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Transcript of interview with Ross Greenwood: Radio 2GB: 5 December 2013: Korea-Australia Free Trade Agreement
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MINISTER FOR TRADE AND INVESTMENT The Hon Andrew Robb AO MP

5 December 2013

2GB MONEY MATTERS INTERVIEW WITH ROSS » GREENWOOD

Subject: Korea-Australia « Free » Trade Agreement

E&OE…

« ROSS » GREENWOOD: Let's go to a man who is very much front and foremost of this, the Trade Minister Andrew Robb who, as we told you earlier on, has been in Bali, in fact in trade negotiations, and so it's appropriate we have a chat to him tonight. Thanks again for your time, Andrew.

ANDREW ROBB: Thanks very much, « Ross » .

« ROSS » GREENWOOD: This is an important deal, isn't it?

ANDREW ROBB: It's a huge deal. There hasn’t been one of this consequence, really, certainly for agriculture, you know, for decades. And it is, though, not just an agricultural deal. It does cover resources and energy, it covers manufacturing significantly, and it covers services.

So we're seeing, really, a world-class agreement with this « free » trade agreement with Korea.

« ROSS » GREENWOOD: The one thing that a lot of people would look at here would be beef trade. Now, the beef industry is one that clearly many other countries are sensitive to allow tariffs to drop. How will it work with the beef industry in Australia?

ANDREW ROBB: Well, this is a huge market for us. It's about $650 million at the moment. It's our second or third biggest market for beef. It's faced a 40 per cent tariff and the problem has been that both the US and the European Community in recent years have struck agreements which lead to the tariffs they were facing starting to come down, and what we have struck is a comparable deal to that of those countries.

So the 40 per cent will reduce to zero over 15 years and maintain the competitiveness of the beef industry because this is a huge market. And the work we've done not just for beef but across agriculture suggests that because of this deal, agricultural exports will increase by around 75 per cent over the next 15 years, so it's of huge consequence.

« ROSS » GREENWOOD: I notice that the Australian Manufacturing Workers Union national president Andrew Dettmer today said he thought it was a cows for cars deal, sacrificing Australian car makers to secure a better deal for beef producers. Is that exactly what it is?

ANDREW ROBB: No, well, we did continue the practice which has been a bipartisan one of further deregulating the economy. This deal is a true « free » trade agreement. We have got, in the main, quite low levels of protection, so we've given up, and it will be staged over time to allow some adjustment, but we've got five per cent tariffs that we've given up in areas such as cars and components, but also steel making and textiles and other areas where we have always struggled to compete.

We've given that up, but we've got in exchange not just a beef deal, by any stretch. We will see the elimination of 99 per cent of tariffs for beef, wheat, sugar, dairy, wine, horticulture - a whole raft of horticultural products, seafood. We'll see manufacturing tariffs gone that we were facing into Korea and we see any tariffs on resources and energy products gone.

So we are seeing the elimination of tariffs, but see, it's the elimination of their very high tariffs. I'll give you one example: potatoes, currently 304 per cent tariff on potatoes.

« ROSS » GREENWOOD: Three hundred and four per cent? Seriously?

ANDREW ROBB: Absolutely. When this comes into force, it'll go to zero. So all of a sudden we've got a marketing career which opens up for potato growers. I could repeat that sort of example across many, many, many horticultural products. Wine: from 15 per cent to nothing immediately. Dairy: several of them to nothing immediately. Cheese will face no tariff. There'll be no tariff on butter and others will phase out over three to five years.

Again, a huge industry for us and one that will benefit enormously is seafood. Fifty three per cent tariffs will go down to nothing, some immediately, some over time.

So this is a wide-ranging deal which will back our strengths, and the bottom line is...

« ROSS » GREENWOOD: That's what I was going to ask you about. Is it really this is what's happening with these « free » trade agreements? That Australia and even its industry, the so-called transformation that we're going through, that we really are now whittling down the strengths and weaknesses in the Australian economy, almost by, you know, natural movement and these « free » trade agreements are simply accelerating it?

ANDREW ROBB: Well, you know, what we've got emerging on our doorstep is a never before occurring revolution in terms of the number of people moving into the middle class. We’re not talking about hundreds of millions, we're talking about billions of people in the next 20 to 30 years moving into the middle class, and we need to position our economy to take advantage of this, and we should focus primarily on our strengths: food

and agriculture, resources and energy, education. This package has a great deal on education, health and medical research and all of the sort of high-end manufacturing, like medical devices, tourism and hospitality, funds management. These are things that we do as well as anyone in the world and better than most, and these are the things that will give us the great benefits.

All of our services, this deal opens up enormous opportunities for engineering, for accountancy, for lawyers, for environmental services, education services, health services, aged care services, a whole raft of areas which will provide the nucleus of enormous trade returns in the years ahead. In fact, we predict or the modelling predicts that this deal will increase our exports to Korea alone by 25 per cent over the next 15 years.

« ROSS » GREENWOOD: It's going to be really fascinating. Just one very quick one finally: you had promised « free » trade agreements. You'd prioritised their importance during the first term of the Abbott Government. You did say that there would be deals with South Korea or maybe advancement, Japan and with China. Is this the blueprint for what you'd be seeking to do with those other two countries?

ANDREW ROBB: This is most certainly. It's the type of agreement that we're looking at. There are differences, of course, with every country. This one is really what they call a high-quality one. It's got lots of breadth and depth to it, and very few exceptions, you know, rice was one, it was the only area really in agriculture. All the other areas in manufacture have opened up.

Last year we exported $120 million worth of brakes systems to Korea. Now, there was an eight per cent tariff. That will go from day one. I'd say there's a lot of things, not just in agriculture, in so many other areas, and it will be a bit of a blueprint for what we do with Japan and China, and we've got one within the first hundred days. Hopefully we can make sure the other two are there within the year that we hoped for.

« ROSS GREENWOOD: Andrew Robb, our Trade Minister in Bali on that, what is an historic deal with South Korea.

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