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PRIME MINISTER
TRANSCRIPT OF TIE PRIME MINISTER, THE HON P J KEATING, MP
DOORSTOP CANBERRA, 6 SEPTEMBER 1992
E& OE PROOF COPY
PM: I want to say something about the Coalition's trade policy. The Coalition is
basically out of control on the question of trade and the reason it is, is because Dr
Ilewson was embarrassed in Queensland ovcr the issue of sugar tariffs. In an
attempt to divert attention from the divisions betwecn himself and the National
Party over tariffs he has lashed out at the United States and Japan, and in a most
erratic display he is now scking to line Australia up behind Mexico and Chile to
get a trade pact with the Americas while turning our back, as he would, our back
upon Japan, South Korea, Singapore, ASEAN, all the places where our trade is
grcatcst and where our trade is growing fastcst. There is no more important thing
that any Australian political party or leader can do then to orient Australia well in
the area of international trade.
But what we have hcrc is a basically a naive, primitive approach where Dr Hewson
is attcmpting to throw our lot, Australia's lo, in with a country, the United States,
which doesn't want us and for which the greater part of our trade is now managed
with quotas, voluntary restraints, etc. As well, I noticed Mr Hill attacking the
failure of APEC, the one body which keeps Australia trading and part of the Asia-
Pacific, certainly a trade-liberalising sense with Continental Asia, the Asia-
Pacific and the Unitcd States and Canada, APEC, the one body that the Opposition
is attacking. So wc have got Dr Hcwson saying he wants to attack the United
States, but at the same time be part of it. Mr Fischer yesterday said the United
States is trade enemy number one, but today they want to be part of it, and at the
same time line up behind Chile, Mexico to become part of an America's trading
block where we would have to get the consent of their Parliaments, the Mexican,
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US and Canadian Parliaments, to be part of an area where a very nmodest volume of
our trade and certainly trade growth goes.
Now on top of all that, we have got Mr Lloyd and Mr Fischer wanting to subsidisc
Australian wheat. These are thc Coalition leaders of the Coalition with Dr
R-ewson', where-Dr Hewson says no subsidies, zero tariffs, no sugar subsidies, no
wheat subsidics, but they say, yes you should subsidlise Australian wheat. So you
can sce how erratic the Opposition now is. Once they fall away from the supposed
fall-back to the Fighitback document, which is itself full of holes and blown to
picces, they are entirely erratic, whether it is on trade, whether it is on industrial
relations, whatever It mightl be there is no dcpth and policy substance in them. So
Dr Hewson says no subsidies, Mr Fischer and Mr Lloyd say they want to subsidise
Australian wheat.
And then you have got the spectacle of Mr Johnston, from Toyota, saying that he
is fed up with the Opposition, their " no-listening thing" as he calls it, amiazes him.
He said that the notion that the Opposition want to attack this Government for
stopping the import of Japanese uscd cars, used cars, into our market was a matter
which of course he found complctely inexplicable.
So I make the point that it is entirely natural for Canada and Mcxico to be part of
the United States, nearly 70 per cent of their exports go to the United States. Only
12 pcr cent of our exports go to NAIA, yet our greatest trading partner, Japan,
whcrc we now run a huge trade surplus, Singapore our third largest partner, South
Korca, ASEAN, where the growth in trade has been at 1.51 per cent growth over I
think three years, I will give you the exact figure in a moment. Exports at
around over the past five years from $ 2.6 billion to $ 6.5 billion, we're
supposed to fly over them on the way to California.
J: Andrew Peacock, as far as he is recognised in this dilemma, was saying this
morning that you can't have the best of both worlds.
PM: What wc are trying to do is have the best of all worlds, the Government, wc are
trying to chart for Australia a country which is not naturally part of any bloc, to
have trade liberalising in thc Asia-Pacific through APEC, bilateral trade links with
particular countries like Japan, South Korea, Singapore, ASEAN and that group, as
well as continuing the press for market access into the United States and Canada.
That's the wise approach; thc dumb approach is to try and line up behind Mexico
and Chile to become part of a trading block where we are not naturally a part,
whcre they don't want us, and our exports are now managed by quotas and
voluntary restraints.
Fancy turning your back on the place wherc you live, which is growing the fastest,
where your success is the grcatcst. I mean isn't this the Liberal Party when it really
gets down to it? They've always have got to have some paternal hand on them, it is
the United Statcs in thc end. Mr Fischer may say they are enemy number one but
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they want to go back under the skirts of the United States because they are only
safc if they can taxi it round Washington. They don't want the alien markets, as
they see it, of Japan, Singapore, South Korea, Indonesia. No, that's too hard for
them. They arc not English-speaking markets, they don't know the culture there,
and for the dear old Liberal Party the only place they call home is either London or
Washington.
J: agricultural exports to Japan, I mean we can't get in there with rice for
example? I
PM: But we get in there in a pretty big way with coal, don't we? With iron ore, with
beef as they liberal ise those beef markets, and they are on a process of trade
liberalisation, and they have been doing it with pressure but again the big
stroke Is GAIT, the big multilateral stroke is GATT and that's where you get a
systemic opening up and that's why the Government has put its greatest effort on
it. Writing to an American President in the middle of an election campaign, hoping
that you will gct some redress on something for which they have taken a political
initiative, and which the administration is saying where they will seek to avoid
impact on markets whcre Australia exports its product, is futile. But no worse than
taking the mindless and unthoughtful step of saying we will be part of the North
American free trade area. The Government thought about these things in the
John Dawkins, Bob Hawke, myself, all discussed these subjects, North American
trade in the middle
J: On Friday Mr Dawkins did say we should be part of NAFTA..
PM: No, he didn't say that at all. lie said we are a trade with North America, the Asia-
Pacific is our area, APEC is the institutional body that we want to see develop,
which we have preposed which the US has adopted, with the whole of the Asia-
Pacific has adopted, an Australian initiative has been adopted in this area which is
going to be a trade libcralising force. Senator Hill, the foreign affairs spokesman,
says we don't want a bar of it, the fact is they are all over the place, Dr l-ewson is
slipping and sliding throughi the North Queensland cane fields, while Mr Fischer is
behind him saying we will subsidise it, while you have got the National Party
saying they will drop out of any arrangement on reductions in tariffs on sugar,
while you have got the car industry saying, don't attack Japan, you're not listening.
The fact is this man is erratic and he is all over the place and his trade policies are
a danger to Australia.
J: Mr Keatirng you mentioned GATT, what is your prognosis now for the outcome of
the trade talk%?
PM: Well this move by the Americans will put more spice into the round, obviously. I
think that there will be more pressure to gct an agreement so that these subsidies
wars, people will desist from them. Obviously the best international backdrop to
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good and fair trade is to extend the GATT agreements of the ' 60s in goods into
agriculture and scrvices in the
J: Are you optimistic about a satisfactory agreement though, Or not?
PM: I remain optimistic yes, I think something reasonable will come from it.
do you think there Is any point in any US contact between us and the
Americans
PM: it is like two noisy neighbours, instead of yelling out over the back fence we have
basically gone and callcd the police, we have gone to GAIT and said look letes
bring the Americans under scrutiny here. It is the toughest thing we have done.
J: Mr Dawkins also said last wcek that there are a number of ways we could get back
at thc Europeans who are the true villains in this trade war. Do you agree with Mr
Dawkins?
PM: Well they started the trade war. They started the subsidies, by first of all building
production subsidies and then extending them into cxports, so they promote the
development of large quantities of produce and not content with simply seeing the
butter mountain, or the wine lake, or the rest of it obtained, they then want to
subs idise its exports, the US joined them in that to protect their markets. And the
bcst result in all of that is a general agreement in the GAIT about trade.
J; But how long can this GATT process keep going on?
PM: Well it Is coming obviously to its conclusion.
J: So In the longer run the US actions may actually be in our favour?
PM: The key phrase is to get a good backdrop for international trade, the great growth
in incomes postwar have come from the success of the Kennedy Tokyo round in
GATT and international trade, and a general agreement in that is what we need.
We don't want to be hiding under someone's skirts, and particularly someone who
doesn't want us.
ENDS