17 May 2020

SUBJECT: Australia’s trading relationship with China; the Government’s failure to show leadership in diversifying export markets.


SUNDAY, 17 MAY 2020

SUBJECT: Australia’s trading relationship with China; the Government’s failure to show leadership in diversifying export markets.

MADELEINE KING, SHADOW MINISTER FOR TRADE: Welcome everyone to my electorate of Brand. Here behind me is the CBH Kwinana grain terminal. The Kwinana grain terminal here is the largest grain handling facility in the southern hemisphere, and it’s been part of the community of Rockingham, Kwinana and Brand for 40 years. And for 40 years it has been exporting grain, including barley, to the world. It stands as a significant reminder, an everyday reminder, of the extraordinary contribution Australian agriculture makes to feeding our region, and in particular the contribution of WA farmers. Most of the barley from Western Australia, that is the subject of this anti-dumping dispute, leaves from here in Kwinana and makes its way across the world, and principally of course to China. So Labor hopes this dispute can be resolved in a positive fashion so that tariffs are not introduced on the produce of barley from Western Australia and South Australia.

It is important to remember the importance of our trading relationship with China. It has been a mutually beneficial relationship for many, many years and will continue to be so. The reason Western Australian barley farmers are able to export so much barley into China is because of a relationship that is built on 40 years of friendship and relationships. And that is important to remember. Diversification takes time. China has been an important trading partner for Australia but the truth of the matter is we share the Indian Ocean with two of the nations that will be among the top four economies of the world by 2050. And that’s India and Indonesia.

For too long our relationships with India has been on the verge of something great. We need a step change in our relationship with India. We need to move beyond talk of curry, cricket and Commonwealth and we need to make a deep commitment to building our trading relationship with India. Equally with Indonesia, our closest neighbour, we need to move beyond thinking of our relationships with Indonesia as a place for a holiday, it is a beautiful place for a holiday in Bali. But we need deeper ties, we need to engage more with Indonesians, learn their language more than we ever have before. And we all know that Australia’s uptake of that language is at its lowest level since the 1990s, even less than the 1990s.

So diversification takes decades, but the work mush start now. The Commonwealth needs to take a leadership role in building our relationships with these two great nations which, if we build on them, in 30 years’ time when they will be some of the biggest economies in the world. Australia will be a trusted trading partner. Today the Government has kind of handballed the job of diversification to the farmers that are caught in this dispute. But I would say it’s time for the Government to step up and show some leadership, in building these relationships and taking diversification seriously.

REPORTER: Does Labor support an inquiry into the origins of COVID-19?

KING: Absolutely, we’ve been very consistent. Transparency is important for not only the world to know how COVID-19 developed but for the people of China. Just like it’s important for the people of Australia to know what happened with the Ruby Princess debacle. So we do support the inquiry.

REPORTER: So even if that costs us export dollars, you’d still support it?

KING: I don’t think the two should be linked. I think it’s important that the world wants to know what happens with COVID-19. And that’s for a health response – we need to know so we can avoid a future pandemic. I do not believe the two are connected.

REPORTER: Labor has been critical of the handling of the relationship with China. What would Labor have changed or what would you have done differently?

KING: Well, we’re not in government. This has been a government for seven years now. They have dropped the ball on the China relationship. It has little resilience to it. There are business to business linkages, like with CBH behind us, that are very important to be the foundation of rebuilding that relationship. And of course the Western Australian Government’s relationship with China is very important. So it’s up to the Government to think about how it might fix it. But what doesn’t help is freelancing from backbenchers with their intemperate remarks.

REPORTER: China is not returning calls from Simon Birmingham. How concerning is that?

KING: That’s not a situation any government would like to be in, where counterparts don’t return calls. We hope the Government can solve that as soon as possible.

REPORTER: How concerning is it … the reliance on Australia’s iron ore and coal and gas particularly here in Western Australia, the reliance on iron ore is very important. How likely is it that given they’ve already targeted beef and barley, that they might turn their attention to iron ore?

KING: Iron ore is an extraordinarily important export for Western Australia and Australia. It will be an important part of our recovery from the COVID crisis. China is still buying our iron ore and I expect that to continue. Various studies have shown that the demand for Western Australia’s iron ore will plateau – this is a few years off yet – but this is why diversification is important because what countries want to buy from us, if that changes as well and if were not ready for that change, we run out of options.

REPORTER: I just want you to detail how you think the Australian government has dropped the ball on the China relationship and why there is never any indication from Labor that perhaps China might have a role in this relationship.

KING: That’s a fair point. Of course it’s a two-way street. Trading relationships, diplomatic relationships, are a two-way street. China has evidenced a different approach to its diplomacy over recent years than it may have perhaps a decade ago. And I do acknowledge that. Nonetheless, we do have to be dedicated and committed to retaining those relationships. We won’t always agree on things, and no one is saying otherwise I don’t think. But nonetheless, we have to put in a great deal of effort to keeping communication channels open.

REPORTER: I am just trying to work what the Australian Government has done. It simply asked for an inquiry into the origins of COVID-19. How has the Australian Government dropped the ball in this instance?

KING: I think I said they’ve dropped the ball on diversification. But the means by which they called for the inquiry left a little bit to be desired. As you would know, in international diplomacy it is important to talk to people openly and honestly on the phone before you make an announcement on an open-air television interview. So I think that leaves much to be desired in how we call for inquiries, which are very important and need to continue.

REPORTER: On Indonesia and India, you obviously think that Australia should begin to diversify its markets away from just China?

KING: Well, we already have markets in Indonesia. The grain behind me, of course, that’s where I principally have been going to for many years. My point is that we need to ratchet that diversification up, we need to step up and make sure it’s more fulsome. We are yet to be able to trade as much as we would like to with India. We need to put more thought into the services that India wants to buy. So, for instance, international education is one of the services that India is very keen on, and we know on the east coast that many Indian students attend our universities. Right now those universities are in an extraordinary spot of bother with the COVID-19 restrictions, yet they are unsupported by government. And this is our third or fourth largest export industry depending on the times. That is the kind of industry we need to put a real effort behind so we can grow those educational export trading relationships in the future.

REPORTER: Can Australia realistically afford to lose China, especially with exports like barley and beef, we can’t in the short term afford that.

KING: We have to maintain a good trading relationship with China. It’s the people of China, the consumers of China, that want the things that we sell them. I don’t see that relationship disappearing immediately or suddenly, but a decline, even a short decline, is difficult and will affect our economy. We can separate our trading relationships from other differences we have with China. And it’s fine to have those differences. We have differences with many nations yet we are able to trade with them.

REPORTER: [Inaudible]

KING: We always say in this country we believe in free speech and of course the Chinese Ambassador is perfectly entitled to his views. Ultimately it will be up to what the Chinese consumer wants. And if they want to keep buying our wine, and those permits are done properly and there are no objections to it, that trade will continue. But the officials are perfectly entitled to their views.

REPORTER: [Inaudible]

KING: I’m not saying everyone’s diplomacy here is perfect. Far from it. And it would be good if the heat was taken out of a few of these conversations on both sides of the diplomatic fence. Thank you.