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Senator Hill reports on a Liberal Party delegation to South America whose economies are emerging and where there are trade and investment opportunities for Australia

MATTHEW ABRAHAM: Each fortnight, we're joined by Liberal Senator, Robert Hill, who is the Opposition spokesman on foreign affairs and Leader of the Opposition in the Senate, and two weeks ago we were unable to contact him because he was in South America and we couldn't get the phone lines up. However, he is fresh back, arrived back yesterday, from a delegation visiting South America - quite extensive trip through that area - and is with us now. Good morning. Senator Hill, you were part of a Liberal Party delegation. Why South America?

ROBERT HILL: Well, because it's largely unknown to Australia, and it's changing rapidly. All of the countries are democratic again. They are liberalising their economies; they are looking for investment and trade opportunities, and it's been an area that's been historically ignored by Australia. So we wanted to be better informed and, further, to look as to whether there are any avenues open to this country so that we could come home and promote it to our business community.

MATTHEW ABRAHAM: It's been sort of the quiet achiever in the democracy stakes?

ROBERT HILL: I don't know about quiet achievement - it's been with a great deal of agony in some ways - but it has now happened, and many of the countries in South America are now really taking off. I suppose Chile is the one that we particularly think of, and BHP, I'm pleased to say, is in there in a big way and doing very well out of its investments in Chile, but it's really going to be followed by the whole of South America - places like Venezuela, Colombia, as well. We only think of Colombia in terms of the drugs and the terrorist activities, but its economy is really starting to zip along.

MATTHEW ABRAHAM: I've read a couple of interesting pieces in the Independent Monthly recently, on Mexican President, Salinas de Gortari, and just what he's doing in that country, and the fact that the whole region is going to emerge as a big player in world stakes. Do you get that feeling?

ROBERT HILL: Yes, that's right. One of the way's he did it was to bring outside economists in, successful business people he brought in to advise him, and it's interesting that that's happened all over South America, now. We met most of the Finance Ministers and Economic Ministers, and they'd all come out of the private sector or out of academic institutions such as Harvard - really the top of the crop - and they were really given a free reign. And South America has never experienced this sort of economic reform before, and although many are still subject to heavy debt, one can see progress all around. In fact, most of them, now, have got arrangements with the IMF to at least control their debt. When they get past that hurdle, I expect great progress to be made.

MATTHEW ABRAHAM: How stable are they, politically?

ROBERT HILL: Well, I'd have to say that most are still fairly fragile, and that's why it's essential that they make economic progress. If they can show that democracy brings benefits to the community in terms of their standard of living, then that will provide the solid base that's been lacking in the past. And that's why, I guess, in some ways, the United States, in particular, but European countries as well, are also locking themselves in to support the democratic process through supporting economic change. And people like Carla Hills and Vice-President Quayle are in South America at the moment, actually, and the the US is really, through the Bush initiative - Bush, eventually, wants to see the whole of the Americas linked into one free trade zone - and basically there's been a positive response to that, so they are linking up and they are looking to mutual advantage.

MATTHEW ABRAHAM: Yes. A formidable prospect, a North and South America economic bloc.

ROBERT HILL: We did say to each of the presidents - we saw presidents in four countries, some who'd never Australian parliamentary delegates before - that whilst we welcomed the freeing up of their market, we hoped that it didn't mean a barrier to the rest of the world, and, of course, we got the assurance that that wasn't so. But nevertheless, as one sees the world starting to move more towards blocs, the possibility of a bloc encompassing the whole of the Americas is really quite concerning. But I guess we don't want to be unreasonable. Most of these countries have been part of the Cairns Group, they work with us and we thank them for that, and even those who are not, such as Venezuela, said they are supportive of bringing down tariffs on agriculture, so there's some precedent to suggest that perhaps we shouldn't be too concerned.

MATTHEW ABRAHAM: The question of business - you mentioned BHP. What other companies have a significant presence there?

ROBERT HILL: Well, there's not too many that you'd say have got a significant presence. It's really early days. There are a number of Australian companies looking to prospects in Argentina, and we met with the Argentinian Chamber of Commerce which is a little chamber of commerce. Some Australian companies are exporting agricultural technology. What they really want in South America that we can provide, is mining technology, agricultural technology, communications, transport. There was a suggestion, at one stage, that Ansett may be interested in buying the airline of Uruguay, but it fell through. But this whole area of communication infrastructure is going to be an enormous business opportunity within South America for those who get in there and invest early.

MATTHEW ABRAHAM: Yes. There would also - one would think there would be opportunity for intellectual exports, if you are talking about them hiring in economists, and so on, to kick-start their economies.

ROBERT HILL: That's right. They particularly and traditionally look to North America, but the opportunities are there. You might be interested to know that, in Venezuela, BHP is also active and has got onto the short list of international companies that are tendering to develop certain marginal oil fields, and I think the list has come down from about 200 international companies to about 40, now, and BHP's still in there. And that would be good for Australia because that would provide the first - if they are successful - and where you, of course, pressed their case to the President of Venezuela and the Finance Minister and anyone who would listen, but if they can get a link there, that will be the first real business link between Australia and Venezuela, and perhaps we could build upon that.

MATTHEW ABRAHAM: Senator Hill, you've touched on the question of the emerging trade bloc. Now, just looking at the US for a moment, the problems of their wheat sales and undercutting Australian traditional wheat markets. We've had some pretty strenuous protests here, while you've been away, from both sides of the fence. Realistically, do you think it's just really blowing in the wind?

ROBERT HILL: Well, I hope not, but I'm also realistic and we don't have a lot of clout. I think, to be frank, even the Cairns Group, as a whole, doesn't have enormous clout when it's a battle between the two majors, Europe and the United States, but you've got to be in there, trying, and I certainly - relating it back to South America, a number of these presidents were meeting Carla Hills, this week, and I urged that they say to her: `Whilst we appreciate the pressure that the US is putting on Europe, we're also concerned that, at the same time, the US is selling into markets that aren't relevant to Europe at all'. So it almost seems to be a double game, and for those of us who favour free markets, we should say to our friends in the United States: `There are two sides to the coin. We certainly want you to help us in the battle of reducing European barriers, but we also want you to show a lead in reducing the barriers and the promotions of subsidised products that you're presently demonstrating'.

MATTHEW ABRAHAM: Now, given you were only back yesterday morning, if I can just grab you on a Cabinet decision which would have been made while you were flying into the country, and that is the three-stage plan on South African sanctions. Is it coming a bit late, or are you happy with the speed of that sort of recognition?

ROBERT HILL: Well, I only had a chance to read the press on the plane, and there didn't seem to be anything new in it, to me. It's what Senator Evans has been saying. With the person to person contacts, sanctions can be lifted now - that's fine - but the trading sanctions are going to have to await further development, and that's where we say they are wrong. We think that the best way in which we can contribute to the process of change in South Africa, now, is to invite the world community to get back into the South African economy, and support it and start getting a flow of funds and wealth into the country that can benefit the blacks. And it still seems that Mr Hawke and Senator Evans are opposed to that process commencing now, and that's what I would quarrel with.

MATTHEW ABRAHAM: You don't feel the Inkatha funding scandal has given just grounds for making haste slowly?

ROBERT HILL: I don't think so. It was certainly unhelpful, but, in some ways, that reinforces the need to make sure that the process that has subsequently taken place, the dismantling process and the rebuilding of the country in a way that can benefit all South Africans, it reinforces the need to keep that process on track, so it wouldn't change my mind, no.

MATTHEW ABRAHAM: Senator Robert Hill, thank you.