27 March 2023

Greg Jennett, Host: And in the morning, an Albanese Government frontbencher will leave Australia bound for Hainan Island in southern China. Anytime before, well, roughly speaking, four years ago, that wouldn't be remarkable, but it is these days because Assistant Trade Minister Tim Ayres, in travelling, will join a select few Australian Government Ministers to be invited inside China's borders. The only other one of note recently, the Foreign Minister herself, Penny Wong, late last year. And Tim Ayres joins us right now in the studio.

Welcome back, Senator. You're attending the Bo’ao Forum, which is a showcase event for China's business and political leaders and organs of the Chinese Communist Party. Will you, there, meet political ministers in the central, national?

Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Well, like a lot of these trips, the itinerary is being finalised as we speak, and in the first day or so of the conference, it is an opportunity to meet with not only political figures and ministers and officials from the Chinese Government, but also business leaders and trade and economic ministers from across the region. It will be an opportunity to engage with our Chinese hosts on a range of issues, but also to support the Australian business delegation that will be out there in force.

Greg Jennett: The Prime Minister mentioned today that there had been "progress", his word - on particular commodities. We know them to be coal and timber, perhaps a few others. What next would you assert as priorities? If you got the opportunity, what would you be stressing to Chinese?

Assistant Minister: Well, as you say, it's important not to overstate or understate the progress that's been made to date. There has been progress over a select range of commodities. I mean, these are trade impediments that should never have been in place in the first place, and we are working through in a careful and methodical way. Given the opportunity, I'll be making the case about all of the range of products that still have impediments in front of them. There will be business leaders from some of those sectors who are engaging themselves as well, and I want to support the work that they are doing. As you've said, there has been steady progress over the term of the government as we work to stabilise the relationship with China.

Greg Jennett: Would agricultural leaders and yourself be pressing the case for barley, for instance, which is also the subject of a WTO –

Assistant Minister: All of these products are absolutely at the centre of our discussions. I wouldn't be on this program, prioritising one product over another. But we're going to make the case. We're going to continue making the case. The Prime Minister made it in his meeting with President Xi, late last year. The Foreign Minister has been in Beijing, I've had a meeting with the Assistant Trade Minister in Europe and the Trade Minister, Don Farrell, has been engaging with his counterpart as well.

Greg Jennett: Yeah. So, in the way diplomacy works, and it sort of escalates things, do you view your invitation as a down payment by the regime to clear the way for Don Farrell to go and meet his counterpart, the Commerce Minister?

Assistant Minister: Well, it's just an opportunity to engage. I see it like that, and there's certainly been an invitation extended to Minister Farrell. I expect that that visit will happen in due course. You know, we are carefully and methodically working through these issues in the national interest, always putting the national interest at the centre of the representations that we make.

Greg Jennett: You won't be the only prominent Australian in China this week. Dan Andrews, the Victorian Premier, will also be there. Is this coordinated? Was DFAT aware of his particular mission?

Assistant Minister: Yes, and I think the Prime Minister said this morning that this visit by the Victorian Premier, you know, another level of government engaging in the national interest; that's a good thing and a good sign, but we've got work to do with our Chinese counterparts to work through at a ministerial level and an official level and a business level to make sure that these trade impediments are resolved. They're not in the interests of Australian exporters, but they're not in the interests of Chinese consumers or a stable, orderly basis for trade in the region.

Greg Jennett: Well, I'm sure much rides on whoever you get to speak to at the Bo’ao Forum.

Can I take you also, Tim Ayres, to a domestic issue about which we've been discussing on this program? The carbon Safeguard Mechanism: looks like it's going to pass Cabinet while - sorry, pass Parliament while you're away. A part of the agreement is for the government to review the feasibility of an Australian carbon border adjustment mechanism. This is potentially putting tariffs on products like steel, aluminium, cement. Are you sure, if Australia goes down this path, that it is legal and compliant with our free trade agreements?

Assistant Minister: Well, we're watching a number of our overseas counterparts, including our friends in the European Union, considering similar messages, similar proposals. There is also, at the OECD, some consideration going into the kind of design of these kinds of mechanisms. You know what - the principle here is to avoid carbon leakage. We are making good steps in Australia, including in the Parliament this week, to getting a framework that delivers certainty for business. We also don't want it - we want to make sure that there's a stable governance framework internationally on these questions as well.

Greg Jennett: Even if it costs more to build a building or a bridge or something in Australia, we are a price worth paying if we go down?

Assistant Minister: We are a long way away from adopting that kind of mechanism. I'm just very pleased that it appears that we've now got the support that is required to get this mechanism through the Senate. Business has been calling for it. The Business Chamber, AiG, Australian Chamber of Commerce and Industry, the trade union movement, the environment movement, overwhelmingly backing this reform in. It is high time we got this done. I've seen the complaints from the Coalition over the course of the day; they have dealt themselves out of this question by refusing to support the mechanism and refusing to engage with the government.

Greg Jennett: But the mere fact that you're contemplating carbon tariffs must suggest that you see a vulnerability to carbon leakage, that is a loss of jobs in Australia?

Assistant Minister: We are a long way away from consideration of any kind of mechanism like that. I just simply observe that overseas, you know, we are watching the developments overseas.

Greg Jennett: Are they established as lawful there?

Assistant Minister: Well, there is a long way to go in those jurisdictions, too. I just simply observe that they are occurring, that that discussion is occurring at least in the in the European Union context.

Greg Jennett: Alright, well we’ll watch with interest and no doubt be discussing that review and other measures with you upon return. Best of luck for your travels.

Assistant Minister: Thanks, Greg.

Greg Jennett: Tim Ayres, great to talk again.