Interview with WION World Is One

Compere: Australia has now decided to take the wine dispute with China to the World Trade Organization. It would be filing a formal complaint over China's imposition of those anti-dumping duties on Australian wine exports. Now, this is a dispute that has gone on for months now, what compelled Australia to take this decision now?

Tehan: Well, we tried to resolve this using diplomatic means. We had our officials discuss this issue with Chinese officials, but ultimately we weren't able to resolve it, so we've taken the next step and that's to go to the WTO. As you know, the WTO is there for all members, where there are trade disputes, to be able to use the dispute resolution mechanism to try and resolve disputes. We're currently trying to do it through the WTO when it comes to barley and the imposition of tariffs that were put on barley and other restrictions—and now we're looking to do the same when it comes to wine. And this is a normal process that all countries use to try and resolve disputes, including China itself.

Compere: Attempts to engage in dialogue with Beijing on this matter tell us more about the back channel negotiations, if at all, that have gone on, on this matter.

Tehan:  Well, we had our officials raise this matter with Chinese officials and try and understand why China had put these new duties on. But, ultimately, those discussions weren't able to resolve the issue and that's why we've taken the approach now to go to the World Trade Organisation. I've said all along since becoming Trade Minister that we would take a very principled approach to our trade policy, and where we thought that our industries were being harmed or injured we'd use all available avenues to us to resolve these issues, including the World Trade Organisation. And that's why we've gone to the World Trade Organization with regards to the dispute we had with China over barley, and now the one that we have with wine.

Compere: How soon do we expect that formal complaint to be filed? What would it say and what are your expectations at this point?

Tehan:  Well, it will be filed straight away and our expectations are that we would hope to be able to resolve this dispute before having to go through the full process of the WTO dispute settlement mechanism. That can take anywhere between two and four years, and our hope is that the Chinese Government will be able to sit down with the Australian Government and work through this issue and we can resolve it before then. But, if not, we will continue the full process, because we think that we have a very strong legal case, that the duties that have been put in place — anywhere between 116 to 218 per cent — are causing harm and injury, and are unwarranted.

Compere: Tell us more about the impact of these tariffs [indistinct] China. Also, China ban on Australian coal exports. Give us a broad sense of how damaging these efforts that have been?

Tehan:  Well, when it comes to wine we were sending over $1 billion worth of wine to China and that's now being reduced to just tens of millions of dollars' worth, and, of course, that not only hurts Australian wine growers and wine makers but also Chinese consumers. They don't get access to the best wine in the world and so, obviously, that's a great pity for consumers in China, but also has caused some hurt to Australian wine growers and wine producers. But what we have seen from the Australian wine growers and wine producers, an incredible resilience, and we've seen an uptake in sales to other markets including, for instance, the United Kingdom market. So, we are finding new markets, which is great, but we still would like to be in a position to restore the Chinese market. We've also seen issues around Australian coal which have also impacted our coal exports to China. But, once again, we've been able to find new markets, including India and other markets in Europe and elsewhere, to be able to divert our coal. So, once again, Australia makes high quality products or has high quality resources and it's one of the things that stood us in great stead through these trade disputes with China as we had been able to find alternative markets. And it shows the resilience of our exporters, including when it comes to barley, we've been able to find new markets in India, Europe, and in South America.

Compere: Right. Australia has been walking a tightrope between balancing the security ties with the United States and the trade relationship with China. How concerned are you about this price Australia is paying for being caught between these two countries?

Tehan: Well, we want to have constructive engagement with China and we've said that all along. When I became Trade Minister just before Christmas, at the same time as my counterpart was made Trade Minister, I wrote to my Chinese counterpart saying I'd like to sit down and work through the issues that we're currently facing, we might not agree on everything but we could agree to disagree on certain things, and hopefully resolve some of the other disputes we've had. Now, I haven't had a response to that letter yet and, you know, we then have just decided, well what we need to do is just make sure that we continue to engage right across the globe, make sure that we're diversifying our exports and send a clear message to China that when they're ready, we're happy to sit down and work through these issues and that's what we'll continue to do. We've always made it clear we would never trade away our values, and we wouldn't trade away the very strong partnerships, security partnerships we have, like the relationship, the security relationship, we have with the US and with other allies in the Indo-Pacific.

Compere: Why do you think Beijing is taking such a tough stance when it comes to Australia?

Tehan:  Look, that's a question that you would have to ask the Chinese Government. Our trading relationship, the trading relationship between Australia and China, has been mutually beneficial to both countries. Our exports have helped lift millions of Chinese out of poverty and, likewise, Chinese exports to Australia have helped us maintain our standard of living. So, it's a mutually beneficial, commercial relationship, and one that we think benefits both nations and that's why it would be very good if we could sit down and work through these disputes person to person, and resolve them as best we can. Now, if we can't do that we're prepared to be patient, but our hope is that over time we will be able to.

Compere: The Australian Government has chosen to remain firm about seeking an inquiry into the origin of the COVID-19 pandemic as well, in spite of the economic costs. So will that push continue?

Tehan: Well, we always have thought that it is incredibly important, not only for Australia but for the rest of the world, that we know the origins of the coronavirus and also that we learn from an investigation into the origins, so that we can deal with future outbreaks swiftly and quickly so they don't have the devastating impacts that the coronavirus has had on the global economy and on lives globally. It's had an enormous impact. You look at the impact that it's had on India, you look at the impact that it's had here in Australia. We want to make sure that a pandemic like we've seen over the last 14 to 15 months doesn't occur again or, if it does occur, we've got the ability to be able to put the measures in place to deal with it quickly and swiftly. And the only way you can do that is through a proper and thorough investigation of the outbreak of the coronavirus and understanding how the globe reacted to it and what we need to do differently to prevent such an outbreak in the future.

Compere: How long would it take for the tourism sec -How long could it take for the tourism sector to fully recover from the impact of the pandemic?

Tehan: Well, in Australia we've seen our domestic tourism sector rebound very strongly and very quickly, and its worth over 70 per cent of the value of our tourism market, so that has really helped our tourism economy recover quickly. But when it comes to international tourism it's highly unlikely that we'll be able to welcome international tourists back to Australia in large numbers until the second half of next year, the second half of 2022. So, it has had a significant impact on those parts of our tourism sector that are heavily reliant on international tourism. And it's one of the reasons why we need to know what the cause of the coronavirus was and how we can make sure that we can address it into the future because we've been very fortunate here in Australia. We have been able to limit the impact of the coronavirus. Our economy now is larger and stronger than what it was at the start of the coronavirus. We had unemployment back down at 5.1 per cent, and the forecasts are that it will go to four percent. So, we've been very fortunate here, but we've got to understand that everything that we've done has still had a cost though, in terms of us being in the position that we are. And that's why we want to make sure that we can deal with future pandemics as quickly as we possibly can.

Compere: Let's talk about the Australian Indian Economic Strategy 2035, which talks about deepening trade ties with India. What kind of significance does Canberra attach to the India-Australia trade and investment relationship?

Tehan: Incredibly important. We've always thought that there are huge opportunities to advance the economic relationship between Australia and India. We have a substantial economic relationship, but we could do a lot, lot more. And that's why the strategy is so important, and it's why I think we need to be doing more when it comes to a potential free trade agreement between Australia and India. There's enormous potential. There's the opportunity, I think, for further Australia investment in India, and there's also the potential for Indian investment in Australia and two-way goods exchange could continue to be- to grow and be enhanced. So, I think, it's an uncapped potential that the Australia India economic relationship has. And my discussions with Minister Goyal, I know he sees the mutual benefits that could accrue from us strengthening the relationship and now it's just a matter of us doing the hard work to try and make that a reality.

Compere: Do we expect discussions on the India-Australia Free Trade Agreement to now gather momentum?

Tehan: Look, that would be my hope. I had a very positive discussion with Minister Goyal two months ago about our economic relationship. Obviously, in India the focus, rightly, has been dealing with the coronavirus, but I'm looking forward to having further discussions with Minister Goyal. I said to Minister Goyal that I would send him a proposal as to how we could strengthen the economic relationship and that proposal will be on its way very shortly. And I look forward to discussing it with him further when we get the time in the coming months.

Compere: Right. What kind of support is the Australian side willing to offer for the Indian proposal on the COVID-19 vaccine patent waiver?

Tehan: Look, we've said all along that we're prepared to look at a vaccine waiver, and we've been playing a very constructive role in Geneva at the World Trade Organisation on trying to get a breakthrough when it comes to how we can increase the amount of vaccines that are being manufactured globally. We see this as vitally important. Our Prime Minister warmly welcomed the decision by the US Government to look at a waiver when it comes to the COVID-19 vaccine. So, we want to play a very constructive role in this area because we understand how fundamentally important it is to all countries that we can ramp up the manufacture of COVID-19 vaccines and make sure they're distributed right across the globe because we're not safe until everyone is vaccinated.

Compere: Mr Dan Tehan, appreciate very much your joining us here on WION World Is One. Thanks very much.

Tehan: Been a pleasure. Thank you, Molly.