• Transcript, E&OE
Topics: China-Australian relations, Australian wine industry; state border closures
18 August 2020

Patricia Karvelas: Well, China’s Government has announced an investigation into Australian wine exports for alleged dumping. The Commerce Ministry says bottles of Australian wine under two litres will be the focus of a one-year investigation. Earlier this year, China concluded an anti-dumping investigation into Australian barley exports, which resulted in huge tariffs that crippled sales to the country. China is Australia’s largest wine export market by a big margin, and both Chinese officials and government media have previously warned that wine could be targeted due to worsening diplomatic relations.

Simon Birmingham is the Minister for Trade, Tourism and Investment so he’s really the man of the hour.

Welcome to the program.

Simon Birmingham: Hello Patricia. Thanks for the opportunity.

Patricia Karvelas: You’ve described this action as deeply troubling and perplexing, but it’s just the latest in a pattern of behaviour, isn’t it? Is it time to acknowledge that this is economic coercion?

Simon Birmingham: Well, Patricia, nothing will be gained by me ascribing motivations or otherwise to what might be happening. We have a case here of China announcing today that it is investigating Australian wine imports for allegations of dumping, allegedly allegations made by the Chinese alcohol industry. Now, it’s within the right of any country to receive such allegations, to choose to investigate them. We will have to respond at face value, as we will do, giving up more support to our industry. The Australian wine industry has worked hard over many decades to build an international reputation for quality, for premium product that is priced competitively around the world and enjoyed in large volumes in many, many countries, because of the professionalism and the innovation of our industry, and we’ll defend their integrity.

Patricia Karvelas: You’ll defend their integrity but you still can’t get your Chinese counterpart on the phone. What does that say about the health of the relationship?

Simon Birmingham: Well, what we will do in this case is we will engage at every level we possibly can. This is a formal process that goes through China’s equivalent of our own anti-dumping commission. So we will be putting forward the most detailed case we can based on all of the evidence that we can muster, all of the facts that should all be able to demonstrate very clearly that Australian wine is not subsidised. It is not dumped. It is simply produced at premium levels in quantities and qualities that are in demand overseas and priced accordingly. In fact, the latest data that we have seen shows that Australian wine sold in China was the second highest value wine sold in China at the time, second only to New Zealand, and of higher value than, for example, European imports into China.

Patricia Karvelas: Okay. So, Minister, when was the last time you tried to contact your Chinese counterpart?

Simon Birmingham: Well, we last spoke last year. We have communicated via correspondence this year…

Patricia Karvelas: But the question is when’s the last time… you tried to contact-

Simon Birmingham: …and it’s well known, Patricia, that- well, Patricia, it’s well-known that I have indicated that the Australian Government would like to have direct ministerial communications with China, and China has not reciprocated…
Patricia Karvelas: And have you reiterated that today?

Simon Birmingham: …China has not reciprocated that request. Our offer is standing. We remain ready to have dialogue because we believe the best way to work through difficult issues is for parties to sit down in a mature way and address those issues upfront, openly, honestly. That’s what we do.

Patricia Karvelas: And have you refreshed that call since this decision was made?

Simon Birmingham: We are refreshing that call. It’s a standing request, as I’ve said, and we will equally reach out again through correspondence, but also through all the other channels available to us, presenting the case and the evidence, as we should through China’s equivalent of our own anti-dumping commission but also through all of the other diplomatic channels using our embassy in Beijing and all of our different representatives that we can bring to bear to defend our wine industry who, as I say, don’t receive undue subsidies, don’t dump their product below market price…

Patricia Karvelas: Okay.

Simon Birmingham: …are nothing but world-class producers.

Patricia Karvelas: But you said last year was your last contact. We’re in August 2020. Doesn’t that reveal that this relationship is broken?

Simon Birmingham: Patricia, look, as I have said, time and time again, the Australian Government stands ready to have that dialogue. Now, you can seek to ask the Chinese [indistinct], if you like, as to why they won’t reciprocate. That’s a matter for them. We are willing to sit down, no matter how difficult an issue, and discuss it in a grown-up like way, confronting it head-on because that’s what mature nations do. That’s what we do to resolve issues. But in the interim, we’ll use all of the other means at our disposal in terms of defending the wine industry, and we will take this case at face value. China’s authorities are simply launching an anti-dumping case at the request of their industry, and we will respond as professionally and fully as you would expect the Australian Government and the Australian wine industry to do.

Patricia Karvelas: The National Farmers’ Federation has echoed your concerns. What kind of support can you offer the industry to help them get through this?

Simon Birmingham: Well, we will support the industry in terms of presenting the case that I’ve been talking about. We also continue to support the Australian wine industry and their expansion into many markets around the world. China is not the only market within which the Australian wine industry has seen growth, indeed double digit growth in recent years. And so, we see strong opportunities for Australian winemakers to continue to grow and expand their exports in a range of different marketplaces. But we value the China relationship. We value it as a trading partner, not just for wine, but in a range of ways that are mutually beneficial to our two countries, and that’s why we think it is to the benefit of China to sit down, to engage with Australia and to ensure that we can each continue to have a positive trading relationship that continues to be, according to all of the trade statistics, one that is trading at very, very high levels relative to historical trends.

Patricia Karvelas: But are you starting to think that’s less and less likely, Minister, given we’ve now seen a series of events that indicate that the Chinese don’t feel the same way about that relationship as the way that you’re describing it?

Simon Birmingham: We will continue to do what we have always done as a government and that is to open up as many opportunities and choices as possible to Australia’s exporters, to our farmers and businesses, who export today in a record volumes. A country, we’ve recorded 30 consecutive months of trade surpluses, exporting more than we import. We’ve seen many thousands of new small and medium-sized businesses grow in terms of choosing to become exporters in our six years in office. We’ve expanded our free trade agreement footprint not just to China, but to Japan, to the Republic of Korea, to the Trans-Pacific Partnership nations that brought us our first ever trade deals with Canada and Mexico. We just brought into force a new agreement with Indonesia. We’re pursuing new economic strategies with Vietnam and with
India, and of course pursuing negotiations with the EU and the UK. This is all about giving our exporters maximum choice. From that choice, those businesses make their decision about with whom they trade, but that choice also gives them the capacity to build maximum resilience.

Patricia Karvelas: China is making this complaint through the World Trade Organization. Does that mean they’ll be bound by its determination?

Simon Birmingham: Well no, they’re not. They’re making this complaint, they say, under their own domestic anti-dumping procedures. Now, those procedures need to be in compliance with the commitments they have given to the World Trade Organization. And in relation to the decision they made on barley earlier this year, we have indicated that if the appeal processes we’re undertaking in China at present fail, then we will undertake an appeal through the WTO process. So, we’ll certainly see-

Patricia Karvelas: And is that still your position?

Simon Birmingham: It certainly is still our position.

Patricia Karvelas: Is there anything to-

Simon Birmingham: We have full-

Patricia Karvelas: Please go ahead. Sorry.

Simon Birmingham: We have full confidence in our position there, and we believe that a WTO appeal would ultimately be successful but of course, we’d rather resolve the matters through bilateral means and using the domestic processes there first if we can, because that will be a faster and more efficient way for all parties to resolve it.

Patricia Karvelas: Minister, Is there anything to stop Beijing slapping tariffs on our wine imports now?

Simon Birmingham: Well, the China-Australia Free Trade Agreement provides a basis of commitments that each country has made to the other. China has honoured those commitments in terms of the removal of tariffs on a range of goods, including Australian wine. Now they could, as part of the investigation of what are known as countervailing duties, make a decision, an interim decision, to put some sort of duties on Australian wine. We hope that won’t be the case. We will argue strongly that those investigations are not warranted, but those are matters again for Chinese authorities. We will simply be presenting the facts and the evidence that shows there’s no subsidy of Australian wine exports, there’s no dumping of Australian wine on global markets, there’s no justification or need for China to undertake any of those actions.

Patricia Karvelas: Last week, Treasury Wines reported a 36 per cent drop in profit. Now their shares are in a trading halt. How is this going to affect producers?

Simon Birmingham: Wine producers have faced, like many exporters and businesses this year, a range of challenges and a disruption to freight routes, to demand in different countries as a result of shutdowns, has been intense, and a business like Treasury Wine Estates, who particularly provide premium product that goes into food service venues, to restaurants and to hospitality venues that have been so hard hit by the pandemic, have seen a real impact there. I understand this will be a serious for big players like TWE but also for hundreds of smaller winemakers across Australia. Now, that’s why we’re going to work closely with the wine industry. I have spoken directly to TWE, as I have to the CEO of the Australian Grape and Wine Association and we will give the utmost of support to them and rely on them as well for the evidence that they can provide us around market conditions, so that together we demonstrate to Chinese authorities that there is no basis in fact for the allegations being made.

Patricia Karvelas: Minister, before I move on to some other issues – because I do want to get you on some very significant issues – given you’ve described this as deeply troubling, perplexing, do you think it looks like economic coercion at this stage? I mean, given what we’ve seen over the last couple of months, and your many attempts to say: let’s have a conversation, let’s try and resolve this. Do you think this has now escalated?

Simon Birmingham: As I said in my first answer, Patricia, nothing will be gained by me ascribing motivation to this. We will tackle it at face-

Patricia Karvelas: But people expect you to be- to level with them as well. And this looks exactly like what it is.

Simon Birmingham: We will tackle it at face value. I understand, given the highly inappropriate marks that China’s ambassador to Australia made earlier this year about threats in relation to certain Australian products, including Australian wine, why many people might draw that conclusion. And the best thing we can do…

Patricia Karvelas: Because it’s the most logical conclusion, isn’t it?

Simon Birmingham: … for Australian industry is to tackle it- well, the best thing we can do for Australian industry is to tackle it at face value, to deal with the issues that are there, and to continue to reinforce the fact that Australia stands ready and willing to have any discussions and negotiations with our regional partners, whomever they may be, and our international partners, whomever they may be, including on difficult issues. It’s a reflection elsewhere if others are unwilling to sit down and reciprocate and have that same high standard of conversation and engagement.

Patricia Karvelas: What do you make of news that a security guard in Sydney has contracted COVID-19 from a returned traveler in hotel quarantine?

Simon Birmingham: The hotel quarantining process has been an absolutely crucial part of how Australia has successfully managed COVID-19. We did see, of course, the tragic failure in relation to Victoria that’s created difficult circumstances for so many people and families, such as your own, Patricia. But we know that equally, tens of thousands of people have been passing through hotel quarantine successfully, without incident, and so what I am confident of is that authorities in New South Wales who handled things so well to date, who will have been learning lessons continuously through this process, will, I trust, be on top of this. They have shown enormous capacity so far to respond to different clusters quickly, so isolate and quarantine where necessary, and I’m sure they’ll do so again in this incident.

Patricia Karvelas: But if there’s been this breach here too, doesn’t it also show a tragic failure as happened in Victoria?

Simon Birmingham: Let’s see what’s occurred in this regard. There is always the risk of transmission. It’s why appropriate higher testing rates are necessary. I know the South Australian government only announced yesterday that they were stepping up testing of some of those working in hotel quarantine facilities to, again, provide additional confidence in terms of how hotel quarantine is working, and safety for the community in regards to those who are working and engaging in that environment. So, with tens of thousands having gone through to date, we can see here that New South Wales has identified a case. They seem to be acting on it quickly. I’m sure, as they have successfully done in so many other instances to date, they will be able to trace, to isolate, to follow all the types of procedures that have thus far prevented New South Wales from going down the path of Victoria.

Patricia Karvelas: Were you aware the New South Wales Government was also using private security guards for hotel quarantine?

Simon Birmingham: I’m not aware of the specific details in relation to how New South Wales structures. I know that they have a very professional system that I am sure is worked up with their police and other authorities in place. We can see the success of New South Wales to date, that as they had a number of incursions crossing the border from Victoria over the last couple of months, New South Wales has managed to show that they have a testing, tracing and isolating system that is as good as any in the nation, if not the best in the nation, that has been able so far to suppress the spread of COVID there, despite the many challenges they have faced, as being the number one international port of entry into Australia, and the state that saw the largest number of Victorians cross their border. It is to the credit of the New South Wales Government that they have managed to contain things to date. And given that professionalism they have shown, I have confidence they will continue to do so.

Patricia Karvelas: I just want to get you on a couple of issues, and I’m pressing my luck. Your Liberal colleagues Dave Sharma and Katie Allen – and Katie Allen actually was on the show just yesterday talking about this – say they’re getting complaints from people who want to leave the country but have been denied permits. Are you looking at changing the rules around that? Because they say they want to push for a change.

Simon Birmingham: We regularly review all of the restrictions we have in place to make sure they are fit for purpose. There are exemption processes in place, and the Australian Border Force has processed many thousands of exemptions to enable Australians to leave the country for a range of both personal and professional reasons. And they will continue to do so. We will continue to regularly review how those exemption processes are working, to make sure they’re fit for purpose. Now, I understand-

Patricia Karvelas: Do you think there should be a review on this?

Simon Birmingham: I was going to say, we routinely review. It’s not a case of set and forget [indistinct], we work closely with-

Patricia Karvelas: Okay. So, that’s something that happens, but what’s your view? Is there a case to look at this again?

Simon Birmingham: Well, as I’ve said Patricia, we routinely review it. I understand there are deep frustrations from people who wish to leave the country, to reunite with loved ones or for other purposes. We’re trying to make sure that the ban on leaving Australia is enforced in a way where those who have a truly compelling case in relation to personal circumstances, of illness, of family members overseas, or in relation to significant business ventures or other factors that need to be taken into account, can be taken into account and addressed. My office has helped individuals in navigating that process on the spectrum of those issues, as I’m sure other Members of Parliament’s officers have as well. But we need do still need to maintain the degree of caution, noting the difficulty that exists in terms of flights in and out of the country, and the challenges that are posed when Australians who might leave the country then raise issues or challenges in relation to their return.

Patricia Karvelas: Just very briefly on tourism – you wanted us all moving around by July. That ain’t happening. WA is going to delay their next stage. Tasmania has announced today that their borders aren’t opening until December. Will borders be reopened by Christmas?

Simon Birmingham: Well, we can see the states and territories are making their own decisions on those matters. And while I respect their right to do so, I would urge all states and territories to take a sensible and proportionate approach to these things. I’m standing in South Australia where SA has really from the start of the pandemic had in place restrictions on Victoria that are much tighter now than they were, has continually had restrictions on New South Wales as well, but has opened up its borders in relation to Queensland, the Northern Territory, WA and Tasmania. Now, whatever people think about the arguments of the SA-New South Wales border, you can at least see a proportionate approach there, where other states and territories, who have had similar success in suppressing COVID, have been opened up from a South Australian perspective. I’d urge the other premiers and chief ministers to think about adopting a similar stance, rather than a blanket stance that is only going to continue to harm the tourism industry in those states, particularly when there are opportunities going begging from similar states that have similarly successfully suppressed COVID in their community.

Patricia Karvelas: So, you are disappointed by WA and Tasmania’s decisions announced today?

Simon Birmingham: I’m disappointed as the Tourism Minister, and I am sure there will be many tourism operators in those states and territories who will be disappointed. And that is, as I say, about taking a careful, proportionate approach in relation to different states and territories. We understand, nobody should be opening up their borders wholesale to Victoria at present. The Commonwealth has supported the quarantining of Victoria, recognising the threat it poses to other states and territories. Where you have no community transmission occurring in a different state or territory, there’s no reason why that shouldn’t be open to another state or territory where there’s no community transmission, and I’d urge leaders to think about that. Because what we know from a tourism industry perspective, is people holidaying within their own state will do certain things. They will support certain businesses. But there’s an extra mile that people will go in terms of touring, traveling and the experiences that they’ll book and what they’ll do when they’re travelling a further distance. And that’s where many tourism operators – be they in WA or SA or Tassie – where domestic activity intrastate is relatively open right now. But there are still many tourism operators missing out because they just have the type of product that people from within that state are unlikely to book.

Patricia Karvelas: Simon Birmingham, I know I took a bit of your time there, but we haven’t had you on for a while so I had lots of questions. Thanks for coming on.

Simon Birmingham: Thank you Patricia.

Patricia Karvelas: That’s Simon Birmingham, he’s the Minister for Trade, Tourism and Investment.