Interview with Haidi Stroud-Watts, Bloomberg News

17 December 2020

QUESTION: Minister, great to have you with us and we appreciate your time. Can I first, as a matter of procedural clarity, ask if this complaint or if the request for consultations with Beijing has actually been filed with the WTO yet?

DAVID LITTLEPROUD: It was filed last night. That was our intention after consultation with industry. And having exhausted all the procedural fairness that we were allowed between China, ourselves and our bilateral agreement. That was exhausted. And then when there was no engagement through dialogue, this was the only way that Australia felt possible, in terms of to rectify this issue, and that was launched last night.

QUESTION: Given the lack of ministerial engagements from Beijing, how optimistic or how much are you managing your expectations that a successful result can be obtained through the World Trade Organization?

DAVID LITTLEPROUD: Well we think we have a very strong case. There is no way that Australian farmers have been subsidised. In fact, of the 37 OECD countries, there's only one country that's been found to subsidise their farmers less than Australia. And in fact, in terms of dumping, we have a high-quality product, malting product, that goes into high-end beer. So with all respect to the Chinese clients, we tend to make sure that we can vigorously defend that. In fact, one of the subsidies also that they're talking about is around Murray-Darling Basin water efficiency programs. Now, most of barley isn't grown in the Murray-Darling Basin and the programs that they're talking about is in fact about putting water back into the environment. So, we have a very strong case in which we'll vigorously defend Australian barley producers. And I think the Chinese will actually find that once that is laid out in front of the WTO, and we hope that they will then expedite the process by actually picking up the phone and starting dialogue, which we've tried to have over the last 12 months that have been thwarted at every attempt.

QUESTION: So what sort of results are you expecting from the WTO and how much is this a move to actually get concrete mandate from the WTO as opposed to just pre-emptively sort of, you know, set the grounds so other commodities won't get hurt?

DAVID LITTLEPROUD: Well we're a rules-based trading nation and we expect those that trade with us do the same, and that's why the procedures and processes, they are the ones that Australia will respect. That's why we've respected the internal appeals process bilaterally provided to us between ourselves and China. That's been exhausted and now the only way is through the independent umpire. We expect that once we're able to go through that process and they're successful, then obviously the first step will be for those tariffs to be removed and for Chinese importers to be able to re-engage without that tariff being imposed on them with the Australian barley.

QUESTION: How long do you expect that to take? And in the meantime, what are you telling farmers?

DAVID LITTLEPROUD: Yeah, look, we've got to be honest, this process does take time. It's probably in the three years that it will take, but we've already been able to send our barley into other markets, such is the demand for the high quality which we produce. So, we will continue to make sure that we build on the 13 free trade agreements that Australia has with trading nations, as well as the countless countries that we have market access to. So we've been able to send boats left and right, so rather than send them to China and into that markets. And in fact, India has in fact reduced some of its phytosanitary protocols because they see the demand for Australian barley. So, we haven't seen a significant drop in price, but there has a reduction in price. And we'll continue to look to diversify our markets outside of China and that's why we continue to try to build on our 14 free trade agreements this government's put in place, with another two being with the EU and the UK.

QUESTION: The reality is, though, there's not one country or even a combination of countries that can make up for a lack of demand from China, right? So, what other strategies are there, other than trying to diversify, that you can use to support agricultural prices? Because, of course, at the same time, we're seeing restocking after the drought.

DAVID LITTLEPROUD: Well, we are seeing in restocking and in fact, putting in perspective, you touched on beef - there has been six processors that have been suspended but we still hit our ChAFTA quota by July when we normally hit that beef quota in around November. So, the demand for Australian product is still there. It's the best quality in the world, and that's what we
have to sell and that's the opportunity we provide to our farmers. Our producers will obviously make some planning decisions as they come into the planning early in the new year over their winter crop, and they may diversify away from barley as well into other commodities such as chickpeas and wheat. We've just signed an additional 750,000 tonnes with Saudi Arabia and
the Indonesian free trade agreement which came into effect in July, allows for 500,000 tonnes of its initial quota.

So, there are significant opportunities for our farmers to diversify. But this is a matter of principle. This is one in which Australia believes we are aggrieved by the actions of the Chinese Government imposing these tariffs, and as a matter of principle and process under our bilateral agreement and under the WTO rules, we intend to have an independent umpire look at it. And we accept it takes time, but we will not forgive our sovereignty to any other nation, the reality is we believe that this is discriminatory action, there is mounting evidence that China is in fact imposing this on barley and on wine and on our timber products, predicating 14 demands that they placed on Australia around sovereign actions that we took. Now, the world is watching and the opportunity for China to rectify this, quite clearly, to clarify this quite quickly, will be through dialogue. And we encourage them to reach out as we have tried to reach out. We will never turn our back, but we need them to engage with us to be able to resolve the differences. And that will be why we’ll expedite any grievance China might have with us.

QUESTION: Minister, in hindsight do you think it was foolish for Australia to stick its neck out - yes, on principles - to call for the coronavirus inquiry that obviously this has come back really to hurt your constituency, to hurt Australian farmers, wine producers, wineries, and the like?

DAVID LITTLEPROUD: No, COVID-19 has hurt millions of people globally. We're a good global citizen. We simply asked a question without malice about learning from these- from this pandemic about how we can do things better. That is what good global citizens should do. We are a smaller community as a globe today than what we were 50 years ago. Our economies
and our communities are intertwined and it is important that when we have a pandemic, we ask sensible questions. There was no malice in that. But there are 14 other demands that China has asked of Australia around our sovereignty, around foreign interference laws, around our authority to decide foreign investment in this country. Those are things that we will never
relent on, those are things that hundreds of thousands of Australians have died defending. And we will continue to make sure that our values and principles are upheld, values and responsibility of our government. And we respect the sovereignty of the other nation, we just expect our sovereignty to be respected in return.

QUESTION: Minister, before I let you go, I want to get your views on obviously the other issue facing the agricultural sector, which is the labour shortages as a result of the border restrictions and the lack of foreign workers. What are the strategies that the Government are putting in place to be able to deal with that? And does it call into question a bigger issue as to whether there's overreliance on foreign workers and also whether they're underpaid?

DAVID LITTLEPROUD: Well, I would say that Australians haven't taken up these jobs over the last couple of decades and probably won't, we've got be honest, even though we've tried to incentivise Australians with money to move around the country. We've got to appreciate that some of these jobs are thousands of kilometres away from wher those unemployed are, so we've tried to incentivise them to go and take these jobs with reimbursement, and to even for acceleration particularly young people who Aust study, and Ag studies they go back to university. But that will not be enough. And we have relied on overseas workers, and there's 22,000 pre-vetted work ready men and women in island nations ready to come in. But we rely
on the states who own public health in Australia to arrange the quarantine protocols that they are comfortable with. They have had since August to do that, and they are still dragging their feet. So, there's a real dilemma around that.

With respect to wages, let me say that on- very concerned by the AWU’s generalisation of Australian primary producers. They are, in fact, they're trying to get more - more Australians are going to work inagriculture but they're scaring them off by a small minority that have done the wrong thing. And they are a cancer in the agriculture sector that have wronged farmers. But let me say, that's no different to any other industry. It's always a minority that try to cut corners. We need to weed them out and remove them. But by far, the reality is, is Australian farmers pay, in fact, above awards most of the time and the unions move to get rid of piecemeal, piece work arrangements could be counter-intuitive because it, in fact, in some agricultural industries, people earn more on a piece work arrangement rather than on an hourly basis. So I think we need to be careful. I'm not against what the AWU is trying to put forward, but we need to work through that carefully, but we also need to be careful not to generalise and to scare people off. Australian farms are fair people, and while there are a few bad eggs, we will get rid of them. But by far, the majority are doing the right thing.

QUESTION: Minister, thank you very much for your insights today. Australian Agriculture Minister David Littleproud.