Topics: Australia-China trade relationship.

Transcript, E&OE

6 November 2019

Kieran Gilbert: Okay, let’s turn our attention now to my interview this morning with the Trade Minister, Simon Birmingham. I spoke to him from Shanghai. He’s attending a major export summit being hosted by the Chinese Government, and in fact it’s his third visit to China in 12 months, which is interesting given we’ve had these bilateral tensions. Certainly some strong criticism of the Chinese Government. Then I spoke to the Trade Minister about the implication of some of those comments.


Simon Birmingham: I’ll leave it for others to seek to characterise or comment on the temperature or the like of the relationship. But you know, we’re just focused on building the partnership, strengthening the partnership and getting on with what is a very valuable and complimentary partnership for both China and Australia. Our businesses, our trade, our engagement has played a role very happily in China’s growth, development and success over recent years. It is, of course, also been of immense value to the Australian economy and we want to make sure complementary partnership continues to grow successfully into the future and that was very much the focus of Prime Minister Morrison’s exchange with Premier Lee.

But yes, there are a number of issues beyond trade, investment and the economy that we have dialogue over. Let’s make sure we do that effectively between governments but let’s also ensure that we don’t impede the opportunities that are on show here, for example, where more than 200 Australian businesses are in Shanghai attending the world’s largest import expo at the invitation of the Chinese Government and these are enormous opportunities for our two countries going forward.

Kieran Gilbert: So do you believe the Chinese leadership is being pragmatic in that sense? Willing to look beyond some of the tougher criticisms from your Government?

Simon Birmingham: I welcome and thank China for the warm welcome that we’ve received here; for the opportunity they’re providing to Australian businesses who are to get on with meeting thousands of Chinese businesses, buyers, customers in the relationship there. And ultimately, what we have is, as I say, a partnership where yes, there are difficult things for us to work through from time to time on matters such as human rights. We’ve had dialogues stretching back decades between Australia and China; they’ve had points of difficulty but through it all, the successive Australian governments have been able to still deepen and strengthen the relationship and that’s had benefits that flowed both ways.

It’s seen hundreds of millions of Chinese citizens lifted out of poverty, enjoy improved living standards, improved education standards, improved health standards whilst also providing real job opportunities in Australia. And today, one in five Australian jobs are trade-related and that type of employment opportunity generation in Australia has been driven in part by our success in creating more trade opportunities by undertaking trade agreements. And that’s why we continue to do that as the PM and I were doing in Bangkok at the weekend.

Kieran Gilbert: It’s a very difficult situation, at many levels, the relationship to keep it on an even keel. I guess we were reminded of that yesterday when President Xi Jinping spoke about potential knowledge blockades as we face the next round of technological innovation. They’ve just launched professional and business services on 5G networks in China at the same time that US, Australia and others are blocking Huawei. When President Xi talks about knowledge blockades, he’s talking about Huawei and other Chinese technology companies, isn’t he?

Simon Birmingham: Well I won’t seek to put words into President Xi’s mouth but in relation to issues of 5G technology, our Government has a clear policy that seeks to ensure that critical infrastructure in Australia is protected. It’s not a policy targeted at any one company or any one country. It’s a policy that simply ensures the sovereignty protection of critical infrastructure and a communications technology that is going to reach deep into Australian businesses, household and life over the years to come.

In terms of the broader relationship in areas of technology cooperation, research cooperation, the development and utilization of those technologies, I’m sure that we will see huge continued growth in those aspects of the relationship between Australia and China; that the type of decisions or policies put in place that any government would consider in terms of protecting its critical infrastructure won’t impede the commercial or market operations of our economies.

Kieran Gilbert: You say that it’s a policy not directed at one company or one country but if this was a UK- a British company with this sort of capacity, you wouldn’t block it, would you?

Simon Birmingham: The policy is clear and that is that companies who may be subject to direction by other governments, governments other than Australia, are not to be participants in relation to the critical infrastructure elements of the 5G network. That has been something now that we’ve been clear and consistent on for a period of time. There are a number of countries, a number of circumstances where that could be the case and so we maintain that to protect what we see as the critical piece of infrastructure that, as I say, will reach very deep into Australian businesses, Australian homes, Australian governments. And that’s why we’ve taken that decision. And whilst each and every government around the world will make their own decision about how they protect that type of infrastructure, I’ve got no doubt that it is not an uncommon, in fact, it is an expected thing of the peoples of different nations to ensure that those types of critical infrastructure are protected in terms of how they impact upon the sovereignty and operation of nations into the future.

Kieran Gilbert: Is there a strategic benefit, a broader strategic benefit by incorporating China within to the rules-based structure of the RCEP as it’s called, the Regional Comprehensive Economic Partnership, one of the biggest trade deals in the world? Obviously trade bottom line, is there a strategic bottom line as well?

Simon Birmingham: Well there’s certainly both an economic and trade benefit and yes, there is a strategic benefit too. The economic and trade benefit is realised by 15 nations in our region, some 29 per cent of global GDP, a huge population base and some of the fastest growing economies of the region having a more common set of trading rules or common understanding of what an owner’s rules of origin that can allow Australian businesses to better integrate into the value and supply chains elsewhere. So for example, manufacturer, you’re going to have better, easier common rules to be able to supply those car parts into vehicle manufacturers in Thailand, or in Japan, or in Korea, or in China, and know that those supply chain routes will be open to you.

On the strategic question, this is an important agreement that is being driven very much by the 10 ASEAN countries. It gives them a clear leadership position in our region. ASEAN has 45 years of successful engagement between those 10 countries and they are now stepping forward to play a leadership role, leading Australia, China, Korea, Japan, New Zealand in this RCEP agreement and that is very important in terms of those countries who are fast growing, being in a position to be able to help to shape the economy of our region and provide a real foundation for closer cooperation across our region.

Kieran Gilbert: Critics of the deal, including the Australian Fair Trade and Investment Network have said that the absence of India severely diminishes the impact and the significance of the deal because Australia already has an FTA with ASEAN and the other nations concerned. It was India that was going to be the big change. Is that a fair criticism?

Simon Birmingham: Well in terms of the network you refer to, I’m yet to see a trade agreement that they haven’t opposed, so I’m not sure that they’re a particularly open of reliable source of information. But of course we’re disappointed that India have decided that at this time, they’re not proceeding with RCEP. That would’ve been a genuine value-add to the RCEP agreement. You know, the door remains wide open to India and we hope that discussions and negotiations can continue. But in the meantime, the 15 other nations are getting on with RCEP and Australia bilaterally will get on with continuing to implement our economic engagement strategy with India, which is a comprehensive one that engages not just me as the Trade Minister, but also our Resources Minister, our Primary Industries and Agriculture Minister, our Education Minister, our Foreign Minister, all of whom have tasks under that strategy to be able to deepen the relationship. And what we really warmly welcome is India’s commitment that that is a two-way flow where they are developing the Australian economic strategy from India’s side and we hope that that will be in a position to be finalised by the Indian Government ahead of Prime Minister Morrison accepting Prime Minister Modi’s invitation to visit in January.

Kieran Gilbert: There is a Cabinet meeting today, you’re obviously missing that being in Shanghai. It’s going to sign off on the next round of drought support, direct support for the communities and businesses affected. Is part of this – I don’t want you- obviously you’re not going to pre-empt the final announcement, but in terms of the idea, the vision behind this is to partly maintain hope, hope in these communities that have been so badly affected by this ongoing drought.

Simon Birmingham: Well look, hop is an important part of it, but ultimately it’s about responding to the circumstances that are there. Prime Minister Morrison has made many visits and tours into drought affected communities now and each time it’s been about checking the situation in those communities and coming back and thinking then about the policy responses to deal with what is an ever evolving circumstance. It’s not something where 12 months ago when he was in those communities and developing the initial policy responses you could say – well, that’s it, done and dusted, forget about it – because we’re 12 months on. The drought has continued, the circumstances in those communities has worsened. And so yes, you want to provide hope for the future and in part, the things that I’m doing here in Shanghai are about that, ensuring that when the drought breaks and our farmers are back on their feet, the market access, the business opportunities, the export opportunities are there for them to be able to pick up their production and succeed to do so. But also about building long term resilience while still supporting them to make sure that their productive capacity isn’t lost in the meantime, that they are able to pick up when the drought breaks. And of course, providing support not only for the individual farmers, but also for their communities. And we’ve done that through grants to local councils, we’re supporting farmers through payments to them, but we build resilience as well through the type of funds that we’ve established and we continue to look — and that’s exactly what’s happening at present — at what else can be done as the drought goes on to support those farmers, those communities and to make sure they’re well placed for the future.

Kieran Gilbert: Trade Minister Simon Birmingham joining us from Shanghai this morning, appreciate it, thanks.

Simon Birmingham: Thank you Kieran.