Interview with Hamish Macdonald, ABC Radio National Breakfast


SUBJECTS: EU Free Trade Agreement and Australian agriculture exports; Disaster Recovery Fund

HAMISH MACDONALD, HOST: This is RN Breakfast. Feta, prosecco, prosciutto, have become a major sticking point in the free trade negotiations between Australia and the EU which wants goods like prosecco only to be imported from the original region in Italy, like you see with champagne. It would leave a lot of Australian producers in the lurch, and it’s quickly stalling talks between the two sides. A trade deal with Europe would give Australian producers better access to a market with a GDP of $20 trillion, including reduced tariffs for agricultural products.

Murray Watt is the Minister for Agriculture and Emergency Management. Good morning to you. Welcome back to Breakfast.


HAMISH MACDONALD: There’s a lot at stake here. Is it fair to say that these talks have hit a snag?

MURRAY WATT: Yeah, there is a lot at stake here, Hamish, because, of course, it’s important that we do keep opening new and expanded markets for our agricultural producers in Australia let alone the other goods that we want to export to the EU. But I actually spoke to Don Farrell, the Trade Minister last night. He’s obviously just finished two days of trade talks in Brussels. I’ve been working very closely with Don throughout this. And, yeah, I think the negotiations that he’s just undertaken have reached a difficult stage.

We’ve obviously been very clear about our position from the beginning of these negotiations – that we really need to see some commercially meaningful expansion of new markets for our producers for this deal to be worth doing. And, equally, we need the EU to understand our position when it comes to those geographic indicators. Both Don and I have met with our counterparts on numerous times and have explained that this isn’t just an emotional issue for European producers; it’s an emotional issue for Australian producers because, as you said, we’ve had a lot of migration post-World War II from Europe to Australia that has seen our producers – our wine producers, our dairy producers – bring their own products from their home countries and make them here.

We, of course, have very high-quality prosecco, feta, parmesan and other products as well. And we want to make sure that the importance from an economic and emotional perspective for our producers is recognised by the EU too.

HAMISH MACDONALD: Can you just clarify, are we talking about more than just naming rights? Are we talking about access for our products to their markets?

MURRAY WATT: Absolutely. And it’s actually something I’ve been really keen to have understood by the wider public. I can understand why most of the debate in Australia around the EU free trade agreement ends up coming down to these geographic indicators, but the very most important thing from Australia’s perspective is to expand the amount of beef, sheep, sugar, grains, wines, horticulture, all of those agricultural products that we want to be able to send to the EU and which are currently very restricted.

We obviously can supply some of those commodities to the EU at the moment, but it’s a very protected market. We don’t – we’re not able to send very much of our product to that market. And, of course, recent events have shown that it’s important that we diversify our export markets, and the EU is an incredibly valuable one.


MURRAY WATT: So the geographic indicators certainly matters, and we’re fighting the good fight there. But it’s also critical –

HAMISH MACDONALD: But, Minister, notoriously, though, even when there is agreement between the two parties at the top level, it’s notoriously difficult to get the member states to agree to some of this stuff. Often it ends up as a sort of localised debate in some far-flung part of Belgium as to whether the whole trade agreement gets up. Are we ultimately asking for something that EU member states will just not agree to?

MURRAY WATT: I don’t think we are. And I think that what we’re asking for is perfectly reasonable, especially when you compare it to what other countries have been able to negotiate with the EU. I obviously can’t go into exact detail about what we’re asking for, but we have certainly modelled our approach on what other countries have been able to negotiate with the EU. So we think we are being quite reasonable in terms of our ask here. But you’re right – I mean, the first step is obviously to get a free trade agreement, but the second step and arguably more important is then to negotiate the real access. Because there are always biosecurity considerations, there are food and hygiene considerations, and they can be used by some of our trading partners to block access, even when we’ve got an agreement. So – but we’re going to keep fighting really hard because this is an important agreement for Australian producers.

But, equally, we’re making the point to the EU it’s important to them – they want access to our critical minerals. There are US car makers right now who have been able to obtain preferential access to our critical minerals. And if the EU want the ability to do that for their car makers and other products, then we hope that they can understand our position on other things.

HAMISH MACDONALD: Is Australia indicating to the EU that we would consider walking away if we don’t get genuine access?

MURRAY WATT: Yeah, we are doing that. Don has done that in the last couple of days. And I’ve certainly made that clear myself in the past as well. We’re not going to do a deal just for the sake of doing a deal. It’s got to be in Australia’s interests as well as being in the EU’s interests. We still think that that is possible to do that, and Don was mentioning to me last night that we have been able to reach agreement for negotiations to continue. They were scheduled to be paused for a period of time after these recent negotiations, but the EU have continued - have agreed to continue talking. So that’s a positive sign. But, yeah, we’re a long way from an agreement at the moment, and the discussions I’ve had with farm leaders in Australia also indicate to me that if we can’t get a good deal we’re better off not doing one.

HAMISH MACDONALD: I just want to underscore that, because I think it’s significant. Australia has said that it would walk away at this point in recent meetings?

MURRAY WATT: Well, what we’ve said is that we would walk away if we can’t get the kind of agreement that we’re seeking. If we can’t get the kind of market access that we’re seeking then it’s not in our interests to do that deal. Obviously, our strong preference is to have a deal reached to open up that market access for our agricultural producers and all sorts of other Australian goods and services producers. But if it’s not in our national interest to do the deal, then we won’t do it.

HAMISH MACDONALD: Australia and India also looking at a full free trade agreement. That would also be complex.

MURRAY WATT: Yes, it would. And obviously, we recently ratified the first interim trade deal with India, which was a very good start and opened the door to, again, what has traditionally been a highly protected market. We’re already seeing some of the results of that come through. We’ve recently been able to get an agreement for Australian avocados to be exported to India, and we’re looking forward to similar arrangements coming in for other commodities as well.

But there are still a number of other goods and produce from Australia that still face quite high trade barriers getting into India, and that will certainly be a focus of our next round of negotiations. But, as I say, I mean, what we’ve really been trying to do since coming to office is widen the number of markets that our producers have. Even in the last 12 months, our Department of Agriculture officials have been able to open dozens of new markets for all sorts of products, whether it be those avocados into India and Thailand as well, stone fruit into Vietnam. There’s always work going on to make sure that we can get new markets to broaden the number of options that our producers have.

HAMISH MACDONALD: I’m speaking to the Minister for Agriculture, Senator Murray Watt. There’s also been some developments in relation to China. Trade has reopened, we understand it, for Australian orchards, including citrus, stone fruits, cherries, mangoes. How significant a step is that in the broader context?

MURRAY WATT: It’s a very significant move for our horticulture producers, Hamish. And I guess it’s another good sign of progress in the government’s efforts to stabilise our relationship with China. Even with the trade impediments that we’ve experienced over the last few years, China remains by far our biggest export market for agriculture and a range of other products. So being able to reopen that market and expand it for stone fruit producers is really important. We haven’t been able to essentially add new exporters of Australian horticulture products to China for a couple of years now. So that will begin. And, of course, you will have seen we’re in good negotiations with China at the moment about removing the tariffs on barley. We recently were able to reopen exports of timber products to China, cotton as well. You know, there’s still more work to be done. Of course, we’re still pursuing things like wine and there are beef producers and processors who still face impediments, and we need to keep working on that, but we’re taking good steps forward each and every day.

HAMISH MACDONALD: Murray Watt, obviously, farmers groups have joined this chorus of voices opposing some of the industrial relations reforms being introduced by this government, particularly the same job, same pay proposals. I understand also that farmers who are using labour through the Pacific Island labour program may be facing changes to what they have to offer to the workers. How much frustration are you hearing from the agricultural sector on these matters?

MURRAY WATT: Well, I think what lies beneath it, Hamish, is that there has been a lot of frustration in the agriculture sector for many years – well before the election – about some of the workforce shortages that they’ve been experiencing. We’ve obviously taken a lot of steps since coming to office to try to address that by funding fee-free TAFE places for locals to take up careers in agriculture, and we’ve actually now got a record number of Pacific Island workers in Australia – more than we’ve ever had before. Some of the concerns of farm groups, frankly, I’m not – I don’t quite understand when it comes to the same job, same pay laws. I don’t actually think that they’ll have a direct impact on farmers. And, in fact, to their credit, a lot of the farm groups have been telling me that they want to see the labour-hire system cleaned up. They know that to attract people to work in agriculture making sure that it has a reputation as a good place to work is important. And if we can crack down on some of those rogue labour-hire operators who are undercutting pay, then that’s actually a good thing for the agriculture sector, as it is for the wider economy.

HAMISH MACDONALD: You’ve announced in your role as Emergency Management Minister $400 million of funding, combined funding, with states and territories to reduce the impact of disasters. All sorts of different programs, as I understand it, fall under this. Were these projects properly vetted? We keep hearing stories about the way this sort of money gets handed out, and obviously, audit processes have had some concerns about the previous government. Can you give some assurance about the way these projects were vetted?

MURRAY WATT: I can a hundred per cent do that, Hamish. We established an independent panel to assess all of the applications that we received from states and territories. We actually received well over 300 applications for funding for different projects. There was an independent panel assessed completely at arm’s length from me or any other minister in the government. And I accepted every single one of the recommendations that they made. Didn’t change anything at all. And I think we’ve all learned a lesson that it’s just inappropriate to see ministers get involved in the way they used to under the former government with colour-coded spreadsheets picking grants that benefit marginal seats. Frankly, there are probably more grants in this program going to non-government-held seats than there are to government-held seats. But I think it’s important that we follow rigorous processes and restore trust in the public.

But, yeah, I think this is a really important announcement and keeps building on what we’ve been doing since coming to office, which is trying to make sure that we’re much better prepared for natural disasters. And this is $400 million in investment with the states and territories to build flood levies, sea walls, bushfire evacuation centres, fire communication devices, the kind of things that will help protect Australians, protect the budget bottom line from those massive repair bills and also protect Australians from rising insurance costs, because if we can reduce risk, we can reduce premiums.

HAMISH MACDONALD: Minister Murray Watt, thank you very much.

MURRAY WATT: Good to talk, Hamish.