US-China trade war; Iran.



Sabra Lane:  Good morning and welcome to AM.


Simon Birmingham: Good morning Sabra.


Sabra Lane: The collateral damage that the Prime Minister will talk about in his speech about the US – China trade, how has that affected Australia?


Simon Birmingham: Well, Australia and indeed the world has seen that the rate of growth in global trade has been downgraded and with that has come a downgrading in the rate of growth of the global economy, that’s been done by the IMF, the OECD and so that has an impact upon all of us. Now, the Prime Minister’s core message today is that with great power comes great responsibility. The United States has had great power for a long period of time and in the period since, particularly the Second World War they’ve exercised that power to establish the global institutions upon which growth and prosperity has been built. And China of course, has grown in that time under those rules and China itself now has great power. And with that comes great responsibility for both the United States and China to exercise it with caution and care.


Sabra Lane: Mr Morrison will say that Australia won’t passively sit by now on the sidelines and watch that dispute, indicating government will be more assertive. How?


Simon Birmingham: The government is actively engaging with our partners in Europe, in Japan, in Korea, in Indonesia, in parts of the world where like-minded countries share similar concerns that a breakdown in terms of good order, a breakdown in commitment to rules based trade, and unwillingness to engage completely and fully in the modernisation of our trade rules to reflect modern circumstances in terms of the growth of new forms of trade, of digital trade, of e-commerce. And of course, the fact that China, in the nature of their economy and systems, needs to also recognise their responsibilities as a country to modernise.


Sabra Lane: How will an Australian contribution make any difference in this dispute, given that both of the leaders here, President Xi and President Trump paint themselves as tough men?


Simon Birmingham: Australia cannot obviously resolve this dispute for either China or the United States, but what we can do is stand with like-minded countries to advocate clearly for what we believe is right in terms of rules based trading systems where we neither have unfair subsidies nor the unilateral application of tariffs, that distort trade practices and harm economic growth. And where we have protections around intellectual property and these are all things Australia has been saying for some time, but we do urge and want to see common action across the world in driving reform of the WTO, of our trade rules and of trying to demonstrate to both the United States and China that there is a better way than the type of conflict that is harming economic circumstances at present.


Sabra Lane: I’m glad you talked about that, because you and I sat here last year and talked about the WTO and the need to change and reform. There doesn’t seem to be any haste in doing that.


Simon Birmingham: There have been a number of advances we’ve managed to start at the commencement of this year, global negotiations around new e commerce rules and digital trade. I welcome the fact that the United States is a partner in that and China is a partner in that, and we urge them to engage constructively through that process. A number of countries have partnered with Australia and we have partnered with them in putting forward reform proposals around the transparency mechanisms in the WTO to make sure that notification of subsidies and how it is that countries are held to account is better enforced. But ultimately, we need to take these talks in and deliberations and turn them into concrete action. There’s an opportunity to finalise negotiations on the restrictions of around fisheries subsidies this year. That’s important, not just economically, but also environmentally in terms of the sustainability of our global fisheries stocks. So we urge countries to demonstrate that those global institutions like the WTO and the rules that sit around them can still be made to work and can still get multilateral outcomes that bring the great powers to the table with an agreement to abide by those rules.


Sabra Lane: The Prime Minister will say today, as a rising power, China will have additional responsibilities. You’ve just said that yourself in the last couple of minutes. What are they and will Beijing really care? They don’t seem to care what the rest of the world thinks.


Simon Birmingham: The responsibilities are indeed a recognition that with great power, as I say, comes great responsibility, but a responsibility to use it with caution, to recognise that might isn’t always right. Now we would say that equally to either party in terms of the way in which trade disputes are playing out. We have recognised, as I have said for some time, these are these are concerns in which Australia’s position is clear, currently stated and consistently stated. China is a valued friend, we welcome China’s continued economic growth because that has helped to lift hundreds of millions of people out of poverty, not just in China, but across our region. But we do urge China to recognise the growth that it has enjoyed and continues to enjoy, changes to its circumstances and China’s approach and outlook needs to change with those changed circumstances.


Sabra Lane: On Iran, the British Foreign Secretary, Jeremy Hunt, says the UK is not interested in joining a US led war. Mr Morrison will meet Mr Trump on the sidelines of the G 20 coming up in Japan, why should Australia be part of this coalition?


Simon Birmingham: Well, Australia is not part of any coalition in the context of a conflict against Iran…


Sabra Lane: The US is obviously seeking our support…


Simon Birmingham: …or anything like it. Australia, like many nations, currently has sanctions in place against Iran, economic sanctions. Those sanctions are under constant review as people would rightly expect them to be.


Sabra Lane: The US is tapping us, will be tapping us to be part of this coalition. Why? Many Australians will be nervous about this, especially given the Iraq experience.


Simon Birmingham: What the US has done at present is to elevate their economic sanctions and what they’ve applied in that regard. We will continually review our economic sanctions and of course monitor carefully what happens around the rest of the world. And we have serious concerns about Iran’s destabilising behaviour and we urge calm from the Iranians in their response to what at present are purely economic sanctions, but economic sanctions designed to control a state or to influence the behaviour of a state, to prevent them from the escalation of development of nuclear technologies and military activities and terrorism activities, that could well undermine the, of course, peace and prosperity of the rest of the world.


Sabra Lane: Trade Minister Simon Birmingham, thanks for joining in this morning.


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Authorised by Senator the Hon Simon Birmingham, South Australia.