It has been a long time in the making, and it has to be remarked that there are so many other agreements out there that sometimes one is left wondering whether it really is worth putting so much effort into establishing bilateral agreements, as opposed to multilateral agreements like the Trans Pacific Partnership or the ASEAN Australia New Zealand Free Trade Agreement. When talking to trade officials about these differing treaties, they always suggest that business entities can really choose which ones suit their own circumstances the best. So, there is a point, and ultimately it is up to businesses to realise the potential of the varying trade instruments.
Trade Minister Dr Craig Emerson appeared on the ABC's Business Today to talk about the MAFTA. The first link is the interview itself, the second link is to the Minister's media page where I sourced the transcript from. The transcript is also copied below - for those of you who just want a quick scan to see what was discussed.
http://www.abc.net.au/news/2012-11-30/australias-craig-emerson-on-new-trade-deal-with/4401064?section=business
http://www.trademinister.gov.au/transcripts/2012/ce_tr_121130_abc_business_today.html#
Subjects: Malaysia-Australia Free Trade Agreement; Doha; Trans-Pacific Partnership.
Transcript, E&OE
30 November 2012
WHITNEY FITZSIMMONS: The dairy, automotive, and wine industries are all expected to reap the benefits of a free trade agreement with Malaysia that’s been passed by the Senate. Under the deal, almost all Australian goods will be able to enter Malaysia free of duties. In return, Malaysian exporters will enjoy duty-free entry to the Australian market. Malaysia is Australia’s third-largest trading partner in ASEAN and its 10th largest partner overall, with exports of $5 billion and imports of just over $9 billion last financial year. And for more on this deal with Malaysia and other trade-related issues, I’m joined by Dr Craig Emerson, from our Canberra studios, who’s the federal Trade Minister. Craig Emerson, welcome to the program.
CRAIG EMERSON: Thank you, Whitney.
FITZSIMMONS: So this deal with Malaysia appears to be a positive for Australian exporters. But why has it taken so long to get over the line?
EMERSON: It has taken a long time, that is true, but in March of last year Prime Minister Gillard hosted Prime Minister Najib from Malaysia here in Australia. And they called me aside, and they said to me that this had been going on for a long time under the previous government and under this Government;‘let’s give it every chance to be done within a year’. We got there, Whitney; we had agreement one day short of a year, and then, of course, you need to do all the legal work; put it in front of the Joint Standing Committee on Treaties, which we did; get it through the House of Representatives, which we did; and, symbolically I guess, the very last Bill that passed the Senate last night in the last day of this sitting was the Malaysia-Australia Free Trade Agreement.
FITZSIMMONS: I’m sure it’s something that you probably breathe a sigh of relief, having had that passed last night as you say. But Independent senator Nick Xenaphon has said that our free trade deals must be conditional on Australia’s support for free and fair elections, particularly in countries like Malaysia. What do you say to that view?
EMERSON: Well, there goes, I suppose, a free trade deal with China, and probably with a very substantial proportion of the countries around the world if the Xenaphon view were accepted. Should we really say to our farmers ‘sorry, we won’t trade with, and reduce our trade barriers with, countries with whose political systems we disagree’? That would be an extraordinary constriction on the capacity of Australian farmers, manufacturers and service industries to be able to gain access to markets overseas. Senator Xenaphon can have these views because he knows they’ll never prevail - and thank God for that.
FITZSIMMONS: But Dr Emerson, can free trade deals be used as leverage in other areas of political discourse?
EMERSON: Well, we don’t think that they should be used in areas such as the political system that applies in particular countries. I mean, that would be unbelievable, in fact, and very few in the Parliament would believe that you seek to change a political system on the basis of a free trade deal. I know where those countries would tell Australia to go, by the way. We do have provisions in trade deals ordinarily, and we will increasingly have this in relation to the environment and to labour standards. These aren’t meant to be trade-restricting provisions, but there is an argument that you wouldn’t want, in a sense, a race to the bottom in countries if they didn’t adhere to basic environmental standards and the core labour standards as set out, for example, by the International Labour Organisation. So, we’re okay about that. But insisting that countries change their political systems in order to do a trade deal with Australia I think is pretty silly.
FITZSIMMONS: What about the criticisms that the free trade deals can put Australian producers at a disadvantage? Because they’re competing with countries that, you know, don’t have the same stringent compliance laws and also environmental standards.
EMERSON: That’s why on the environmental front we were just having a conversation about, countries agreeing to reasonable environmental standards, but again…
FITZSIMMONS: How likely is that really to happen? It’s a very difficult…
EMERSON: I’ll give you an example: in the Trans-Pacific Partnership those negotiations are going on. That partnership, involving 11 countries, embraces 30 per cent of the global economy and there will be labour and environmental chapters in that. So it is realistic, Whitney. But again our tariffs here in Australia, in terms of what trade deals would do to us, are either zero or 5 per cent for some items and some textiles; clothing and footwear products are coming down to 5 per cent. So in terms of access to our market, much of it is duty-free access anyway.But are we really saying, as Australian producers, that we don’t want improved access to the markets of the fastest-growing region on earth? That we don’t want improved access to the marketsof Japan and China and Indonesia? I mean, that would be an extraordinary statement.
FITZSIMMONS: I don’t think producers are saying that necessarily. I think that they just want a level playing field.
EMERSON: So this is the idea: they say, if this is the proposition,‘we want improved access into their markets, but we must not give any improvement in access to our markets’. Well, again, that would be a very short negotiation, ending up with an answer ‘n-o, no’. We actually have to offer something in free trade negotiations. And to suggest that an Australian Trade Minister, whether Labor or Coalition, should just go over to other countries and insist on them opening up their markets while at the same time saying ‘well our 5 per cent tariff on a few items is absolutely sacrosanct’ would lead to no deal, to no deal.
FITZSIMMONS: Dr Emerson, Pascal Lamy, WTO Chief, has said that free trade deals can lead to policy fragmentation and also promote protectionism. Is there validity in these comments, or is he just protecting the interests of the WTO?
EMERSON: Well, I support Pascal Lamy in his work, in Geneva, in seeking to advance the Doha round of multilateral trade negotiations. Indeed…
FITZSIMMONS: But is what he’s saying, is the validity…
EMERSON: I know. I’ll come to that. But, indeed, Prime Minister Gillard, on behalf of Australia, has mapped out new pathways to the completion of those negotiations - that’s been accepted by all members of the WTO. I think people don’t realise the enormity of that achievement. But in terms of Pascal’s view about free trade, about bilateral and regional free trade agreements: if they’re truly liberalising,if they don’t excessively cut other countries out of the deal, then they can actually contribute to the momentum for multilateral trade negotiations being completed. But I fully support Pascal’s suggestions that low-quality trade deals, done for political purposes, are not productive. And that’s what we have set out in our trade policy statement of April 2011. We will not complete trade deals just for the sake of having a trophy sitting up on the national mantelpiece. What we will do, Whitney, is we’ll do high-quality deals, and we have participated just a week ago in the launch of a Regional Comprehensive Economic Partnership negotiation, again in this case involving ASEAN countries and six trading partners, including China, India, Korea, Australia and New Zealand and Japan.So we will participate in those. But I agree with Pascal: you shouldn’t just have these fragmented deals that are low-quality and detract from the negotiations in Geneva for the World trade liberalisation.
FITZSIMMONS: Let’s move on to the Trans-Pacific Partnership, or the TPP as it’s been called. Given the broad nature of such a deal, is it in danger of becoming another Doha?
EMERSON: Well, I think its gaining real momentum following the re-election of the Obama Administration in the United States. Indeed, at that same venue in Phnom Penh only last week President Obama chaired a meeting of the leaders of those members of the Trans-Pacific Partnership who were in Phnom Penh. And he was indicating to us that he is not interested in a low-quality deal; he’s interested in a high-quality deal to put to the Congress and we’ve all signed up to that. We are going hard to do that now as quickly as possible. I think it is easier under a second term US President, and he has given a very strong commitment to that. So I don’t think it’s going to suffer the same fate as the Doha round has suffered, which has been going for 11 years now. But I do have renewed hope in the Doha round as well, having come back from Geneva…
FITZSIMMONS: Do you think you’ll get expediency on it as President Obama wants?
EMERSON: Well, President Obama wants high ambition and that’s what we have argued for, New Zealand has argued for: high ambition. So, it’s not simply …
FITZSIMMONS: High ambition takes time though.
EMERSON: Well this has already taken some time. And what we’re doing is making sure that we deal with what are called the 20th Century issues as well as the 21st Century issues. If I just quickly can explain that: there are still tariffs on goods and we want them eliminated over time - they’re the remainder of the 20th Century issues. Twenty first Century is information technology, services in particular, investment - and that’s where you get that extra ambition as well. And we are very keen to create a trading area in the Asia-Pacific. And the thing about all this is that both the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership are pathways to the ideal in our own region for a free trade area for the Asia-Pacific. All this, by the way, is set out in our Asian Century White Paper and the region really appreciates the fact that we have done that work.
FITZSIMMONS: Dr Emerson, thank you for joining the program and we wish you well in a well-deserved break.
EMERSON: Okay. Thanks very much, Whitney.
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