Interview on Sky News Live, Speers on Sunday, with David Speers.
Topics: Trade relationship with China, the Regional Comprehensive Economic Partnership, Indonesia free trade agreement, upcoming AUSMIN talks, imprisoned Australian writer Yang Hengjun
David Speers: Now, as we’ve been mentioning over the past half-hour or so, we’ve been aiming to get to the Trade Minister Simon Birmingham in Beijing. We’ve been unable to resolve some of the technical issues in the studio end at Beijing. But I am very pleased to say that the Minister’s joining us on the phone now. And thank you for bearing with us, Simon Birmingham.
You’re there, of course, as I mentioned, for the wider trade negotiations for the 16-nation Regional Comprehensive Economic Partnership trade deal, a mega trade deal not including the United States. Could I ask though, along the way, the government were hopeful you would get a proper bilateral meeting with your counterpart. Did that happen?
Simon Birmingham: Well, David, what I had was several opportunities for discussion with both Mr Zhong Shan, the Trade and Commerce Minister here in China, as well as Vice Minister Wang Shouwen. So we had opportunity to discuss a number of different issues. Not the full formal sit-down across the table for a long period of time, but numerous opportunities as the 16 nations were around the table, during breaks in discussions, to chat on the sidelines.
David Speers: Well, is that a little disappointing? And any word on whether the Australian Prime Minister might be invited to China some time soon?
Simon Birmingham: Well, David, I didn’t talk about Prime Ministerial visits. I am pleased to have received an invitation to return later this year. It’s my intention to hopefully do that. This is, of course, a critical trade relationship between China and Australia. It’s also a very strong one, and despite some of the negative commentary our two-way trade remains at record levels, has seen continued growth in a number of categories. And certainly I and my Ministerial counterparts here both expressed confidence in the ongoing strength of that relationship when we spoke with one another.
David Speers: Notwithstanding that, you were seeking some answers as to why there have been delays in Australian coal getting through Chinese ports. Did you get any answers on this? Are you able to explain why Australian coal is being held up?
Simon Birmingham: My Chinese counterparts continue to state that this is not a discriminatory practice, that it is applied in relation to additional environmental checks across different products. I’ve asked them to try and work with our authorities so that Australian business can better understand what those checks are, how they’re being applied, so that we can ensure efficiency there.
We can see some issues particular to thermal coal and we know that there may be some broader issues at play when it comes to China seeking to manage the volumes of thermal coal coming into the country. But we do want to try to get to the bottom of whether it is about demand management or supply management side from China, whether it is in relation to environmental checks, and I’ve asked for us to have some further dialogue on that.
David Speers: So you’re still not 100 per cent sure about what this is about, but suspect it may be China propping up its own coal industry?
Simon Birmingham: There are a number of factors that could be there and that may be one of them, as well as, as I say, in terms of the actual amount of coal usage within China we see as also possibly a factor there. So there could be numerous factors influencing it. Overall, we still see huge volumes coming through. Our iron ore exports are at record [indistinct] have been booming, which was noted by Chinese authorities in discussions with me. We see as well, in relation to coking coal, incredibly strong volumes. And of course just recently we saw wine trade figures demonstrating that Australia is now the single largest wine importer into China, outstripping even the French.
David Speers: Sure, but when China can simply pull these levers, say that it’s environmental concerns and hold up Australian exports, would you say that China plays fair when it comes to trade?
Simon Birmingham: China is a country where we have struck a really strong trade relationship, and yes certainly there are questions here that we’re seeking to understand in terms of why there are some delays for some shipments coming into the country. But overall our relationship has seen phenomenal growth year-on-year for a sustained period of time, and to dwell simply on the singular negative there, that there are some delays in some shipments, is really to overlook the fact that economically, and in a trade sense this relationship is very sound…
David Speers: But Minister, it’s not just that. There are also the allegations when it comes to stealing intellectual property or commercial secrets. Certainly that’s Donald Trump’s view. Is it a view you share?
Simon Birmingham: We have indicated, in terms of the US dispute with China, there are some aspects of the US arguments that we share and that we want to see further action on, and I publicly welcomed last year the commitment from President Xi to take further steps in relation to intellectual property reform in China and to ensure further protections. And again, we have seen some improvements in that area. To look at the wine trade, for example, there have been some significant legal actions taken by Chinese authorities over the last couple of years [indistinct] products and the like. They’re the type of steps that we welcome, and we want to see continued development of China’s economy, which also means continued modernisation of its laws to protect intellectual property and technology and the brands that come in as imports from other countries.
David Speers: All right, well, clearly Donald Trump’s still not impressed. On Friday he’s announced plans for further tariffs on another $440 billion worth of Chinese goods. You said the other day this is disappointing. Can I ask, is it also a breach of world trade rules?
Simon Birmingham: China has launched certain actions in the World Trade Organisation in relation to earlier decisions by the US administration. This one is something that has been announced but not yet taken effect. And that is a matter for the WTO to determine. Our prime concern is the…
David Speers: What do you think though? Would it be a breach of those rules? You understand them pretty well.
Simon Birmingham: Well, the unilateral tariff actions is something that we have not welcomed, and may well be. But that is something for the independent processes need to determine, and to let them run their course…
David Speers: So this may well be a breach of WTO rules?
Simon Birmingham: It may be, David, but what is a bigger and more immediate concern is that it’s having a negative impact in relation to global trade levels. What we’ve seen is that the growth in terms of world trade volumes, which was growing in 2017 at 5.5 per cent, in 2018 at 3.9 per cent, is now, according to the OECD, expected to be down to 2.1 per cent in 2019. That’s a significant drop, it’s the lowest growth rate in global trade levels since the GFC, and what that is doing is having a dampening impact on the rate of global economic growth, which is bad for jobs and business in China, in the United States, in Australia [indistinct].
David Speers: This meeting you’ve been there for, the 16-nation Regional Comprehensive Economic Partnership mega trade deal, it’s called, would it allow, can I ask, more foreign workers from those countries the ability to work in Australia?
Simon Birmingham: No, this isn’t an agreement that’s going to create some big new area of work rights or migration rights. This is an agreement focused on economic cooperation and trade opportunities, and that’s where we’re going to keep it focused. It is a huge bloc, as you say, 16 countries, one third of the world’s GDP, close to half of the world’s population. And of course it’s here in our Asian region, and this Asian region has been economically the fastest growing and most dynamic region over recent decades, and this agreement is a wonderful chance to cement that continued dynamism and growth [indistinct].
David Speers: What’s Australia willing to give, though? Is the Pharmaceutical Benefits Scheme up for any negotiation?
Simon Birmingham: Absolutely not. So, Australia stands firm in our protection of the PBS, of our rights to be able to regulate in relation to environmental standards or health standards. Australia, of course, is a relatively open economy and we already have trade agreements in place with 14 of the 15 other nations that we’re negotiating with here. So the big opportunity for us is certainly to have a regional trading agreement that includes India and would give us, for the first time, improved market access conditions into India.
But in there are also huge opportunities for Australian businesses through better rules of origin for products, which can allow them to better integrate into the value chains right across the Asian region. That’s about allowing business to do deals with other businesses where they collaborate [indistinct] which components each one makes, how they provide services, and making sure that overall this region is as productive as possible, and therefore everybody is best able to export to the rest of the world.
David Speers: And how are things going on some of the other free trade deals, the individual free trade deals you’ve been pursuing? Indonesia’s one that’s dragged on and on. Is that any closer to agreement?
Simon Birmingham: Well, no, the Indonesian agreement has been struck and signed between Indonesia and Australia. What’s happened since the parliament resumed after the election is that it has been referred to the Joint Standing Committee on Treaties. There’s a required period that it sits before that committee. We expect that report to come back in October and then our Government will move promptly to legislate that. You’ve got to understand why is this important? Well, it’s important because we’ve got Australia’s export levels at record volumes, a [indistinct] and that has helped to underpin jobs growth in Australia. And what would give the best certainty to the Indonesian agreement is for the Labor Party to be clear that they will support its passage through the parliament. And if that’s the case then we can hopefully ensure its entry into force before the end of this year.
David Speers: Can I ask you, just on a couple of other fronts, the AUSMIN talks are getting underway in Sydney between Australia and American Foreign and Defence Ministers. One of the issues they’re discussing is whether Australia should join patrols in the Strait of Hormuz to protect commercial shipping there. From a trade perspective do you think it is important that Australia plays its role to protect trade through that stretch?
Simon Birmingham: I’m very conscious that our Foreign and Defence Ministers will be sitting down with their US counterparts today and that this may be a topic of conversation there. I think it’s most appropriate for me to let them comment on that today after those discussions happen live in Sydney, rather than me seek to comment from Beijing.
David Speers: Fair enough. Look, final one. You said, I think before, or when you arrived, that you would raise the case of Australian writer Yang Hengjun. He’s been detained for six months in Beijing, he’s now in a Beijing prison, accused of endangering state security. Did you get a chance to raise this case of this Australian with anyone there?
Simon Birmingham: My conversations ended up being quite focused on trade. What we did have the opportunity, though, was our Foreign Minister Marise Payne meeting with her counterpart, State Counselor Wang Yi, in Bangkok, which happened at the same time as my meetings here in Beijing, and I know that they discussed consular cases. And of course our messaging remains consistent in that regard, that we are seeking fair and transparent application of laws and treatment and, importantly, for him to be granted access to his legal representatives.
David Speers: Okay, but to be clear, you say you didn’t have a chance to raise this case with anyone in Beijing while you were there as the first Minister since the election?
Simon Birmingham: My comments and ability to raise issues were focused on those trade issues, such as the coal ones that we discussed before, and making sure that we get those underway. It was literally at the same time that Foreign Minister Payne was meeting with her Chinese counterpart, so she was able to raise those consular matters.
David Speers: Doesn’t this come back to, I guess, where we began, the need for a more formal bilateral meeting, and indeed a leader-level meeting, to discuss these things, to get more answers even on the coal front, which you acknowledged you still don’t have 100 per cent clarity on? Is the relationship still in a position where you’re unable to get those sort of meetings that we need?
Simon Birmingham: Well, I hope that we can see a further dialogue and a two-way consultation and discussion that allows for us to work through all of these issues. I was pleased to receive the invitation to come back before the end of the year. We’ll be working hard to make sure that happens and to make sure that we have as much dialogue there as possible. And it should be made clear that, of course, it was between Minister Payne and State Councilor Wang Yi, a thorough discussion that they had, a formal meeting that happened in addition to the dialogue they were having as part of the ASEAN meetings. And that’s a good opportunity for them to have worked through a number of issues germane to their portfolios, and of course that’s where consular cases sit. And rightly, in my case, I was having discussions about trade issues and the economic relationship.
David Speers: Trade Minister Simon Birmingham, once again thank you for bearing with us through the technical issues there. Appreciate your time joining us.
Simon Birmingham: Thanks, David.