Ross Greenwood, Host: Australia’s top five two-way trading partners right now are China, the US, Japan, South Korea and the UK. We have free trade agreements with each of them. But with China, of course, it’s been fractious since the sharp decline in government relations led to prohibitive tariffs imposed on beef, wine, barley and aluminium back in 2020. Well, over the weekend, the last of those tariffs on wine was lifted. Wine exports that were worth $1.1 billion back in 2019 had collapsed; absolutely nothing. So, will Australian business farmers and wine growers embrace China in the way they once did? Or are other relationships with the UK, India, Japan and Korea now more important?

Well, Senator Don Farrell has been in the middle of all those negotiations. I spoke with the Federal Trade Minister a little earlier today.

Minister for Trade, Don Farrell: When we came to office almost two years ago now, we had $20 billion worth of trade impediments imposed on Australian products by the Chinese government. We took the view that there was an opportunity to stabilise our relationship with China and get these products back into the Chinese markets. And, as you’ve said, wine was one of the last products and over the weekend, the Chinese government has agreed to lift those impediments on almost $1.2 billion worth of Australian wine trade. I’m actually quite optimistic that, based on what’s happened with other products like barley, we will very quickly get our wine back into the Chinese market.

People say, oh, well, the Chinese market for wine has reduced, and that is true, but I think one of the reasons it’s reduced is because the Chinese consumer has not had access to Australian wine. We know that they really like our big red wines, we know that they really like our premium wines. I’m very confident that very quickly we’ll restore our trade with China. But as a government, we’re encouraging winemakers and other producers to try and diversify our trading relationships so that we never again find ourselves so reliant on one market. Now, what does that mean? Well, we have new free trade agreements with India and the United Kingdom. We want those markets to expand, but more particularly, we want to focus on Southeast Asia. We’ve tended to fly over Southeast Asia to China, Japan, and South Korea. Well, we want to stop there, and we want to sell more product into our immediate region, and that’s what the government will be focusing on.

Ross Greenwood: Yeah, because I wanted to go to, say if you’re a winemaker and you had been largely reliant on Chinese exports, you would be a little tentative going back in there holus-bolus, mainly because of the risk, the political risk that at some stage offence is taken by China and these punitive tariffs are reintroduced. And that’s the reason why you’d be seeking to diversify the supply agreements you would have.

Minister for Trade: Yeah, look, and that just makes good commercial sense Ross. I guess it’s a surprise that that wasn’t happening before. Our policy is not to sell anything less into China, and as I said, we’ve restored almost $20 billion worth of trade to China through the removal of all these impediments. China is still easily our biggest market. Last year, our trade with China was a tap under $300 billion, two-way trade. No reason why we shouldn’t be selling more into China, and in fact, over the weekend I read recommendations from Chinese companies about just how much they see the opportunity for Australian companies to sell into China.

But we must diversify, and part of our project over the next twelve months is getting more Australian Austrade officials into Southeast Asia. We’re underdone in Southeast Asia. We should be selling more into the Philippines, into Thailand, into Vietnam, into Indonesia and to other ASEAN countries. They’re growing economies, they’re growing populations, we’ve got good relations with them. We’re just not selling enough of our product into those countries, and I think if you’re a winemaker, then that’s one of the places that you’ve got to look at to expand your market opportunities.

Ross Greenwood: Just tell me, as the Trade Minister, just to explain the thin line you have to walk along when the government quite clearly is a part of AUKUS, when there’s things that China really doesn’t agree with Australia doing, including increasing its defence spending in the region and siding in particular with the United States. How do you go against that as compared with trying to get more access to our goods and services into the Chinese market?

Minister for Trade: Well Ross, we as a government can walk and chew gum at the same time. We want to build our trading relationships, particularly in Southeast Asia. We have a defence arrangement with the United States and the United Kingdom. That’s absolutely vital to our future security. I think we can do both. We want to stabilise our relationship with China, and we want to build our military relationship with the United States, and the United Kingdom. We can do both of those. And it’s the sensible, mature approach that particularly Anthony Albanese and Foreign Minister Wong have taken, on all of these issues, which gives us the absolute best opportunity to ensure that we grow our trade with our region, but also make sure that the first job of government, which is to defend our country, that we achieve our objectives there.

Ross Greenwood: Take me also to Europe, because quite clearly those negotiations for a free trade agreement broke down in October last year. Is there any sense that they are back on the table or that there is, even in this term of parliament, or maybe the next, a free trade agreement with Europe, which is much needed, quite clearly?

Minister for Trade: Look, I won’t kid you Ross, it’s hard work with the Europeans to get a free trade agreement. I spent most of last year trying to pull it off. I recently met with my counterpart, Minister Dombrovskis, in the Middle East. We’re both committed to having another go at this. That won’t happen before the European elections in June. I’m willing to have another go, and I think the Europeans are. But the reality of it is that they have to understand that if they really want a free trade agreement, then they have to engage in free trade. That means greater access, particularly for our products like beef and sheep meat, into the European market, if they want greater access to our market.

It’s a two-way process. We’re not going to sign just any agreement. Just to put it into perspective Ross, we’ve managed to almost remove $20 billion worth of trade impediments with China. The total value of what the Europeans were offering us for beef and sheep meat was $1 billion. So, just in the last two years, we’ve managed to get almost $20 billion worth of trade back into China; the EU agreement – they were only offering us $1 billion worth of trade. So, we’ve got to get a better offer from the Europeans. I won’t be signing any agreement on behalf of Australia until we get that better offer.

Ross Greenwood: Senator Don Farrell, good to have you on the programme today and many thanks for your time.

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Source: Australian Department of Foreign Affairs and Trade

Speaker: Senator the Hon. Don Farrell, Minister for Trade

Format: Interview

Link to Original Source