Interview - Doorstop at Parliament House
Main Topics: FTA with China, trade relationship with
China, beef imports
Transcript - E&OE
24 February 2010
SIMON CREAN: Our trade relationship with China is the largest
trading relationship we have, and Australia is one of the very few
countries to have a trade surplus in our trading relationship with
China. So therefore, furthering our interests in that trading
relationship is a terribly important part of the Government's
agenda. It's therefore pleasing that today we see the commencement
of the fourteenth round of talks between the two countries to try
to conclude an FTA. This is the first round of negotiations for
more than 12 months and it reflects the desire on the part of both
countries, reflected seriously at the highest levels, to try and
bring about a conclusion to this trading relationship. The nature
of the relationship between our two countries is very
interdependent. There's a simplistic view that all China requires
of Australia is its resource base. That's true, but it's not the
complete picture. Australia has a diversity and a depth of
opportunities and assistance that it can provide to China as it
goes through its important development phase. In a funny sort of
way, the hiatus in the talks has enabled all countries to reassess
their circumstances coming out of the global financial crisis. One
of those reassessments has significantly taken place in China
whereby they are seeking to move to a more consumer-driven economy,
one that's less reliant simply on exporting to the world. For that
to happen there has to be a development of, within the country,
important industries and services that see the development of that
consumer driven-economy - urban development, logistics,
infrastructure, retailing, financial services - these are all
important spaces in which Australia can play. And that's why in
terms of the FTA, as difficult as the issues of agriculture are
that still remain, the great opportunities are in services. Clearly
the investment equation also is going to be terribly important.
China has interests in investing in Australia. We've seen that over
the last couple of years. We need a new framework that reflects
that interest but a framework that reflects the importance of
investment as a two-way street because Australia, too, has
significant interests in getting greater investment into the
Chinese economy. On agriculture; I said it remains sensitive and
difficult. We understand the sensitivities in China but we keep
pointing out that we have been able to negotiate those
sensitivities with other developing countries. We have made it
absolutely clear, and we still remain committed, we are not going
to settle for less than was extended on agriculture to New Zealand.
The final point that I would make is the dynamics that are
emerging, not just in China and our trading relationships, but in
Asia as a whole. And it's very interesting that we have actively,
at the moment, not just free trade talks going with China, we have
concluded a Free Trade Agreement with the whole of South East Asia,
the ASEAN nations, and we have active negotiations in place,
amongst others, in Japan and Korea. And so for North Asia, the
sphere where China operates, I think it is also an interesting
dynamic as to the pace and the progress of our Free Trade
Agreements between Japan, Korea and China. At the moment, Korea is
leading that race, but we're happy to be in the position in which
not only are all of these trading relationships important to us, we
have some competitiveness in the race.
QUESTION: Are these talks today a sign that Australia's
relationship with China is on track and that issues like Stern Hu
and foreign investment are now - you know, are not disrupting the
bilateral relationship?
SIMON CREAN: Well, I don't believe either of those issues have
ever themselves disrupted the trading relationship. In fact, we've
seen the trading relationship go from strength to strength. The
Stern Hu case - we continue to make representations as a consular
case. The matter is now before the courts. The timetable needs to
run its course. But so far as the trading relationships are
concerned, both countries understand the interdependence of each
country on the other and I think that there is a genuine desire to
deepen and diversity that interdependency. That's why the talks are
back on track. They will be difficult but we are determined to try
and see them through.
QUESTION: How big is the gap on - how difficult is the task in
front of you? I mean, is the gap huge or are they sort of narrowing
down? How do you see the hurdles in front of you?
SIMON CREAN: The opportunity is enormous and in those
circumstances I don't think we need to be deterred by the gap. All
negotiations are difficult. All countries are going to have
defensive interests. We have defensive interests. That's the nature
of negotiations. But I think the real challenge is to try and find
the way through that argues that the opportunity that's there can
come through mutual interdependency. And I say to you that the
services and investment front by far opens up the biggest
opportunities. And I think if we can get a saner and more relevant
identification of those circumstances then I think we will be able
to deal with the sensitive issues in a mature way.
QUESTION: Is there a certain urgency needed for the investment
framework now?
SIMON CREAN: Well, I think there's an urgency for the conclusion
of the FTA. I think the conclusion of the FTA can provide a basis
for a new framework for dealing with investment. I don't - I put it
in the broader sense of urgency, not the imminence of urgency. I
mean, it's not as if, if we don't get this agreement in the next
month or the next year or the next two years for that matter, that
the trading relationship is going to diminish. It won't. It's just
that we can expand it better and in the context of an understanding
and a framework that realises the opportunities that both countries
have in their development by drawing more on each other. That's the
real opportunity. And I cast the argument in terms of the
opportunity and failure in terms of opportunity cost, not in terms
of urgency.
QUESTION: Do you think it could be another ...
QUESTION: Minister Crean, how far off do you think this FTA is?
It's been nearly five years since both countries agreed to start
negotiating towards a deal, so when do you think it might be
concluded?
SIMON CREAN: Well we've only been in office two years and we
inherited this in a stalled state. We unfroze it and then it
stalled again. I think that highlights the difficulties and the
sensitivity. But, in the meantime, we've had a global financial
crisis that's turned the globe - the world on its head. It's forced
all countries to understand the importance, not just of taking
stock and - of the importance of stimulus to generate economic
activity. It's the question going forward as to how we sustain that
economic recovery. Now, what was the cause of the global financial
crisis? It was the sub-prime collapse and the failure of the
banking systems, in particular in the US and Europe. Australia has
one of the safest banking systems in the world. It's also one of
the most innovative and as China is looking to develop its economic
base and diversify it, it's going to have to develop its financial
services market. Shanghai knows this. It's positioning itself for
it. Australia is the best placed of any country to offer support,
investment opportunities, joint ventures and assistance in terms of
a range of innovative safe product. Australia needs to be confident
of what the strength and the breadth of its product base is. And
that's why the China circumstances really provides a practical
example of where we can demonstrate the broader brand of what
Australia has to offer - the range of product that Australia has to
offer - other than just resources.