Interview with CNBC with Will Koulouris

Will Koulouris: Minister, thank you so much for joining us today. I understand that you're in quarantine following on a pretty successful trip overseas. But firstly, I wanted to touch on some of the reports coming out today when it comes to the WTO action that Australia is raising against China over the barley issue. And we've actually heard that there is now probably going to have to be that dispute mechanism entering into effect on 28 May because China shut down the discussions when it came to having that three person panel this time around. Do you think, though, that with all of these issues, it's just a matter of, perhaps they could be solved rather quickly if the Chinese side was just willing to get on the phone, get on Zoom and just have a frank discussion?

Dan Tehan: Well, the best way that the countries can operate is by dialogue, and I wrote to my Chinese counterpart in January—we were appointed roughly at the same time, with about 24- within about 24 hours of each other—asking whether we could have a very constructive dialogue to work through these current disputes, and my hope is that over time, that's what we'll be able to do. In the meantime, it's incredibly important that we can use the World Trade Organization dispute mechanism to be able to address issues like this, and that's what Australia is seeking to do with the barley dispute. And we're also considering whether this is an option for other disputes, including the action that's been taken against our wine industry.

Koulouris: Yeah. And I was going to mention the wine industry as well, because we had that win when it came to Canada and the wine issues that were prevalent there. But even when you were discussing with the WTO Director-General a little bit earlier this year when it came to perhaps the need for reform of the WTO, do you think that even today's, or today's reports of those events, when it did come to the rejection of the dispute panel body in that first instance, do you think that this just highlights the need for further and more comprehensive reform of the WTO?

Tehan: Well, I think all countries have come to the realisation that we do need reform of the World Trade Organization. We want to make sure that it has a pre-eminent place when it comes to resolving disputes and setting global trade rules—and I don't think there's ever been a more important time for us to have a properly functioning World Trade Organization than the current time. So we'll continue to work through with other countries how we go about progressing that reform, and it was one of the key topics of conversation when I met with the new Director-General of the World Trade Organization in Geneva last week. We had some very, very fruitful discussions and I know that she's keen to see a very proactive World Trade Organization up running and operating how it should in the future. And the work we do between now and MC12 at the end of this year, the ministerial meeting at the end of this year, is going to be incredibly important in that regard.

Koulouris: In terms of discussions as well, you had discussions with your Japanese and Indian counterparts this week when it comes to supply chain resilience and really trying to set up a separate kind of mechanism in terms of global trade. Now, we actually had some commentary coming from the Chinese foreign ministry spokesperson just this morning, basically saying that an artificial industrial transfer is an unrealistic approach that goes against the economic laws and can't solve domestic problems. Do you agree with that kind of sensibility or is it just a matter of perhaps just stoking tensions even further?

Tehan: Look, what we're trying to do is to make sure that there is that supply chain resilience that we know that all countries can count on when it comes to dealing with pandemics. For instance, one of the things that the pandemic has shown is that all countries need secure supply chains, so they can get access to important materials or ingredients when it comes to manufacturing, when it comes to processing. I mean, one of the things that's been highlighted recently is around vaccines. Vaccines often require materials, and really a milkshake of sometimes up to 120, 200 different sources of materials to make a vaccine and we've got to make sure that we've got those secure supply chains in place. And I had a, very fruitful discussions with my Japanese and Indian counterparts about this, and we're going away to do, officials are doing more work on what we can do to provide certainty for, especially our manufacturing bases, to ensure that they can get access to those secure supply chains.

Koulouris: I wanted to touch on the matter of vaccines as well. In terms of your discussions with the EU Commissioner and securing perhaps those doses for Papua New Guinea, because it's such a devastating situation that we are seeing play out there. So how important is it going to be to be able to secure these doses and ensure that they aren't caught up in those export controls that are in the EU?

Tehan: Oh, look, it's critically important. The situation in Papua New Guinea is fraught at the moment and we want to make sure that we can get those one million doses of the AstraZeneca vaccine to PNG. And I had very good discussions with EU Trade Commissioner Dombrovskis. He's given a guarantee that there is no need for AstraZeneca to go to the EU and seek a permit to be able to export those vaccines. So now we know, as long as we can get those vaccines delivered from AstraZeneca to PNG and they go directly, there is- the EU will not stand in the way of that vaccine delivery. So we're now working, our Foreign Minister and Health Minister are working with AstraZeneca to get those one million doses delivered to PNG as soon as we possibly can.

Koulouris: Now, it was a fruitful trip as well in terms of your European excursion, because you also managed to speak to both your EU counterparts, and importantly, in the UK as well, in trying to really knuckle down on getting those FTAs signed. In terms of having that in principle deal by June, how important is that going to be, not just for the fact that it could be one of the first post-Brexit deals for the UK, but also for the Australian economy when it does come to having even broader trade markets?

Tehan: Look, these are really important for a couple of reasons. The first is, it sends a really positive message to the world as we come out of this pandemic that continuing on with our trade liberalisation agenda, freeing up markets, making sure the countries can export with each other, is going to be critically important to ensuring jobs and growth as we come out of the pandemic. There's been a lot of protectionists pressures come on countries and, I think, it's critically important that the UK, the EU and Australia lead in demonstrating that the best way that we can go is by further liberalising our markets, opening them up. Because that's the way you produce jobs and economic growth in countries. And it was terrific to be able to sit down in the EU with my counterpart, Commissioner Dombrovskis, we had very fruitful discussions, two meetings and we were able to progress our discussions on the EU-Australia free trade agreement. And then, in the UK, my counterpart Liz Truss, I had two days of meetings with her and we made significant progress on our discussions, and we're now having to sprint to have in principle agreement on that free trade agreement by early June. And I've got thank Liz for the cooperative way she sat down with me and worked with to nut out the difficult issues, and to make sure that we're on track to finalising that agreement. And it will be one of the quickest FTAs that's been negotiated for quite some time if we can nail it in June—and I'm confident that we can. And once again, it sends a powerful message in the United Kingdom, because it will be the first substantial agreement they've negotiated since Brexit, and really shows they're on track for their global Britain mission. And for Australia, it once again helps us diversify our markets. And it's never been more important time in Australia for us to make sure that we're diversifying our markets to as many places, as many regions, as many countries as we possibly can. And I'm looking forward to having further discussions with Liz tomorrow. We've agreed to meet every Friday between now and early June to make sure that we can nail this in principle agreement.

Koulouris: Now, you do wear a few hats. I wanted to talk about the tourism situation here in Australia, and firstly in terms of the travel bubble with New Zealand. Is it the kind of mentality within the Government that this can serve, I suppose, a pilot programme for other green lanes that could be developed perhaps in the next few months with places that have demonstrated that they have had the COVID-19 outbreak under control to some extent, like the likes of Singapore, South Korea?

Tehan: Look, it's welcome news. The Australia-New Zealand bubble and our tourism industry, and the tourism industry in New Zealand, have widely welcomed it as well. And, I must say, you always hold your breath a little bit when open up these types of bubbles when you're operating in a pandemic but so far, so good. And that's great news for our tourism sector. And the idea is, over time, based on that medical- expert medical health advice, that we would open up further and look at potentially other countries to be able to do that—and we're continuing to monitor that, to have discussions. Singapore is obviously the logical next step, and we're very keen to see how we can progress that over time. But at the moment, we're definitely watching very closely the bubble with New Zealand. I must say, at the moment, we're very happy with how it's working out. And we are starting to see very good tourism flows as a result of it. Uptake was a little slow to start with, and I can understand that there was probably some uncertainty. People weren't quite sure whether borders might be closed if there was one or two outbreaks, et cetera. But what we've been able to see, so far, is that we've been able to keep it open, and so I think there's more and more confidence coming into bookings. So if we can continue down that path, then I see no reason, as countries deal with the pandemic, why we can't expand future bubbles and, as you mentioned, Singapore is the likely next target for us. And we'll continue those discussions with the Singaporean Government.

Koulouris: Just finally Minister, I appreciate that you're no longer the Education Minister, but it sort of relates to tourism in some respect. How far away do you think we are from perhaps international students returning? Because they do create so much for the economy, particularly when it comes to travelling around. So, is there a kind of timeframe that we could potentially see them returning here?

Tehan: Oh, look, they're still very relevant to my portfolio in terms of services, exports, the international student market is very important to Australia. And something I'm keenly following and still having discussions with my counterpart Alan Tudge, the Education Minister, the new Education Minister. And we want to be in a position to be able to welcome international students back to Australia as soon as we possibly can. And I say to all those international students out there who might be watching, make sure that you continue your studies with Australia online, with Australian Universities Online, and we want to welcome you back as soon as we possibly can. So, at the moment, we're working through with states and governments how that might take place. Obviously, we've got to take the expert medical advice as well into consideration and we'll continue to work through that. But one of the things that I've been very, very happy about is that our online enrolments continue to hold up very, very well. Which is- gives us great reassurance that there's still that strong demand there from international students to come to Australia and study. And that's welcome.

Koulouris: Minister Tehan, thank you so much for your time, I really do appreciate it. Thank you for joining us today.

Tehan: Been a pleasure. Thanks.