is that China is forecast to grow. It's in positive territory. It's an opportunity for Australia in the global financial crisis to take advantage of that. But Australia's been impacted by the global financial crisis, there's no doubt about that. Trade is being impacted by the global financial crisis, but trade is not a cause of the global financial crisis. In many senses, trade is very much part of the solution.
QUESTION: How is the crisis affecting households, household debt?
SIMON CREAN: It's affecting households to the extent to which it's impacting on employment opportunities. Household debt, to some extent, is easing because interest rates have come down, and because the Government here has injected a lot of money into the economy, into consumption.
So there have been a lot of transfer payments to families. So income to families, lower cost of debt to families - but the fact is that we're positioning ourselves to have a much more sustainable economic base once the recovery happens, and that's why we're also investing heavily in the things that make us competitive going forward - in infrastructure, in skill development, and in innovation.
QUESTION….In concrete terms, what is there that Chile can export to Australia that would maybe increase or help the Chilean economy?
SIMON CREAN: Well I think that Chile has got to play to its comparative advantage, just like any other economy. What the free trade agreement does is to liberalise the markets. It's up to the Chilean economy to become and continue to drive the structural reforms at home to enable them to become competitive, more competitive, more productive.
It's up to Chile to identify the real opportunities for its exports. It's up to Australia to do likewise. But as I said before, there is a real opportunity to strengthen the cooperation, and find mutually beneficial capacity to advance both countries interests.
And one of those, clearly, is in renewable energy.
ENDS
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