Interview on Radio National, AM with Sabra Lane

Sabra Lane: Australia signed up to a new trade deal yesterday, and it's a mouthful: The Regional Comprehensive Economic Partnership. It'll mean greater access to 14 nations in the Indo-Pacific with uniform trade rules. Australia already has bilateral agreements with all partners, so it won't lead to a dropping of tariffs. The biggest benefit might be enabling the chance for Australia to sit down with China face-to-face to sort out their differences after Beijing recently imposed a range of restrictions on Australian exports of barley, wheat, timber, coal and lobster. Australia's Trade and Finance Minister is Simon Birmingham.

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Minister, welcome back to AM. Australia is holding out hope that this deal might be the circuit breaker that helps bring about an opportunity for trade ministers from China and Australia to meet face-to-face and smoke the peace pipe. How realistic is that?

Simon Birmingham: Sabra, this deal has been very important through the negotiating phase, is an opportunity for all 15, indeed, 16 nations when India was still at the table, to be able to discuss and engage, not just on the negotiations, but on other aspects of regional trade. And so it will provide an opportunity in the future. I don't want to overstate that. What's really important about this deal is that it has been led by the 10 South East Asian nations, the ASEAN nations, who really are the tiger economies of our region in large part. And they have driven an agreement that will provide for regional cooperation, integration and really give a strong boost to the way in which trade occurs across our region at a most crucial time of economic recovery.

Sabra Lane: Sure. But on to the point about Beijing. You said you don't want to overstate that. The ABC's been hearing from Australian exporters caught up in unexpected disruptions to their business with China recently. Barley growers are feeling the pain of tariffs that were imposed after their crops were planted, a Queensland wine maker has told us the Government needs to find alternative markets and a rock lobster fishery in South Australia have told us they’ve had to dramatically cut their catch in response. Let's have a listen.

Exporter 1: I think the Government would be much better spent looking at alternative markets for a range of commodities and investing in that as quickly as possible. Look, I think everybody in Australia can see what's going on. I don't think we can hide from the fact that essentially China is upset with Australia over a range of different things.

Exporter 2: It's the Australian Government's fault. Look, if you don't want us to export to China, fine. I've got no problems with that. You find other markets for us to send our wine to because we need it. And if we don't have the export markets, you are going to see massive amount of wineries go out of business in Australia.

Exporter 3: As a whole, the fishing is probably about 10 per cent of its capacity and it's all to supply the local market and some smaller international markets.

Sabra Lane: Minister, what hope are you able to offer those producers of new markets?

Simon Birmingham: Well, what we've pursued is absolutely an opportunity across a range of new markets over a long period of time. The trade deals we've done as a government, haven’t just been with China, they've been with Japan, Korea, with Canada, Mexico and with Vietnam and Indonesia, we are pursuing new agreements with the EU and the UK. So we're very serious about new markets. Now, a government essentially opens the door to trade to happen. It’s then a business and a commercial decision about where people choose to trade and who they sell to. But we are working hard to make those new market opportunities and our trade representatives in Austrade offices right around the world are working hard with businesses like the barley sector to try to secure new contracts. So we are deeply concerned by some of the regulatory actions and decisions China has made this year. We've made no secret of our concern and our displeasure in that regard. And I don't on that understate the impact of that on Australian businesses at all. But of course, nor are we as a government going to compromise on Australia's values, security or sovereignty in any way. What we have made clear, including in the signing of this new regional agreement with those 10 ASEAN nations at its core, is that we continue to be open to dialogue with China at any time, our door is open and the ball is very much in their court.

Sabra Lane: Sure, those producers, though, have lost businesses in the blink of an eye. You can't hope to replace those markets, you know, by snapping your fingers and conjuring them up in a matter of weeks.

Simon Birmingham: No, these aren't always easy things. Different sectors will be affected in different ways. Some that are more commodity driven possibly have an easier opportunity in terms of opening up new markets, whereas others that rely on high value, higher brand products and relationships, indeed, face a more challenging time if some of the worst predictions are to be realised. Now, we hope those worst predictions aren't realised, and we urge China, who is also a party to this new regional trade deal, to act consistent not just with the letter of such agreements, but also with the spirit intent of them.

Sabra Lane: Many would wonder, we already have a free trade agreement with China, they would wonder, what’s the benefits of having that if China is able to impose restrictions like this without any penalty?

I can understand that cynicism, that’s why I make the urging that I just did. The trade agreements we have delivered have secured an environment which Australian exporters have generated a trade surplus for this country for 33 consecutive months, exporting more than we import as a nation. It’s not just been growth in the China market, we’ve seen strong growth in countries like Japan, Korea and Vietnam as a result of our trade agreements as well. So we have created this opportunity across a range of different markets. The China situation is troubling, no doubt about that but what we have sought to do is give the maximum number of choices to Australian farmers and businesses as they type of markets they operate in. And of course in having these types of agreements in place, although enforcement can take time, we are reserving all our rights to pursue China through the World Trade Organisation where we believe they have breached the types of agreements or undertakings they’ve made.

Sabra Lane: On this new regional pact, when will Australia notice a discernible benefit from this agreement? And will it create new jobs? Can you guarantee that?

Simon Birmingham: So it has to come into force first and so that will take a period of time for Australia and other countries to go through the legal processes. We’ll put this treaty through the Parliament, subject to the scrutiny of the Joint Standing Committee on Treaties, so that it is transparently scrutinised and assessed. So it will take, as I say, a period of time, and it may even be a year or two before it comes into force. But in the practical benefit to our goods exporters and that they get a more common seamless set of rules across a range of exporting markets. So markets like the Philippines or Singapore or Japan or Korea, rather than accessing different trade agreements to get different tariff rates into those markets, they'll be able to use the same type of process across the board. Common practices around intellectual property, around rules of origin; provide services exports a real increase in market access there that will make it easier for healthcare services, aged care services, engineering or architectural services, financial or education services, to operate in many of the markets across the region, particularly in the South East Asian nations that have such strong growth possibilities for those businesses.

Sabra Lane: Senator Birmingham, thanks for your time.

Simon Birmingham: Thank you, Sabra. My pleasure.

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