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Minister congratulates Socceroos; discusses arrest of four Australian women in Syria; lifting of US ban on AWB; APEC meeting in South Korea; and newspaper reports of Defence employee involved in spying.

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Thursday, 17 November 2005




FRAN KELLY: Yesterday we spoke to a US wheat export body about the suspension of Australia from a US credit program for our wheat growers; it was in response to the UN report on the oil-for-food scandal which found that nearly $300 million of Australian Wheat Board or AWB’s cash ended up as kickbacks for Saddam Hussein’s regime. Well that ban that we were discussing yesterday has now been lifted. It was only in force for about 24 hours and it was lifted following representations by the Australian government.


A relieved Trade Minister and Acting Prime Minister, Mark Vaile, joins me now. Minister, welcome to Radio National Breakfast .


MARK VAILE: Good morning, Fran. Good morning to your listeners.


FRAN KELLY: Minister, before we get to trade sanctions, really … what a game!


MARK VAILE: Oh, it was just a stunning victory. There is no doubt about that. On behalf of all Australians can I congratulate Mark Viduka and the team on what was really a gutsy Australian win and something that’s really charged the nation up. Obviously there is going to be many, many Australians this morning booking their tickets to go to Germany next year.


FRAN KELLY: I think so.


Minister, before we get to wheat, there are reports this morning of another story: four Australian women have been detained while trying to board a plane in Syria, reportedly after gun parts were found inside a child’s toy. Have you had any briefing on this? Can you tell us any more of this?


MARK VAILE: Well, I have seen the reports and, yes, our consular officials from Cairo are currently seeking to obviously confirm those reports and to provide consular assistance to the Australian women, but there are not too many more details available. I am aware of the allegations that there was either a firearm or parts of firearms were found in the hand luggage of the group but there is not much more information available than that at the moment. Our consular officials from Cairo are in the process of making contact and providing assistance to the group.


FRAN KELLY: Okay. There were some suggestions that it could have been a planned hijacking. You can’t add anything to that?


MARK VAILE: No, no, I couldn’t comment on those sorts of allegations. We understand that one of the Australian women was accompanied by her young son and there were women in the group from other nationalities.




Minister, let’s go back to the story I referred to in my lead. Obviously you’d be happy that the US ban has now been lifted after a short time. It seemed like a fairly punitive even prejudicial move, in the first place, for one good friend to make on another. Why do you think the US imposed this ban originally?


MARK VAILE: We argued that it was actually premature in that, firstly, the Volker report obviously found no wrongdoing on the part of the Australian government and found that AWB didn’t knowingly pay kickbacks to the former regime in Iraq. We also argued the case that we had very quickly established the commission of inquiry in Australia—the judicial inquiry that’s going to be undertaken by Terrence Cole—and put all that together and, through our diplomatic representations in Washington, the US Department of Agriculture has agreed to lift the suspension pending the outcome of the Cole inquiry—and that’s the correct thing to do.


FRAN KELLY: Minister, how fierce was the lobbying from Australia to get this ban lifted?


MARK VAILE: We did that at a senior officials level if you like, at the level of the Ambassador in Washington direct to senior officials in the US Department of Agriculture just arguing the case that … those facts as I just laid them out.


FRAN KELLY: Yesterday we heard from Alan Tracy from US Wheat Associates. He said that contrary to what the AWB, and what in fact you just said then, are saying generally, the Volker inquiry made no judgment as to whether AWB knew its funds were going to Saddam Hussein. Do you accept that?


MARK VAILE: Well, look, we are aware of many, many comments that US Wheat Associates have said over the years and particularly during the course of the Volker inquiry. I should remind your listeners that US Wheat Associates represent US wheat growers and US wheat exporters particularly and so they are commercial competitors of AWB.


FRAN KELLY: But the Volker report did say that if AWB officers didn’t know the destination of these payments they should have known, and Alan Tracy said US Wheat Associates found it hard to believe that one of the world’s largest grain companies didn’t seem to know just what virtually every other trader knew, and he says US Wheat raised it in 2003.


MARK VAILE: That is true, and the issue was raised in 2003 and all information was passed on to the United Nations in terms of their management and operation of the oil-for-food program, and obviously the program continued.


FRAN KELLY: Are you confident that nobody in your department—the Department of Trade—or the Department of Foreign Affairs knew anything of these matters or these warnings which apparently came from the US and Canada?


MARK VAILE: We are aware of the comments that were raised by the US and Canada but as I said, the Volker inquiry, which we cooperated fully with and provided every bit of information available to the Volker inquiry and certainly we encouraged AWB to do the same, came up with the finding, as you indicated, that AWB didn’t knowingly pass any money on to the former regime. Now, we have established a commission of inquiry in Australia to investigate the possibility of any wrongdoing, as far as Australian laws are concerned, by all three companies—all three Australian companies named in the Volker report.


FRAN KELLY: But Minister, shouldn’t it be a broader inquiry in terms of, as you said, the departments knew that these warnings were there? Shouldn’t the Cole inquiry report into what the government departments knew and what they passed on to AWB or what questions were asked?


MARK VAILE: The government passed all information that we had over to the Volker inquiry and that all became part of their investigation, and certainly as part of the record that they have put in place as far as the overall exercise and inquiry is concerned, and they found no wrongdoing on the part of the Australian government.




Mark Vaile, can we turn to trade now as it’s being discussed with APEC leaders in a summit this weekend in South Korea—next month is in Hong Kong, the WTO meeting—which many are now predicting will end in failure. Is there any way that APEC can have any impact on that WTO outcome, do you think?


MARK VAILE: Well, it certainly can. Just remember that APEC is a group of 21 economies from the Asia-Pacific region that is possibly up around about 70 per cent, 75 per cent of global GDP. This group contains the United States and Canada and Japan and China and Korea and Australia and all the South-East Asian countries—some are obviously the largest economies in the world—and so when APEC leaders speak with one voice it does have influence but it needs to be directed at those that want to, at the expense of the poverty stricken countries of the world, protect some sections of their wealthy economies.


FRAN KELLY: And you’re talking about the Europeans?


MARK VAILE: Well, not just the Europeans. I mean, there any many countries within the European Union that want to continue with the liberalisation agenda. It’s only a few of the European countries that want to hold things back. And the question should be asked: how can, in all good conscience, these countries protect some sectors of their economy, in the wealthiest economies in the world, at the expense of the poorest economies?


FRAN KELLY: Minister, shouldn’t America come in for some criticism here too? Because although it has made an offer to make cutbacks in its subsidies if the EU comes on board … I mean it could do this unilaterally as others have.


MARK VAILE: Well, it could but I mean you obviously—and I am not an apologist for the Americans on this. I mean we all know what domestic politics is like and I think that the Americans have come up with a proposal to cut 60 per cent off bound rates as far as domestic support is concerned, and they have done that in an attempt to try and unlock this impasse if you like to move this whole process forward—and that is commendable. We would like to see them do more. Yes, we would like to see them cut deeper into those levels of domestic support.


There are other things that the Americans need to address such as the cotton issue with the four west African countries, and I am sure they are prepared to do that in the processes leading to and during Hong Kong. But interestingly, if there is a positive statement—as we expect there will be—comes out of the leaders’ meeting on Friday that will also be supported by Japan and Korea, which will be a significant move forward.


FRAN KELLY: Minister, just finally on another issue. The Australian newspaper is reporting this morning a link between an Australian Defence employee and an American engineer who is accused of selling Defence secrets to foreign powers. Can you add anything to this? Is this being investigated?


MARK VAILE: Well, I can’t add any more than what I have read in the Australian newspaper this morning. Obviously we’ll be attempting to find out the background of the allegations with regards to the implications for the Australian named in the article, and obviously if the allegations are correct it’s quite a very serious circumstance and we certainly will be doing all we can to find out the background to it.


FRAN KELLY: Mark Vaile, thanks very much for your time this morning.


MARK VAILE: Thanks, Fran.


FRAN KELLY: That’s Trade Minister and Acting PM, Mark Vaile.