Topics: Australia-China trade relationship, Queensland tourism; Cruise industry;
11/30/2020
07:35AM
Peter Stefanovic: Let’s go to Canberra now, joining us live is Simon Birmingham, Minister for Finance, Trade and Tourism. Minister, good to see you. Thanks very much for joining us this morning. Let’s start off with China, the ongoing stoush that exists at the moment. Do Australian wine producers need to accept that China is a lost market?
Simon Birmingham: Look, I wouldn’t describe it as a lost market, but it is an incredibly challenging market now for the Australian wine industry so long as these tariffs remain in place. We’re going to work with the wine industry as hard as we can to try to overturn this decision by China and to try to ensure that we get those unfair and unjustified tariffs removed. But in the interim, yes, it is going to be a hellishly tough time for Australia’s winemakers. That has impacted them, it has impacts for grape growers and it’s why we’re going to work with them as hard as we can to grow into other markets. It’s worth noting that the free trade agreements Australia has in place mean that Australian wine can enter tariff-free into other markets like Korea where we have an FTA, United States where we have an FTA, Singapore where we have an FTA, and the next year, our Japan FTA will bring wine tariffs to zero as well. And that, of course, we are pursuing in big markets for us like the United Kingdom and the EU, trade agreements similarly to try to get those wine tariffs eliminated.
Peter Stefanovic: To achieve progress here, you’re going to have to go to the WTO, right?
Simon Birmingham: Well, the WTO is the independent umpire. Australia is a country that has been a member of the WTO or its predecessor body since 1948. We believe in a rules-based system to international trade. It’s a crucial thing, we think, to give certainty to businesses as they go around trading relations about the world. If you back a rules-based system, that means you ought to call out when you think the rules have been broken and call in the independent umpire. And so we certainly reserve all our rights to use the WTO processes. We’ve already raised our concerns through those WTO processes. And certainly we will look to, if it comes to it, there is some domestic processes in China on the wine case still to go. But if we fail at those domestic hurdles, then we reserve all our rights in relation to a WTO appeal as well.
Peter Stefanovic: But that whole process could take three to four years, right?
Simon Birmingham: It is a very long process, and so that’s why, as I said before, the opportunities in other markets and the support we want to provide to access those other markets is a very important thing too.
Peter Stefanovic: So those wine producers, though, and there are many of them in Australia that purely rely on China to survive, with that out of play for the next three to four years, are you expecting that they could go under?
Simon Birmingham: Look, there will be real business pressures for certain wine producers. And I spent my pre-political life working in the wine industry, so I know the industry well and I understand the different sectors that make it up. Ultimately, these are business decisions as to where you trade, and these are risk management factors if you choose to trade entirely into one country. But what we’ve sought to do as a government is give Australian businesses the maximum choice. And we haven’t just struck a deal with China. We struck trade deals with Japan, with Korea, with Canada, with Mexico, with Indonesia. We’ve been out there aggressively striking new trade agreements to make sure that Australian business have got the maximum opportunity to spread their risk, to expand into other markets as well.
Peter Stefanovic: Well, diplomacy, Minister, as you know, it’s all about conversations and negotiations at the moment, but it’s just not working with China. Either Australian officials aren’t trying hard enough or China is just having a sulk. Which one is it?
Simon Birmingham: Well, I can assure you that our officials are all trying and working very, very hard. That our team in Beijing, our foreign affairs officials, our agriculture officials, all working at every level they can. It’s been well publicised right through the course of this year, from the very earliest of these sorts of disputes, that I wanted to sit down and talk with my trade counterpart in China. Australia is willing to come to the table for dialogue to try to resolve these issues. It’s China who’s unwilling to reciprocate. We ought to remember in all of this, it’s China who has decided to take these actions, not Australia. Only China can reverse these actions. We urge them to do so. We’re looking at all of the avenues with the independent umpire, but we also remain very willing to sit down and have the dialogue and discussions to try to work through these types of issues. Let me give you an example, we actually had a WTO case against Canada over the last couple of years. We challenged Canada, it also related to wine market access. Now ultimately, we didn’t get to the point of a final WTO ruling because the two countries came to the table and worked it out. And that is the ideal situation that we would like to repeat with China, that even if we ignite those formal WTO challenges, there is always an off ramp, always a pathway, and that is called dialogue and discussion.
Peter Stefanovic: Okay. Just a couple of quick ones. Minister, before you go, Queensland are about to open up its borders, particularly in New South Wales and Victoria. No doubt that is a relief to you as Tourism Minister. But does it also give you some anxiety when there is the threat coming from Queensland, that if there is another outbreak, they won’t hesitate to shut the borders again?
Simon Birmingham: Look, I’m thrilled to see the borders reopened, but not as thrilled as the Queensland tourism industry will be. New South Wales and Victoria represent an $8 billion tourism market for Queensland. So that’s a huge market that Queensland tourism businesses have been going without, and people will be very happy to see it open again. I urge people to book with confidence, at least because airlines, hotels, all of those companies, have recognised that given the uncertainty that’s out there, there need to be more flexible terms and conditions to able to change your bookings, vary your terms in case you find a disruption. I understand that there’s a high degree of anxiety about whether or not a state like Queensland that has shown a high propensity to whack the borders back in place at a moment’s notice may disrupt that- those travel plans again. But for the sake of the tourism industry, I urge people to recognise the tourism businesses have pivoted. They’ve changed their terms and conditions. People should book with confidence, knowing that should something unfortunate happen, they’ll get their money back. They’ll get another chance to have their trip and get out there and support Australia’s tourism businesses, because they sure as heck need it.
Peter Stefanovic: I’m sure they are. No doubt about that. Just finally, Minister, the cruise line industry wants to get back up and running again. It’s confirmed that it will impose mandatory COVID tests for guests and crew before boarding, limit passenger numbers and conduct daily health monitoring and temperature checks for all on board. Are you satisfied with that?
Simon Birmingham: Look, it’s not a matter for me to be satisfied, it’s a matter for the health officials to be satisfied. I’d make the observation that a daily COVID test just before you get on board is only as good as that day. We know that COVID has a 14-day incubation period potentially. And so you can not have it one day, but may well have it a few days later, having had it in your system but not showing up at that earlier point. So these are some of the concerns that clearly sectors like that will have to work through. I welcome the fact that they are doing the hard yards of trying to find ways to be able to safely reopen. And at some point, they will be able to safely reopen. But they’re going to have to get through the hurdles with the health officials first.
Peter Stefanovic: Okay. Minister Simon Birmingham, appreciate your time this morning. Thanks for joining us.
Simon Birmingham: Thank you. My pleasure.