Virginia Trioli: The Trans Pacific Partnership deal has finally been done; so long in the making. How will it benefit Australian businesses Minister?
Andrew Robb: It's going to have – in many ways – a very transformational benefit; particularly for so many of our hundreds of thousands of small and medium-sized businesses. There's a very big focus on getting a 21st Century set of rules for internet-based commerce – the whole digital age which has opened up opportunities for small and medium business to do business directly into the region.
Now this has opened up another eleven countries really, because we've got one set of paperless rules for customs rules; all sorts of things which are a bit boring, but actually will make it much easier to do business; remove areas of dispute; lower the cost and make it far more competitive for our small and medium-sized businesses.
For agriculture, there’s a lot more elimination of tariffs and protection; it's a great deal for agriculture. There’s a whole lot of new countries that we haven't had big access to: Vietnam, there's a whole lot of new opportunities in Malaysia, Peru, Chile, Canada – a country we've never had a deal with. So there's tremendous opportunities in the goods and in services – it's a very big deal so there's pages and pages of benefits.
Virginia Trioli: It is indeed. As I mentioned earlier 30 chapters and of course we're all yet to see the full text for quite some time. But sugar was a key issue for Australian sugar growers. And also for your partners – the Nationals – and they were wanting to hold firm on that.
Out of a US market of 11 million tonnes, we're only going to get an additional quota of 65,000 tonnes extra – above what we already have – on top of the existing 87,000 tonnes; and perhaps an extra allocation into the future. So we can't really call that one a win, can we?
Andrew Robb: Well it's not as much as we wanted, but you have somewhat understated the situation. There is a base quota of 87,000 tonnes and that's been the case since 2000. No deal has been able to shift that. But every year or two, there are additional allocations and that's a fairly constant cycle. And what we've seen is over the last 15 years, an average of 107,000 tonnes a year, including the base quota. We've had a 65,000 tonne increase in the base quota and we've had an increase in the proportion of extra allocation from eight per cent to 23 per cent. Which means we will probably see – based on past experience – an increase from 107,000 tonnes to 207,000 tonnes.
But with that increase in the proportion of new access, the USDA – the US Department of Agriculture – forecasts that there will be an extra million tonne of unsatisfied demand in the United States within two to three years. That means that if that's the case, we will get nearly one quarter of it, another 200,000 tonnes. So that means up to over 400,000 tonnes a year is in prospect with this deal.
Virginia Trioli: Well do you believe that will satisfy your Coalition partners? Will the Nationals and will the Agriculture Minister Barnaby Joyce in particular be happy with that?
Andrew Robb: I suspect he'll be satisfied; all of these deals are a question of making a decision in the end about the balance. The agricultural offerings across so many areas are really outstanding increases on top of the three free trade agreements we've struck in the last two years. But I'm sure the sugar people will be disappointed; we were disappointed.
I couldn't get as much as I wanted, but there has been no increase now for 15 years. We've doubled it more or less, and there is a prospect of doubling it again within two to three years with the increase proportion that I've negotiated from eight per cent to 23 per cent guarantee of any new allocation that comes along. So I think they'll see potential for growth, and they'll see an ability to double what they've been putting in, and we've just got to keep working away at these things.
Virginia Trioli: You've managed to restrict that patent restriction period for biologic medicines to five years. So in your estimation, should that make no change to the cost of the Pharmaceutical Benefits Scheme here in Australia?
Andrew Robb: There should be absolutely no change. What we have succeeded in negotiating is an acceptance that we don't need to move to the American system, which is actually twelve years – that's what they had on the table. And they haven't got the sort of patent system that we have. It's not so effective; in fact it’s hardly effective with biologics.
They have to move to another system, and it's rational for them. But I've been saying from day one to them – and others – that our system is as good as any in the world, and it's five years of data protection – which we've had for some time now as a country – and it's got a very robust patent system; and it is achieving a lot of growth in our biologics innovation sector, so there must be a reasonable expectation of return. At the same time we've got community support for the downward pressure on prices; and the access to all-new drugs. We're not stopping any of that happening. Therefore we were not going to change. And we didn't change. We didn't change anything. The day after this deal comes into effect, there will not be one iota of difference to the health system compared to the way it was before the deal was done.
Virginia Trioli: Minister what has to happen now of course is that every country that's a partner to this agreement has to get individual legislation through their own parliaments and their own political systems. How far off then does this actually make this agreement?
Andrew Robb: We'll have the details out within a couple of months at the outside, and then a month or two later we're looking to sign the deal, and then every member party has to go back to their parliament. So we're talking around the middle of next year when this will take effect.
But I've got to say with the deals we've done in North Asia, I took 35 business people to China a few weeks ago, and the sense of anticipation both in China and in our own community is leading to a whole lot of new business arrangements in anticipation of the China deal going through.
And I think you'll find the same with this TPP; people will study what's in it, where the opportunities are for them, and they will be starting to make – even before the end of this year in my view – approaches and build relationships and look for opportunities in any one of these eleven other countries, all off the back of what's been negotiated. So I think you'll start to see some sort of immediate effect in many respects.
Virginia Trioli: Minister I'm afraid our time is tight so I'm sorry to be hurrying you along but I just have a quick last question, if I can, on that agreement, on the free trade agreement with China; there's a story on the front page of The Age today saying that without particular labour-marking protections, your government will effectively surrender autonomy over migration laws, and there will be an influx of Chinese workers into Australia. This is after a migration lawyer has poured over the details of the agreement so far. How keen are you to put such protections in place?
Andrew Robb: Is that the study that was commissioned by the ETU?
Virginia Trioli: The report was commissioned by the ETU, yes. The Electrical Trades Union commissioned the report, yes. That says everything you need to know?
Andrew Robb: It does. It’s consistent with the nonsense they've been peddling from day one. Before they even saw the detail of that agreement, they have been peddling this fearful scaremongering; it is total nonsense. The arrangement that we've struck in the China deal did not remove one worker protection from what already existed under the Labor Government just two years ago; not one. I was insistent on this because I knew that we would have these sorts of scaremongering campaigns. I didn't think they would come out and start making it up and totally misrepresenting what we'd agreed to. And that piece of news on the front of The Age is not worth the paper it is written on.
Virginia Trioli: Minister I will have to leave it there; I'm sorry to have rushed you this morning, but thank you for making time for us.
Andrew Robb: It's a great pleasure, thanks Virginia.
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