Fran Kelly: You’re describing this deal as transformational; how will it change the landscape for Australian exporters in this region?
Andrew Robb: In quite a number of ways; it opens up a whole series of emerging countries that are part of this 12 country deal. It will establish a new set of rules for all sorts of every day practical things; electronic payment systems, telecommunication services, paperless customs rules – constant across all 12 countries, so it’s going to dramatically increase efficiency. It’s opportunities in a whole lot of new markets, as well as traditional ones, in services and manufactured goods.
It’s a great deal for our farmers when you put all the opportunities that have been identified together. And then it goes on to other areas to do with environmental standards and protections, stopping illegal fishing and worker protection, so it’s a very wide ranging agreement that will not only have an influence now, but well into the future and right around the rest of the world.
Fran Kelly: In agriculture, the TPP will eliminate about 98 per cent of tariffs on agricultural exports you’ve told us in the past, but you’ve also told us there will be no deal without sugar. What is in this deal for Australian cane growers?
Andrew Robb: What we’ve got is a doubling virtually of access from an average of 107,000 tonnes a year over the last 15 years, to 207,000 tonnes a year in the future. But more importantly, any sugar which is required in excess of quota allocations – which seems to happen on a regular basis – or any new demand in the market place, will lead to us getting a quarter of all of that increase.
At the moment, we’ve been getting eight per cent, so that jumps to 23 per cent, and it does mean that, given the expectations of probably a million extra tonnes of demand in the next two or three years, that that 207,000 tonnes – the doubling – could lead to something over 400,000 tonnes if the forecasts by the USDA are accurate.
Fran Kelly: The Australian sugar industry wanted 700,000 tonnes; you’re still a long way short. Do you think they’re going to be happy with this deal?
Andrew Robb: Well I hope so. It is the first increased access from almost anywhere for 15 years. Of course we wanted to try and get more, but it’s a very difficult market. We’re now, after Mexico – which is part of the North American Free Trade Zone where they all have free trade between Mexico, the US and Canada – equal with Brazil, the second biggest supplier. And with the quality of our sugar, every time there’s a new demand, we’re in very good shape; we’re guaranteed a quarter of it and we could get more.
Fran Kelly: One of the red lines and the last one for you to cross was the biologic medicines. You’ve negotiated a two-track approach to the question of monopoly periods – this is about patents on biologic medicines and when they can switch to generic, so how will this two track approach work?
Andrew Robb: It means that it’s like two roads, two systems leading to the one outcome. What I’ve said all along – particularly to the United States – is that our system is as good as any in the world, and probably better than nearly all in the world for that matter. We have a very robust system; we’ve got five years of data protection. We add to that perhaps the most robust and strongest patent system in the world, and we are providing the right balance between looking after biologics, but also making sure that the pharmaceutical companies don’t get a monopoly and push up prices too much.
So I said we have no need to change; the US have a problem with their system where the patent system is not doing what it does in Australia. They had to change, but I said we don’t need to change. We’re delivering a very satisfactory outcome, one that has community support, we’re not going to change.
Fran Kelly: So just very briefly on that, bottom line is that Australian patients won’t end up paying more for cheaper generic drugs, or won’t be waiting longer for them?
Andrew Robb: No they won’t, not because of this deal, because nothing will change; absolutely nothing in our system will be different once this deal is in place, compared with the period before.
Fran Kelly: On another area of dispute, one of the most contentious aspects of the TPP has been the ISDS, the Investor State Dispute Settlement provisions, which would enable foreign investors to sue the Australian government. We’ve spoken to you about this before, but you mentioned in the past that there were carve outs on this for environmental issues and now there’s apparently a carve out to stop tobacco companies, is that true, taking legal action against governments?
Andrew Robb: We were successful – again for the first time with the United States – in getting into the ISDS, of which there is one in this deal, but there are safeguards against action against public policy on health grounds, but also public policy on environmental grounds. In addition to that, we were successful in leading an initiative to ensure that no tobacco company ever could challenge a government amongst the 12 countries, using the basis of ISDS. So they are excluded from using ISDS in any circumstance.
Fran Kelly: The US president Barack Obama has rolled up his sleeves and personally got involved in this. It’s seen as a legacy achievement for him, that’s what’s at stake for him. But plenty of commentators in America say he’s still got a long road to hoe to get this through Congress. In fact, they say it will face months of debate in Congress and may not get through. Could this deal still sink?
Andrew Robb: Well every one of the 12 countries has to go back and get the support of their parliamentary systems, whatever they might be. I don’t think the United States would have closed this deal if they didn’t think they could sell it in the Congress. I think they feel they have a very good chance of getting it across the line, albeit not without any great majority.
Fran Kelly: This has been signed by 12 Pacific Rim countries, notably not China, and all the way along it’s been regarded as being as much about geo-politics and it is about trade. The TPP in the US is being viewed as a bulwark against China, Obama has made it clear quote: “We can’t let China write the rules of global trade, we should write those rules.” By signing this deal, are we picking sides here?
Andrew Robb: No, because at the same time as negotiating this one – which was far more advanced – there’s the one being negotiated with the west of Asia, which includes China, Japan and India and all of the ASEAN countries; put those two together and we would have the common ambition between ourselves and the United States, of ultimately getting one free trade area for the Asia Pacific.
Australia’s involved in the two big forums which cover the region in its totality for free trade agreements, and it’s our ambition that the TPP and RCEP, which involves China and India, will come together at some stage and create one free trade zone.
This agreement will help that ambition because it will in some ways, instruct the conclusion of the one involving China, and it will drive the way forward, not just in our region, but in other trade deals around the world.
Fran Kelly: Andrew Robb thank you very much for joining us.
Andrew Robb: My pleasure; thanks Fran.
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