• Transcript, E&OE
Topics: China-Australia trading relationship, Australian trade economy.
11 May 2020

Annelise Nielsen: Joining us live now is Trade Minister, Simon Birmingham. Simon Birmingham, thank you for your time. Very significant news with this barley development with China. Do you think it is premature though, to link it to the trade tensions with the country given that this barley issue has been underway for about 18 months?

Simon Birmingham: Well, thanks Annelise, it’s good to be with you. And yes, it is important to keep that perspective there, that this was an investigation launched by China’s equivalent of our own Anti-Dumping Commission. It was launched close to 18 months ago; it was always due to conclude around about now — there was a deadline that had to be met in terms of the decision being handed down.

So, we knew that this information or this news was coming, we would have had expected and hoped, and still hope, that the final determination is one that reflects the reality which is that Australian agricultural producers — our farmers, our grain growers, our barley producers — are not subsidised by the Australian Government, they don’t dump their product on international markets below cost and they are simply some of the most efficient and productive farmers in the world — that’s why they produce large volumes at high quality and efficient prices.

This morning I spent some time speaking with representatives of the grains industry across Australia as we frame a response to this draft finding. And we will make sure we put the strongest possible case forward back to the Chinese authorities as we seek to get a final outcome that reflects the reality, which is that our grain producers operate on purely commercial terms.

Annelise Nielsen: Do you think though, Australia pushing for this global inquiry into the source of the coronavirus outbreak and its focus on China will impact that decision?

Simon Birmingham: Well, each of these issues ought to be determined firmly on the merits of the cases before them. And the merits in terms of the suggestion that Australia’s barley farmers dumped their product below production cost price on the Chinese market, or any other market is without foundation, without clear evidence. And that’s why we think this case that’s been long running ought to be knocked back, and that there’s no justification for applying duties to our farmers and their barley exports to China.

In terms of the very separate issue of an investigation into the origins and handling of COVID-19, well, I think the world, rightly, should expect that — when hundreds of thousands of people have died, millions of people have lost their jobs, billions of people have had their lives disrupted — of course there ought to be an investigation to help us learn lessons to make sure that if we can avoid a repeat of it in the future; we do, or if there is a repeat, that we handle it much better in the future so that we do minimise that loss of life and those disruptions. And I think the case there is equally a clear cut one in terms of hoping to see the World Health Assembly move forward with a resolution that the European Union is putting forward — and we and many other nations are supporting that.

Annelise Nielsen: It’s fair enough to say that it ought not to impact this particular decision that Australia is pursuing it, but do you think the reality is that it will? And is that a cost worth bearing?

Simon Birmingham: Well, it should not. And we would be deeply, deeply concerned were that to be the case. And we’re already worried about this draft determination — we are analysing it carefully, and we will make sure that we provide the strongest possible case back to those Chinese authorities. But these issues would all be determined on the merits of the arguments, there is no relationship between them whatsoever, and it would be of grave concern were any connection to be drawn.

And certainly, the Australian Government’s view and the arguments we’ll take are about the merits of the case. And when it comes to the barley and the grains industry generally, we have world class farmers who produce premium crops, high quality, great volumes when the weather allows them to, at low costs and prices that are competitive for the world, and that’s why they command large markets around the world.

Annelise Nielsen: Are you in conversations with the Chinese Government at all about any other industries that might be under threat? We’ve seen them threaten the economic relationship previously because of our pursue- us pursuing this global inquiry. Are other industries a concern – things like meat exports, dairy?

Simon Birmingham: We’ve continued to see strong export levels out of Australia over the first few months of this year and it’s to the credit of our exporters, our resources and energy sector, our agricultural exporters and many others, that they have managed to battle through the logistical challenges and the ups and downs of restrictions, to still be able to record, indeed for the last month, another record trade surplus for Australia.

And so, it’s a demonstration that we’ve continued to trade effectively, including continuing to trade effectively with China. And that is the type of cooperative economic relationship that we seek to continue with all of our key trading partners including China. And we hope to be able to maintain that level of free flow and trade consistent with the terms of the China-Australia Free Trade Agreement and the other undertakings we have between one another.

Annelise Nielsen: Is now the time to be revisiting Australia’s trading relationship with China, diversifying our portfolios so we’re not so reliant on China? Because we’ve seen how quickly these political considerations can impact what’s so important for the Australian economy.

Simon Birmingham: Well, it really a business decision for individual businesses as to who they sell their product to. As a government we’ve sought to provide the maximum number of choices to Australian businesses, that’s why we have free trade agreements in place — not just with China. But we’ve secured them with Japan, and the Republic of Korea, through the Trans-Pacific Partnership, we’ve opened up opportunities with Vietnam, and with Canada and Mexico for the first time ever. We now have secured confirmation following discussions I had last week with Indonesia’s Trade Minister, that 5 July will be the date upon which our Indonesian Free Trade Agreement comes into effect. And we continue to pursue negotiations with the EU, the UK, to implement our India economic strategy. And all of that is about creating more choices, more opportunities for Australian exporters to consider where they do business and with whom they do business.

But we also need to be mindful that China will continue to be the largest economy within our region, the second largest economy in the world and the largest consumer market within our region and that’s why we should continue to try to have positive economic relations there. Even though we may have occasional differences government-to-government, we want to make sure that we continue to have those positive relations as partners who share a place in this region, that enables us to be able to get on and do business where and when we can.

Annelise Nielsen: And just finally, Deloitte Access Economics has released some pretty grim modelling about the Australian economy – that we could be facing double deficits. They’re talking about $140 billion here. What’s the Government going to be doing in a trade sense to be trying to mitigate the damage?

Simon Birmingham: That’s why I’m so pleased to have seen the recent trade data that shows that our export volumes have been holding up incredibly well, and it’s why we’ll continue to try to create even more opportunities for business.

It’s also why, in terms of government spending, we haven’t just gone out there with measures to support jobs, such as the JobKeeper measure, and to ensure small businesses stay afloat such as our payments there — we’ve also been supporting things like the international freight assistance mechanism, where — because of the collapse of the global aviation industry — we are having to subsidise, contract, and operate to an extent a freight network out of Australia that’s enabling hundreds of millions of dollars of prime agricultural produce to still reach its export destinations around the world.

And now, we know our farmers, our exporters, work damn hard to secure export contracts around the world and we don’t want them to lose it just because they can’t get their goods on a plane at an affordable price. And so that’s about ensuring they keep those contracts, keep those trade routes open, so that when we move through the recovery phases, we still have every opportunity for people to keep exporting their product.

Annelise Nielsen: Trade Minister Simon Birmingham, thank you for your time.

Simon Birmingham: Thanks Annelise. My pleasure.