MONDAY, 12 MARCH 2018
SUBJECTS: US tariffs on steel and aluminium, steel dumping in Australia, WTO action, CPTPP, Adani, ALP President
SPEERS: Joining me is the Shadow Trade Minister Jason Clare. Thanks for your time this afternoon. The Prime Minister confirmed this morning that Australia won’t be joining any case at the World Trade Organisation against these US tariffs. Is that the right call from Labor’s perspective?
CLARE: I think it is. I was a bit surprised yesterday when the Minister didn’t rule that out. I said this morning that I thought it was unlikely that Australia would participate in an action like that given that we’ve received an exemption from the United States. So the Prime Minister has cleaned that up this morning and said that Australia wouldn’t be a part of that. I think that’s the right call.
SPEERS: But is there a principle here though? We clearly don’t think higher trade barriers anywhere in the world is a good idea. We might be exempt on this one but should we in principle be opposing it?
CLARE: Well I think you’re right to make the point that we should be arguing across the world that increasing tariffs is a bad idea. It increases the risk of retaliation and that just means prices go up and jobs go down. The lesson here in Australia from Bob Hawke and Paul Keating is that if you want to create more jobs then you’ve got to cut tariffs. That’s what we did in the 80’s and the 90’s and it led to the stronger economy that we’ve got today.
SPEERS: But for those principled reasons shouldn’t we be joining an action like this or do you think that would risk the exemption that we’ve got?
CLARE: I think there’s a fair argument that it would be counterproductive. It’d be like poking the United States in the eye after receiving an exemption. That’s why I was surprised the Minister didn’t rule it out and why the Prime Minister understandably had to mop that up this morning.
SPEERS: Labor is worried that the steel from Korea, from China, from other countries that would have been going to the United States is now going to end up in Australia. You’ve suggested beefing up some of the penalties that the Anti-Dumping Commission can apply. Is the problem at the moment that penalties are too light when it comes to dumping or is the problem that they don’t actually cover the sort of behaviour that needs to be covered?
CLARE: Well the problem is that with America increasing their tariffs on steel and aluminium the likelihood of steel or aluminium being dumped into Australia increases. That’s what BlueScope has told us. The Prime Minister was down at Port Kembla today and BlueScope would have told him what they’ve told me and that is that there’s an increased likelihood that steel will be dumped in Australia and you do need to make sure we’ve got the resources to properly investigate it, to enforce the law and have penalties that are going to convince people that Australia is not a soft touch.
To your point, yep, the penalties at the moment are lower than in comparable countries. In the United States for example the penalties are much harsher where companies are found to have dumped product in their market.
SPEERS: But is there a difference between dumping and actually legally selling steel? Not below cost but legally selling steel in the Australian market. Is there anything that can be done about that?
CLARE: There’s a very big difference. One is the open market at work and Australian companies have to compete against imports. The other one is cheating. Dumping under WTO rules is cheating. The WTO says you can’t do it and countries can put in place mechanisms to penalise companies that do it. We’re talking chalk and cheese here. I’m not recommending we go down the American route where they’re jacking up tariffs of 25 per cent on steel or 10 per cent on aluminium. But if companies decide to redirect their steel and aluminium and dump at below cost price, at below the price they sell it for in their own country, with the deliberate intention to try and hurt Australian companies…
SPEERS: I take your point that BlueScope steel might be worried about that but there’s no suggestion from anyone else that they’re going to do that is there? I mean they would be selling this steel to the US at a certain price, they can still sell that in Australia at that same price.
CLARE: They could. They could still sell it in the US and be hit by that tariff as well. What BlueScope have told me is that there is about 10 million tonnes of flat steel alone which is destined for the US every year. A lot of that will be hit by this tariff and some of that may then be redirected to other countries. Now if it comes in at cost price plus, then that’s the market at work and Australian companies need to compete with that. But where it’s dumped, and this is different, this is cheating under WTO rules, then it’s the responsibility of governments like Australia to put in place the mechanisms to make sure that doesn’t happen. We’ve got a strong Anti-Dumping Commission - I set it up when I was a Minister in the last Labor Government - but given the increased threat level here, given the increased risk because of what America’s doing, I think it makes sense to bump up their resources, give them more investigators and bump up the penalties as well.
SPEERS: Let me turn to the TPP-11. The trade deal that was signed just last week. You still have concerns that plumbers, electricians, mechanics and so on can be brought to Australia, more of them, without a requirement for an employer to test that an Australian can’t do the job first. If there’s no change on this in the deal will you oppose it?
CLARE: Well this is the sort of thing I think we can fix in government. The Trade Minister himself has said these are the sorts of things that could be renegotiated. I just think that this is the sort of thing that Australians don’t like. Before someone comes from overseas and works in Australia their boss should have to check if there’s an Australian who can do the job. The purpose of the visa system is to fill a gap where there is no person in Australia who can do that job and so it makes sense that you test first, you put an ad in the newspaper, to see if there’s an Aussie who can do that carpentry job or that plumber’s job or that electrical job.
Last year Malcolm Turnbull said he wouldn’t go down the path of waiving labour market testing anymore and he’s done that in this. Which I think is just a mistake, it makes people angry and it’s the sort of thing in this agreement that we’d have to go back and fix.
SPEERS: So when you say this is the sort of thing you could fix in government does that imply that you might waive it through, support it for now and then potentially change it if you are in government?
CLARE: Well let me make this point – no party, Labor or Liberal, has opposed a trade agreement in the last 20 years. We’re a party of free and fair trade. I talked a moment ago about what Bob Hawke did and what Paul Keating did in cutting tariffs. The economy we’ve got today is largely built on the wreckage of ripping down those tariff walls. This agreement has some positives in it. It’s good for farmers, it cuts tariffs, and it improves market access. It’s got the strategic benefits that Penny Wong, my colleague talks about. Of creating rules for the road, for the region. I’d like to see an agreement like this eventually include the United States and China.
SPEERS: You are indicating here, Jason Clare you’re not going to oppose this in Opposition. You’re not actually going to stand in the way of this deal.
CLARE: I’m telling you what the history is. I’m outlining the positive aspects of it. Some of the more controversial aspects of it, like the biologics and the copyright sections have been ripped out, or suspended from it. The next step David, is that the Joint Standing Committee on Treaties examines it over the next few months. Then once they’ve done their work they report to Parliament, and then it’ll go to Shadow Cabinet, then go to Caucus and then the Parliament later this year will debate the legislation needed to implement the tariff cuts that are part of this trade agreement.
SPEERS: The history is Labor doesn’t oppose it in Opposition. You’d fix any problems in government, that’s what you’re saying?
CLARE: There are a few problems. Labour Market Testing is a good example of that. But I don’ think it’s the sort of thing that can’t be fixed. People believe that before someone comes in from overseas to get a job they should first have to check, or the employer should first have to if check there’s an Aussie that can do the job. I think that’s a good principal and that’s the sort of thing that we would try to do in Government.
SPEERS: I appreciate that. But in Government is the key here. You’re not actually going to stand in the way of this whole deal in Opposition. You’d try and renegotiate that in Government.
CLARE: To his credit, the Minister has said these are the sorts of things that can be renegotiated and can be fixed.
SPEERS: He’s also pointed out though that when you were last in Government, the last free trade agreement Labor signed with Chile, you did have this Labour Market Testing waiver.
CLARE: There was no Labour Market Testing at the time. He’s right to say that in respect to the Chile agreement. That’s true. But Labour Market Testing didn’t exist at that time. John Howard had gotten rid of it and we hadn’t reinstated it yet. Let’s not get distracted though by an argument about what happened a couple of years ago. If we continue to waive Labour Market Testing in the trade agreements ahead, with India, with the UK and with Europe, we’ll end up with a case where Labour Market Testing isn’t required for any worker that comes in from overseas.
SPEERS: But you are setting a higher standard now than you were in Government. That’s fair to say given that we do now have these Labour Market Testing rules.
CLARE: As I said we didn’t have Labour Market Testing back then. We do now. I think it’s important and it will only be effective if it applies to everybody that comes in from overseas. Not just select countries.
SPEERS: Can I turn to your other portfolio areas? You’re the Shadow Minister for Resources and Northern Australia. The Adani mine has already been granted its principal environmental approval. In fact we’ve got a quote here of the Chief Executive of the company writing in the Australian Finiancial Review today. He says
“Much commentary ignores the 112 approvals granted, the studies that supported them and the many environmental conditions that the project must, rightly, comply with.”
Yes it still has some management plans it needs to submit to the Department. But does Labor have any problems with the approvals already granted.
CLARE: No, I’m not critical of that. Our point is it’s got to stack up commercially and environmentally. On the commercial side it’s still got to get the requisite equity and debt in order for the project to go ahead. On the environmental side you rightly point out they’ve got most of their approvals. There are still others that they need to get and they’ll need to be considered by the Coordinator General in Queensland, and then ultimately by the Minister for the Environment at a Federal level as well. It hasn’t met those requirements yet. It might. It might do that. But at this point in time it hasn’t, and there’s a lot of people that are sceptical about whether it will.
SPEERS: But if it does comply with all these management plans, Labor would support the mine?
CLARE: As I said to your colleague Tom Connell before we’re not in the business of ripping up contracts. We’re not in the business of ripping up contracts or approvals. The ball is in Adani’s court. They’ve got to get all of those approvals that they’re still to get and they’ve got to get the finance in order for the mine to be built.
SPEERS: So when Bill Shorten says it doesn’t stack up environmentally, what does he mean?
CLARE: Well he’s pointing to those approvals that they still don’t have.
SPEERS: Alright but you’re indicating they may pass them and then Labor would support them.
CLARE: Well that’s right they may still get those. There’s the water management plans that they still need to tick off. They’ve got to design and develop them. They’ve got to be approved. That hasn’t happened yet. But it may well happen. I think the bigger challenge for Adani is getting the finance. I was up in Townsville only a couple of weeks ago, and lots of people are sceptical about whether they’ll get the money they need in order for the project to go ahead. They want the project to go ahead. There’s 30,000 people who are unemployed from Rockhampton to the tip of Queensland looking for a job. But even if the project goes ahead best case analysis is it creates 1,400 jobs in operation. There’s a lot more people who need a job, other than 1,400 people. That’s why we need to be investing in a raft of different projects right across the north. From ports to airports, to road, to rail, new economy jobs, health, education to try and boost employment in the north.
SPEERS: Final one, Jason Clare. The contest now for the ALP presidency between Mark Butler and Wayne Swan. It seems the main difference is over whether Party members should be given more power, more say in Senate pre-selections and so on. Where do you stand on that issue would you like the rank and file to be given more power?
CLARE: Well this is a great example of the rank and file having power. Power they don’t have in other political parties. We give rank and file members the right to vote on who should be the leader of the Party in the Parliament, and likewise a vote to see who the President of the Party is. There’s over 50,000 members of the party and they’re spoiled for choice here voting between Wayne and Mark. I’m not going to confide who I’m going to vote for. They’re both great mates of mine. Whoever wins I think the Party will be very well served.
SPEERS: But the question is do the rank and file have enough power? What about preselections and so on. Should there be more democratisation?
CLARE: It’s different in different states. At the last Conference there were some motions moved to try and make that uniform across the country. That may happen again. Certainly in the state that I come from – in NSW – rank and file preselections are the norm. It’s different in different states and so I suspect we’ll see some of that debate take place on the Conference floor come July this year.
SPEERS: We’re looking forward to that Jason Clare, Shadow Minister for Trade and Resources. Thank you so much for joining us this afternoon
CLARE: Thanks Dave.
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