Senate Foreign Affairs, Defence and Trade Legislation Committee, , 8:06:02 to 8:54:59
The Trade Minister provides an opening statement before officials are questioned on the economic modeling and projected benefits of the EU Free Trade Agreement.
Topics: Trade policy, EU free trade agreement, Exports
Speakers: George Mina, Hon Matthew Canavan, Hon Don Farrell, Senator Raff Ciccone, David Woods, Interjection, Speaker 46
I'd like to now welcome um Senator the Honorable Don Farrell, Minister for Tourism and Trade and Mr. George Mina, deputy secretary of trade and the investment group within the department of foreign affairs and trade and all the officers of the department. Uh now minister or um deputy secretary did you did either of you have an opening
>> Uh thank you for that opportunity but no I do with your indulgence, chair. >> Um, thank you uh for this opportunity. The global trading environment chair is as complex and contested as it was last time we appeared before this committee in June. The department has continued to work deliberately and effectively across our international network and with partner agencies to strengthen Australia's economic security and resilience in the face of these headwinds. As the secretary said this morning, we continue to invest in new rules and relationships, support the resilience of critical supply chains, advance multilateral trade reform at the WTO and beyond, and expand opportunities for Australian exporters. Our strong trade performance demonstrates the value of this approach with two-way trade reaching a record $1.3 trillion. We've also supported the government's efforts to bolster and diversify our economic partnerships, including through a comprehensive free trade agreement with the European Union. This agreement will open a market of $450 million consumers with a GDP valued at $30 trillion that has been effectively closed to many Australian exporters for It will deliver billions of dollars in trade and economic benefits to Australia, including nearly a billion dollars in preferential red meat access every year. At a time of uncertainty, this is a strong outcome for Australian agriculture, a strong outcome from Australia, for Australian producers and exporters, and a strong outcome for our consumers. Australia secured market access outcomes that are comparable to and in many cases better than those obtained by major agricultural exporters. For beef, we secured one of the most commercially valuable outcomes the European Union has ever granted to a competitive beef exporting nation. The agreement levels the playing field with one of the world's most protected agricultural markets and provides our producers with commercially meaningful opportunities that would not exist under the status quo. Let me be clear, the agreement does not compromise our sovereignty. It does not give the European Union authority over our domestic policies, emissions targets or climate settings. Australia retains the right to regulate in its own interests and to determine its own policy settings consistent with its international obligation obligations. Nor does the agreement lock Australia into net zero. Our commitment to net zero arises from our own nationally determined contributions under the Paris agreement, not from any free trade agreement. Australia retains the right to determine and update its own contributions under that framework. What this agreement does do is support greater trade, investment, and job creation in clean energy, critical minerals, and environmental goods and services. It'll help Australia secure the benefits of the global transition to a lower emissions economy while maintaining full control over our domestic policy choices. Chair, we are not immune to the disruption that's challenging the rules-based system on which our prosperity relies. In July, the United States imposed section 301 tariffs on 60 of its trading partners, including Australia. The government has made clear that these tariffs are unjustified and unwarranted and should be removed. The government has advocated with the United States at all levels, including through leader level engagement, ministerial advocacy, officials level consultations, and sustained efforts through our embassy in Washington. Even in the face of these measures, Australian exporters continue to access the US market with non- gold exports growing by 7.5% in 2025-26. chair. As a trading nation, our interests are best served by continuing our engagement with partners, pursuing new opportunities, strengthening our partnerships, and continuing to support an open, stable, and predictable trading system. The department will continue to advance these interests. And as always, none of this work would be possible without the dedication, professionalism, and expertise of DEFAT staff here in CRA and across our overseas overseas network. and I thank them for their efforts. Thank you, chair. And I've got copies uh for the secretariat.
>> Ah, fantastic. Uh thank you, Mr. Mayor. We'll get that circulated to senators as soon as possible, please. Um now, before we just start, I just want to bring senator's attention. We do have a guest in in our presence today from Western Australia all the way from WA. Anyway, the honorable Steven Price, who is the speaker of the uh legislative assembly. Uh just like to welcome the speaker to uh the Senate estimates. Uh hopefully you're not in the wrong room or uh uh members in the house uh stumble across what we do in the upper house here working very hard diligently, but welcome. Anyway, and I'm sure um Tony and the team here in the Senate will look after you while you're here this afternoon. Now on that note, I'm going to now hand over to Senator Canavan to kick off with questions in the trade portfolio.
>> Thanks, uh chair. Um, look, I might just start with the opening statement then. Um, your statement says the agreement uh, nor does the Sorry, I better read the whole thing cuz the negatives at the start. Nor does the agreement lock Australia Internet Zero. Does the um does the agreement lock us into the
Well, Senator, um, as I've tried to set out in the statement, uh, and and mentioned on the previous occasion we met, uh, the agreement, uh, reaffirms our commitment to the Paris Agreement. Uh, and, uh, and and of course, we had been, uh, members of the Paris Agreement before the the free trade agreement and, uh, uh, we are members after. So, it it simply restates that commitment. uh and and uh it does not you know it was a it was a binding commitment but it was already a binding commitment before the free trade agreement
>> in the free in the in the fact sheet that you distributed um or the government distributed on signing the agreement and I'll quote from it said for the first time in a free trade agreement Australia has made a binding commitment to implement the obligations under the Paris agreement so this is the first time we're doing this
>> Senator as we traversed last time uh This was a commitment made in the free trade agreement and as I said earlier uh it was a binding commitment prior to the free trade agreement
>> but it wasn't a binding commitment just to be clear my my I'm not asking you to restate what you've just said must have explained this statement. This is the first time we've made a binding commitment to the Paris agreement in a
>> Well, yes or no? So as I've said earlier, Senator, it is it is uh it was an it was a restatement reaffirmation
be here or not if we start like this. Can I get a clear answer? Is this the first time we have made a binding commitment to the Paris agreement in a trade agreement?
>> Well, it is the first time we have made a distinct reaffirmation of the Paris agreement. Yes.
>> Yeah. >> You're regretting the choice of words in the fact sheet. can see but it's there for all to see. Uh I I unless you say otherwise it's I take that as an accurate representation. We'll come later to this trade agreement but to the EU trade agreement. But what penalties do we face under the Paris agreement if we don't adhere to it?
>> All right. Well, Senator, um, with respect to the enforcement provisions of the Paris agreement, uh, which is, of course, a climate uh, department lead, I would have to refer to the Department of Climate Change.
>> I think we'll come this is a substantive change and and don't accept the evidence that you provided here. There's something substantively different with this agreement which we'll come to. Before getting to that agreement though, I just wanted to ask questions on the news overnight. um that that uh apparently there's reports that the prime minister would like to renegotiate the Australia UK free trade deal uh uh particularly in regards to the provisions around working holiday makers. Has there been any communication with UK officials about renegotiating
Senator, in respect of your uh comment about this being a substantive change, I would have to uh restate my earlier evidence that this is a simple reaffirmation of our Paris agreement. I'll
>> give you plenty of I'll come back to
>> So So I I do need to uh to make that point in respect of uh the Australia uh UK working holiday maker uh arrangements. Um the point I would make there is and you uh have picked up on uh one aspect of of recent commentary by the government but um uh you have suggested if I heard you correctly that this would require a renegotiation if I understood you correctly Senator of the UK Australia arrangements. I'm just
repeating the reports that we that have
been >> those reports are not are not accurate.
>> Okay.
>> Um the point to make to you of course is that uh that uh Minister Burke is leading on these discussions with respect to the working holiday maker commitments with the UK. Uh we're doing that collaboratively with the UK uh and cooperatively. We're discussing a range of options. Those options are being uh uh discussed by the uh Department of Home Affairs and and Minister Burke and uh our representatives. Uh and in respect of the Australia UK FTA uh there is flexibility in in that uh arrangement to amend the working holiday maker commitments by mutual consent. So that that's a uh it's incorrect those reports that there is a plan to to uh to change or renegotiate if they were the ones that were used.
>> Ask the distinction between if we amend the agreement by mutual consent. How's that different from renegotiating the
agreement? Well, there are provisions in inside the package >> to allow for either side in respect to working holiday maker arrangements >> to by mutual consent to amend the arrangement.
>> That's a renegotiation then, right? If we're doing it by another way of describing that would be a renegotiation.
>> Had there been no such flexibility, there would have been a requirement for a renegotiation. What I'm trying to explain, Senator, is built into the arrangements with the UK uh uh is that flexibility >> for both sides, explicit flexibility.
>> I would have thought any agreement between two parties can be can be amended through mutual consent presumably because it's an agreement
that Senator I think um uh what what I'm trying to explain here is that in this arrangement there are explicit provisions that allow for either side uh to make amendments to uh the working holiday maker uh commitment. So that that was that was preconceived and it was built into the UK.
>> So the government is seeking amendments to the uh free trade deal.
>> No, no, that's precisely what I'm trying to explain. But you just flexibility to
amend the arrangements.
>> The arrangements in respect to working holiday makers in respect to working holiday maker. Not the deal, not the UK Australia free trade agreement.
>> Okay. But the working holiday maker arrangements are part of that deal, aren't they?
>> No, they are separate uh visa category and and visa regime that sit within our visa system, our short-term. But did we or did we not
>> when we signed and certainly the brief >> I was given at the time in parliament when we signed the UK free trade deal part of the deal was giving greater access to British backpackers to our working holiday maker scheme. Is that
>> Senator there are two uh concepts you're >> you're raising here. The first relates to our working holiday maker system. The second indeed relates to commitments made in the context of the UK Australia free trade agreement in relation to that system and what I've been trying to distinguish
>> we made commitments to that
>> commitments to that to that in relation to that system I'm trying to explain is that in the UK Australia arrangements there's flexibility in respect of those commitments
>> right so so what flexibility what changes however we want to describe it are we asking for
>> well Senator this is being worked through right at the moment by uh the uh the government and and with the UK. You'll have seen reports of comments by the prime minister to the effect that uh uh he's uh discussing with uh the UK government arrangements to increase the uh the opportunity for uh UK working holiday maker visa holders to participate in the employment markets in regional rural Australia.
>> Right. Okay. So if if we do pursue this um desire to to to deal with issues in rural and regional Australia, would any ch those changes require new
>> Uh in respect of in respect of Australia's visa regime and visa law, I'd have to defer Senator to the Department of Home Affairs on that >> there may be implementing regulations in relation to visas but not in respect of the uh the free trade agreement uh
I think your official might you feel free to pass on advice if you need to? You're okay. Thank you. uh so has the UK raised any reciprocal requests to our desire to make these
amendments? Again, again, Senator, I think these conversations uh are best left in the hands of our uh Department of Home Affairs who are leading on these issues. And Minister
>> this obviously seems to be a reaction to the mess that's been created by the delays in approval to working order makers, the introduction of ballots and caps that has gone down like a lead balloon uh in regional areas of the country. Uh has DEFAT or any of the organization done an assessment of the economic consequences of the recent uh changes to working holiday maker visa applications and the proposed ones to introduce a ballot and a cap system
>> uh modeling? No, Senator, these are issues on which the Department of Home Affairs leads and of course we would uh >> you cover tourism in authorization. You
cover tourism in DEFAT.
>> Tourism is uh is is is managed in the minister's portfolio. It's not a uh >> so have you been asked by responsibility
I I get conf I'm only relatively new to this committee that tourism matters in this outcome now or later?
>> Well, no. I think that that would be later with the tourism commission and and parts of Australia. So what my
officials going to be there with those agencies.
>> The point here is that uh the that the lead departmental agency who would work with uh those with interests in this issue would be the department of home
>> Right. So who who where are the department officials that deal with tourism located in the Australian
government? Well, as I said, the Australian Tourism Commission >> and parts of Austral deal with tourism policy, but in respect of these issues, these visa related issues, they're managed by home affairs.
>> Okay. There's no separate tourism policy section within a department as such.
>> No tourism policy section.
>> Okay. All right. Um uh uh well I'll come back to those questions later. Um moving on then another topic. Um just uh interested in in Treasury put out a report last year about Australia's net zero transformation about the potential for green commodity exports to overtake coal and LNG exports and then this modeling was reused uh for the recent intergenerational report. Has Treasury consulted with DEFA at all about the its forecasts for green
No, Senator, I'm just consulting with uh Mr. Woods. Um not to our knowledge, Senator, these would be normal Treasury uh forecasting arrangements.
it does seem sorry. So you have you done any independent analysis then or separate analysis about whether or not we'd be able to hit these projections or who would be willing to buy uh green exports, green commodity exports to the extent that they'd overtake our coal and LG exports. Have you done your own work
on this? uh we don't have a uh a very developed modeling capability senator and uh the treasury leads on matters relating to uh modeling of the Australian economy including uh aspects relating to the international economy.
>> It's a bit strange. I mean I would have thought DEFAD of all agencies would have a little bit more on the ground knowledge there in our key export markets. None of that is being fed back to Treasury to inform their advice to government on these issues.
>> No. Well, as as Mr. Woods is is saying in respect of resources, exports, uh the Department of Industry, Science and Resources plays a key role with Treasury uh in in those sorts of analyses and assessments.
>> Right. Okay. I'm also interested because just recently the AAN Center for Energy released its 9th energy outlook. They released it just a few weeks ago. uh that work is done with support from the Australian government. Under their baseline summit scenario, uh the coal supply uh from um Asian countries triples by60 triples. Um and this this is this is a scenario that does notionally uh incorporate the stated climate policies and goals of AAN members. I I'm just wondering given we're we're funding that work, have has anyone actually had a look at it and seen that actually in our region, countries in our region are tripling their coal supply and uh uh surely that should be factored in in our own uh domestic policy
settings. Well, the the general principle I' I'd state, Senator, is um that across the Australian government, we're taking a very close interest in the energy supply and demand trends in our region. So, so the general principle one is one of cooperation, monitoring, uh and assessments in respect of the Azan 9th energy outlook. There's not a a publication into which we uh uh feed in or contribute.
informed to give financial support to this. Can anyone
>> No, I'm I'm not doubting that at all, Senator. Um I would have to check, but my guess would be that the climate and energy portfolio or indeed our colleagues at industry science and resources would have a much closer engagement with that analytical work.
>> What happened to me [clears throat] you sorry
>> no thanks. uh Dave Woods, chief economist. Um I I think the point that you're making broadly around Azian is probably true uh for probably a little bit more widely throughout the region. So if we look at uh energy statements and energy plans from North Asia as well, we look at Japan and we look at North and sorry South Korea um we can see that there is um a uh broader projection of a lift in energy needs and with that a requirement for particularly fossil fuels as well. So what you're saying I think is not in terms of the Asian one is not unique to the region. Um in terms of then how that is taken into account uh back here in Australia again to the points that Mr. Mina was made that Mina was making that is um you have the department of industry science and resources who have uh um a team that put out quarterly reports forecasts and projections for our major commodities including energy. um that um uh I think questions about how much they take account of global supply and demand dynamics would be best addressed to them, but I would be very surprised if they aren't looking at um those sort of global trends that we're just both talking about.
>> Okay. Yeah. I'm just So, is anyone in the department actually gone through this report and had a look at it?
I I would say Senator um uh certainly in my team no um I can't speak whether some of our colleagues in the geographic um team may
like on the acknowledgement page, it's like the second page or second page on the paper, sixth page in the PDF, um they acknowledge that the development of AO9 was made possible through the support of the United Kingdom Foreign Commonwalth and Development Office through the AIN UK green transition fund. uh the Australian government through the Aian Australia Energy Cooperation Program under the Australia for AAN futures initiative. Is that is that initiative and that program that we fund in this
department? It it sounds uh indeed as it as though it may be Senator uh if it is
>> maybe I'll just how much funding did we provide to
>> if it is the case Senator we would need to check with our colleagues in the
>> might be someone who can help >> Southeast Asia I'm not sure
>> Mr. White may be able to help us with
>> Thank you, Senator Justin White, First Assistant Secretary, Southeast Asia Strategy and Development Division. I don't have Azanne specifically. I'm happy to take the details on notice, but we do have a support program with the Azan Center for Energy as you outlined. My recollection is that it's about >> uh six or seven million in total. that funds a range of work and uh I haven't cited this report specifically but um if there are specific questions you have I'm happy to take them on those.
>> Has anyone prepared a brief for the
>> Uh I I haven't Senator but I can take that on those.
>> I mean we're funding it. What's the point of funding it if we're not going to look at it or use it and it has massive implications for our country, right? Um there's a tripling of coal supply in our region and it's coal is our second biggest export. LG not far behind as well. This report covers that too. Uh I just I don't quite understand what not there's not massive focus on these things in our trade department.
>> Yeah, we we we I think Mr. whites uh agreed to take take on notice but but there is no question that uh we we take a very close interest in energy trends in our region and there will be of course uh policy makers with close interests in
>> I I'm concerned about that because the focus seems to be on running scare campaigns about the EU free trade deal when and you talk of uh which will get to figures of 10 billion etc. our coal exports uh are multiple times of that alone than LG again and there doesn't seem to be a lot of focus on the fact we may presumably may lose market share here big time if they're going to triple coal supply uh and countries like Japan, Korea, China, India can potentially go to other countries and ourselves that are closer to them to get their energy needs. Why why isn't there a focus on this potential
>> it's not Senator it's very important um that we rebut I mean the the individuals at the table may not be um conversant with the report you raised but [clears throat] the idea that we're not taking interest in these issues or that we uh are not paying very close uh engagement with the coal export questions you raise is is uh is not not correct uh across the Australian government as I've said we have strong interests in a range of portfolios in regional energy trade trends uh including in the department of climate change and energy department of uh of industry science and resources and there may well be people who are uh investing very heavily in this analysis.
>> Okay. All right. Well, I'm glad I brought to some people's attention. Um I'm I follow these things very closely. I'm very very concerned about our competitive position particularly geopolitically. uh uh with countries like Russia as well uh very very keen to supply more energy to our region. Um okay uh moving on to the EU free trade deal which as I say is certainly the obsession of this government. Um, you do I think you mentioned in your opening statement something around the benefits of the but I'm particularly interested in um figures from the original fact sheet uh that was produced on the benefits of the deal a while ago, which um estimated the deal would provide $7.8 billion in benefit to uh Australia. Can I confirm that was I think based on a European Commission study in 2020 uh titled the trade and sustainability impact
Senator, the the the way we go about assessments uh uh in uh and during a free trade agreement negotiation is is to uh to settle uh once once the negotiation itself has settled. Uh we've commissioned some modeling after the negotiations have uh concluded. Uh we'll be in a position of course to share that more widely in in coming months. uh that particular figure that you mentioned uh is a reference to an early study by the European Union several years ago at the outset of the negotiations uh and uh and it resulted from some modeling that they had undertaken at that time.
>> Okay. Um I I've seen the minister say $10 billion in different speeches. Is that based on that original that sort of assessment uplifted if you like?
Well, uh, uh, that that $10 billion figure was was, uh, put into the public arena by former trade minister Dr. Craig Emerson, who runs the RMIT, uh, studies center on trade. Uh, and yes, we understand that he is also drawn from that figure and updated it.
>> Yes. So, $20 and presumably with >> exchange rate and inflation effect. [clears throat] Fair enough. Okay. I'm just wondering that that figure in that study, what were the reductions in in trade barriers that it assumed?
>> Uh well, one could go back to the uh early modeling that the European Union uh took on at that time. Uh it's important to note, Senator, that figures uh on the impact of the trade deal can fall into roughly two major categories of analysis. The first relating to the economic welfare effects with your own professional background you know well that that that uh work uh concentrates on the GDP effects and then there's material on the trade uh impact. So so this figure we understand was concentrating on the welfare or GDP impacts uh at an early stage of the negotiations.
>> Yeah. And I've gone back to this study and uh so uh on page 15 of the study they show that Australia's real GDP would increase in one of the scenarios by 4.8 billion euros which roughly speaking with exchange rate does get you the 7.8 appear to be the base of that. That scenario though is titled the ambitious scenario in their description on page 11 of the study. The ambitious scenario includes um uh agricultural tariffs and tariff rate quotas and the EU's price system for fruits and vegetable being So I'm just trying to check here. Is the figure the government using relying on the complete uh abolition of all quotas or tariffs on Australia's agricultural exports to the EU? No
Senator, as I said earlier, there are two types of impact of these agreements. Some of them relate to the GDP impacts, some of them relate to the trade impacts,
>> right?
>> And and in respect of the trade impacts, quite obviously, they'll be many uh multiples higher than the GDP impacts. And what we're talking about in early assessments of the uh impact of the FTA on the Australian economy uh are some fairly uh rough estimates clearly at at an outset of a negotiation. And secondly uh around some large orders of magnitude uh with respect to trade and smaller orders of magnitude.
>> Well, given you've used these figures, Mr. Mina, can I just ask you or the min these questions? The minister's use these figures. What is the basis for those figures? What reductions >> in tariffs or quotas in the EU on Australian goods are those figures relied upon? Do those figures rely on?
>> I think we we said earlier Senator Dr. Emerson has an an eminent former trade minister has made
>> right
>> uh reference to uh these sorts of figures. Uh European leaders have made references to bigger figures. With all
respect, I'm not I think an argument to rely on on authority is not really good enough here. The report's publicly available. Have you read the report, Mr.
>> Senator, um we're not relying on
>> You are. You are. Well, you're reported.
>> If I could finish, please Senator, >> we are conducting our own modeling. uh we're doing it on the basis of a negotiated and concluded deal rather than of particular scenarios. We're doing it in 2026 and assessments rather than in respective 2020 uh dollars exchange rates and so forth. So we will >> okay get through that.
>> Can I bring you back? Does the does the $10 billion figure that you've marketed, the minister has been out in national media saying this deal is going to deliver $10 billion of benefit. Does that rely on the EU completely getting rid of its its tariffs and quotas on Australian agricultural products?
>> No, Senator, it's a figure relating to
>> misleading the Senate, Mr. Mina. I mean, you just said no. It clearly does. And I'll chair, can I just table these two extracts from the EU Commission's report which clearly show that those figures rely on the complete abolition of tariffs and quotas. Are you disputing that evidence or not? >> Let's get that distributed. And Yep. My
point was simple that the that the figure of 10 billion was introduced into the public debate by uh an eminent former trade minister and we understand yes he has relied upon earlier assessments using EU modeling.
>> I find it but hang on are you saying
>> I'm not telling you that we have modeling ourselves. We haven't we haven't done that yet. We are working methodically through after an after after a deal has been concluded to to model the realistic parameters after the negotiation has been finalized. And we'll be in a position to share with you more uh let's say accurate and and precise uh assessments. But what what I should also say, Senator, is again, you know this better than than most. Um, with respect to uh macroeconomic modeling, uh, general equilibrium modeling of trade agreements, uh, there's always a a level of of assumption made in those agreements.
>> And I'm asking about those assumptions, which you don't seem to be aware of. I I mean are you seriously suggesting this committee that the government's assessment of the benefits of this free trade deal to Australia rely on a former trade minister as eminent may be a former labor trade minister not on the independent analysis done by your own
department? Well, Senator, my evidence is is is that we will conduct our own >> that that uh it it's it's appropriate now after uh a deal has been finalized to be in a position to make assessments based on the negotiated and concluded deal. So, so if you're looking and and that's entirely reasonable, if you're looking for what are the the most upto-date and and uh uh sensible assumptions upon which to base these assessments, uh we are in the process right now of conducting uh uh some modeling on on that.
>> I mean, these questions are all to the minister. He's being very quiet. But Minister, on the 19th of October, uh you did a doors stop at the Sydney Fish Market where you you said on your um website has you saying, as I said, worth $10 billion from the start of the agreement very quickly rising to 30 Was that $10 billion figure based on this EU Commission 2020 report? uh based
on a couple of things um Senator firstly the um [clears throat] analysis by Dr. Emerson which I think is um a public document. Secondly, on the assessment of President Vonteline when she came here to sign the agreement, um she was more optimistic about the future of this agreement and uh that's where she mentioned the figure of $30 billion. Um my [clears throat] understanding of my conversation with her is that um that you [clears throat] reached that $30 billion as a result of uh all of the agreements that relate to uh the export of critical minerals. One of the features of this uh agreement is that uh uh our critical minerals will go into Europe tariffree. um whereas our competitors uh all continue to pay uh a tariff on their uh on their critical minerals exports. Um so the figures I have used have been the ones provided by um [clears throat] uh Mr. Emerson, um the EU president, uh and uh the fact that um um I think because of that significant critical minerals aspect to it, um uh that will add very significantly to the benefits of this agreement. So, does
your $10 billion figure rely on the complete removal of EU barriers to Australia's farming products? Does it
>> 10 the 10 million figure relies on um the assessment of um >> [clears throat] >> uh Mr. Emerson, the assessment of President Vanderline and as I say um the future benefits to Australia as a result
of critical do you know the basis for the $10 billion figures? Could anybody help you here exactly what reduction in EU barriers on Australian farm products is this figure [snorts] based on?
>> I'm happy to go back and get uh okay Mr. Emerson's um assessment and provide that
to you. is has the department ever briefed the minister on the EU Commission 2020 report?
>> Uh Senator, of course we have been uh keeping the minister apprised of earlier assessments um in respect of uh of the free trade agreement. Uh we've also been uh able not only privately to the minister but in a range of public evidence to point to the very significant uplift in you mentioned agricultural exports uh in in our agricultural exports uh position uh where we currently have misly access and where we are uh going to receive a very big up uplift in our agriculture. export access. Now, in the case of red meat alone, I mentioned in my opening statement an outcome of nearly a billion dollars in new access in red meat alone. So, it gives you a sense just in one sub sector of one sector, agriculture, what the orders of magnitude.
>> I I'll come to red meat. Um, but I I well, minister, have you read the EU Commission 2020 report? Have you looked at it at all?
>> Uh I think I read it in the context of um the uh uh assessment by Mr. Emerson.
>> Are you aware that the figures Mr. Emerson came to then if he was relying on this report do rely on the complete removal of barriers to trade to Australia's >> farm products to EU?
>> I um look I'd have to go back and have a look
at Mr. Take that.
>> I don't have that. Um
>> could you take on notice then exactly what the basis of the $10 billion figure is? What what particularly interest is?
uh Mr. Emerson is a very good uh economist. I think he's made a professional assessment of this. I think we have been relying on those figures. But not just on those figures, they're also the figures that President Vanderline used when she announced the agreement. And as I say, um that figure is [clears throat] at the very much at the lower end of uh value to Australia because of that aspect of critical minerals.
>> But if you're going to rely on these figures, I would have thought you could basically explain them particularly something as important as exactly what barriers to trade they assume are going to be removed to get to that figure. So could you take on notice whether or not the $10 billion figure, the $7.8 8 billion figure quoted in the original fact sheets do rely on the complete removal of e EU barriers to trade to Australia's uh farm exports. We can take
that, Senator. And and just to to make the point, the obvious point >> that uh where we are now >> without access to these very lucrative new markets uh would provide us zero
economic benefit accurate information provided to them.
>> We've got a very clear sense we've got a very clear sense in respect of agriculture of the orders of magnitude. So in respect of beef an eight-fold increase in respect of sheep meat a five-fold increase that lead on an annual basis.
>> How much was the increase in red meat did you say?
>> On an annual basis to nearly a billion dollars in
>> the the the factor how much increase the factor
>> in respect of beef.
>> Yeah beef
>> eight-fold increase in respect of sheep meat. Fivefold increase >> and that leads you to a an order of magnitude of a billion dollars alone just in red meat. So, so you know these are the kinds of figures on the trade impact. Let's not confuse if we if we can be very clear let's not confuse the trade and the GDP impacts but the trade impact there's some very big figures
mean the key point here is I think Australians deserve uh Australian government to provide accurate information to them and clearly because you haven't been able to say otherwise. I think the information being provided by the Australian government is misleading because the suggestion is the minister is very clear this will provide $10 billion in benefit. It won't because all of the barriers to trade for our farm exports won't be removed. Yet these figures are reliant on them being removed. In fact, there's a there's another scenario that would have been more accurate to use in the modeling which provides a lot lower figure. But the government's just ignored that and and hidden that from the Australian people in your communications. And I find it quite remarkable that the department itself hasn't maybe provided advice to the minister saying, "Hey, you know, that figure is a little bit high." But it would seem that your department hasn't done the basic diligent due diligence of looking at the underlying underlying assumptions that those that figure goes to in your rush to sell this
dud deal. Senator I really do need to uh respond a basic question. The well the the if you are talking about the trade impact of this deal quite obviously quite obviously if one sub sector alone is leading to an annual uplift of a billion.
>> If this was so good why isn't the red meat sector supporting it? They don't >> they don't and I'll come back to the red
>> one sub sector alike then it if you're talking about the trade impact >> I think it's pretty obvious >> that the orders of magnitude involved a very significant
>> we'll come back to those orders of magnitude later but
>> if you are talking senator about the department's advice >> I have to restate again that we are in the process of conducting economic modeling on the basis of a concluded deal so we can have it the most accurate economic assist.
>> Clearly, this modeling is not based on that. Uh it's very far from that. Um I want to go to another issue here. Uh on page 12 of this report, uh the uh European Commission discusses uh the treatment of the United Kingdom. The original modeling for this report was done in 2017. Uh and at the time the UK was included as part of the EU uh in that modeling even though Brexit was sort of occurring at that time. Um so what the EU seems to have done or the EU commission here has done they say in this on this page that the anticipated impacts reported in this study on the European side refer to the EU 27. However in reporting the current state of play or current situation refer to the EU 28 including the UK that is because the current situation by definition about the then E28 EU member states. It's a little unclear from this report, I must say, or being upfront because the EU Commission doesn't really devote much attention to Australia, understandably, but on this reading, it may appear that the increased benefits to Australia reported in this modeling exercise include Australia's exports to or potential increased exports to the UK. Am I am I reading that wrong? Can anyone help me with this?
>> We have undertaken Senator to go back and have a look at this report. But what I will do is make the point that the figure I gave you of
>> nearly a billion dollars in new reg. >> But this is not this is not a platform for the secretary to advertise the government's policy. is a is a platform for the opposition to ask questions about uh government policy. I haven't asked about red meat at all in my question. >> You've asked the official trying as I
can see it trying to actually provide you an answer. You may not appreciate his answer but at the end of the day I think he's trying to um provide an answer to you. >> He's been re in my opinion it's been relevant but you're also entitled to keep asking questions.
>> Yeah, sure. I know but then we'll be
here all night. Senator Senator, I just wanted to make the point I'm booked. >> If one were to include if one were to include the UK and the EU FTAs, so taking your concept of an EU 28 impact and if one were to look simply at the red meat sector, we have done some calculations and yes, we do have some figures that that that would uh emphasize the point you're making that they [clears throat] could indeed be much greater. Right. >> Uh, one, uh, estimate is that putting the EU and UK red meat outcomes together would lead to a $3.8 billion increase in market access per year. So, so you can get a sense that with the >> with the EU 28 lens as you're as you're asking us to assess it, it is indeed significantly larger again. Uh, so and we are of course in a in a world where we've had to negotiate.
>> But I'm not I'm asking about the GDP and you've made this point before, but I'm asking about real GDP. I'm asking about a figure that DEFAT included in a fact sheet on this deal where you said this deal would deliver $7.8 billion of benefit to Australia. The footnote refers to the EU Commission model Merlin report and I am simply so given you've done all those things I would have thought DEFAT would have done some due diligence on exactly what's in that report if you're going to include that figure and I'm simply asking does that $7.8 8 billion figure include benefits to Australia of exports to the UK. >> I find it remarkable that no one can answer this question.
>> It's it's a I I don't have page 12 in
>> You included the figure, not me. And you footnoteed and you can't answer basic questions about that report and and you are engaged in political spin right now, Mr. Mina, to keep quoting these red meat figures and all these things. You can't ask answer basic questions about a report you referred to and your documentation.
>> Senator Canavan, I think that's a bit harsh to be honest. I mean, I think the the official is trying to provide you with an honest answer, but you know, um
I understand
have some questions. I'm happy to rotate
the calls more questions here.
>> I'm happy to come back to you
>> this report that the um on the table or >> uh look, I'll table that page that page about the UK. Okay. Well, it's up to you, chair. >> Fair enough. Okay.
>> All right. But we'll table that and we'll get copies to everyone. Uh, Senator Go.