Topics: Australia-China trade relationship; Government supporting Australian industries;
Sheridan Stewart: Now to Simon Birmingham, the Federal Trade Minister who joins you. Good afternoon, Minister.
Simon Birmingham: Hello, Sheridan. Good to be with you.
Sheridan Stewart: Yeah. Good to have you here. Is John Mickel right, at least in some of the products Queensland exports to China being displaced by US products under this deal?
Simon Birmingham: This deal is an unconventional one between the US and China, and it’s also coupled with enormous uncertainty in relation to its potential execution. The deal does allegedly have a commitment from China to an additional $200 billion of purchase from the United States over a two-year period. But it’s got to be into some context. In 2019 alone, China’s total volume of imports grew by more than $250 billion. So just the growth in terms of what China imports in one year was in excess of the totality of this commitment that is meant to be spread over a couple of years with the United States. But I think in addition to that, we can see that the uncertainties that hang over this deal, the commitments between China and the US, and the way in which it would be executed means that- could I rule out any impact at all? No, that would be hard to rule out. But is it likely that the driver of the type of issues we’re seeing at present? I think that’s fairly unlikely as well.
Sheridan Stewart: We also heard from Queensland Wine Industry Association President Mike Hayes. Now he is saying the blame is squarely on our federal and state government’s relationship with China. Your thoughts on that?
Simon Birmingham: I’m not sure what people who – and I hear elements of the Federal Opposition making some of those sorts of suggestions as well – and I’m not sure what they are proposing that we should have done or will be doing differently. We continue to reinforce that we value the relationship and partnership with China. We continue to reinforce that we would welcome the opportunity for ministerial dialogue with China, and that Australia holds the door open for that. It is the ball very much in China’s court there given that they have declined to engage in such a discussion or dialogue. I’m sure that surely people aren’t suggesting that somehow we should change our policy in relation to the protection of critical infrastructure in Australia or our communications networks, or the protection of our democratic institutions, those sorts of issues, which we, as the Government, have undertaken or indeed call or support with most other nations of the world for a transparent approach to COVID-19, how it came about, and particularly how it’s been handled. And these are all things that I think people would expect us to do in Australia’s national interest. We don’t see those as needing to have an impact on what has been a mutually beneficial complementary relationship for a number of years now between Australia and China on a range of other levels, including trade and economic cooperation.
Sheridan Stewart: For our listeners here in regional Queensland, we’re very aware that there’s quite a few important industries to us that are apparently in the firing line for export bans from China. Timber’s now been added to that list as well. And the list has been growing steadily across the year. Is there anything the Government can do about that?
Simon Birmingham: Well, we continue to approach this in a couple of different ways, Sheridan. One is certainly on an issue by issue basis, where there are different technical issues that China has taken action on. We work through our diplomatic channels, through our agricultural representatives and with industry to try to resolve these issues. And so, we have been heavily engaged in trying to present the evidence on behalf of Australian exporters as to why some of the claims or suggestions by China are inaccurate. Or sometimes in relation to a single company, there may be a minor issue, and so we then work with that company to try to agree on rectification steps that can be taken to get their licence or approach to being able to export into the Chinese market reinstated. At a broader picture level, I do see increased speculation and commentary in the last couple of days that somehow there has been a ban of sorts put on Australian imports into China by Chinese authorities exerting pressure on Chinese businesses. But I also note that China’s Ministry of Commerce has denied that they have undertaken such actions. And so, I would hope that if they are telling the truth there, then they will work with our lobster industry, our seafood industry, our timber sector, and make sure that any of these other barriers or difficulties that are being encountered are genuinely addressed, and that they are true to their word in terms of not seeing such applications.
Sheridan Stewart: Some of the things we’ve been hearing seem fairly flimsy when it comes to reasons or excuses. China’s said that bark beetle in timber, heavy metals in rock lobsters; those claims have been difficult to prove or disprove. If they really just don’t want to buy from us, is there anything we can do about it?
Simon Birmingham: Well, we will continue to press on all of those sorts of technical issues. You’re right, sometimes they are challenging to prove or disprove, but that is why we have a range of technical experts who work with industry to try to resolve these sorts of issues. Ultimately, China has made commitments to Australia as part of the China-Australia Free Trade Agreement, made commitments to the world via their membership for the World Trade Organization – has commitments there. And we would be very concerned if they were behaving in a manner contrary to those commitments by seeking to exert some sort of pressure across Chinese business that prevented free flow of trade between businesses freely exercising their will to purchase and to provide goods to consumers. There’s no doubt that Australia’s goods are highly valued by Chinese consumers as being of high quality, as being very safe and very reliable. And so, that is why we continue to see, even through this year, an increase in exports for many of our products that have been hitting China’s shelves, including wine, including beef. And these are goods that we want to be able to continue to provide, not just because it’s good for Australian business, but it meets the demands of many Chinese businesses and consumers as well.
Sheridan Stewart: Well, Australian producers and the Australian governments on many levels have spent years developing these closer ties with China because those ties can be so lucrative. Has it been a mistake to put so many eggs in that proverbial basket?
Simon Birmingham: What we’ve been doing over recent years is trying to provide Australian businesses with the maximum number of choices around the region in the world as to where they trade. So, yes, we’ve done a trade agreement with China, but we also did trade agreements with Japan, with the Republic of Korea, through the Trans-Pacific Partnership with Canada and Mexico, with countries like Vietnam, Indonesia most recently coming into play with a direct bilateral agreement, negotiations that we have underway with the European Union, the UK, and economic strategies that we’re deploying with India. So, in all of those cases, what we seek to do is create the maximum choice for Australian business. It is then up to those businesses as to who they sell their goods to, where they develop their trade relations. What we have seen this year, sadly, is that because of a number of these administrative and other decisions that China has taken, the risk profile for Australian business in doing business and trading with China has clearly changed and has worsened. And so, I would expect that many businesses would be looking at those other opportunities that our government has created through our other trade deals and looking as to how they can explore further business linkages with those countries as well.
Sheridan Stewart: You’re hearing from Simon Birmingham, the Federal Trade Minister. Minister, just lastly, one point that Mike Hayes from the Queensland Wine Industry Association made yesterday is that if Australian producers are to have a critical market cut off like this, if it does come to fruition, some of those that- I guess, whispers that we’re hearing at the moment and hearing a lot of, Australian Government should be making sure that those markets are replaced to ensure that the industries and all the jobs they provide are maintained. Is that a view you agree with?
Simon Birmingham: Sheridan, we certainly work closely with industry to try to help them secure alternate access, alternate contracts where possible and to pursue those opportunities. These are business to business relationships. And so, we can’t provide guarantees that such business to business relationships always remain open. But I can say in relation to the barley sector, for example, where China did make a decision earlier this year to put additional tariffs on Australian barley going to China – which we disagree with and we think are unjustified – but we’ve been working with grain grower representatives to try to secure additional opportunities and contracts across parts of Asia, in parts of the Middle East. And so, there is work that we’ve stepped up through Austrade and through our diplomatic channels to try to help those traders in the grains market and grain growers overall. And of course, we would do the same with other sectors if similar events occur. And then on a day to day basis, we are always, through those Austrade and diplomatic networks, working to try to create new opportunities and avenues for our exporters to get out to market. That’s one of the reasons why we’ve seen growth not just in the China market, but in many other markets for our exports and why we have recorded now 30 months of consecutive trade surpluses for Australia, where we continuously export more than we import as a nation.
Sheridan Stewart: Senator Birmingham, thanks for your time on the program this evening.
Simon Birmingham: Thank you, my pleasure.
Sheridan Stewart: Cheers. Simon Birmingham, the Minister for Tourism and Investment, and Minister for Finance and Trade. Trade. He’s a busy man, isn’t he?