• Transcript, E&OE
Topics: China’s tariff on Australian barley; Hard borders in Australia.
19 May 2020

Gareth Parker: On the line the Federal Trade Minister Simon Birmingham. Good morning.

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

Gareth Parker: Thanks for your time. So we’ve been talking to a grain farmer in this state who is sort of realistic and clear sighted about the challenges ahead. It’s not the first time that we’ve seen markets caught up in these sorts of disputes. But I just wanted to start with the nature of the dispute because the Agriculture Minister here in this state Alannah MacTiernan is, I think, realistic about this. She says it would appear that West Australian barley growers have been caught up in a much larger issue. She’s right about that, isn’t she?

Simon Birmingham: Gareth, it is hard to say in that regard. China is emphatic that they have run this as a technical trade remedy action. They’ve put it through their anti-dumping process. It was commenced 18 months ago and today was always the deadline for a determination to be made. So they’ve stretched out the full time frame and it is in that sense, at least, coincidental. But I could have told you 18 months ago that the process that should run for 12 months but for which they can take a six-month extension would come to an end on this day. I couldn’t have told you 18 months ago that the World Health Assembly would be meeting at the same time or that there would be a COVID-19 pandemic.

Gareth Parker: There’s just no evidence for the assertions they’re making though. I mean they’re doing things like suggesting that drought relief to Murray-Darling farmers is somehow evidence that West Australian grain farmers are not playing by world trade rules.

Simon Birmingham: Well that’s right. Look, it doesn’t stack up in terms of the arguments that have been put. We think the case has clear errors of both law and fact in the way in which they’ve determined it. And that’s why we’ll now take some time in talking to industry to work through the best next steps we can take to appeal this in some means, to try to convince China to overturn its decision.

We fully appreciate these are tough times for the farmers who are looking at good rainfalls and a great start to the season this year. But now see that that a key market is effectively unviable in terms of being able to sell their barley there at the end of the year. And so we’re working pretty hard as well to try to help them identify alternate markets around the world, noting that clearly if China does now go and buy more expensive or substandard barley from other parts of the world, that’s their loss that they’re not getting the best quality Australian produce. But if they do go and do that, that will of course shift supply from other locations and create some opportunities we hope our farmers can fill.

Gareth Parker: You know, this is why the sort of the whole thing makes no sense. The party that they’re punishing the most other than Australian farmers is Chinese brewers. But I guess there’s some logic in there somewhere.

Simon Birmingham: Certainly wouldn’t be good politics in a democracy like Australia to go and punish the brewing industry.

Gareth Parker: Exactly, right. Minister, have you been able to place a call to the Chinese Government yet? Have they picked up the phone and answered your calls?

Simon Birmingham: Regrettably, no. And it is disappointing because Australia is a country where we engage on the world stage. Happy to have discussions with our counterparts even when they’re difficult discussions, even when we disagree. The best way to try to resolve such disagreements or at least reach an understanding around them is to have dialogue and discussion and unfortunately, that hasn’t been the case; hasn’t prevented us from putting the strongest possible defence forward for the barley industry.

We’ve submitted more than 10,000 pages of evidence, economic analysis, market analysis et cetera. Obviously, all of which has been ignored in this determination. But that analysis will now form the basis of whatever appeals we take forward.

Gareth Parker: So what’s your best guess of how long this process takes? With the WTO adjudication process?

Simon Birmingham: If we get to the point where we pursue a World Trade Organization dispute, that can take years to resolve itself. I would think well within- China’s said they’re applying these duties for five years. I would expect we’ll get a decision well within that timeframe. But it’s not a quick process and that’s why we’re having a look at what other avenues are available to us in the first instance and we’ll determine from there with industry, the best way forward.

I’ve said all along that we reserve all our rights to undertake any action that we can to appeal and resolve this because we know that our farmers do an amazing job, highly productive, it’s their productivity and their innovation that allows them to produce large volumes of premium grains at competitive prices. It’s not any subsidy and certainly not any dumping of their product.

Gareth Parker: Is there anything that the Federal Government can do to facilitate access to alternative markets or is that really a matter for grain exporters?

Simon Birmingham: Well we’ve put out the call right across our trade and diplomatic network to make sure that we are looking at other opportunities that may exist. There’s been some growth in recent times in the Middle East and we see opportunities that exist there. In terms of feedstock opportunities, we’ve got a 500,000 tonne quota that comes into effect on 1 July for grain to enter duty free into Indonesia as part of our new FTA there.

So while that isn’t for high quality malting barley, it’s an opportunity and no doubt with the uncertainty that’s been hanging over this decision, that will have influenced the planning decisions of some farmers in terms of the varieties and what it is they’ve planted this year. But we’ll apply everything we can to find alternate markets and help them through this.

Gareth Parker: With your Tourism Minister’s hat on for a moment rather than your Trade Minister’s hat, I’ve noticed that you’ve made comments this morning asking the state premiers including our State Premier to reconsider the hard borders that currently exist that are preventing the movement from people around Australia. Yesterday, the Federal Deputy Chief Health Officer Paul Kelly said: look, there’s really no health advice that suggests that hard borders can remain. That said, take it from me, that West Australians have very quickly become attached to their hard border. How difficult is it going to be to bring those hard borders down again? And how do you think you’ll be able to convince the premiers of the merits of that?

Simon Birmingham: Logically, it’s a sequential thing. Just as the steps are being taken at present through the different stages of the road map to bring the economy back to life in terms of getting gradually people back out, whether it’s playing sport or ultimately pubs and restaurants opening or having to follow social distancing practices and so on.

Once you’ve gotten through all of those stages over the coming few weeks, it- if we have still enjoying- if we are still enjoying the success in containing COVID-19 that we’ve had to date at that point in time, then logically we should take down the state borders too, at that stage.

So I’m not saying it should happen instantly. I understand everybody wants to tread cautiously and appropriately and following the health advice. But one in 13 Australian jobs are tourism related. The international tourism sector is going to be absent from our shores for quite some time and so the only lifeline that will exist to many tourism businesses is to get the domestic tourism market moving again. And if some states choose well beyond what would be reasonable in terms of the health advice and the reopening to keep border controls in place, well then those states have got to answer to their tourism industry in terms of the pain or damage that that it will be causing those businesses if it’s really unnecessary that states should have those border restrictions in place.

Gareth Parker: Alright, Minister. Thank you for your time.

Simon Birmingham: Thanks, Gareth. My pleasure.

Gareth Parker: Simon Birmingham the Trade Minister.