Interview on 2GB Drive with Jim Wilson

Jim Wilson: Well, China’s decision – and this is breaking news this afternoon – to increase tariffs on Australian wine is a major blow. Simon Birmingham is the Federal Trade Minister, and he’s just finished a media conference, and I’m pleased to say he joins me on the line this afternoon.

Minister, welcome back to drive.

Simon Birmingham: G’day Jim, thanks for the opportunity.

Jim Wilson: Okay. Just- a telling blow isn’t it – a devastating blow to the wine industry.

Simon Birmingham: Look, it sure is. China is a very high value market for Australian wine. Indeed, that's one of the ironies in this whole thing, that China is claiming that we dump Australian wine on the Chinese market when in reality our wine is one of the highest priced wines in the Chinese market. And the Chinese market is one of the highest value markets in terms of price per litre paid for Australian wine. So, we know that our wine producers, indeed in Australia, produce quality product. They do it on fair market terms. They go out and market hard to the world. And this decision is completely unjustified in terms of whacking them in this way. And by applying tariffs or taxes on Australian wine of potentially in excess of 200 per cent in some cases, it will render that market unviable for many producers.

Jim Wilson: Okay. So, China is the biggest destination for our wine exports. Duties, as you mentioned, will range from 107.1 per cent to 212.1 per cent, effectively doubling the cost of our beautiful wine. What- I mean, what's your message to Beijing and how can you help out our wine industry?

Simon Birmingham: Sure. So, China is by value our largest market. We ship a lot of volume into Europe and elsewhere as well, but this a big hit in terms of the bottom-line dollar impact to the Australian wine industry. We're really concerned that this is now a pattern and accumulation of impacts by China in relation to trade sanctions against Australia. This is not just a one off. If we look at the pattern for this year, we’ve of course seen a hit to our barley industry similarly facing duties and tariffs, regulatory decisions impacting red meat, impacting lobsters, impacting timber. There is a clear pattern here. It's a deep, deep concern, and it certainly is creating the perception that these actions are being driven by matters outside of what should ordinarily be trade decisions. And we are certainly using all levers possible to call on Beijing to persist and to honour the commitments that it's actually made not only to Australia, but to other nations through the World Trade Organization and other platforms.

Jim Wilson: Well, with all these tariffs, you’ve mentioned coal, sugar, barley, lobsters, wine, copper, timber. I mean, are we getting to the stage where we say, right, well, we're going to play- have a hard line stance with iron ore, for example, who they rely heavily on us for that.

Simon Birmingham: Look, Australia's approach, and we do it consistently right around the world, is of course- is to create opportunities for our businesses to sell into other markets. I don’t determine what Australian business chooses to sell to which market as Trade Minister. I just try to create the opportunities for them to do so. So no, it wouldn't exactly be fair on Australia's private businesses, our mining companies, the jobs that depend on them for government to somehow try to come in over the top and say: we're not going to let you sell to a market any more. But for all businesses, frankly, the risk of trade with China has heightened markedly. That's why I urge businesses to look at the different opportunities that our free trade agreements with Japan, Korea, with Canada, Mexico, Vietnam, Indonesia, the long-standing agreement with the United States. What opportunities do all of these provide for you to spread your risk and diversify, given the extent to which China has heightened the risk, not only, frankly, for Australian businesses working there, but the problem for China is they've heightened that risk for everybody who will be looking at what is happening in this regard, and see that there appears to be a potential lack of respect for the commitments that have been made.

Jim Wilson: Essentially, it amounts to bullying tactics by Beijing, doesn't it?

Simon Birmingham: Look, this is the perception that, of course, takes hold as a result of these types of actions. Now, Australia is not about to change our foreign investment laws or our support and protection of our critical infrastructure in response to tactics by any other nation. That's not the way we go about things. We act purely in our national interest in terms of those protections. But we do value what has been a successful partnership with Beijing and with China. And what we would like most of all in this dispute is, of course, for dialogue to happen, for us to work through these issues, and for us to back the fact that there are legitimate Australian businesses and legitimate Chinese customers at the other end who are all suffering as a result of these sorts of decisions. And that governments ought to step aside and allow the people to people, the business to business contacts to occur as they should without this sort of interference.

Jim Wilson: Any updates on these 80 ships carrying our coal worth $1.1 billion? Sitting off the coast of China, they’ve been- is there any developments there? 1500 seafarers are stranded on those vessels, and I believe that our coal exports to China have fallen 96 six per cent in the first three weeks of November.

Simon Birmingham: So, the coal market has huge fluctuations to it. We saw a significant growth in our coal exports only earlier this year. So, it's not unusual - and it's a pattern that has been in place for a number of years, so we shouldn't read too much into just a few weeks’ worth of data there, given the fact that our coal exports have been very up and down. And that's a result of the number of domestic factors in the way China manages when it brings coal in and when it doesn’t. But the fate of these ships and the crews on them is very distressing and concerning. The Australian companies generally get paid when the coal leaves Australia, so in that sense, we have in some ways sold our coal, and these vessels, which are by and large - or all, I think - foreign flagged vessels with foreign crews. These are issues where Australia, together with the other countries whose vessels they are and whose crews they are, are making representations to try to find a way to enable those ships to move on and those crews to move on from the circumstances they're in. But it's an issue, obviously, of concern to the Australian industry too. But it is a peculiar one in the sense that the product has, generally speaking, already been paid for.

Jim Wilson: Minister, I know it’s been a very busy Friday afternoon for you, we do appreciate your time.

Simon Birmingham: Thanks Jim, my pleasure.

Jim Wilson: Good on you. That's Trade Minister Simon Birmingham.