• Transcript, E&OE
Topics: Australian trading relationship with China.
18 May 2020

Will Goodings: But first, let’s talk to the Federal Trade Minister, Senator Simon Birmingham who joins us. Senator, good morning to you.

Simon Birmingham: Good morning, Will. Good to be with you.

Will Goodings: So, have you got a call back yet from your Chinese counterpart?

Simon Birmingham: No. Look, not of yet, but that’s not stopping us from mounting very strong and compelling arguments back to Chinese authorities in relation to these barley and beef trade issues that they’ve raised with us.

Will Goodings: Put that in context for our listeners. So, usually, if you rang up the New Zealand Trade Minister or the US Representative, do you usually, you know, does someone answer? Do they call you back promptly? How rare is just not to get no answer whatsoever?

Simon Birmingham: Well, let me respond firstly from how I behave, and that is that if one my counterparts around the world wants to speak with me, we’ll usually schedule a call. And some of them, the relationships are sufficiently informal that we can text or WhatsApp and make it happen instantly. Others, you go through the embassies or the departments and make a request to get lined up, and particularly those that require translation usually take a little bit of extra coordination. But from an Australian perspective, we’ll always engage thoughtfully, constructively with our counterparts around the world. And even if the topic is difficult or we disagree on things, we’re up for the conversation, and we would always prefer others to reciprocate in kind.

Will Goodings: Back in a happier time, Minister, when you could have face-to-face meetings and we didn’t all have to talk over Microsoft Teams and what have you. I know that ministers from different countries-

Simon Birmingham: Sounds like Nirvana.

Will Goodings: Yeah, I know. It’s hard to remember exactly what it was like. But ministers from different countries often establish something of a rapport. Do you know the Chinese Trade Minister that well? Like have you had face-to-face discussions in the past, like have you got each other’s mobiles? Is it that sort of a relationship normally?

Simon Birmingham: Look, we’ve certainly met on numerous occasions at different for a. China being a very, very large country sometimes think that vice ministers different events. So, both Minister Zhong Shan and Vice Minister Wang Shouwen, I see them around the world at different times and have certainly engaged and sometimes engaged in the small talk that you do when you’re seated next to each other at a dinner table for a couple of hours. So, you know, we have- there’s a relationship there. As I’ve said, Australia’s policy position, doesn’t matter how tough or difficult the conversation is, we’ll always be up for it, that’s the way we engage diplomatically. But when it comes to these trade issues as well, we’re not just hanging it all on whether or not I can have a conversation with somebody, we’re putting every possible effort in to make sure that Chinese authorities, right through the system, get the evidence they need. They’ve publicly and privately said these are technical trade disputes that hang off of a weight of evidence. And so, we’ve made sure we provide some pretty weighty evidence, there’s more than 10,000 pages of evidence backing our argument that Australian barley is [indistinct] competitively.

Will Goodings: Clearly though, what’s happening is that the trade issues are getting muddied by Beijing’s indignation about the fact that Australia has been pushing for a COVID-19 inquiry. How eroded do you think the validity of any indignation is now when you see this extraordinary coalition of other countries overwhelmingly, democracies, that have come out in the last 24 hours saying that they too support an inquiry?

Simon Birmingham: It’s always been a very logical argument, that when you’ve got something that’s caused as much devastation and mayhem as COVID-19, there ought to be an inquiry into it so the world can learn the lessons and try to avoid a repeat of it in the future. And clearly, that message is one that many nations around the world agree with, and ultimately I hope that all agree with. Everybody’s been touched by this, and in the case of China, they’ve lost many lives, they’ve had their first economic downturn that their nation has faced in more than 40 years. And so, for them as well, understanding how to avoid a repeat is important. And so, I hope that if it goes to the World Health Assembly during the course of this week, we ultimately see an outcome that everybody is happy with and everybody can cooperate.

Will Goodings: Minister, you’re not the only member of the Senate that has this morning been commenting on this issue. One of your federal colleagues has just been on with Alan Jones and had this to say.


Concetta Fierravanti-Wells: Let’s not forget that in 2000, five per cent of our exports were to China, and this rose to a massive 33 per cent by 2018. So, we’ve got 26 per cent of our two-way trade is with China.

[End of Excerpt]

Will Goodings: She’s saying that we should use this as an opportunity to decouple. What would you say to those sorts of suggestions?

Simon Birmingham: China’s economy has grown enormously since the year 2000. And so, it’s unsurprising in that time it’s become a much bigger trading partner, not just for Australia but for every nation within our region, that’s what happens when you have a country that is now the second biggest economy in the world that is the largest consumer goods market in our region. And so, I think we have to acknowledge that Australia and China are forever tied to one another in the same geographic region of the world. We ought to want, and we do want and work to have as constructive a relationship as possible. Of course, we have different systems of government; we’re a democracy, they’re not. We have different values that underpin the way in which we engage, and our values are never up for sale or traded away. But we want to have positive, constructive relations, our businesses, our people and our government have progressively managed to really strengthen those over the years. We’ll continue to have hiccups, we’ll continue to have differences, but we also ought to continue to work to get on with each other and to acknowledge the reality that China is a big economy and will stay so and therefore will be a big trading partner for everyone across the Asian region.

Will Goodings: That was Senator Concetta Fierravanti-Wells. And she made a point that our listeners have often made, Senator, on this issue that there needs to be diversification, diversification. That’s something I take issue with, and I’d be interested in hearing your thoughts on this. It’s not as though we can simply go to other countries in the world: buy more iron ore. We need to- you need to start building more stuff, and so we can sell it to you and not China. It’s not as simple as simply saying, we’re going to sell elsewhere, is it?

Simon Birmingham: Well, you’re right to a degree there. I mean, firstly, governments don’t sell minerals or resources or agricultural products or services or anything. You know, we facilitate trade for business to undertake, and we facilitate it through the type of trade deals we do — we have one with China, we’ve struck them with Japan, with Korea, through the Trans-Pacific Partnership with Vietnam, Canada, Mexico, others, with our ASEAN partners. And we have a new one coming into effect with Indonesia on 5 July, and we’re pursuing others with the EU and the UK. And that creates opportunities for business to be able to trade without facing excessive tariffs or taxes on their products, and that’s really important. But it’s still a commercial decision that we undertake — is there a buyer for your product, what’s the reward you get, is it a good price, are you going to make good profits, what’s the risk, is it a risky market, is there regulatory uncertainty? All of those factors. And they are commercial considerations. Now, we’ve tried as a government to give our farmers, our exporters, our businesses, the maximum range of choices through the different trade deals we’ve done, and we’ll keep doing to allow them to open up and seize more markets. But China, as I said before, is the second largest economy in the world, the biggest consumer goods market in our region, and so it is a very important trading partner and will continue to be so. And that is why we will continue to work, to engage with them as respectfully as we can, while supporting our exporters to grow their markets in other countries as we would in any event.

Will Goodings: Simon Birmingham, the Federal Trade Minister and Liberal Senator for South Australia. Thanks very much for joining us this morning.

Simon Birmingham: Thanks guys. My pleasure.