Alan Jones: Andrew Robb is on the line from America; Minister good morning and thank you for your time. Am I right in saying that 98 per cent of tariffs on Australian exports to these countries will be eliminated? 

Andrew Robb: That’s correct Alan; it is yes.

Alan Jones: Good god; will there be a doubling now of access to the US market for our sugar producers? 

Andrew Robb: Yes, double and it could double again in three years’ time depending on whether the forecasts are correct or not. 

Alan Jones: If there is a domestic production shortfall in America we will have an option to fill that sugar gap?

Andrew Robb: We will be guaranteed 23 per cent, nearly a quarter of that gap; we could possibly get more but we are guaranteed 23 per cent, while before we were guaranteed eight per cent. So if the expected 1 million extra tonnes of demand occurs over the next two or three years, we will be guaranteed 250,000 extra tonnes of that increased demand in the US.
 
Alan Jones: It is not just volume is it? Because currently in the Asian market we get what, 12 cents a pound while the American market is 22 cents. This is a lot more volume and a lot more money?

Andrew Robb: Exactly. It is why everyone wants a piece of that action.  But it is because the market is locked up by the Americans, in many respects that the price goes up and so it is very much treasured and is a very lucrative market.

Alan Jones: So what did you have to give back to get these concessions?

Andrew Robb: I didn’t have to give anything in regard to that concession. The Americans have been saying that this deal is all about removing all protections; so I have been saying – consistent with that objective – you can’t lock up your sugar industry. I mean in many respects to be fair to them, nearly every other agricultural industry we’ve got access to.  But they have to be consistent, and in the end they gave ground on agriculture, and we gave ground on the five per cent tariffs that we’ve got left that apply to countries. 

And now we have given that five per cent pretty much on everything; some of them take a few years to wind down, and we want to be able to allow people to transition a little bit; adapt or invest more and become more automated or whatever it might be that is holding them back on the world market, but the Americans had to give way on agriculture as we gave way on some textile areas and car componentry areas. 

Alan Jones: Without going into detail because this is where it gets complicated; these biologics which are drugs produced from living organisms.  There has been a lot of concern so I won’t go into a lot of the detail about the cost of medicines, but you can guarantee to the people listening to you now, that there will be no increase to the cost of medicines in Australia under the Pharmaceutical Benefits Scheme? 

Andrew Robb: Absolutely. The situation we have arrived at is to accept that there is more than one way of skinning a cat I suppose, to put it in the vernacular.  Our system is not broken, our system delivers as good as any country in the world – and better than most – a health service and a Pharmaceutical Benefits Scheme, and we do provide sufficient protection for more innovators and investment in this whole space.

The evidence of that is that we have a very quickly and rapidly growing biologics sector and also we’ve got a lot less pressure on prices than many other countries.  But we are getting all the drugs out of the US very quickly after they’re released; that is no discouragement to come here and I have been saying we’re not changing our system – which we know works – to go to another system which suits the US.

Now they haven’t got a good patent system like we have, so they have to move to something else; what they want is rational for them but it is not rational for us, and they wanted the one system, but in the end, they accepted that there could be two systems; ours and all of the measures that surround it, and their system, and people could choose which one they wanted.   

Alan Jones: You’ve done a hell of a job here because this is complicated stuff and we are trying to keep it simple. The Labor Party is saying that we are handing foreign investors the opportunity to sue the Australian Government if companies within these foreign countries believe that our regulations discriminate against them. That is something that even drew the attention of the former High Court Chief Justice Robert French, who criticised the potential for this – what is the standing of that issue now? 

Andrew Robb: We’ve been successful in regards to this dispute settlement mechanism – which we already have with 28 other countries, and we’ve had that for up to 30 years – but we’ve been successful in this negotiation in getting safeguards for public policy to do with health and public policy to do with the environment.  So if someone’s mining or whatever, they are subject to the laws of the nation, but under this deal they can’t be sued with the ISDS, but in addition to that we got an absolute ban, with others, on tobacco companies suing governments within these 12 countries.  

Alan Jones: Because the Asian arm of the tobacco multi-national Philip Morris is currently challenging us or you and your Government over the plain packaging laws.

Andrew Robb: Yes they are and they are using one of the older versions of these dispute settlement mechanisms out of Hong Kong, which has been there for about nearly a quarter of a century. The new ones which we have engaged in, all have this safeguard for public health issues and for environmental issues, and this one is even stronger because it has blocked tobacco in any circumstance, under any issue, from using any of these dispute settlement mechanisms.    

Alan Jones: Just a quick one before you go, is this now signed?

Andrew Robb: No, what will happen is that probably within about 60 days – it’s not quite settled yet, it might even be earlier – all of the text will be made available, and then 30 days after that the countries will come together to sign the deal, and that should be about the end of the year, and then it all comes back to each parliamentary body for deliberation and it should be about the middle of next year that it all takes effect.

Alan Jones: Well done; good to talk to you.

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