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Interview with the Minister for Trade

KEVIN HUME: The Australian Trade Minister, Senator Peter Cook, takes off on a major business trip this Saturday, but before, in terms of his preparations for that trip, he outlined what he expects on the trade conference circuit overseas. Here's Pru.

PRU GOWARD: The ministerial trade trip takes in GATT, the European Community, the OECD and the US, just about all our trade enemies, but it comes at a time when a dangerous airline trade war is hotting up. The struggle between America's Northwest Airlines and Qantas is over the sharing of the lucrative Japanese route. Qantas is crying foul, saying Northwest broke the written agreement on the route, and Washington says: Ban us and we'll ban Qantas on those equally lucrative Los Angeles flights.

Well, the Trade Minister is with me, now. Peter Cook, if I can leave your trip just for a moment. The airline war - how serious a dispute do you think this is, at this stage?

PETER COOK: Well, disputes like this have always got the potential to become serious and I think that Qantas has got a good case. I think what is foreshadowed from the American side is greater retaliation than the circumstances would, on the face, justify, and this is one of the issues that I'll be covering in the United States in my talks with the United States Special Trade Representative, Micky Cantor.

PRU GOWARD: Does it worry you when you see overreactions - as you are basically describing this from Washington - does it worry you that this new government is really shaping up as a fairly protectionist one?

PETER COOK: I think it's too soon to form a decisive judgment about that. I think there are some fairly ordinary reasons why there are mixed signals coming out of this administration, and one of them is that of all of the political positions that they have to fill in the government structure, only about a quarter of them have been filled; 75 per cent are not; and all of the decisions of the previous Bush administration are being reviewed by committees, even the most unexceptional ones. That's not complete. You can't complete the process until the political appointments are in place. And in the absence of all those things being done, we're getting different signals because the infrastructure for decision making isn't fully completed by the Clinton administration. Now, that may not be one of the world's most shaking of reasons but I think it's one of the logistical reasons why we're getting that effect.

PRU GOWARD: And it keeps you calm, at this stage.

PETER COOK: Well, no, it doesn't keep me calm; it keeps me alert.

PRU GOWARD: Now, your trip comes at a time when Europe must increasingly see us as leaving them and integrating ourselves within Asia. Do you have to reassure them that we still are interested in serving their markets and buying from their markets?

PETER COOK: Well, that's a very important point, Pru. It is one of the issues that I'll be covering in Europe, and the point that I'll be making is that, sure, the new Australia, the restructured Australia, sees itself as part of Asia, but that doesn't mean to say we see ourselves withdrawing from the European market or concentrating less on the American market. We see ourselves as a bridge for Europe into the Asian market - that's one of the messages. And the second message is that our economy is expanding more and more as an export economy. And the exports we've had to Europe we would want to expand on, as well.

PRU GOWARD: What do you mean by us as a bridge for Europe into Asia?

PETER COOK: I think that if you look at debate, current debate within Europe, it's all about problems with Maastricht, it's all about problems with monetary union and things of that nature, and I think there is a tendency in the European debate, at the moment, to concentrate on the European navel. But there is a realisation by some of the smart money that the growth levels in the Asian area are the ones that, if they can hitch their wagon to those stars, can pull them through. Australia knows that market; Australia is positioned to serve that market; and we offer them a culture and a background similar to their own which they can use our expertise to help them through with, and they should look at investing in Australia as the leaping-off spot for ....

PRU GOWARD: Sort of a trading house, a clearing house.

PETER COOK: Yes, as a regional headquarters, as a friendly environment to tackle the Asian market.

PRU GOWARD: Minister, if I can look at the Prime Minister's trip to New Zealand, just finally, and the closer economic relationship which you play a very big role in - what chance, really, do you think the Australian Government has of getting New Zealand to agree to meet more of its social security commitment for New Zealand pensioners living here?

PETER COOK: Oh, I think it's a question we've got to press them on. I mean, half a billion dollars drain out of our Budget at a time in which we're all re-examining our portfolios to see what cuts we can reasonably make after ten years of making such cuts and with pressure on the Budget deficit - we have to look at all avenues and it's a reasonable ask for Australia to say that this leakage of social security moneys is high and it ought to be addressed. I think there are signs on the New Zealand side they are prepared to address it. The question is: To what level?

PRU GOWARD: And if they don't, what can we seriously do?

PETER COOK: Well, let's see the outcome of the prime ministerial talks before we jump to any conclusions about what next. I've got a great deal of faith in the Prime Minister as a persuasive advocate.

PRU GOWARD: But I guess the big question mark is the shearers. I mean, you could still cut workers off, the New Zealand workers off from coming into Australia, couldn't you, and the AWU would be very pleased?

PETER COOK: Well, they may be very pleased, but we're not going to do anything that cuts our nose off to spite our face as a wider economy, and I think there is every reason why we can be proud of the changes we've made in our own labour market, too, and the competitiveness that's arisen there. But coming back to your original question, it is an issue for us and it's one I'm sure the Prime Minister will press strongly.

PRU GOWARD: Peter Cook, thank you for your time.