ABC Business Today with Whitney Fitzsimmons

Subjects: live cattle exports, anti-dumping rules, food security, Doha Round

Transcript, E&OE

27 June 2011

WHITNEY FITZSIMMONS: The Australian Government has announced a $3 million compensation package for workers who've been affected by the ban on live cattle exports to Indonesia. It includes payments for people who've lost their jobs as a result of the move, and assistance for employees and small business owners who earn most of their income from trade to Indonesia.

Federal Agriculture Minister, Joe Ludwig, says the Government will provide financial assistance for up to 13 weeks if people have had their incomes affected. Senator Ludwig says the arrangements are separate to the $5 million compensation package the Government's still trying to negotiate with Meat & Livestock Australia.

And to look more closely at how the ban on live exports is impacting trade with Indonesia and to look at other trade matters, I spoke earlier to Federal Trade Minister, Craig Emerson.

Craig Emerson, welcome to the program.

CRAIG EMERSON: Thanks for having me on the program.

FITZSIMMONS: Now, firstly let's talk about the live export ban to Indonesia. It's being – it's our fourth largest agricultural market, so how concerning is it that this is continuing to drag on?

EMERSON: Well, obviously we're working as a team with our counterparts in Indonesia to resume the trade as soon as we possibly can. We've been working around the clock, Senator Ludwig, as Agriculture Minister, with his counterpart; I'm doing the same with mine; Kevin Rudd with the Foreign Minister; and the Prime Minister's directly involved in this.

So obviously we want to see that resumption, but we just need some assurance that the humane treatment of cattle will occur. Once we've been able to settle that, then the trade will resume.

FITZSIMMONS: It's a very, very difficult situation to solve. The longer it does go on, how damaging can it be to trade links with Indonesia on a broader spectrum?

EMERSON: Both countries are close friends, in fact, at all levels, and we want to continue working with our counterparts. I think when the images were shown on television…

FITZSIMMONS: But surely there must be some … it must…

EMERSON: …there wasn't a … there wasn't an alternative but to suspend the trade, but now we're seeking to resume it.

FITZSIMMONS: But surely this must raise tensions between the two countries.

EMERSON: Well, my conversations with my counterpart have been cordial and civil, and we are methodically going about the resumption. But here's the challenge: there's something like 600 different processing facilities in Indonesia that could take Australian cattle. Now, we won't be able to work collaboratively overnight to get all of those 600 up to international standards. So what we're trying to do with our friends in Indonesia is to concentrate on a more limited number, get those going and then again work collaboratively with the Indonesians to lift to international standards those others that may not be there at this point in time.

FITZSIMMONS: Dr Emerson, does it have the potential to spill over into other sectors and affect other trade areas?

EMERSON: Well, I wouldn't think so. I mean, the Indonesian-Australian relationship is a very good one. It's not only based on friendship but based on commercial realities. And the reason that we buy and sell from Indonesia and why Indonesia buys and sells from us is that it makes good commercial sense.

So, I'm not sure that it would follow that because of this disruption – which we would rather not have happened but we felt was necessary in terms of suspending – I don't think commercial reality would just be thrown out of the window because of this. There are benefits to Indonesia from trading with Australia and obviously benefits to Australia from trading with Indonesia.

And, in fact, we're working on a closer economic partnership agreement with Indonesia where we would, amongst other things, seek to liberalise trade between our two countries, but importantly work in technical cooperation to help people in rural Indonesia with animal husbandry and such matters. All of those initiatives are in the interests of the Indonesian Government and the Indonesian people, and therefore on that basis, I think I'd be confident that they'll continue.

FITZSIMMONS: And are you confident that you'll be able to resume trade at the, you know, in the sort of the ban for six months at the end of this ban?

EMERSON: Well, this is what we're working to: resumption as soon as possible. And the way to do that, as I, really, I think I inferred, was that we'll start with a more limited number of facilities first – get them up to standard. And the other aspect of this is that we need to ensure that we can track the Australian cattle so that they are going into those facilities that are confirmed at being at international standard.

FITZSIMMONS: All right. Minister, let's move on to another issue. You just recently introduced anti-dumping measures which are in line with WTO standards. What will that do for industry?

EMERSON: Well, you make a very important point. I'm the Minister for Trade and you may be aware that I'm an advocate for open trade, but in the global trading system anti-dumping regimes are important to assure the integrity of the global trading rules. If you've got rules that could theoretically be breached easily, then there's not much point in having the rules, and anti-dumping systems are central to that. But they mustn't cross the line into back-door protectionism, and that's why we've been assiduous in working to ensure that the changes that we're making are consistent with the WTO rules.

So consistent with open trade, but I think every country, you know, would agree that there is a role for an anti-dumping regime that at the same time doesn't constitute back-door protectionism. That's what we've achieved.

FITZSIMMONS: That brings me to my next point. You're not concerned at all that these new measures could be viewed by some as the introduction or the slow creeping of protectionism?

EMERSON: No, and our government has been absolutely clear about this. Just two Thursdays ago, Prime Minister Gillard said that the Australian Government is committed to the principle and practice of free trade. This isn't the first time Prime Minister Gillard has made that statement. That's what we are; we're committed to free and open trade, but an anti-dumping regime, as confirmed by its existence in all of our trading partners and competitors, is consistent with open and free trade and the application and implementation of the global trading rules that make that open and free trade possible.

FITZSIMMONS: You've recently voiced some concerns also about food security, and you said that, you know, is due in part to political unrest in the Middle East. What do you think needs to be done on this front, because food security is an issue that's been bubbling away for quite some time.

EMERSON: Yeah. Actually, what I said was the other way around: that concerns about food prices contributed to political instability in the Middle East, not that political instability in the Middle East contributed to food security issues. But my point here …

FITZSIMMONS: Okay, well thank you for correcting me there, Minister. I appreciate that [laughs].

EMERSON: There might be a little bit of confusion otherwise, that's all. I'm not being pedantic, but I'm just saying that I think governments are aware of what's happened in the Middle East, and one of the impacts of rising food prices or even food shortages obviously is going to be political instability if not handled properly, and we've seen that played out in some countries in the Middle East.

But, fundamentally, this is the issue: there's going to be another two billion human beings on Earth in the next … by the middle of this Century, and food production is not keeping pace with demand. And when you've got demand outstripping supply, prices go up and you have shortages.

And so I think this is really one of the huge challenges of the first half of the 21st Century. One of the key solutions to this – and you'll probably say, 'I thought this was coming' – is open and free trade. Because if you've got open trade, then food production can go into those parts of the world that are best at producing – that is, literally are the most productive at producing food. And that's why I'm so keen to see a successful conclusion of the Doha Round. The Doha Development Round is actually …

FITZSIMMONS: Do you think that is … do you think that's even likely to happen, though? They've been there for … they've been on hold for so long.

EMERSON: Yeah, it's certainly been going for a long time, hasn't it?

FITZSIMMONS: I remember speaking to Simon Crean about this [laughs].

EMERSON: Yeah, you've got a long memory and Simon did an enormous amount of hard work, but didn't bring home the successful conclusion of the round. And I'd have to say that the political will for a successful conclusion of the round could be a lot stronger, if I could put it as mildly as that, could be a lot stronger than it is right at the moment.

And, but what will be absolutely clear is Australia will be standing there shoulder-to-shoulder with any and every country that believes in an open trading system, and the gains from trade and the liberation from poverty of 10s of millions of human beings, we will be there still pushing for a successful conclusion of the Doha Round because it is vital to human progress; it's vital to those 900 million people on Earth who go to bed hungry every night.

FITZSIMMONS: All right. Well Dr Emerson, we wish you luck with that and hope you have more success. We'll have to leave it there for now.

EMERSON: Thanks for having me on the show.

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