Doorstop Interview, Beijing

Subject: Australia-China FTA negotiations.

Transcript, E&OE, proof only

21 November 2013

ANDREW ROBB: Thanks for coming along. Could I just start with a little bit of context, which I did share with Minister Gao in our discussions today.

It is about 40 years since the first major iron ore shipment arrived – Rio Tinto, in the early '70s, about '73, it was Hammersley Iron at the time – and at that stage there was very little commercial involvement between our two countries, and very little diplomatic relationship, very little cultural relationship.

And you jump forward now 40 years – which is not a long time – but in 40 years, China is now our biggest trading partner, and it's our partner with the biggest growth in investment. For our part, Australia is the seventh biggest trading partner with China – despite our relative smaller size, we're their seventh biggest trading partner.

We've got 122,000 Chinese students currently being educated in Australia, over 700,000 tourists from China visiting Australia last year, and a very strong cultural connection – now, no matter where you go around the major cities in China, you are seeing Indigenous art, you see reports of visiting orchestras and all the rest.

It is a very deep and broad relationship now, and my sense is that, together with the outcome of the Third Plenum – which I think is a very courageous document – and it is going to very materially lead to further opening of the Chinese economy, you put that together with the Free Trade Agreement that we are discussing, and were discussing today, to me, it does provide the framework to take our relationship to another level over the next 40 years. So it is quite a significant point in the history of our relationship, I think, and it does provide us with this wonderful opportunity.

So today – having met with Minister Gao a few weeks ago, just after we had taken government – since then I've been given a mandate by our Cabinet, after many hours of constructive discussion. It was one of the first issues considered by the Abbott Government, and I have been able to present today the results of that.

We did jointly present, and in some considerable detail, the offerings and the requests that we've both got. It's against the background of eight years of negotiations – a lot of technical work has been done, but the negotiations had now reached a point…well, they'd stalled, but they'd stalled at the point where the very difficult issues are there on the table.

And having studied all of that and discussed it with my colleagues in Cabinet, we feel we've got a way through. And we both agreed, Minister Gao and myself, at the end of our discussions, that what we had on the table, certainly in our combined view, provided the foundations for concluding a Free Trade Agreement in the not-too-distant future.

I'm open to questions.

JOURNALIST: What are some of the specifics that you talked about in terms of moving this forward?

ANDREW ROBB: Again, as on other occasions, with negotiations, it's not helpful to have the negotiations in front of the TV cameras. But it is well understood that the Chinese Government is keen for continuing and strong investment in Australia, and to make sure that that's properly facilitated.

For our part, of course, it is access to the goods market in China. It is already very strong – but again, there are significant and very useful opportunities to open up the market for goods, particularly agriculture.

But again, we jointly discussed the mutual benefit from services. Again, the Third Plenum discussed – significantly – the benefit that China will get in developing services and providing access to other countries in all sorts of areas – anything to do with health, things to do with education, childcare, construction, financial services – all of these areas are properly recognised in the Third Plenum.

The Third Plenum documents talk about not discriminating between local companies and foreign companies. Now all of these things can be given effect quickly and constructively within the context of a bilateral Free Trade Agreement.

JOURNALIST: Do you get the sense that the Chinese have given some ground, or are more willing to negotiate around services? Do you think their position has changed somewhat on that?

ANDREW ROBB: Well, I keep going back to what I can see within the Third Plenum document – and there's still a lot of detail to be presented – but again, today, Minister Gao did confirm that there is a keenness, and an understanding, that for China again to move to the next level in terms of its economic development, that services are fundamental.

We've all been hearing for 2, 3, 4 years the intent of the government here to move the economy from one that's reliant heavily on exports to one that's reliant more so on consumer activity and demand, consumer demand. Now to get to that consumer demand – that's why they've got a target of an increase of 4 per cent in services in the next five years, which, when you break that down into actual numbers, it's unbelievable.

It's very difficult, but like most things, they've got a determination and a capacity to really, I think, get close to those targets, and services is at the heart of moving the economy into a more consumer-based economy.

JOURNALIST: But Australia's sort of had to shift its focus a little bit in the talks, and give some ground in some areas, maybe pull back – do you get the sense that the Chinese have equally had a tinkering or change of their position in light of what you've seen out of the Third Plenum?

ANDREW ROBB: Without a doubt. And it's not because of pressure from Australia. It's because of the internal work and thought that has been given within China itself, within the leadership, and they've still got to put all of this into effect.

But I do think that the Third Plenum has surprised – very pleasantly surprised – so many China-watchers around the world, and people who are influenced by their relationship with China. There was hope, but now I think in many ways, what I read through the outcome of the Third Plenum, it certainly exceeds the expectation of so many people around the world, and it does, I think, convey the very clear authority President Xi has got in China, and the strength of the leadership team.

As I say, they are very courageous steps that they've put out there. Any change causes winners and losers, so there's a lot of resistance, and I just think that the things they have proposed are in the long-term interest of the Chinese people.

China, you must recall, has in the last 15 or so years been responsible, the Chinese Government, for seeing a quarter of a billion of its people move out poverty. Now this is something that has never been achieved in the history of the world, and probably won't be ever again. But there is this capacity that they've demonstrated, and I do think the Free Trade Agreement, because our economies are so complementary, there's so much we can offer.

Eighty per cent of our GDP is now services, and while the goods, the resources, will continue – and very importantly, the agricultural product, it is the century of water and food security, very important we get an enhanced relationship in agriculture. But also the services component, I think will be a huge growth area for Australia in China, and will very much complement the needs that they've got to, if you like, "train the trainers".

JOURNALIST: Minister, what's the prospect of carve-outs being offered in this deal. Was that discussed today?

ANDREW ROBB: I don't think there's ever been an agreement where there are not concessions made on particular sensitivities, or the staggering of the, or the wind-back or the phasing-out of certain tariffs. So in the end, this will be no different.

We didn't discuss that today, to be honest. In some areas, they've already been identified, but in the big areas, I think you'll see progress across all the major areas, good progress.

JOURNALIST: Australia's former Ambassador, Geoff Raby, believes Australia's chances of concluding the FTA within a 12-month timeframe have been affected by the blanket ban on Huawei, and also by the Prime Minister declaring that Japan is Australia's best friend. So how would respond to that?

ANDREW ROBB: I just don't accept it. I mean I've just had two hours of negotiations, and Huawei was not raised in the context of the Free Trade Agreement.

JOURNALIST: Was it raised?

ANDREW ROBB: In general discussion afterwards, it was raised, along with a number of other topics.

And I must say that the nature of the discussions I had with Minister Gao both in Bali and here – very frank, very professional, he'd certainly done his work, I hope they felt I'd done my work. We made a lot of progress, and you can tell that in terms of objectives, we're both on the same page. We've both got our own countries' interests to look to, but we are both on the same page, and we both feel that it is good for China and good for Australia.

JOURNALIST: So Minister Gao raised Huawei, what were his concerns?

ANDREW ROBB: Well, he just put to me the position of the Chinese Government, which is public. And I listened.

JOURNALIST: What about Japan, did he mention why you favour Japan over us?


JOURNALIST: Last time you were up here, there was a sense that the ban on Huawei might be lifted, what's happened there?

ANDREW ROBB: As has been articulated by the Prime Minister, the ban was in place on the advice of national security agencies, and that advice hasn't changed.

JOURNALIST: Do you still expect to reach the trade deal within 12 months?

ANDREW ROBB: That's the objective. We did agree that what we both finished up with on the table today provided the foundation to rapid conclusion. We didn't set a timetable on it today, but we've got officials meeting again now, actually, as I talk, and we're looking for the first opportunity to get together again at a Ministerial level.

JOURNALIST: Minister, was there any mention of Australia's current spying scandal with Indonesia at all?


JOURNALIST: What about the Beijing Embassy being used as part of US spy …?


JOURNALIST: Did you discuss the GrainCorp deal?


JOURNALIST: Is there a sense that the Chinese are still absolutely determined to have the threshold around investment at the same level as the Americans have?

ANDREW ROBB: Their position has been that all along, I understand.

JOURNALIST: Is there a sense that maybe they're willing to give some more ground on that area?

ANDREW ROBB: Well, I don't want to get into the details of the negotiations.

JOURNALIST: But obviously it's a key sticking point…

ANDREW ROBB: No, well, it's a key point, but let's see where we finish up.

JOURNALIST: What about the Australian Government – where do they feel on this issue?

ANDREW ROBB: I think from both sides of politics, we're very happy to see Chinese investment. Since the First Fleet arrived, we've required, we've needed foreign investment, and there's a very significant investment of Chinese capital in the last 13 years at least, into the resources sector, and the encouraging thing is that that investment is starting to broaden.

It's an interesting point, because I've heard that unfortunately, the Shadow Minister for Tourism in Australia, Anthony Albanese, has been making some fairly vacuous claims about the new Australian Government not being in a position to assist the tourism sector, because we put tourism into trade.

Well, I tell you, as Trade and Investment Minister – the last government didn't have an Investment Minister – I must have had in excess now, in the eight weeks, I think I've had 10 roundtables in different countries around the world, including five roundtables in China in the last eight weeks, of some of the most significant investors in Australia.

And there hasn't been one of those roundtables where I have not discussed, for a considerable period of time of the roundtable, the opportunity for significant high-grade investment in tourism infrastructure.

Now there wouldn't have been a junior minister in the previous government that would have got one of those opportunities, much less 10 in the first eight weeks of the government.

I've have a lot of experience in tourism, I am the Tourism Minister as well as trade and investment, and I've been on the job eight weeks after getting this opportunity, this privilege, of this portfolio.

So we are looking in a very integrated way. We did set five major areas of strength that we would be looking to promote in trade and investment – resources and energy, food and agriculture, tourism and hospitality, education, and health and medical research. And a subsidiary, funds management.

They are things that we as a country are as good at as anybody, and better than most.

The tourism part of that equation, I have been very seriously and very comprehensively encouraging new business because already, even out of China, you can see the demographic is changing – it's changing from group tours to couples and individuals, looking for high-value experiences.

So we need that infrastructure, and it needs the clout of a Cabinet minister who is looking at and equating tourism with any sort of other capital investment in Australia, and the significance of it.

JOURNALIST: Chilled beef, that's sort of been a controversial issue, was that raised in the discussions?

ANDREW ROBB: I noticed you'd taken some interest. We didn't discuss that, because I think it's a sort-of protocols issue. In my discussions with the industry back home, trade grew so rapidly, a lot of the normal understandings and comfort that you would normally have, as a trade grows, had not developed fully, so the industry back home are quite confident that this process will work through, and we will get back onto an even keel.

And of course beef is a significant part of the Free Trade Agreement, and so we will in the end, one way or the other, be looking to get a fair outcome on that.

JOURNALIST: Did you get a timeframe on a fair outcome on that?

ANDREW ROBB: Well, it's being considered outside the context of the FTA, but ultimately, the whole beef package will also be part of the FTA, so we might even do better, who knows.

Thank you.

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