INTERVIEW WITH TAT MONDE -PARIS -13 JUNE 1978
QUESTION. I would like firstly to know if you could tell us about
the aims of your vi sit, if it is mainly economic, and what
do you expect to achieve and perhaps what you think you have
achieved so far.
PRIME MINISTER
1978 is a particularly important year in terms of world
economic and trading relationships. It is important for a
number of reasons the Tokyo Round Trade discussions are
designed to come to a conclusion in July; there will be a
Bonn Summit also in July. For a number of years now, but
especially over the last year, many nations have been pointing
to the Tokyo round and their conclusion this year in 1978
as--a matter of some importance. While people have been
pointing to July as the concluding date, over the last twelve
months there has been a growth of protectionist pressures
in a number of countries we have seen a number of actions
that have been taken. We have also seen that governments
have been able to point to MTN and have been able to use
that as a defence against a too greater move towards protectionist
measures. With the levels of unemployment that there are
in a number of countries and with the concerns that there are
with the world trading scene, there are clearly greater
protectionist pressures now thdn I think there have been
for a very long while. Against that background, the decisions
made at the Bonn Summixit, the decisions made at MTN are
vastly important. We have got the choice of taking a forward
looking step of-' freeing trade, of seeing that the benefits
of that freer trade are distributed as widely as possible
amongst nations. Or we have got the possibility-of not
recognising the needs of the present, and moving back to a
1930' s type protectionism which would be disastrous for France,
Australia and all significant trading nations, with damaging
consequences to the standard of living of all of us.
About six weeks ago I visited Prime Minister Fukuda in Japan
to discuss these matters with him and found a broad identity
of view, and discussions with Vice-President Mondale of America
and Trade Negotiator Strauss, Prime Mi nister Callaghan and
your Prime Minister because I wanted to assess for myself
the possibilities of successful trade and to see how other
nations were regarding 1978 in terms of trade and the economic
situation. I am heartened to the extent that I have found that
every nation shares my concern. They share my concern that
there should not be a reversion to protectionism. I find
differing views-about the prospects of success, either at the
Bonn Summit or at MTN. To try and provide some shot in t'he
arm for MTN, but at the same time recognising the limits
of Australia's influence, we have designed to adopt the formula
approach even though we know quite well it is not structured
to meet the needs of the Australian economy as it is structured
to meet the needs of Europe and North America. / 2
We will be pressing our views vigorously at MTN forums, we will
be pressing for progress in relation to agriculture and
through UNCTAD in relation to the Common Fund.
The industrial tariff proposal covers less than 20 percent of
world trade, and it will result in a half a percent a year
reduction for eight years from 1980, and it is very unequal
in its effect 40*-percent of Europe's exports, and five percent
of Australia's, and many developing countries, much less than
that. So to have a MTN that distributes benefits reasonablevenly
amongst different groups and categories of trading
nations it is going to be very important to make progresz:
not just on the indtistrial tariff proposals, but on agriculture
and also on Common Fund proposals for developing nations
Australia quite deliberately moved'away from the B-Group of
countries, and took'a step . in the direction of the developing
nations, because we felt both groups were too inflexible
in their positions and that there needed to be movement,
so that we can try and move things at least a stage nearer
agreement. I am glad to say that amongst both developed and
developing nations with whom I have directly spoken I do
detect a willingness to move. There is a recognition of
the fact that nations will have to be practical and that
there will have to be a movement away from rigid positions
if there is to be an advance and an agreement.
I am here at the moment'because I believe all of these things
are vastly important, and if in 1978 you make the wrong
decision, we are probably not going to have a chance to
undo those decision for quite some time, in other words,
with all the history that has led up to this year, the
decision taken in 1978 will prqbably set the pattern for
many years ahead.
QUESTION So you discussed the main problems you have with the EEC,
in broad terms, but you have specific problems with the EEC..
PRIME. MINISTER
These have mostly been handled by Mr Garland, our Special
Trade Representative, but at the same time I have in both
Britain and here, stressed in the strongest terms
the complete inadequacy of the Community's response.
Twelve m~ onths after discussions were opened, when I was in
Brussels a year ago., the Community has not yet been able
to put its view to us in writing, which I find very hard to
understand. They have said that in a number of areas there
will be progress at the Multi-lateral Trade Negotiations, and we
will test the validity of what the Community has said to us,
we will be in there negotiating at the Multi-lateral Trade
Negotiations, we will be developing the concept of joint
disciplines of our own, because it is possible to see the nature
of-joint disciplines that would allow a real prospect of
growth and development in trade in a responsible way that
is not disruptive; or it would be possible to see under
joint disciplines rules drawn up that did not allow any possibility
of trade. Therefore it is necessary for Australia to test the
validity of what the European Commission has put to us in the
MTN forum. We will be continuing to press our view bi-laterally
with the Coffmission with indi~ vidual Community countries,
because the matters are of great importance to us.
It is not generally understood that a number of Australian
industries began in Aurstralia because there were markets
in Europe, and Europe wanted us to supply them.
Then 1, ecause of the advent of the European Econoriic Commuv'ity
the policies developed that pushed Australia out of those
markets. Now we recognise the'right of France to protect
French farmers, we don't challenge that we would be
very foolish to. But we do believe that it is possible to
protect French farmers in a way that allows the prospect of
some trade instead of no trade. People concentrate on beef.
We used to have quite a health and vigorous wine export industry
to Europe that might seem to strange to France, renowned
for its wine, but we used to export quite a lot t;-o France
as well we import from France in addition and import.
substantial quantities. Our wine industry is a good one
and the wine established new rules which over the last 12-18
months have halved wine, because of arbitrary changes in rules,
this has halved the wine we can export to the European
Community. I think that is an example of unequal and not
responsible trade behaviour which we just cannot afford.
There is strong agreement between the Prime Minister and
myself that a trade war, a reversion to protectionism amongst
major trading nations is going to damage standards of life,
everywhere. We will be needing to test the validity of
what has been put to us.
QUESTION Do you intend to have some retaliation if you are not
heard here?
PRIME MINISTER
I hope that it won't have to come to that. We have said
that if we can't make progress we will have to reexamine
our commercial and trading policies, with Europe. i
I hope very much that the European Community will not push us
to that course. Having said that, it shouldn't be taken
as any weakening or lack of determination on Australia's part.
We are very determined indeed that countries which can do
things best should be allowed to trade in those commodities
not in a disruptive way. We don't seek revolution
and disruption to trade because we know what damage that
can do to have no prospect of trade, because it will
deny the possibility of trade; or to have export subsidies
which can destroy a -market you have spent 25 years developing
this has happened through the policies of export subsidies
of restitution. When the Community has said, where is a market
we have a surplus product, and they provide the subsidy necessary
to take that market. That is very disruptive to other
countries trade and it is a fact of life that a country such
as Australia does n~ ot want to and cannot enter the competitive
subsidy business of 260 million people in the European
Community.
QUESTION Regarding uranium. Do you think you have any plans of
using uranium for other
PRIME MINISTER
We have international obligations with uranium to accept
safeguards for the * trade and to give people confidence
confidence that our uranium won't be used for proliferation
purposes. We have re sponsibilities internationally to
provide energy in-an e . nergy-short world no countries
want to diversifytt h eir sources of energy. But I hope very
much that because wex. ecognise those international responsibilitie
that other countries won't want to push us too far in directions
in which we would be most reluctant to go. I would want
to keep Australian uranium separate from the general thrust
of the particular bi-lateral arguments we have. We are
probably shortly going to be ready to sign a safeguards
agreement with Britain a draft has been agreed between
officials, and that would clearly open the way to commercial
discussions and negotiations. rh-at is as it should be.
While we have got inter national obligations in relation to
that trade, we also have obligations to very large geographic
areas of Australia, which have been put into a state of
depression and despair, which is totally misunderstood in
Europe. In our beef growing areas you get country towns
which are dependent upon the beef industry almost entirely.
You get total communities dep'endent and built up on that
industry. The industry developed over a long period to
supply the European market, and other markets.
And then it finds that the European market is closed to it,
and the towns start to die people leave their properties,
in some cases they cut fences, have somebody to look after
the watering points, this is in the large back-country
areas which it is hard to conceive, although you night be
carrying one cow to the square mile. It is flat country,
difficult country America has got some of the same.
It can still produce ? jood and by world-standards well-priced
beef. In the markets for some commodities the products
are particularly atuned to the needs of the technologically
advanced democracies, and beef is one such commodity
rice is a different matter, atune to. different markets,
you can sell rice in many different countries.
In some areas if Australian industries are to return to a
degree of profitability we need access to the large-scale
affluent markets, of which Europe is clearly one a very
large one and a very significant one. All of that is just
stating a fact of life, quite apart from the fact that we
think that the sorts of rules which have been applied to
agriculture, and to find this of all the rules of fair and
reasonable trade, and of everything that we have been
fighting for when I say we, I mean trading nations
collectively in terms of responsible trade, in all the
years since the war.-I have got great respect for the
economic policies that the Prime Minister of France has been
introducing over recent times. I recognise the courage with
which they are pursued. * As' we see it from a distance
I would think they are much to the long term
best interests of France. So too it is in the interests
of all of us trading nations to establish the circumstances
in which countries which can do things best and cheapest
in the total world environment have a prospect of trading
in that particular commodity, The way rules are applied in
relation to trade in agriculture, there are some commodities
to which that just can'. t happen at the moment.
QUESTION I suppose you have raised this question with our Prime Minister.
PRIME MINSITER
The heart of these issue s has been put to the Prime Minister.
I asked to see him because of my concern with the broad-based
multi-lateral issues.: Our concern is a parallel concern,
and it is a serious one. The concern I have that MTN
be a success a little later this year is very great indeed.
T1hat is the reason why I am over here at the moment.
I am glad to say that the Prime Minister made it perfectly
plain to me that he doesn't want to see a reversion to the
protectionist policies of Past years. He recognises the damage
it would do to this great nation, and all the trading world.
QUESTION Do you believe your meeting with was successful?
PRIME MINISTER
I believe it was a useful meeting, not unsuccessful.
The real test will depend on what happens in Geneva at MTN.
QUESTION I understand that your Government wants to open Australia to
more foreign investment.
PRIME MINISTER
We have modified the foreign investment rules and guidelines.
If you wish to pursue this I would like you to speak to
John Stone, who would be technically expert, because they are
technical expert. In broad terms we welcome foreign investment
particularly in partnership with Australia. There are rules
there are objectives of seeking to achieve 50 percent Australian
equity in projects, but if that can't be achieved we wculd-*
not want to hold up a good and worthwhile project on that account.
There has been French investment in Australia. Our inflation
rate is falling substantially, the last quarterly figure was*
1.3 percent. We are going to continue with policies that
will bear down on inflation and establish a good climate for
investment. We would like to see more and interest from
France in joint enterprises. It would be very welcome.
We don't req~ rd D~ f it as a dirty t erm, it is an honourable term'
Without prof its Elfere would be no investment.