Interview with Will Koulouris and Samantha Vadas, CNBC

16 December 2020

WILL KOULOURIS: Obviously, this double tier action isn't necessarily ideal, obviously for not only the Australian side, but the Chinese side as well. But realistically, is the hope that this could perhaps bring China finally to the table and engage in discussions with you?

DAVID LITTLEPROUD: Well look, thanks for having me. But we've exhausted all avenues around being able to engage with dialogue with China. Both the Trade Minister and I have made numerous attempts in which to reach out to our counterpart and have dialogue around any concerns and issues that they have. We've been thwarted at every attempt. 
There has been mounting evidence that this has more to do around geopolitical issues and our sovereignty, and decisions we've made around our sovereignty, and our principles and values here in Australia, rather than technical trade matters. Therefore, having exhausted all that, we've made the decision after consultation with the grains industry that we should continue on in following the processes and procedures that we signed up to - not only through our bilateral agreement with China, but also through what we signed up with the WTO. 
And we intend to go to the independent umpire, the WTO, and ask them to arbitrate this because we strongly, vigorously will defend the fact that we have not dumped barley into the Chinese market, nor do we subsidise Australian farmers. In fact, of the 37 OECD countries, there is only one country that subsidises their farmers less than Australia, and that obviously points very strongly to the fact that we need to continue on to support Australian farmers against any action that is basically baseless.

WILL KOULOURIS: At the moment though it's not just, you know, the barley industry that is being hit. We've got the raft of the agriculture products, plus what we have been seeing lately when it comes to coal. Do you buy that mentality just from the Chinese Foreign Ministry spokesperson today that they're not aware of any kind of imposition being put on Australian coal?

DAVID LITTLEPROUD: Well, that's why it's important that, not just officials, but actually Government members come out from China and start dialogue. That is a protocol in which we have all signed up to under the CHAFTA agreement, but also under the WTO agreements - is that formal notification will be held at official level and above. 
And it has now got to a juncture, after mounting evidence - not just on, on agricultural products but now coal - that it's imperative on the Chinese Government to come forward and to rectify these allegations that are starting to mount as a result of their actions being not about, not about trade technical issues, but in fact around our sovereign issues that we will not, we will not compromise on. We would not ask another nation to compromise on their sovereignty, and we don't expect any other nation to ask Australia to renege on its sovereignty. If they do, they're going to be sadly mistaken and they need to be very patient, because it won't ever happen.

WILL KOULOURIS: When you're dealing with other Ministers from overseas, are you getting any kind of reticence towards dealing with China because of what they're saying when it does come to these impositions placed on Australia?

DAVID LITTLEPROUD: There's a rising level of anxiety out there at the moment in other trading nations because they are watching and watching very carefully the actions of China and how they've dealt with Australia. 
And we've been, on face value, been very respectful and taken much of what they've put to us on face level- on face value as being legitimate. But, when they start to outline 14 demands that need to be rectified, they go straight to our sovereignty - not around trade technical barriers. Then it goes to the point that it is gone well beyond, well beyond the technical matters and gone more to sovereignty. 
And there are nations around this around the world that are watching very closely and China needs to understand that. The world is watching, watching their actions and the actions that they take here. And this is why it's important that they come out and rectify this very clearly, make sure that they start this dialogue with the Australia at government level very quickly, so that not only we can get confidence, but the rest of the world can get confidence in trading with China into the future.

SAMANTHA VADAS: Minister, good morning. We're joining this conversation. What kind of relief are you expecting where the WTO's intervention on this matter? And are you seeking a complete repeal? As you said, the rectification is one of top from the table, but what are the next steps expected?

DAVID LITTLEPROUD: Well, the quickest way to resolve this is dialogue, and that's why I will never turn our back on China in terms of trying to have that dialogue and initiate that dialogue - that is the quickest way to resolve that. 
But you've got to appreciate the WTO action will take time, and that is the procedure in the process. We've already exhausted internal processes between ourselves and China, and therefore we've taken this next step in taking it to the arbitrator, The WTO. To have them arbitrate on the allegations and assertions the Chinese Government has made against our barley producers. 
So, we'll exhaust that; but that will take months, if not years - in fact, it will probably take into the years. We are already in WTO with India at the moment with respect to sugar, and we've taken Canada to the WTO on wine which we able to resolve without having to go through the full process. 
So, that's why we're still saying to China; the best way to resolve this through dialogue, we can do that quickly, rather than a through a formal process that takes time and money with the WTO - which, I might add, other countries may actually come with us on. Now that we initiate this, I wouldn't be surprised if there's other nations that also sign up to our action.

SAMANTHA VADAS: Right. The only thing that comes to my mind while looking at this entire story play out is what does this mean for our RCEPs execution? RCEP is the deal that Australia signed on with 15 other nations, including China, and I wonder how these equations run parallel to each other? And do you risk spill-over effects?

DAVID LITTLEPROUD: Well, this is why Australia's stuck to the process and the procedures outlined; not only through our bilateral agreement with China, but through all the agreements we sign - whether they be multilateral or through the WTO. Australia is a rules-based trading nation and we expect all other nations to respect that when they trade with us. Now, this is the process outlined throughout those agreements that we are afforded, and we will pursue vigorously because we strongly and vigorously believe that Australia has been discriminated against with respect to barley.

WILL KOULOURIS: Is this going to be the new status quo, Minister? Because you are taking the WTO action on barley, but we've also got the wine industry getting hit with some pretty serious allegations that don't seem to necessarily have that much substance? Is wine also going to be brought to the WTO in quick order?

DAVID LITTLEPROUD: Well, we were within out right with respect to that. But we'll continue and firstly, exhaust all the other processes and avenues that I outlined throughout those bilateral agreements and through the WTO before we actually take the formal step of going to the WTO. So, we will respect those processes, we'll continue to try and have dialogue.
But we will reserve our rights for other commodities in which China has imposed sanctions - whether that be for wine or timber, and whether they are able to clarify very quickly around coal and they need to do that very quickly. 
Even though there seems to be a different messages coming out of China through their state owned media at the moment. It's very important that they clarify that; so that we can make sure that there's rectification of any issues there, without having to go to the WTO. But we will reserve our right on any commodity where we've got [indistinct we have been aggrieved and haven't been treated fairly in terms of the trading system that we have signed up to.

SAMANTHA VADAS: Minister, great having you on the show. Thank you very much for your reaction on this very important developing story in the region.