Topics: Asia-Pacific Economic Cooperation; US-China trade tensions; Hong Kong; China’s developing country status; negative globalism; The Regional Comprehensive Economic Partnership.

Transcript, E&OE

27 October 2019

Ticky Fullerton: Well, our Trade Minister Simon Birmingham is heading overseas later this week. He joins us live from Adelaide.

Minister, very nice to talk to you there. I know that APEC meeting is coming up a little later but- love to talk about the relationship at the moment and what you think could come from the talks on China-US free trade, particularly given Mr Pence’s comments.

Simon Birmingham: Well, great to speak with you, and look, I think we’ve seen in the last couple of days the Friday night communications between leading US officials and leading Chinese officials as part of the negotiations. Very high-level discussions there between Vice Premier and Commerce Secretary and Trade Representative, demonstrating that things are progressing following the announcement of a stage 1 settlement in terms of the US-China trade tensions.

Now, we continue to eagerly await some more details around what that stage 1 settlement looks like, but it is encouraging that notwithstanding other tensions and pressure points in the relationship we do still continue to see that very high-level dialogue happening, positive noises coming from both sides, and hopefully we can see that the step forward in terms of concluding at least the first stage of negotiations, and therefore bringing down the tension levels in relation to this trade conflict is achieved. And obviously, I’m sure there is a fair bit of pressure to ensure that is realised ahead of the two presidents meeting in Chile in just a couple of weeks’ time.

Leo Shanahan: Minister, you talk about tension levels going down, but this speech from Mike Pence on Thursday did anything but that, one would argue. I mean, he did talk about aggressive and destabilising factors in China. He brought up human rights. Do you think these issues will be raised at the Chile meetings?

Simon Birmingham: Look, that is entirely, of course, up to the two presidents as to the topic of their discussions. I’m sure that when the presidents of the US and China get together they talk about more than just the trade issues, but clearly that has been at the forefront of the bilateral dialogue between the US and China, and no doubt will be a key part of the discussions that happen. But it’s important to underline: it was Friday night that the US Commerce Secretary and the US Trade Representative were in phone discussions and negotiations with the Chinese Vice Premier, building on what had been… for the sake of Australia’s trade and export arrangements. We’re monitoring the details, as I say, very closely and want to see what is in this agreement, and we hope it is an agreement that is consistent with WTO rules; that isn’t managing trade and purchases in a way that’s detrimental to our farmers or business or compete with anybody. And if it’s about …

Ticky Fullerton: Simon Birmingham, you mentioned there our own trade opportunities here. If I come back to Mike Pence for a moment: he also seemed to be linking trade talks with Hong Kong. The White House has said a violent crackdown would make a trade deal less likely. Mr Pence said he supported the protest movement. Where does Australia sit on that now, given that the US Government has come out through Mr Pence?

Simon Birmingham: Well, Australia supports the right of individuals to protest peacefully and appropriately. We support the basic law that exists in Hong Kong — the two systems that exist — that gives Hong Kong its own unique identity and makes it so beneficial to business. And we’ve been very clear in our support for that. We see that our trade deal with Hong Kong; it is a different deal to the one we have with the People’s Republic of China. It gives life to the two systems and to the separation of those two systems. And we continue to monitor the situation there closely. Our view is that the final ratification of our trade agreement with Hong Kong is a demonstration of support for two systems, and it’s important to underpin that into the future, which is why we’re moving ahead with that. But of course, we continue to monitor the situation closely. And absolutely, a violent crackdown and entry of the People’s Liberation Army, as some have speculated, would be a very different set of circumstances. But we hope that doesn’t occur and we continue to urge for a peaceful settlement of these issues.

Leo Shanahan: Now Minister, you are going to Shanghai ahead of APEC for the big China Expo. It’s quite an event. I was there last year myself. But will you be pushing this line that China should be treated like a developed nation by APEC, as the Prime Minister has said?

Simon Birmingham: We pushed that line in the negotiations that we have that are live at present. So in relation to matters such as negotiations on e-commerce rules or on fishery subsidies, our view is that the utilization of special considerations by countries like China should be minimal or nil, and we take that into the negotiations that we undertake. Clearly, China’s economy has transformed remarkably in the last couple of decades. That’s something Australia welcomes, and we want to see that transformation continue in a positive way. But absolutely now, as a far greater, stronger economic power, China has to live by rules and standards that are commensurate with that, and that’s the approach we consistently take.

Ticky Fullerton: The Prime Minister has talked about this — pushing the W- certainly in terms of the WTO on the developed country status. He also, of course, did a recent speech at Lowy. He talked about negative globalism. Now Minister, in Senate Estimates this week, we found out that DFAT wasn’t consulted on a couple of these speeches, including the developed country and negative globalism. I mean, is this of concern — that the Prime Minister’s Office seems to be bypassing DFAT in quite important messages?

Simon Birmingham: Well, the Department of Foreign Affairs and Trade provides advice, analysis to all of us — to the Foreign Minister, the Prime Minister and myself as the Trade Minister — and we take all of that advice into consideration, then in the speeches that any of us deliver and the policy decisions that we make. Both the Foreign Minister and I were aware of the respective speeches as they related to us. But ultimately, the Prime Minister gives his own speeches in his own language, in his own words to make the points that are consistent with Australian Government policy. And when it comes to China’s development status, ultimately the World Trade Organisation rules allow countries to self-designate, but what we do in our negotiations is urge every single country to negotiate in a way consistent with their overall developmental standing. And in China’s case, that has changed remarkably from when they entered the WTO and rightly has some concessions at the time; to negotiations that take place today, where the case for those concessions is much weaker, if it exists at all.

Leo Shanahan: What about this concept of negative globalism, Minister. What does the Prime Minister mean by this? What kind of institutions are we talking like the WTO for instance, is that who we’re talking about it? And does this concern you? What are your concerns in terms of negative globalism?

Simon Birmingham: The WTO remains fundamentally important to Australia, and we are at the forefront with a number of other countries in trying to push for resolution of issues that both major economies in some ways are making challenging at present. We’ve discussed the development issues, but also elements of US engagement in terms of blocking appointments to the appellate body of the World Trade Organisation, are making it very challenging in terms of maintaining that rules based order to global trade that is important for Australia as a very outward-looking trading nation. But elsewhere, of course, we’ve seen over the years issues like in human rights debates, and so on, when we find ourselves being lectured by countries whose human rights records are appalling, and yet they use the fora of certain multilateral organisations to do so. And you know, that’s just unacceptable and I suspect they’re the types of things the PM had in mind.

Ticky Fullerton: Minister, we’re almost out of time, but I must just ask you about RCEP, which is a very important meeting that you’re going up towards. This is the top 10 ASEAN nations, with Australia, New Zealand, China, India, Japan, South Korea. Now, India doesn’t look very happy about this, particularly in terms of their tariff situation with China. Can you really get agreement?

Simon Birmingham: Well, it’s going to be a very challenging few days now, Ticky, to make sure we seal as much agreement as we possibly can out of RCEP, and present to leaders when they gather from the 16 nations, ideally, text that has been concluded. And I think that is within striking distance for us — to be able to settle all of the text of the trade agreement there, which is a very complex one. In terms of the market access exchanges between all of the different countries I think, overwhelmingly, they will be concluded between the 16 different countries as they all exchange market access offers with one another, and that we are well-advanced in settling that with nearly everybody. But it is going to be a challenge to see whether we can get all of that done in relation to India’s participation in particular. We are working as hard as we can because we see enormous value in trying to bring India along in this journey, making RCEP as inclusive as it can be. And in doing so, it will encompass some 50 per cent of the world’s population; a third of global GDP. So it’s an incredibly beneficial arrangement if we can seal it. But I don’t underestimate the challenge of being able to conclude with all 16 countries, and particularly the challenges of getting the market access arrangements and exchanges between all of those countries settled in what is really just a weeks’ time now.

Ticky Fullerton: Minister Simon Birmingham, we wish you all the best with that. Very nice to catch you there on a beautiful morning in Adelaide.

Simon Birmingham: Thank you very much. Cheers.