Interview with Paul Kennedy – ABC News Breakfast – Monday, 12 March 2018


SUBJECTS: US tariffs on steel and aluminium, steel dumping in Australia, WTO action, CPTPP

PRESENTER: Back home the Federal Opposition is demanding more information on the deal that Australia has made in return for the tariff exemption. Joining us in Sydney is the Shadow Minister for Trade and Investment, Jason Clare. Jason Clare thanks for your time this morning.

CLARE: No worries at all, Paul.

PAUL KENNEDY: You heard what Jeff Flake just said there. Do you agree? He said it’s an awful situation, but at least a dubious situation to have different deals up in the air?

CLARE: Well the lesson from Australia is that if you want to create more jobs and more economic growth you cut tariffs, you don’t increase them. I don’t think it’s a good idea to be increasing tariffs at all, but if the Americans are going to go down that path I think it’s quite legitimate for us to argue that Australia should be exempt from them. Donald Trump’s argument was that he was putting up these tariffs for national security reasons. Well America has got no closer ally than Australia. I’m glad that we’ve got the exemption and I congratulated the Government about getting the exemption on the weekend.

KENNEDY: What do you still want to know about this deal? We saw the tweet from Donald Trump; we heard the Australian Government saying that there has been no promises to reconfigure Australia’s security arrangements.

CLARE: I take that at face value. The Prime Minister has said that there’s no separate deal. I accept that argument. If there is something else that’s connected to it then the Government should explain that. The Government has said there isn’t and I accept that argument.

KENNEDY: Do you have any fears for the global economy with what Donald Trump has done here, moving down a protectionist model?

CLARE: I guess there’s two challenges – two fears I have. One is that other countries haven’t received this exemption. Steel they might have planned to import to the United States might now be dumped here in Australia at below cost price. If that happens that’s a threat to the steel making and aluminium making industry here at home. Most of the steel and aluminium that we make never gets shipped overseas. it’s for domestic use. If steel gets dumped here at below cost price then that’s a threat.

The other threat is that we have tit-for-tat tariff increases. That Europe responds by jacking up tariffs on US goods, or that the Chinese respond by jacking up tariffs on American exports. They’re conducting a review at the moment of US exports of sorghum into China, and the Chinese Foreign Minister talked about a necessary response over the weekend. That’s concerning. No-one wins a trade war and I’d urge all countries, all parties here to have a bit of sober reflection. Make sure that we don’t end up going down that path because all it does is increase prices around the world and end up costing thousands of people their job.

KENNEDY: Should Australia support any action by the World Trade Organisation in making some sort of statement or taking action against the United States?

CLARE: We’ve been down this path before. About 15 years ago George Bush did largely the same thing that Donald Trump’s doing. He jacked up tariffs on steel – even higher by about 30 per cent – and Europe took the United States to the WTO. Australia pretty much had an exemption from those steel tariffs as well, and Australia wasn’t involved in then. Europe won. I expect something similar to happen this time around. I think it’s quite unlikely that Australia would formally participate in a WTO case. But that doesn’t mean that we can’t – or shouldn’t – make the argument that jacking up tariffs is a bad thing and urging the countries of the world not to retaliate here, and not to go down the path of a trade war.

KENNEDY: Would making such a statement put Australia in a tenuous position given that we have won an exemption?

CLARE: There is an argument that it would be counterproductive given that we‘ve won an exemption. But that shouldn’t top us form making the case all around the world that if you want to create more jobs you want to cut tariffs and open markets up. The last thing we want is tit-for-tat tariff increase around the world because that leads in one direction, and it’s a bad one. A trade war is something that no country wins.

KENNEDY: Just very quickly you mention the dumping of steel. Which partnerships would you be looking at for Australia to head off that concern?

CLARE: The Dumping Commissioner made the point two weeks ago that if the Americans jack up tariffs on steel there’s a risk that more steel will get dumped here. BlueScope is worried about that. Capral is worried about the dumping of aluminium as well. We made the suggestion only last Friday to Malcolm Turnbull that we should increase the resources for the Dumping Commission and increase the penalties. It’s an offer in good faith to the Prime Minister. We’re not criticising the Dumping Commission – I set it up when we were last in government – but we think that given what’s happening, there is an increased threat of the dumping of steel and aluminium here in Australia. The Government should take action now to make sure that doesn’t happen.

KENNEDY: I know the Prime Minister is visiting workers from BlueScope today so we might hear more from that quarter.

CLARE: I hope so Paul, because BlueScope came out on Friday and said this is a good idea. I’m sure they’ll say the same thing to him today.

KENNEDY: The TPP that Australia signed last week, was that a good deal for Australia?

CLARE: If it’s good for jobs and if it’s good for Australia then of course we’ll sign up to it. There’s some obvious benefits there in terms of extra market access for our farmers. Penny Wong has made the point there’s strategic benefits in an agreement like this as well, by creating road rules for trade for the whole region. I note also that some of the more controversial elements of the original TPP have been taken out, that deal with pharmaceuticals and copyright. There’s still some parts of it that we wouldn’t have done the same way. The Government has waived Labour Market Testing for six different countries. I think most Australians believe that we shouldn’t bring in foreign workers to Australia before we first check and see if there’s an Aussie that can do the job. The Government’s got rid of that. I think that’s a mistake. It’s also a broken promise. It’s the sort of thing we think we can fix in government.

KENNEDY: Steve Ciobo said yesterday to Barry Cassidy that it’s not for unskilled workers that it’s actually for executives to move within corporations. Do you accept that?

CLARE: It’s broader than that. Skilled workers include plumbers, electricians, mechanics, carpenters, lots of blue collar trades. Lots of very skilled workers. Before we bring in carpenters and plumbers and electricians and mechanics from around the world an employer in Australia should first check and see if there’s an Aussie that can do that job. I think most people would agree with that.

KENNEDY: Will Labor – on what you know now – will Labor support the passage of this?

CLARE: There’s a few steps we have to go through, Paul. It goes to a parliamentary committee, they provide recommendations to the Parliament. Then it formally gets considered by our Shadow Cabinet and Caucus.

KENNEDY: What are you thinking at the moment?

CLARE: Well look at Labor’s record. We’re a party of free and fair trade. As I said, Bob Hawke, Paul Keating cut tariffs. No party – Labor or Liberal – has opposed a trade agreement over the last 20 years. But it doesn’t mean this agreement’s perfect and I think there are things that we would need to fix in government.

KENNEDY: Shadow Minister thanks for your time this morning.

CLARE: Thanks Paul.


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