15 December 2020

SUBJECTS: Coal exports; trade tensions with China; the Government’s failure to diversify Australia’s trading relationships.



SUBJECTS: Coal exports; trade tensions with China; the Government’s failure to diversify Australia’s trading relationships.
PATRICIA KARVELAS, HOST: Chinese state media has confirmed that Beijing has banned Australian coal imports. There's been uncertainty around the ban for months now with China blaming environmental problems for processing delays. Prime Minister Scott Morrison says the Government is treating the report in the Global Times as speculative but says a formal ban would violate the free trade agreement. Madeleine King is the Shadow Minister for Trade and joins us tonight. Madeleine King, welcome.
MADELEINE KING, SHADOW MINISTER FOR TRADE: Thanks Patricia. Thanks for having me.
KARVELAS: Do you agree with the Prime Minister that this is a clear breach of Beijing's obligations under the free trade agreement?
KING: I think the Prime Minister, and Minister Birmingham, is justified in questioning adherence to the free trade agreement with China. And it's at timeS like this, when we've been in, quite frankly, prolonged disputes for some time across many sectors, that’s when nations like Australia that depend on the international rules-based system have to turn to those rules to help protect them in the face of trade actions taken by other countries.
KARVELAS: So would Labor support the Government to lodge a dispute with the World Trade Organisation?
KING: Yes, I've said that before. Australia's perfectly entitled to do so; that's why we signed up to the WTO and helped develop it. That’s why we support the multilateral rules-based trading system because small countries like Australia depend on it more than most countries because we are dependent for our economic prosperity on trade. I don't believe Australian barley farmers have been dumping, I also don't believe Australian wine exporters have been carrying out dumping practices in China. So we would support that action by the Government.
KARVELAS: What specifically would Labor be do be doing to fix the China relationship that the Federal Government currently isn't?
KING: For a start, we would appoint a dedicated Trade Minister. What we know is that six months ago, Mathias Cormann said he was retiring and for six months, the Prime Minister has known that he would have to put in a reshuffle for his Cabinet. And it took three months later to figure out that Simon Birmingham would no longer be Trade Minister. But now we're in December, and the exporters of this country do not know who the next Trade Minister is.
KARVELAS: Okay, they currently deal with Simon Birmingham who I think most people acknowledge as a very capable minister. And he clearly is across his brief. There'll be a new Trade Minister but really it's the same government. That wouldn't change much would it?
KING: Minister Birmingham is across his brief but he's a very busy man. He’s leader of the Senate, he's got two other particularly hefty portfolios with Finance and SMOS. I just think it's important to make the point that this has been known for six months, we're in the middle of a trade crisis with our largest trading partner, yet the Government can't make this very important choice and the constitution of the Cabinet is in limbo and has been since Senator Cormann announced his retirement. So I think an important focus that is required for the Government to help fix the relationship is to resolve who will be the next Trade Minister, yet we're still waiting.
KARVELAS: Okay. What more could the Federal Government be doing to help primary producers diversify their markets?
KING: I think, and I've said this many times before, this Government needs to take the challenge of diversification seriously. What we've seen is a proliferation of free trade agreements with many, many nations and Labor has supported those, although we have doubts about how some of the content has been developed. But they've done it in a set-and-forget type approach -- sign the agreement, go to the signing ceremony, enjoy the media that follows. And that's it. It's like ‘put your feet up, job done’. But diversification takes a lot of effort and a lot of time. This Government has had the Varghese report sitting on a shelf for two years, more than two years. This is a roadmap for how we diversify into the massive market that is India. Yet they have implemented literally one of 90 recommendations from the former head of the Department of Foreign Affairs and Trade. So if you want to help primary producers, you take your own advice seriously and you do something about it. You don't just sit around and dust off your boots and think the job is done because you've inked the trade agreement.
KARVELAS: If you're just tuning in, this is RN Drive and I’m Patricia Karvelas. Our guest tonight is Madeleine King, the Shadow Minister for Trade, and we're talking about reports from Chinese state media that have appeared to confirm that Beijing has banned Australian coal imports. And of course this is a further escalation of those trade tensions which look like they are very much economic retaliation for certain positions Australia has taken. 0418 226 576 is our text line. I'd love to hear from you. Could Australia be doing more? That’s what Labor is arguing. So Madeleine King, do you agree with the National Farmers Federation that a whole-of-sector response is the best approach?
KING: For the agricultural sector, I noticed other parts of the agricultural sector have said that perhaps it needs to be targeted depending on what sector deals where. The National Farmers Federation represent a lot of different farmers producing a lot of different things, so I appreciate their expertise in representing that community. I think the diversification project that Australia has to commit itself to is complex, it's going to take time and commitment. Sectors will need to look at it on that sector-wide approach that you mentioned. But also individual businesses that know exactly where their best prospects for new markets are, they will have to really double down on how they're going to get into those other markets, and how they're going to, if they haven't already, forged the relationships that will keep them going.
KARVELAS: Should the Government be offering direct financial support for producers who’ve been affected by trade tensions?
KING: I think the best thing the Government can do to help producers at the moment is to make sure they are actively supporting them access those markets. And that's more than just the free trade agreements. It’s getting in their resources on the ground, helping them build relationships where they may not have done before. At the moment there is this attitude that it's exporters’ fault that they haven't gone out and diversified, whereas you have to apply to access a tariff-free rate under a free trade agreement. It’s not as simple as one might think, so I think the Government really needs to put its shoulder to the wheel in getting feet on the ground to help producers to access those markets. And while some people may prefer a cash injection, I think it's the expertise in country that we really need to help people and business, the employers of this nation that export, access those markets to create more Australian jobs.
KARVELAS: What do you make of reports that Five Eyes nations are considering coordinated retaliatory sanctions against China?
KING: Well, no one wins a trade war, Patricia, and I can't be more clear than that. Retaliation in trade is not going to help Australia. I think aligned nations should always work together across a range of matters but retaliating in trade is not good for Australia. We have to do as we say we would do and obey the rules that we want others to obey. So sometimes it's about leading and setting the example of being an open economy and demonstrating the value of that to other nations.
KARVELAS: Look, there's another story out saying that Woolworths and Coles both recently announced they were obviously selling the half-price WA rock lobsters after purchasing more than needed to help out fishermen who had their stock rejected by China. Now Coles will follow Woolworths’ lead in imposing a purchase limit on half-price rock lobsters after the seafood began flying off shelves. What do you make of that?
KING: The loser in the western rock lobster industry stopping in China is obviously fishers here, but also the Chinese consumer. The winner is people like me who get to go up to Fremantle and buy crayfish off the back of a boat.
KARVELAS: Have you done that yet?
KING: Yes, I have. And it’s a fantastic product and we're going to have an extra special Christmas, but that doesn't really make up the margin that those fishers need to keep doing this continually. So I do think that whilst it's a boon to the ordinary everyday Western Australian who can go into Coles and Woolworths. And there’s a purchase limit - I don’t think that's unreasonable. And you’ve got a purchase limit off the back of the boat too, and I don't see anyone squabbling about that over here.
KARVELAS: Thanks so much for joining us.
KING: A pleasure. Have a good Christmas.
KARVELAS: You too. Madeleine King is the Shadow Minister for Trade.