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Tuesday, 20 September 1994
Page: 962

Senator JONES —My question is directed to the Minister for Trade. I refer the minister to his recent visit to China and the special wool industry seminars being held in China to promote the Australian wool industry. Can the minister report on the developments since the forging of closer links between Australian wool exporters and processors and Chinese importers and mills? In particular, what are the prospects for the Chinese government agreeing to removing its high tariff barriers on greasy and processed wool imports?

Senator McMULLAN —Senator Jones has raised a very important issue. Recently a major wool industry delegation was in China and conducted a series of seminars in key wool and textile industry regions, and I was delighted to have the opportunity to launch that series of seminars. In the course of that visit, I took the opportunity significantly to promote Australian wool exports and to reinforce our recognition of the importance of wool exports to Australia overall and our exports to China in particular.

  Australia exported $700 million worth of wool to China in 1993, and such exports are growing very quickly. China is now our No.1 wool export market. One of our key objectives has been to cement cooperation between the Chinese and Australian wool and textile industries, and this delegation, which the industry and Austrade put together, made an important contribution to that. There are projections that China's consumption of wool may well double over the next two decades, and Australia could well keep its market share, which would mean another $700 million of wool exports.

  But there is a key issue, a critical issue, in the long-term growth of our wool exports to China—and that is the question of the access China will permit Australia as part of the terms of its accession to the General Agreement on Tariffs and Trade. This was an issue I took up, particularly with my counterpart trade minister, Madam Wu Yi, and I think we made some important progress in the negotiations during my recent visit.

  Last week, in my meeting with China's minister for foreign trade and economic cooperation, she provided me with an assurance which she asked me to convey to the Australian wool industry, which is this: an assurance that the present level of Australian wool access to the Chinese market would be maintained and that there would be provision for future expansion of Australian wool exports. She also assured me that China's accession to the GATT would not hurt Australian wool exports. She asked that this assurance be conveyed and has given the recognition that we are both significant beneficiaries of the wool trade. I am not saying that we are yet satisfied with the outcome of our negotiations with China on wool access—we are not—but this assurance gives us a good platform. It gives us a good base.

Senator Watson —What about keeping the tariffs down?

Senator McMULLAN —As Senator Watson keeps interjecting, of course we want the Chinese to drop the tariff. That is the proposal we put to them. It is what they should do; it is the only reasonable course of action they should take in the process of negotiating their access to GATT. We continued to put that proposal to them. We have put a new series of proposals to them. My concern was that negotiations were deadlocked. We had our position; they had theirs—and there was no progress. It is all very well having a noble, well-articulated position, but we do not get an agreement if one side has a good position.

  I think we have broken the deadlock as a result of these discussions. I believe that we now have the opportunity to recommence the negotiations on China's GATT accession, free up those negotiations and provide the setting for a more productive dialogue on Australia's access to the China wool market. Officials from both sides have now been given the job of examining the details of an acceptable argument. I think we are back on track towards a reasonable settlement. The Australian wool industry has been consulted in all these discussions, and will continue to be consulted. (Time expired)