Interview on ABC Goulburn Murray, Breakfast, with Bronwen O’Shea.
Topics: EU trade terms
Bronwen O’Shea: And I’m sure you’re aware that as part of the EU’s trade negotiations with Australia, they’re trying to stop Aussie producers using names like feta and brie, Kalamata olives even and prosecco. But there’s far more at stake, I guess, than those names. What is that trade agreements going to mean for our export opportunities into Europe? And what will our Australian producers have to give up in return? The Trade Minister- Federal Trade Minister Simon Birmingham is in our region today. So I took the opportunity to put that to him.
Simon Birmingham: Well good morning Bronwen. Look our plans are, and what we’ve done is, to release the list of terms that the European Union has requested. Now with that list of terms, it’s provided some certainty for some producers that not everything that was on people’s fear list is actually on the EU’s real list. So for example, many people or cheese producers were worried about terms like camembert. Well in fact, the EU is only asking for protection of camembert de Normandie. So obviously that is really focusing in on a geographical region, and Australian producers just tend to use camembert because they’re not from Normandy.
Bronwen O’Shea: Correct, so no problem there.
Simon Birmingham: As I say(*), no problem there. There are terms like feta there, so that is something that we’re now working through in inviting Australian industry to tell us what that’s worth to industry, understand how it is used in Australia as a term by our own cheese producers, the arguments that they want to see us put back to the EU as to why they should be able to continue to use that term, or indeed the alternatives that they think might be possible. And there are a range of examples in previous deals the EU has done as to whether it has to be clearly defined as Australian feta, whether there could be grandfathering approaches, or even coming down to the spelling of the term feta may be an option that we can explore. So there is …
Bronwen O’Shea: P-H-E-T-A.
Simon Birmingham: Well P-H too, whether there’s one T or two T’s, it’s amazing the things that come up in these negotiations like at Riverina dairy today. I’m heading out to the Brown Brothers, who are one of the largest makers of prosecco. What we’ve done there is to say, well actually, Australia and the EU did a deal with- in relation to wine around 15 years ago now. Prosecco wasn’t on the list at the time. We’re not intending to republish that list. We think it was negotiated, settled, and agreed at that stage, and that it ought to stand. But if people want to pursue other terms, then we should use the processes of that agreement, rather than the negotiations for this bigger free trade agreement to settle it, so …
Bronwen O’Shea: And the argument has always been, we understand protecting the names that link to geographical areas, but prosecco is the name of the grape. So why on earth should the EU have claim over that?
Simon Birmingham: That’s right. And that really is, you know, a very strong approach that I’ll be taking through the negotiations in regard to any of these terms. And that’s why we didn’t want to- as one of the factors why we didn’t want to reopen the wine negotiations. They’re done, they’re dusted, they’re settled. We’ll hear arguments if there are arguments to come on it, but the list we’ve published relates exclusively to either food products or spirit terms that the EU have requested. So they’re different categories, we’re going to work through that. But overall why are we doing it? Well, we’re doing it to try to make sure that our farmers and businesses can get better access into the European Union in the future. It is already third or fourth largest export market and so it’s a huge market for Australia. But that’s with incredible barriers that we face, very restrictive quotas, quite high tariffs in places. And if we can manage to open up that market, then it can grow much more for our farmers into the future.
Bronwen O’Shea: So the question is what are we prepared to negotiate. [Audio skips] He said, look, I’m less concerned about whether or not I can call my cheese feta. I’m more concerned about cheaper, imported product coming in and competing with what I’m making here. So what can you tell me about your consideration of that aspect and what this deal might mean in that regard?
Simon Birmingham: Well Australia is already a relatively open economy. So yes, we see European cheeses on the marketplace in Australia, they face relatively low tariffs as it is. Now, yes of course, the EU will want to see elimination of those tariffs, just as we want to see elimination of tariffs on Australian products into the EU or expansion of quotas. So it’s a genuine negotiation where ultimately, we only do a deal if it’s in the best interests of Australia. But let me take for example sheep meat, where our counterparts across the ditch in New Zealand can send around 250,000 tonnes of sheep meat to the European Union each year if they want. They send about 170,000 tonnes. Australia’s quota is less than 10 per cent of that. It’s closer to 20,000 tonnes. So …
Bronwen O’Shea: Why?
Simon Birmingham: So the unused- just historical anomalies, sort of decades ago. The negotiations that were done at the time, they got a good deal. We got a dud deal. And that’s just the way it’s played out ever since. And so the unused portion of New Zealand’s quota is bigger than the entirety of Australia’s quota. So- and that’s we’re driving to try to make sure that farmers across the country get better deals to be able to sell more product into what is a very, very large marketplace of more than 500 million consumers.
Bronwen O’Shea: So what is the government prepared to negotiate on then? What we need to give up in order to open up those opportunities?
Simon Birmingham: The EU has a number of areas where, you know, they’re looking for access. Clearly, they want protection of those names as we were discussing before.
Bronwen O’Shea: And there are hundreds of names on that list, [indistinct].
Simon Birmingham: There are 400 or so names overall. Most of them mean absolutely nothing to Australian consumers or businesses. So you could tick and flick the vast majority of them and it wouldn’t really matter, but there are a small number that are sensitive, and that’s why we’ve put it out to this public process to ask industry to give us their feedback. And then the EU has real interests in other areas, such as manufacturing. European vehicles are a large part of the Australian car fleet, still face certain tariffs on entry into Australia. So they will negotiate hard in some of those industrial goods areas. So it’s not just about agriculture in this space. We want to see our services companies get more access to the European markets. So those companies can be as diverse as traditional accounting or legal services, through to mining engineering services, where Australia has great expertise, or of course in agricultural services as well. That we’re not just great farmers and producers in Australia anymore. The technology that underpins that knowledge, that underpins that mean we have great technologies that we’re able to export and skills and knowledge that we can export to advise other farmers around the world.
Bronwen O’Shea: So is there anything on their list of wants that you absenced?
Simon Birmingham: Oh look, hey, I mean I wouldn’t say that I’ve drawn, you know, red lines in that sense at this point. It is all about making sure we get a good deal overall. Yeah. We’re going to make sure that it works for our farming sector and I’m very mindful of not selling one out to advantage another. It’s about making sure that it’s a good deal that is ultimately in everyone’s interests and if there are some negative aspects, well then we’ve got to make sure we step through how we manage them.
Bronwen O’Shea: Federal Trade Minister Simon Birmingham is who you’re hearing from in our region today here on ABC Goulburn Murray.
Unfortunately, today we’re reporting about the decision from Nestle yesterday to close its tinned milk factory, predominantly tinned milk factory at Tongala in the Goulburn Valley. So, over 100 people are going to lose their jobs over the next sort of 12 to 18 months. And Nestle said, a) we’re not drinking as much tinned milk as we used to be but b) that they have been affected by cheaper overseas imports. So I guess that’s why I’m raising this with you. We’ve seen this time and again; big employers like that in the food processing sector shut up shop in Australia and relocate overseas. What can be done about that?
Simon Birmingham: The individual cases are very challenging for individuals, communities, when you see a closure like that and the job losses like that and the impact that it has. And so we’ve always got to be mindful of that. On the whole, as I was saying before, our export performance and our trade performance has been incredibly successful over recent years and that Australia does now export more than we import. I think for 28 out of the last 30 months we’ve recorded a trade surplus. So …
Bronwen O’Shea: So would you say that their argument that they’re too negatively affected by cheaper imports or on the flip side, they’re benefiting from the opportunities to export is – would that …
Simon Birmingham: Well …
Bronwen O’Shea: … be an argument to make?
Simon Birmingham: I have to get right down to the granular level of the tinned milk market and really explore that precisely to see whether their argument stacks up there. But the dairy industry I know has been through an incredibly challenging time. The water prices that are high, water availability that is low, drought affecting pasture growth, as well as then the market pressures and the domestic sensitivities of milk prices. All of that have made for very tough times in the dairy sector which is why I’m spending a lot of time in these consultations engaging with dairy farmers, dairy producers, cheese makers, right through the value chain there to talk to those communities.
I certainly see in parts of Australia now that I think we’re moving past the commoditization effect and we are actually seeing more producers shift to higher value products that they’re able to send out to the marketplace, whether that’s in the dairy sector, where I visited a cheese maker yesterday who is producing very boutique cheeses that are selling for around $600 a kilo in the presentation style that is being approached now.
Bronwen O’Shea: Are they made of gold? What are they putting in this cheese?
Simon Birmingham: It is- they are quite incredible, they taste great. I was very lucky to be able to have a taste but, you know, they are also very much about packaging and presentation and the value adding there including one of the products or the particular $600 a kilo product using green ants from the Northern Territory as a additive to the cheese. So great …
Bronwen O’Shea: And people are going to buy and eat that at $600 a kilo?
Simon Birmingham: People are buying and eating it.
Bronwen O’Shea: Okay.
Simon Birmingham: The exports to the United States there are growing substantially. That’s not for everybody. That’s a very boutique and niche space of the market. But elsewhere, if you look at our exports to China, increasingly we see packaged, branded, individualized products as part of the digital trade, the ecommerce trade, where people go on to platforms like Alibaba or Wechats platforms order their goods directly and they want to see that it’s an Australian good. They want to believe it’s the same Australian good that appears on our supermarket shelves or is consumed by Australians because that goes to the safety, the reliability, the quality of those products.
So it’s about helping our industries to adapt into those spaces where the global markets are going and where we can play to the fact that no, we’re not a cheap low cost producer, particularly when it comes to value adding and more labor intensive parts of production. But we are absolutely one of the safest, most high quality and reliable. And to consumers who have cash, will pay for that right around the world.
Bronwen O’Shea: ABC Goulburn Murray is where you are and Simon Birmingham, our Federal Trade Minister, our guest this morning. And you’re in town of course today as we farewell Tim Fischer, former deputy prime minister, former Nationals leader and …
Simon Birmingham: [Audio skip] He was an exceptional figure and I’m pleased that I was able to bring forward the visits that I’m doing in the local area today to coincide with Tim’s memorial as the current Trade Minister reflecting upon a former trade minister.
I think he’d be pleased to know that I wasn’t just here for his service but that I’m out talking to those local farmers, producers and people who are on the land doing the jobs that Tim valued so much and championed so much. As trade minister, he opened the way initially for China’s ascension to the World Trade Organisation and helped with that process. Australia’s initial engagement with many of the South East Asian nations that are key partners today. And so the things that we have done previously through our free trade agreements built very much upon the work that Tim Fischer did as trade minister.
I got to know him most after he left the Parliament but before I entered the Parliament when he was chairing the National Wine Foundation and I was working for the Winemakers Federation of Australia at that time. And Tim’s passion for such amazing ventures and at the time we funded in the remote community of Docker River projects to help with capturing wild camels and exporting those wild camels and creating industry and a marketplace for those people in a very remote Indigenous community. And you know, Tim brought such passion, drive, but care for the individual and I think that was what came through in everything he did whether it was a global trade agreement or working in a local community. It came down to that, you know, that passionate care for individuals in their circumstances that we pay tribute to today.
Bronwen O’Shea: Appreciate your time. Thanks so much for coming in.
Simon Birmingham: Thank you, Bronwen.