Topics: India’s withdrawal from RCEP; Australia’s relationship with China.

Transcript, E&OE

6 November 2019

Haidi Stroud-Watts: …I talked to him about the RCEP deal and whether the advantages and benefits for Australia and other participants are now lessened after India decided to withdraw?

Simon Birmingham: India are choosing at this time not to proceed with RCEP. Now, the door remains firmly open to India, and I hope and trust that dialogue and negotiations will continue over the months or indeed years to come depending upon their circumstances. RCEP itself still remains very commercially viable and beneficial to the parties that are there.

Haidi Stroud-Watts: Does the absence of India, though, create an awkward I guess political disconnect for Canberra because the strategic goal was to bring India and of course the US as allies more within the orbit to act as counterweights to the influence of China in the region. Does that make that task more difficult now?

Simon Birmingham: It’s not just at the economic level. The Prime Minister’s visit in January will be focusing as well on a range of strategic issues and keynote speech that he’ll be giving there at the invitation of the Indian Government. But more generally in terms of RCEP, the strategic benefit there is that the ASEAN nations sit at the heart of RCEP. Those ten sovereign ASEAN nations, many of them very rapidly growing economies, and they are the ones who have driven RCEP from concept stage to execution. They are the leaders within RCEP in terms of chairing the negotiations, and so strategically it really does in our region cement the centrality of ASEAN and that’s very important.

Haidi Stroud-Watts: I’m wondering what kind of, I guess, delicate balance Canberra has to strike between obviously having China as its main trading partner — and that is highlighted by its role in RCEP — but how do you I guess maintain that relationship on a trade and economic basis when there are other concerns about its actions in the South China Sea, about the Chinese treatment- the government treatment of Uighurs in the Xinjiang region. Is that a difficult balance for Canberra to be able to create?

Simon Birmingham: No, it’s a balance that we are well-accustomed to. Australia’s human rights dialogue with China stretches back decades. Having those discussions on sometimes difficult issues are not new things for Australia. They are things that we have dealt with China in partnership for a long period of time and yet throughout all of that, we’ve managed to deepen other aspects of the partnership in which we are in firm agreement. And we are confident that the partnership is strong enough to be able to continue to grow into the future and here in Shanghai at the China International Import Expo, we’ve got more than 200 Australian businesses who are participating at the invitation of the Chinese Government.

Haidi Stroud-Watts: And in fact, this is your second visit, I believe, to China in three months. Do we glean from that that the relationship between Canberra and Beijing has warmed in recent months after a period of tension?

Simon Birmingham: Ah look, others can comment on the tone or warmth or otherwise of the relationship. We’re just focused on getting on with the business of the relationship and the partnership as it is.

Haidi Stroud-Watts: President Xi Jinping’s speech, though, yesterday alluded to — albeit fairly clearly — the sort of dissatisfaction with the exclusion of Chinese tech companies like Huawei from markets like the US and Australia. Is there still quite a bit of anger there in terms of China’s reaction to the anti-foreign interference laws, the ban from Huawei from building out Australian 5G networks, is that something that is up for negotiation in the future, particularly as we’re getting closer to a phase one trade deal between the US and China being signed?

Simon Birmingham: Australia hasn’t decided to exclude any particular company or any particular country from participation in the 5G network, but we have set some rules for how our 5G network which of course has such enormous reach into every aspect of business and society in the future. We’ve set some rules around how that will operate and who can- what standards must be met in terms of participation in that network. Now, they’re the type of safeguard measures that I would expect any country to contemplate and consider. How each country does it is up to each sovereign nation, but that doesn’t prevent Australia and China from building further economic ties, including into areas of science, research and technology.

Haidi Stroud-Watts: That was Simon Birmingham, Australian Minister for Trade, Tourism and Investment speaking to us in Shanghai. Lots more ahead on Daybreak: Australia, this is Bloomberg.