SENATOR THE HON SIMON BIRMINGHAM
Minister for Trade, Tourism and Investment
Topics: Trade War; US Tariffs; Free Trade Agreement; Hong Kong;
Question: Minister, you’re in Beijing to talk about free trade and opening markets, so what’s your reaction to Mr Trump’s tweet overnight that he will raise, by another 10 per cent, tariffs on Chinese goods in just four weeks?
Simon Birmingham: This is a disappointing potential further development in the trade war. Now we hope that it will be averted through the discussions that we trust will continue over the next few weeks, we continue to urge the United States and China to engage in dialogue to try to resolve their differences in this trade dispute. We know from the IMF, the OECD, that the trade tensions and the escalation in protectionism in recent times has had a negative impact on rates of global trade growth. That’s had a flow on effect of a negative impact on rates of global economic growth and our fear would be that a further deepening of that trade conflict and a further escalation of protectionist measures could hurt those trade flows further, economic growth further and that’d be bad news for everybody.
Question: The Prime Minister’s positioned Australia as a mediator between China and the US. How do you mediate in this kind of environment where trust seems to have been eroded between both sides?
Simon Birmingham: Well Australia can play a role, as I will say in my speech later today, in terms of trying to resolve tensions through organisations like the World Trade Organization. We can’t fix the bilateral issues between the United States and China. That is for those two countries to sit down and to resolve themselves. And we will get on, as best we can, in the interim. We’re seeking to ensure that we maintain the best possible trade and economic relationships with both China and the United States, as well as seeking to secure new opportunities as I’m doing here in China through the RCEP negotiations, by seeking a new regional trade pact that can better integrate Australia and the 16 economies across this trading bloc, and give us an opportunity to demonstrate that although protectionism may be on the rise in some quarters, in our Asian region, we are committed to continued economic growth using the levers that have been proven to be successful in the past.
Question: What does Australia say to the United States though about things like good faith negotiations when it sees tweets firing off, announcing these 10 per cent tariffs instead of negotiations that were being held between China and the US in Shanghai? Is that good faith negotiation?
Simon Birmingham: Well it doesn’t matter which of our economic partners it is. We don’t seek to provide them with gratuitous public advice. In the end, they conduct their negotiations according to their terms. Australia conducts our negotiations in ways in which we seek to get outcomes and we’ve had great success in recent years of achieving significant trading outcomes, export growth for Australia by securing new trade deals in our region and we want to keep that momentum going.
Question: Can I ask you about sort of diversifying the relationship, the trade relationship with China. Our innovation ecosystem tends to be configured towards the US. Now we’re trying to engage more with China in the innovation space. The issues around Huawei might have a cascading effect to other technologies. What are you doing in government to try and to encourage that relationship and to get through the current difficulties?
Simon Birmingham: I was just speaking to our Austrade Commissioner following my remarks in there about how the Landing Pad in Shanghai is progressing and the work that is happening there to help new start-up businesses and the opportunities that are there, especially in the tech sector. We’re backing Australian companies to continue to innovate and collaborate on technology platforms, such as for example agricultural technology. We co-hosted last year, through Austrade, an ag tech event in Melbourne, that really was a significant demonstration of the new innovations and breakthroughs that are happening in that sector, which is a demonstration that a country like Australia can use historical comparative advantages to applying a new domain of technology spheres. You’ve been doing it now for a number of years in terms of the mining services sector. We don’t just as a country export raw minerals and resources anymore, we also export expertise to help other countries in their mining developments.
We can do the same in terms of agriculture where our productivity and environmental sustainability is amongst the best in the world because of the advanced use of technology and we can make sure that we apply those tech breakthroughs as an export vehicle to integrate with countries like China and the rest of the region, and do the same of course, in other sectors as identified in my remarks such as medical devices, technologies that again, a country with a high quality aged care and health care system like Australia can help to provide some of the services, but also technologies that are necessary for increased opportunities in the future.
Questions: When you speak to your Chinese counterpart over the next two days, will you be raising concern about the restrictions on Australian coal and does the Government have any concern about pressure from Chinese steel makers to get the price of iron ore down?
Simon Birmingham: Well I will be thanking my counterpart for the assurances we’ve received that policies are non-discriminatory and I’ll be seeking to better understand in relation to the additional checks and safeguards that are apparently being applied around thermal coal, how our businesses can get clarity as to what those checks are; how they can have certainty around how long it takes to clear customs processes so that Chinese businesses and their customers can enjoy certainty of supply from those Australian providers. So we’ll continue to work to make representations on relation to those issues of certain delays.
In relation to pricing in other sectors, we see and have seen over a long period of time significant price fluctuations and variations. Australian business responds to that in an entirely commercial way.
Question: Last year China launched the anti-dumping investigation and is still in the process. Is there anything more you will address to the Chinese counterpart?
Simon Birmingham: Australian barley producers and their representative organisations are engaging thoroughly and constructively with Chinese authorities in relation to the investigations there. Australian barley is produced on an entirely commercial basis, without government assistance. The growth in terms of barley sales to China have been because of the quality of our barley and because of demand within China and ultimately, because they are- it is a product that can be delivered at a high quality market price. And we continue to reinforce those points whilst cooperating with the investigation that’s there.
Question: If the potential for long term supply deals between China and the US breaks down, is there an upside for Australian exports like beef, like coal, like barley?
Simon Birmingham: I’ll pause for a second, just because I can- no. There are always possible short to medium term upsides in relation to trade conflicts where purchase decisions from one country may be diverted to seek goods or services from another country at a cheaper rate because of the tariffs that have been applied elsewhere. So could there be some short or medium term upside for certain Australian industries? That’s not beyond the realms of possibility. But we take a bigger picture view and a long term perspective which is that increased protectionism, greater trade barriers have been demonstrated to hurt global economic growth. That’s not good news for Australia or for China or for the United States or for anybody else around our region or the world. And that’s why we urge these two largest economies in the world to keep talking, to keep engaging and hopefully to resolve the dispute.
Question: [Indistinct]… and criminal detention. Last time I spoke to his lawyer; he’s not allowed to have visitor. Will you raise this question when you with Chinese official?
Simon Birmingham: Certainly if the opportunity arises, I will reinforce the points that have been made by Foreign Minister Payne and our representatives here in China, which is that we urge that he be treated with respect and with transparency and be granted access to his legal representatives.
Question: Just quickly, I mean, will you have any message for the Chinese authorities in terms of Hong Kong. There’s fears that China could take a more direct role in Hong Kong. Does the Australian Government have any concerns though?
Simon Birmingham: Australia respects the one country, two systems model and that’s best evidenced by the fact that not only do we have now China-Australia Free Trade Agreement. But last year, I signed and cemented the Hong Kong-Australia Free Trade Agreement which reflects the fact that we engage with the two systems, whilst respecting the one country. We urge and appropriate caution, restraint and respect for those two systems. And certainly that’s the way we conduct ourselves in our activities.