Interview on RN Breakfast with Fran Kelly

Fran Kelly: Global business and political elites have gathered at the World Economic Forum in Davos again and Australia is there driving talks to establish a new set of global digital trade rules. The rules would cover how companies do business online around the world, focusing particularly on the transfer of data, where it's stored and how it's stored. A report released in Davos this week has found the ability to move data across borders underpins new business models and has boosted global GDP by 10% over the last decade. The talks in Davos are part of a week-long tour of Britain, Europe, and the US for our Trade Minister Simon Birmingham who joins us now from Davos. Simon Birmingham welcome back to Breakfast.

Simon Birmingham: Hello Fran good to be with you.

Fran Kelly: Minister you are championing new digital rules for the WTO around how companies around the world do business online. What needs to change? What's the problem?

Simon Birmingham: Australia together with Singapore and Japan have been leading an initiative that I trust tomorrow morning in Switzerland time will see a good number of nations, hopefully around 70, sign on to agree to negotiate new e-commerce/digital trade rules for the WTO. Now of course so many of your listeners would have over the Christmas period logged on online, purchased presents, gifts or otherwise, using digital trade and what we are really trying to do here is make sure that WTO rules, which were negotiated a long time ago, are fit for the future. And what it will enable us to do is several things: firstly, to protect consumers, to ensure common standards around privacy and how it is people can have confidence when they are trading online. Secondly, to make sure that we have streamlined invoicing, streamlined payment systems, common standards that can give business, especially small- and medium-sized businesses, confidence to actually engage in digital trade. But then also, thirdly to make sure there aren't new barriers to effective global trade erected by countries putting in place unreasonable impositions in terms of how it is that data is transferred and stored.

Fran Kelly: And is that happening? What does that mean? Can you tell us what that means? How is data storage being used as a barrier at the moment or acting as a barrier?

Simon Birmingham: We are seeing that in some places around the world, countries are putting in place new laws that prevent the effective transfer of data, a mandate that certain data storage has to happen within their country borders. There are a couple of threats to that. One is that, of course, there is a hacking, or security breach of that data there is no backup if it has to be stored within a single country. Secondly, the challenge that exists there is also really fraud identification. The more different points there are for payment systems or the like to have data stored around the world in different countries, in isolated categories, then the harder it is to identify where fraud is occurring, where somebody's credit card might be being used in multiple locations at the same time. Those are some of the practical issues we want to make sure aren't put in place as trade barriers that just make it more expensive to do business.

Fran Kelly: China is one of the countries two years ago who put in place rules around mandating that data be stored within its borders. China is yet to join the talks, as I understand, your e-commerce talks. The US and others insist that any WTO e-commerce deal targets what they perceive as unfair trade practices from China around particularly the notion of theft of intellectual property. What exactly is China being accused of here?

Simon Birmingham: We are hoping and expect that China will be present tomorrow morning. They've been participating informally in some of the discussions today. I hope that they will agree to participate in these negotiations for new WTO rules. It's important that China as a major economy is there at the table engaging constructively. It's also important that China lives up to commitments that have been made previously. Just late last year at the China International Import Expo President Xi made commitments in terms of making sure there is further protection for intellectual property in China and I publicly welcomed those. We do look to see firm progress on those in the future.

Fran Kelly: WTO rule changes we know can take years even decades. A report this week found e-commerce has increased global GDP by 10%. One analyst described data as the oil of 21st century. How would Australia benefit from the rule changes you are talking about?

Simon Birmingham: Australia is very much a trading nation already. The fact is that if I talk about China as an example, when I was there at that import expo late last year, what was evident is how many more Chinese consumers, using ordering and payment platforms like Alibaba, ordering their goods and services direct from Australia. Entities like Australia Post are doing a fabulous job in getting more small and medium enterprises connected into those digital trade platforms, which makes it easier whether it's heath or wellbeing products, high-quality food or other goods that you're able to actually connect them into markets swiftly. And we want to make sure that all of those types of businesses, innovative businesses, often businesses that start at home as SMEs sector, are able to benefit from these growing trade opportunities. As a nation we have really turned things around over recent years. We are now more routinely recording trade surpluses where we export more than we import, and we want to make sure that we keep that trend going.

Fran Kelly: Our guest is Trade Minister Simon Birmingham, he is at the World Economic Forum in Davos. Sensitivities around China are acute at the moment. Not just because of laws like this one, the WTO e-commerce rules. Not just because of the trade war between China and the US. An Australian citizen Yang Hengjun is under what's called residential surveillance or home detention in Beijing. Is he caught up in China's fury at the arrests in Canada of a senior Huawei executive?

Simon Birmingham: Well I know that Foreign Minister Payne addressed a number of questions on this issue yesterday. As Marise identified quite rightly, Australia has been notified, is seeking to ensure proper consular access in this case and of course will provide all of the usual consular assistance to this citizen as you would expect.

Fran Kelly: Is Australia though paying the price for showing supporting for our five eyes ally, Canada in this case? And could your move for these new data laws under the WTO exacerbate those kinds of tensions? Make China, as we say, other countries are pressing Australia to make sure China is caught up in these rules. Is that going to exacerbate China's fury?

Simon Birmingham: Well Fran as I said before, China has been participating informally in relation to discussions around e-commerce digital trade rules and we expect that at the event tomorrow morning that China's WTO Ambassador will be present and will be engaged and we hope that they will continue to be engaged in that regard. We do want to make sure that China and as many nations as possible are active participants in these discussions and of course we will continue to make sure that when it comes to the setting of effective global rules [indistinct] wherever it occurs that we will be engaging as many nations as we can.

Fran Kelly: Minister, as our Trade Minister, does the arrest of a citizen, an Australian citizen like Yang Hengjun, does that affect our trading relationship with China? I mean, are we seeing crackdowns under Xi Jinping. Are we seeing economic and strategic interests colliding more, does that make it more difficult for us to work with our largest trading partner?

Simon Birmingham: We have to be able to as a nation pursue all aspects of relations and of course deal with difficulties from time to time in a mature and professional way. And Australians can and should have confidence that as a government we can pursue successfully a trading agenda in terms of setting new global trading rules as well as backing what's in Australia's interests while also standing up for the interests of Australian citizens and providing them with the representation and consular support that anybody would expect.

Fran Kelly: Well should Australians, particularly Australian businessmen and women, at this time have confidence they can go into China to do business? Is it safe for them to travel into China, given the arrest of Yang Hengjun?

Simon Birmingham: Well as the Foreign Minister said yesterday, we monitor, we update travel advisories all the time in relation to every nation, and my understanding is that the Foreign Minister indicated the last update for China was October last year.

Fran Kelly: Yes, but have you, I mean in October last year Yang Hengjun was not arrested and not detained. Has that change anything? As Australia's Trade Minister, you must be dealing with Australian business men and women all the time who are going in and out of China. What's your advice to them? Are they seeking advice from you?

Simon Birmingham: We maintain a constant watch on our travel advisory for every single nation and my advice to any Australian wherever they are travelling in the world is to look at the latest travel advisories that the Department of Foreign Affairs and Trade issue regardless of which country it is they're going to.

Fran Kelly: Have you sought any assurances on that front from your Chinese trade counterpart?

Simon Birmingham: We of course have had engagement. The Minister for Defence, Christopher Pyne, is in China at present, or was in Beijing yesterday at least, and of course had meetings there. We have had the consular discussions in relation to the case at hand and will continue all of those direct discussions with China as you could expect.

Fran Kelly: We haven't heard yet this morning, I wonder if you can shed any light on it, whether Australia has had consular access to Yang Hengjun yet, whether he's had any consular assistance?

Simon Birmingham: I haven't had an update, what is this evening Davos time, in terms of whether there's been progress from what the Foreign Minister provided publicly yesterday.

Fran Kelly: Simon Birmingham, thank you very much for joining us.

Simon Birmingham: Thank you Fran, my pleasure.