Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Hansard source

Some of these questions will have to be referred to the Minister for Trade, and any detailed questions on the Export Market Development Grants Scheme should certainly be put on notice for the trade minister. Let me just make a point about the FTA negotiations with China. I was in China a couple of months ago, and while I was there I spent some time talking about the FTA negotiations with China. There is no doubt that these are difficult negotiations. There is just no question of that. They are difficult negotiations. The reason these negotiations are difficult is partly that within China there is a lot of sensitivity about agriculture. Why? Because there is a lot of poverty, particularly in western China, and there is a growing wealth divergence between the urban parts of China—particularly in the coastal fringes of China, where there are high rates of economic growth and very substantial increases in income—and the rural parts of China. The government is very concerned about that. That means that the issue of agriculture is inevitably going to be a very sensitive issue.

Equally, given China’s history—you find this, by the way, with most developing countries—they are quite sensitive about the services sector. Of course, the very big gains that Australia could get from an FTA with China would not just be in agriculture; they would be in services. So that is difficult. There is no question of that. Equally there are sensitivities here in Australia, in the textiles, clothing and footwear and passenger motor vehicle industries. We have always said—and I think this is the point that Mr Wells was trying to make—that these negotiations are inevitably going to be very difficult. They will have their ups and down. We offer no guarantee that these negotiations will be successful. The Prime Minister has said that, I have said that and the trade minister has said that on many occasions. But they could be successful. We could achieve an outcome in these negotiations which would be very beneficial to Australia.

I think the wise thing for this country to do is to try its best to get a good outcome. I think it would be unwise just to tank the whole negotiations, to abandon the whole negotiations, on the grounds that they were difficult. That is not my approach to life. Just because something is difficult, I do not abandon it if I think it is potentially very beneficial. If I could say this to the honourable member: I think that is the perspective he needs to look at this FTA through. It is difficult; there is no doubt about that. It is very difficult, but worth trying. We have a chance of achieving a successful outcome, so we should stick at it. These are going to be protracted and difficult negotiations.

I am not sure of the exact timing of the mid-term review—that could easily be established—but the point is that the FTA with the United States has worked well so far. As the chamber knows, the government is much in favour of it. I think, particularly over the years, you will see very great benefits flow from the integration of the Australian and American economies, particularly bearing in mind the dynamic nature of the American economy in areas such as R&D and technological development and innovation. It is a most impressive component of the American economy.

There were obviously aspects of the agreement which we would have hoped would have been better. We said so at the time, in particular in relation to sugar. We will always have a look at and talk with the Americans about ways we could improve the agreement over the years ahead through mid-term reviews and other processes. But I think it has got off to a good start. We are pleased, in general terms, with the way it is working, and there are at least no high-profile problems with the FTA that have necessitated my direct involvement with my counterparts in America.

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