Senate Foreign Affairs, Defence and Trade Legislation Committee [Part 2], , 2:38:26 to 2:49:17
The Minister explains the application of US tariffs related to modern slavery and forced labor provisions, comparing the situation to previous Chinese trade sanctions.
Topics: Trade policy, Human rights, Exports
Speakers: Senator The Hon Don Farrell, George Mina, Senator Matthew Canavan, Unknown Speaker
>> Well, look, I agree with all of that, but moving on and you did just uh um as you have done many times berate the former coalition government for having uh uh for for China making a decision about their tariffs. Given that given
that >> all I did all I did Senator with due respect was point out >> that the wine industry lost more than a billion dollars worth of trade.
>> But you blame us for that and in that with that in mind.
>> Well well I never blamed you for that Senator. I simply made the observation that the effect on the Australian lamb industry >> if the Americans proceed with this is exactly the same as what happened to the Australian wines.
>> Okay. Well, you have blamed the coalition many times for those Chinese tariffs. If that being said, then why haven't you been able to present prevent the US from imposing higher tariffs on Australia under the forced labor provisions than they have on other developed countries? I >> mean, if the coalition is to blame for the China situation, why aren't you to blame then for these high tariffs from
the US? Uh well there is a significant difference between what is occurring in the United States and >> well you might not like the answer uh Senator Rakanovan but at least give me the respect of listening to me uh without making well those funny little comments that you make. Um there is a significant difference between what's occurring now in the United States and what was occurring um in China. When China imposed those 20 billion dollars worth of bans uh on Australian products uh we were singled out for treatment. And so for instance uh with uh with beef uh when the um uh bans were imposed on beef um our quotas [clears throat] were being filled by other countries Brazil, Argentina um and so forth. What's happening in the United States is this. Um on so-called liberation day in April of last year um the United States government decided to impose um a range of tariff regimes um on every country that basically traded with the the United States. Um those tariff regimes uh r range from a figure of 10% which is at at the lowest to anything up to uh 50% or um a figure even uh even higher. uh consumers in the American in in the United States uh took a case to the American Supreme Court uh to challenge the implementation of those tariffs and they were successful in overturning uh the tariffs. In response to that um the American government then imposed an acrosstheboard tariff of 10%. Um so [clears throat] whereas we had had an advantageous um provision uh originally when the original decision was made by President Trump all of a sudden we were returned to the average of all of the uh all of the countries. Now under American law that can only could only have been applied for a period of 6 months and that 6 months um sorry
>> 5 months 150 days 5 months
>> sorry 100 I've just been corrected 150 um so at the end of that when that provision was coming to an end um the um United States government then had to find another way of keeping the uh the tariff tariffs and they chose to go down the path of examining the responses of countries to modern slavery and um again made an almost universal uh application uh of modern slavery against every country in the world and lifted the tariff to 12 a.5%. So countries like Australia, like uh the United Kingdom, like New Zealand were all lumped in a similar uh category. Interestingly, countries like Pakistan and Bangladesh were exempted from that uh that that that higher increase. Um we continue to argue against um that uniform uh application. Um, the point I make that the distinguishing factor between what happened in China and what is now happening in the United States is that the United States are applying these tariffs right ac across the board um as a as a policy position um to reintroduce tariffs. That wasn't what was happening in China. But can I say this, Senator Canniban? Despite all of those tariffs being applied, our exports to the United States have gone up by 67%. So despite the application of these tariffs, um, Australia has managed to increase our exports to the United States. When I was talking to Senator Roberts a bit earlier, I referred to the fact that last year was a record figure for trade uh $1.37 trillion. One of the reasons for that higher increase in our trade figures is the fact that we have been able to uh increase our exports to the United States. How have we have done that? um, Senator Canniban, I know you're looking a bit bored there, but, [clears throat] um, uh, the reason that we have been able to do that is our three largest exports both in terms of volume and value, um, are beef, gold, and copper. And all of those three products enter the United States tariff-free. So whereas [clears throat] um the other products that we sell into the United States are subject to a 12% tariff or higher as in the case of steel or aluminium 50%. Um those products which represent both higher value uh and uh and higher volume uh have given us that figure of 67%. Um why is beef um such a significant contributor? Well, the American beef stock because of drought uh is very low. Uh they've in fact even invited other countries to uh increase the amount of beef exports. Um and you'll have seen a figure of 300,000 ton made available to particularly the uh the South Americans. Um so uh the net result uh is that we are increasing our exports to um the United Kingdom. I met CSL, one of the the companies that um exports significant amounts of product into the United States. They believe there's an opportunity to increase uh exports in in their space. So, um, we're doing everything we can, uh, and I think met having met with the the the meat industry today, they're appreciative of the efforts the Australian government is going to, but there's certainly more work to be done in that space and we don't resolve from that for one moment. Senator Canavan.
>> So, look, I was looking a bit bored because you've described what happened, but you haven't answered my question. Why haven't you been able to get the same lower tariff that the UK and other countries have got on these these uh across the board tariffs on forced labor
issues? No, they've got it right. >> Um, Senator, I I I think um here uh we have to talk about the US's approach to the test and the thresholds they were applying in respect of what they wanted to see from partners on uh dealing with modern slavery in their supply chains. So, so the US was very clear they opposed a binary test. either one has a blanket import ban or one doesn't. What we've been trying to argue to them and we're continuing to press this case is that uh we have a different approach. We have the same policy objective to remove modern slavery from supply chains. As I think uh we discussed last time Senator u we are emphasizing to them that we have a a different approach which relies on businessbased accountability. mechanisms and in fact there are many aspects of our approach that are more effective because you can reach higher up supply chains identify risks and deal with them at their source. We've also in the last couple of months uh and again this is the highest levels. Prime Minister and the minister have been making these points uh introduced a legislative reform package that goes to higher and more serious civil and criminal penalties for offenses particularly for companies with revenues over $und00 million. We've introduced that into the discussion with the Americans. Mr. Farrell was able to do that in his last discussions not only in Milwaukee but actually uh you know back in August. So we have been continuing to advocate on the effectiveness of our reforms uh which uh are obviously uh yet to be brought into into force uh but we will be uh uh pressing for the Americans to recognize those reforms the prime minister has done.
>> Just to make clear I don't blame the minister of the government for not getting a better deal. The primary blame for these tariffs are with the United States administration clearly. But it just I think does the last 10 minutes or so uh that we're not going to get back demonstrates how absurd it is to blame the former coalition government for China's actions. It's the person resp people responsible for increasing protection of the countries that do it and I'm not going to run down our country or our officials by making these sort of things political. We we should stand together when action like this is taken. That's the point I was making. Anyway, thank you chair. I might we might move on I think then given the time if there's no other questions