Alison Carabine: Minister welcome to Breakfast.
Andrew Robb: Thanks very much Alison.
Alison Carabine: $15 billion in agricultural subsidies will be phased out worldwide, is it possible at this stage to quantify what this will mean for Australian farmers?
Andrew Robb: It’s difficult to put a figure on it but it does mean that into the future, no longer will meat or dairy or sugar or grains or wine or horticulture or cotton or many other things be confronted with other countries putting massive subsidies on their exports. So we’ll have a level playing field; Australian farmers will be far more competitive. We’ll keep markets that we otherwise would have lost, and it just generally puts us in a much, much stronger position than we have been for decades.
Alison Carabine: These subsidies have been paid by governments to help reduce exporter’s business costs; obviously it’s the richer countries that can afford these subsidies to the detriment of poorer nations. Just how much have they distorted the level playing field?
Andrew Robb: They started really in a big way with the Europeans and the Americans back in the 70s and 80s. Australian governments and the industry have been fighting these issues for decades now, and many would recall the big stockpiles of dairy products and meat and grain that built up in Europe at different times, off the back of these major subsidies; they caused enormous loss of market and loss of income, over decades for that matter, and the big players – Europe and the United States – their entitlements are worth $11 billion of that $15 billion, so it is quite critical that this decision was taken, and it really is a historic time.
Alison Carabine: So it’s mainly the Europeans and the Americans that are applying these export subsidies. What about here in Australia; what kind of subsidies will Australian farmers loose?
Andrew Robb: We have an entitlement in dairy and in fruit to use subsidies, which we haven’t used for 20 years. We haven’t used export subsidies for a long time and even when we did, it was on a very limited basis. Australia is seen to be – and is in fact – one of the most open agricultural countries in the world, and this will put us in a stronger position going forward; it adds more certainty to investors and will in many ways, underpin what we hope to be a very successful future with the Free Trade Agreements coming in with China, Japan and South Korea and then the Trans Pacific Partnership over the next 12 months.
Alison Carabine: But this deal only covers government subsidies, it doesn’t go to broader domestic subsidies or the issue of market access. How much longer will Australian farmers have to wait until there’s an outcome on those fronts?
Andrew Robb: That’s a big question; we’ve been waiting a long time now. This is the first decision the WTO has taken to reduce protection; this is the first decision they’ve been able to get a consensus on across the 161 member countries since it was formed 20 years ago, so it hasn’t been successful until today.
Now we are starting to see some success, but nevertheless we can’t wait another 15 or 20 years for the market access issues to be better resolved, and some of the domestic subsidies that apply. That’s why we have called off the back of this decision, to examine how we can perhaps better organise the World Trade Organization negotiations so we can fast-track a lot of these issues in the future, and I believe that will dominate a lot of trade policy discussion over the next few months.
Alison Carabine: Just a few days ago over in Kenya you were saying the WTO faces a genuine crisis; a comprehensive outcome from the Doha Round of talks that have been underway for 14 years was no longer in prospect. Since that criticism the subsidies deal has been reached, but are you still of the view that the WTO does need an overhaul?
Andrew Robb: I’ve got no doubt about that. We have had this result, but there are still major issues which are part of the Doha Round which we are nowhere near (resolving). I think there’s a general acceptance from many countries that have been to these negotiations, that the process is deeply flawed; yes we got an outcome this time, but it’s one of many, many issues that should and could have been resolved years and years ago.
So we do have to examine the process with the way in which these negotiations are approached and see if we can start to see some results that occur far more quickly and far more comprehensively than what we have seen.
Alison Carabine: You have concluded a number of bilateral trade deals – China, Japan, South Korea – do those bilateral trade deals deliver more for Australia than the negotiating torture that the WTO has become?
Andrew Robb: I think that in the short term they certainly have; those bilateral trade deals certainly have delivered far more comprehensively and far more quickly into our major markets in North Asia; they have been very effective, but I don’t see them as being contradictory. I think it’s been a far more productive approach to aggressively go for these bilateral deals.
Alison Carabine: Andrew Robb, also at this session of the WTO a deal was reached to cut tariffs on high-tech goods; more than 200 items such as head phones, video game consoles; what kind of price cuts can Australian consumers look forward to?
Andrew Robb: Tariffs of up to 35 per cent are coming off so many of these electronics and other high-tech goods. We got that negotiation concluded in about 18 months to two years, compared with the torturous 14 years we’ve been going on the Doha Round, which is nowhere near complete. It’s a very important outcome on that deal (ITA) and is worth about $1.3 trillion in savings across more than 50 countries, so that will translate into significant benefits for Australian consumers.
Alison Carabine: Andrew Robb thanks so much for joining Breakfast.
Andrew Robb: It’s my pleasure.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555