Interview on ABC AM with Sabra Lane
Indian sugar subsidies; WTO reform; Indonesia




Sabra Lane: Good morning and welcome to AM, I’m Sabra Lane. On today’s program, as the world braces for the fallout from the US-China trade war, where does Australia stand? The Trade Minister, Simon Birmingham, is my guest.


Sabra Lane: The Federal Government is taking action against India at the World Trade Organisation over the nation’s decision to subsidise sugar growers. India has provided almost a billion dollars in assistance which has prompted a glut of sugar on the world market and a dramatic price slump, which has affected Australian producers. For months, the Coalition has been trying to quietly coax India into dumping the subsidies, but it’s now taking this action instead. At the same time, the Trade Minister, Simon Birmingham, is pushing to reform the WTO to stop countries dragging out responding to complaints. He’ll lobby other APEC countries to support that reform at a meeting in PNG this weekend. Senator Birmingham joined me earlier from Darwin. Minister, good morning, and welcome to AM.


Simon Birmingham: Good morning, Sabra, great to be with you.


Sabra Lane: The action against India at the WTO, complaints do take a long time to resolve at the Organization, how long could this take before there’s a decision?


Simon Birmingham: Well it can take a while, but what we’ve done is lodge what’s known as a counter-notification which will prompt initial discussions as early as the 26th and 27th of November in the WTO’s Committee on Agriculture. So that’s an early, at least, initial step which is an opportunity that we hope, following all the representations that we have made through our High Commission staff, through my representations to India’s trade and commerce ministers, those of other Australian Government ministers, those of our Prime Minister to Prime Minister Modi, we really do hope that India will reconsider its position in relation to what are more than one billion dollars in additional subsidies for sugar producers, which has pushed global sugar prices to a decade low.


Sabra Lane: Being pragmatic, though, how quickly do you think that there will be a decision, given that you haven’t had a quick resolution to this now? Could it be 2020 or beyond?


Simon Birmingham: Look, it may end up taking some time. I know that the representatives of cane growers and sugar millers understand that. They have been urging us to take this step and we have been listening very carefully to them. Australia is the third largest exporter of sugar, we are a significant player. We would expect and hope to have support in terms of our action from Brazil and other nations, and ultimately this is about trying to ensure that we get a fair go for our sugar farmers who play by the rules, and they just want to be able to compete. There are broader issues at stake in the sugar market, as you said in your intro, in terms of global over production suppressing prices already which make it difficult, and the scale of these subsidies make that even harder.


Sabra Lane: How much has it cost Australian producers because of India’s decision?


Simon Birmingham: That’s hard to entirely quantify, but we’ve got various pieces of analysis that we’ll present in the WTO about how it is that we think that has driven down prices.


Sabra Lane: A rough estimate?


Simon Birmingham: It’s certainly costing Australian producers many millions of dollars in terms of the impact of suppressed prices, flowing through into then getting lower prices for milled sugar out of Australia.


Sabra Lane: You’re taking action on this as Australia’s also trying to forge better trading ties with India, how can you do both?


Simon Birmingham: Look, we’re confident that we can do both. My counterpart and I have spoken of the respectful relationship that we have, the relationship with India is much, much deeper than one issue. We already have, for example, a WTO dispute with Canada with whom we’ve just concluded and brought into force the Trans-Pacific Partnership Agreement. So it’s a demonstration that we’re able to walk and chew gum at the same time, have a disagreement in one particular area, but still be able to pursue trade agreements.


Sabra Lane: More broadly, you’re pushing for reform of the WTO, full stop. It’s notoriously bureaucratic and slow. Donald Trump has recently suggest that the US will withdraw from the Organization, has Mr Trump’s threat actually forced the WTO to sit up and listen?


Simon Birmingham: Well certainly the dispute between the US and China has galvanized action from a group of likeminded countries, such as Canada – who I referenced before, Australia, New Zealand, the EU and others, where we are looking at the various steps that can be taken to present reform proposals to the WTO. How do we improve its dispute resolution function so that it is indeed faster in terms of bringing down findings? How do we ensure that there is better transparency from countries that are providing notifications about what it is that they’re doing, such as subsidies of sugar? So we’ve signed on to particular reform proposals that we hope will engage the US in discussions and other nations to make sure that we can get a more effective WTO in the future.


Sabra Lane: Indonesia is holding off signing a free trade agreement with Australia because of the decision to consider moving the Australian Embassy in Israel to Jerusalem. Malaysian leader Mahathir Mohamad has warned that Australia’s decision risks adding to the cause of terrorism, how worried are you that Dr Mahathir is right?


Simon Birmingham: Prime Minister Morrison is doing precisely what he said he would do, which is to consult global leaders during this summit season about how it is that we can best progress and achieve a two state solution between Israel and Palestine-


Sabra Lane: And sorry, to the point of the question, how worried are you that Dr Mahathir is right?


Simon Birmingham: Well, all of these factors, all of these potential implications, will be considered as part of the proper process we’re undertaking. This will go through, ultimately, a thorough, proper Cabinet process for a final decision, but equally-


Sabra Lane: And, how worried are you that Dr Mahathir is right?


Simon Birmingham: Well, we are equally worried, Sabra, that for a very long period of time now, really no progress in relation to a two state solution, and that we continue to see violence as a result of that lack of progress. So what we’re doing, what Scott Morrison is doing, is rightfully consulting with world leaders about how it is that we get progress towards that two state solution, that reduces the implications and risks and threats of violence in the Middle East, and elsewhere around the world. Now we’ll do that, and as the Prime Minister has indicated, by being respectful of Security Council resolutions, and this is about having proper consultations. We know that under the current settings, there is still violence in the Middle East that still exacerbates tensions around the rest of the world – and can, through any changes, we reduce those threats?


Sabra Lane: Alright, Trade Minister, Simon Birmingham, thank you very much for joining AM this morning.


Simon Birmingham: My pleasure.