Interview with Scott Emerson, 4BC

6 November 2020

SCOTT EMERSON: One of the big issues I'm seeing at the moment is the issue with China and these exports concerns I'm reading about- in terms of reports coming through from the China media that, that exports to Australia could be banned. 
Now, David Littleproud, he's the Federal Agriculture Minister and he joins me on the line now. David Littleproud, thanks for being on 4BC.

DAVID LITTLEPROUD: Thanks for having me, mate.

SCOTT EMERSON: Now, in terms of these reports we're hearing from Chinese media, they're saying there that $6 billion a year in exports could be lost from Australia because of bans from China. What credence do you give to these reports?

DAVID LITTLEPROUD: Well, none at this stage. The last official clarification we had was a rejection of any discrimination by Chinese officials. We are obviously working with them in Beijing, both through my department, Department of Agriculture in Beijing and Department Foreign Affairs and Trade to work through these issues to make sure that there is clarification. 
There has been obviously other action on industry specific. So, around the wine, they have an allegation from their industry that we've been dumping wine into their market and subsidising, which we vigorously defend. In fact, Australian wine is the second highest priced wine in China, and we do not subsidise our farmers - whether they be winery or any other commodities. In fact, of the 37 OECD countries in the world, we subsidise our farmers’ least than only New Zealand. So, we will vigorously defend this. We're trying to get clarification, but we’re just saying that it's important we take them on face value until we get official notification.

SCOTT EMERSON: Well we say official notification, now this report is in the Global Times, a state-controlled tabloid, and just quoting here from the report saying: Australia nervous about losing China market. Now, we're seeing beef, barley, wine being targeted - we heard about lobsters this week. Is there a trade war being fought, at least from China's perspective, with Australia at the moment?

DAVID LITTLEPROUD: Well we’d be concerned if there is. Obviously, we had to take everything on its face merit, and in fact, that's why commodity by commodity we work through this. And if you look at beef, one of the five abattoirs that was in fact suspended was, in fact, majority Chinese-owned. So that's why we've got to be careful to work through each one of these concerns that China has.
We are a rules-based global trading partner, and we expect those that we trade with, in fact, to stick to those rules as well. And that's why we've got to be careful not to jump the gun and make sure that everyone's living by the rules - not only China or any other trading nation, but also ourselves - and we're prepared to do that. So that's why we'll continue to work with our officials in Beijing in a collaborative way with Chinese officials.

SCOTT EMERSON: You know, I can appreciate, David Littleproud, you don't want to escalate this in terms of rhetoric and go through diplomatic channels, but at what stage does the Morrison Government call it for what it is? 
Clearly, as I just mentioned, beef, barley, wine. And we're seeing these reports now out of a state-controlled tabloid about an export ban of up to $6 billion a year. When in the end do you suddenly say, yep, enough is enough - they're targeting us and we got to fight back.

DAVID LITTLEPROUD: Well, media reports can also be skulduggery from, from their own industries trying to cause some uncertainty amongst importers in trying to take Australian exports out. But we've got to take it on actual fact, and there is a protocol in which to undertake that. But what we're also saying to our exporters is that a simple business principle that I learnt in Grade 8 was not to have market concentration, to spread your risk. And this Government has, in fact, got 14 free trade agreements with other nations around the world in which our exporters can send their products into.
This is a commercial decision and we are saying to our exporters, you should spread your risk. But if you are going to put yourself in that position - and there's also a simple business principle I learnt, that is the higher the risk, the high reward. 
So what we are saying to our trading partners is if you want to play by the rules, everyone will play nicely. But if you don't, then obviously there's a greater risk, even for our exporters, and they need to take that into account if they're going to send product there, and they may ask for a higher price for that commodity. 
But we have given all our exporters the opportunity to send into new markets and we're, in fact, trying to finalise free trade agreements with the UK and EU as we speak.

SCOTT EMERSON: I'm talking to David Littleproud, the Federal Agriculture Minister. 131-873 is the open line number. Give me a ring if you want to chat about this- what we're hearing reports in terms of bans and exports from Australia by China. David Littleproud, you just said about risk then; would you say then, it's fair to say that it's becoming riskier for an Australian exporter to export to China?

DAVID LITTLEPROUD: Well, I think it depends on the commodity. If you look at beef, as I said, even despite the fact that one of their processing plants here in Australia that they suspended was Chinese-owned. We, in fact, have met our free trade agreement quota for beef in July this year - we normally meet it in November, December. So at a business to business level there is still, in many commodities, continuing to be a very strong appetite for Australian commodities.
Now, where they raise issues around some of the actions that they believe that we subsidised and dumped commodity, we obviously will, will have to adhere by the rules - you can't have your cake and eat it too, we’ve got to actually be able to demonstrate that we've also lived by the rules, and we'll have to adhere to that process. 
So we'll go through that. And then obviously with barley, we're looking at engaging with industry now about whether the internal process in China, if that fails, then whether we go to the WTO - go to the independent umpire. We are a fair-trading nation and we expect those to trade fairly with us - but you have to do that with evidence and you have to make sure that we demonstrate that. And- because that also has implications in terms of your reputation, trading with other nations as well. And that's why we've got to make sure that we're very careful with this, we play by the WTO rules. But if someone doesn't, we have a track record of going to the independent umpire - we've taken India on sugar; we've taken Canada on wine; and, we will continue to pursue that in consultation with the industry if we believe that we have been wronged.

SCOTT EMERSON: Alright. David Littleproud, thank you for joining us on 4BC today.

DAVID LITTLEPROUD: Thanks for having me, mate.

SCOTT EMERSON: And that was David Littleproud, the Federal Agricultural Minister.