James Findlay, host: Don Farrell is the Federal Trade Minister. Good afternoon to you Minister. Look, how soon are we expecting these – the dropped sanctions to be able to help our industry?
Minister for Trade, Don Farrell: Nice talking with you, James. Look, I think almost immediately, I think you should expect already, particularly some of the big winemakers in Australia will already be getting ready to ship their beautiful Australian product back into the Chinese market.
It is true that wine consumption in China is falling, but one of the reasons it’s falling is because they haven’t been drinking Australian wine for the last couple of years, and Australian wine was very popular in China. How do I know that? Well, the Chinese Trade Minister himself told me just how much he enjoys a glass of Australian Shiraz. I think the fact of the matter is, that there’s actually a hole in the market because Australian wine hasn’t been able to be sold over there.
I’m actually a bit more upbeat than some of the other commentators, because I’ve seen what’s happened to barley. We had a similar problem with barely. We managed to get the barley back into the Chinese market. We’re now selling more barley into China than we were before the bans were imposed.
So, I’m more optimistic than a lot of the commentators because I think the quality, particularly of South Australian wines, as we know, we’ve got the premium wine market in South Australia. I think there’s a hankering for it, for our Australian wine over there. And I think we will very, very quickly re-establish ourselves, as in the top tier of wines to be sold into the Chinese market.
James Findlay: Okay, no doubt that would be a very welcome news to many grape growers in our region. Look, what are the biggest barriers that are affecting the industry to make sure that the amount that we’re exporting is, you know, at least – I’ve heard that it won’t be anywhere near close to what it was before. But, you know, what’s the government doing to make sure that it’s, you know, at least on its way to that?
Minster for Trade: So, two things James. In Australia, of course, Austrade is providing information to all the Australian grape growers through Wine Australia to ensure that they understand what the rules and regulations are in terms of getting your product back into China. And in China, the government is very heavily promoting Australian wine. And as I say, I’m extremely confident that, particularly the premium wine, will very quickly re-establish itself into the Chinese market. We’ll very quickly see Australian wine flowing back to the Chinese consumer. We know they like our product. All we’ve got to do is get them into the supermarkets, get them into the bottle shops, and they’ll be flying off the shelves.
James Findlay: Obviously, China is a huge trade relationship for Australian wine, as you’ve mentioned, but these tariffs showed how vulnerable that relationship can be. How important is it that the industry still diversifies its trade partners?
Minister for Trade: Look, that’s a very good point James, and we don’t ever want to put all of our eggs in the one basket again.
Over the last 18 months, the government has established new free trade agreements with India and the United Kingdom. They potentially are very good markets for Australian wine, but closer to home, the ASEAN region, we’re putting more emphasis on diversification into the region. That might be the Philippines, Vietnam, Thailand, Indonesia, getting our products into those markets. Often in the past, James, we’ve simply flown over those countries and gone straight into China, Japan, South Korea.
We’ve now got to focus just as much on our region, Southeast Asia, and ensure that we have alternative markets so we never, ever find ourselves in a situation where we’re so reliant on one market, that if trouble occurs in that market, we have the sorts of problems that we’ve had over the last two or three years.
James Findlay: Okay. Don Farrell is with you as the Federal Trade Minister on ABC Radio, South Australia and Broken Hill. It’s twelve to five. I know you’ve got to head off in just a moment, Minister, but I do want to ask you about the other tariffs that are still on some products that we have here, particularly in our region. Rock lobster meat, have you heard anything about whether they will be lifted any time soon?
Minister for Trade: I’ve now met with my Chinese counterpart six times over the last 18 months. And on each and every occasion, I raised the issue of lobster and those couple of outstanding abattoirs who haven’t managed to get their product back into China.
I’m extremely confident that just as we’ve solved all of the other issues so far, we will now resolve the issues of lobster and those couple of remaining abattoirs. Just to put it in perspective for you, James, we started with $20 billion worth of trade bans 18 months ago. With the lifting of the wine ban, we’re now down to $700 million. That’s the figure you’re talking about with lobster and meat. I’m very confident that those trade restrictions will be removed, and then, of course, we can focus on all of the other wonderful products that we have to offer, food and wine, into the Chinese market. I think we should be very confident that given everything that’s happened so far that we will very quickly get lobster and that remaining meat abattoirs back into China.
James Findlay: So, maybe before the end of the year?
Minister for Trade: Well, I’m hoping before that. I did make a prediction that it was going to be before Christmas. That might have been a little bit optimistic, but look, there’s a clear direction here. And just to put it into perspective, we fell short of getting a free trade agreement with the Europeans. The value of the meat and the sheep meat to the Europeans was worth $1 billion.
We’ve now managed to reduce almost $20 billion worth of trade impediments. It’s been a very significant development with China. I can’t see any reason why the stabilisation process that’s resulted in the removal of these trade impediments won’t continue, and we’ll very quickly get our lobster and meat back into China.
James Findlay: No doubt very welcome news to many people listening today. Minister, thank you so much for your time this afternoon.
Minister for Trade: Thanks very much, James. Nice talking with you.
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Source: Australian Department of Foreign Affairs and Trade
Speaker: Senator the Hon. Don Farrell, Minister for Trade
Format: Interview
China Policy Research 