Interview with Patricia Karvela, ABC Radio National Breakfast

E&OE TRANSCRIPT 
RADIO TRANSCRIPT
ABC RN BREAKFAST
TUESDAY, 8 AUGUST 2023

SUBJECTS: China trade; barley; wine; EU FTA; El Niño and bushfire risk; drought; industry net zero 2030 goals

PATRICIA KARVELAS, HOST: A years-long trade dispute between Australia and China has made significant progress after Beijing removed 80 per cent tariffs on Australian barley. The trade spotlight is now turning to Australian wine, but not just the wine sent to China. Wine, including prosecco, is also at the centre of trade negotiations with the EU which for now remain stalled. Murray Watt is the Agriculture Minister and he joins us this morning. Minister, welcome back to RN Breakfast.

MURRAY WATT, MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY: Good morning, Patricia.

PATRICIA KARVELAS: What’s the timeline now for wine - the World Trade Organisation is still making its decision on that case. What’s the earliest that Australia could suspend that case and a decision be made?

MURRAY WATT: Well we obviously want to see the wine dispute with China resolved as quickly as we can. The decision by China on Friday to lift their tariffs on barley obviously was a very positive sign, another sign of the stabilisation of the relationship between our two countries, and we definitely see wine as the next cab off the rank. In all the discussions that myself, Don Farrell, Penny Wong, all of us we have had with our counterparts we’ve always made clear that we see wine as just as urgent as barley. And for that matter we see all of the trade impediments that remain in place as urgent to be removed. So we’ll be pushing for China to move quickly on the wine dispute.

Our position has always been that we would much prefer to see these matters resolved through dialogue and negotiation rather than having to undertake WTO cases. That’s been the approach that has worked in relation to barley, and we’re very hopeful that we can come to a similar arrangement in relation to wine.

PATRICIA KARVELAS: OK, so what’s the earliest that Australia could suspend the case?

MURRAY WATT: Well we would need to see some positive indications from China that they are similarly prepared to negotiate and to lift the tariffs on wine before we would consider that. We obviously wouldn’t walk away from the WTO action until we had seen any positive sign like that. That’s what led us to suspend the case in the barley matter. China came to us and said that they were willing to talk. And until we see something like that happen for wine then, of course, we’ll press on with our WTO action-

PATRICIA KARVELAS: OK, so you’re saying for barley you got – you received a strong indication, you dropped it, so you’re waiting for the same scenario to play out?

MURRAY WATT: Yeah, what happened with barley was that the WTO handed down a draft decision, provided that to both countries and China at that point said that they were willing to talk. At this point we haven’t seen a draft decision from the WTO, that’s expected some time later this year. But we’d like China to remove those tariffs today. We’d like China to remove the trade impediments that remain in place on seafood and some beef processing establishments today as well. That’s the position we’ve always put, and that’s certainly the position we’ll keep putting.

PATRICIA KARVELAS: So the decision on barley was announced on Friday. Is barley now on its way to China?

MURRAY WATT: There’s a couple more steps that still have to be fulfilled, and there are a couple of our exporters who also had their own businesses suspended by China, and that remains to be lifted. So we’re continuing to work on that. But we would expect to see barley returning to China in the very near future-

PATRICIA KARVELAS: What’s near future mean? It means different things to different people.

MURRAY WATT: I’d be certainly hoping in the next few weeks we’d be starting to see some real progress on that and starting to see some shipments at least being arranged if not departing our shores. Obviously you don’t just load up a boat the next day; there’s a little bit of work to be done to organise those shipments. But this is the barrier that needed to be removed and from the discussions that I’ve been having with grain producer organisations over the weekend there’s a lot of enthusiasm to get back into that market. Obviously before these tariffs were imposed by China it was our biggest market for barley. Anyone who’s drunk a Tsingtao beer or various other products would know that China’s a big consumer of our barley for brewing and other industries. It was worth about a billion dollars a year prior to the tariffs being imposed. So that’s why it’s not surprising that our barley producers are very keen to get back into that market.
You know, some good work was done to develop alternative markets in the process, but the reality is that China is our biggest and most valuable market, prepared to pay better prices than other markets. So I think we’re really keen to help the industry get back in there as quickly as possible.

PATRICIA KARVELAS: Minister, China says the decision was due to changes in the market situation of barley. Are they trying to separate this decision from the WTO case?

MURRAY WATT: Well it’s obviously up to China how they decide to express their decision-

PATRICIA KARVELAS: Do you think it’s linked?

MURRAY WATT: I wouldn’t want to speculate on the motivations of another government. But what we’re really focused on is the outcome, and whatever it was that led China to remove this, I think there’s no doubt that undertaking that WTO case was a crucial part of this. But also I think that the efforts that the Albanese Government has put in since our election to stabilise our relationship with our major trading partner have been a big factor here as well. We’ve taken a calm and consistent approach to dealing with China, which is a big contrast to our predecessors. And I think that’s been a really big factor in us being able to restore this trade, and we hope to do the same with those other products as well.

PATRICIA KARVELAS: Australia is also in negotiations with the EU. Last month another attempt to forge a deal in Brussels fell over. Will you or the Trade Minister be going back to Europe for more talks, and when?

MURRAY WATT: We’re certainly intending to pursue further talks with the EU. I don’t have any immediate plans myself to go back there and I’m sure Don will answer for himself as to his travel plans. But whether those discussions occur overseas, in other countries, in Australia, we are keen to push on here and reach a deal with the EU. I think one of the things that we’ve all learned from the last couple of years with China is that we do need to build more diverse markets. And that’s why we’ve been putting so much effort into new trade deals with India, with the UK and now with the EU as well.

I mean, it’s not widely known but even just over the last 12 months, the Department of Agriculture and DFAT have been able to establish new access to new markets in over 100 locations, which has been worth about $5 billion our agricultural producers. And, of course, if we can reach a deal with the EU that would open up a very big and valuable market for our producers, a market that’s prepared to pay premium prices. And that would complement our existing markets and provide that sort of further reassurance if we do face any trade destabilisation in the future.

PATRICIA KARVELAS: How long will the Government keep trying? Because negotiations were first launched in 2018, and the negotiations themselves would be costly. Is there a point where the pin is pulled?

MURRAY WATT: No, we’ve always said that we’re happy to keep talking with the EU. But our position is that they need to be willing to put an offer that is commercially meaningful, that actually offers something to our producers. The whole point of trade deals is that each party gets something out of it, and we think that we are making a good offer to the EU. There’s a lot of interest-

PATRICIA KARVELAS: And they haven’t made an offer?

MURRAY WATT: Not at this stage. In relation to agriculture, the offer is far below what we think is acceptable and it’s far below what our producers think is acceptable. And that’s been the consistent position we’ve been putting now for months. I think over the last month or so I think there has been– the EU I think has – the penny has dropped for them that we’re really serious when we say that the deal is not good enough. I know the Prime Minister had discussions with his counterparts, EU leaders, when he was at the NATO conference. Don and I have both done it as well. And we’re certainly hopeful that we can convince them to come to the arrangement. But, as you said, these negotiations have been going on a long time. There’s a reason the former Government didn’t reach a deal with the EU either, and that’s because this is the hardest one to crack. It’s a very protected market, lots of different member states with different views, very politically influential farmers. So, it is difficult. But we see the value in reaching an agreement and we’re happy to keep talking in order to try to get there.

PATRICIA KARVELAS: Just on another issue, El Niño has been declared by the World Meteorological Organisation and there are serious concerns that we could see another Black Summer bushfire period this year. How are you preparing for that so that it’s not catastrophic?

MURRAY WATT: Yeah, I guess this is in my emergency management role, and there’s been a huge amount of work go on by the National Emergency Management Agency working with their state and territory counterparts really since the beginning of this year. I remember having my first conversation with my officials about the forthcoming bushfire season back in about February this year, even before the floods had finished, because we do need to be planning ahead.

There has been some really good work I think done since the last Black Summer bushfires. Australia now has one new aerial fire tanker, a large aircraft that can be deployed in addition to the others that were already there, and the others that we can bring in from overseas. There’s a new fire danger rating system that has been brought in since the last Black Summer bushfires that more easily and simply explains to people what the level of fire risk they face is. But there is also a lot of work going on on the ground – hazard reduction, I’ve seen that happen myself in South East Queensland with the smoke in the air – and there’s a lot of good coordination going on between federal, state and local agencies. But, you know, we are aware that there is a risk. We’re probably facing our first significant fire season since Black Summer, and that’s why I’ve put on the agenda for the next meeting of emergency management ministers – which will take place in three weeks – a really good discussion about bushfire preparedness. We want to elevate to a ministerial discussion. There’s been good work, as I say, happen at officials level. We have had some discussions amongst ourselves as ministers, but this will be the key item for discussion at the next emergency management ministers (meeting) to make sure that all states and territories and ourselves are fully prepared.

PATRICIA KARVELAS: El Niño has seen vast periods of drought across the country. It’s been devastating for farmers. You just mentioned that you're putting it at the top of your agenda at your ministerial meeting. Should Australia begin conserving water from now? Is that one of the discussion points?

MURRAY WATT: No-one has raised that with me as something that we particularly need to do. Obviously there would be certain parts of Australia that are probably already undertaking water conservation measures because of low rainfall and water collection in their own areas. But when it comes to drought more broadly and the work that we’re doing with farmers, this is something again that our Government has been working on for some time now. In fact, in our first Budget in October we allocated more money for drought preparedness, and that was before anyone was really talking about drought.

One of the things I guess I’ve learned as the Agriculture Minister is that the best time to be preparing for a drought is when you’re getting lots of rain. You want to be ready well and truly ahead of time. There’s some excellent work being done through the Future Drought Fund, funding research projects and innovation projects around drought resilience right around the country. We’ll be holding a drought forum in Rockhampton with government and industry in September, again to make sure that everyone’s prepared. And we’re in the process of negotiating a new national drought agreement with the states and territories.

Again, it’s all about being well prepared before these things happen. That is something that obviously the Albanese Government has really brought to the table since taking office – is looking over the horizon and making sure we’re ready for future challenges rather than being reactive like what we used to see in drought and disaster management and a whole lot more.

PATRICIA KARVELAS: Minister, six years ago the red meat industry set a target to become carbon neutral by 2030. Yesterday the CSIRO claimed it will miss that target. Agriculture is, as we know, a really emissions-heavy sector, is it time for a federal intervention?

MURRAY WATT: Well, our Government, the Albanese Government, is certainly working very closely with the red meat industry and the agriculture industry more broadly to help them reduce their emissions further. And I think this is something that where there has been a significant change since the change of government. What I-

PATRICIA KARVELAS: But they missed the target.

MURRAY WATT: Well we haven’t got to 2030 yet. And the industry is putting a huge amount of effort in to reducing its emissions, as they have in the past-

PATRICIA KARVELAS: So you think they can– sorry, do you think they can still meet the target, despite what the CSIRO says?

MURRAY WATT: Yeah, I think they can. But it will require more work. And I think the thing that’s changed with the change of government is that we now have industry and government working together to tackle these targets rather than industry having to do it on their own. The red meat industry, like most of the agriculture industry, has been doing a lot of work over recent years to reduce their emissions. But that was happening in the absence of government policy. But since we’ve come to power we’ve been funding trials of asparagopsis - a form of seaweed that can be used as a feed supplement to reduce methane from livestock. We’re also investing in other emissions reduction methodologies in the agriculture sector. And you might have seen a couple of weeks ago Chris Bowen and I announce that we’d be developing a sector plan for the agriculture sector about how we can work with the industry to reduce its emissions further.

One of the consequences of all the work that we’re doing in reducing emissions in energy production is that it is going to put the spotlight more on industries like agriculture and transport and their share of the emissions profile of Australia. So, we do need to do more, but I’ve found as the Agriculture Minister that farmers are up for this. They were already doing things despite the opposition of the former Government. They’ve now got a government who’s keen to work with them. And I think farmers recognise it’s good for their business to take climate – reduce their emissions. They can reduce their costs. They can protect their businesses from extreme weather which wipes out farms all too regularly. And farmers also recognise that our international markets and consumers are increasingly wanting to see their food produced in a sustainable way. So, I think it’s a really exciting opportunity that we’ve got now with a government and industry on the same page trying to drive down emissions and make sure that our farmers remain profitable and productive for a long time to come.

PATRICIA KARVELAS: Minister, thanks for joining us this morning.

MURRAY WATT: Good to talk, PK.