Subjects: Free Trade Agreement with Singapore; APEC; oil prices; talks with President Wahid.
E&OE……………………………………………………………………………………
PRIME MINISTER HOWARD:
The Prime Minister of Singapore and I have just completed our discussions and we have agreed to immediately begin negotiations for a Free Trade Agreement between Australia and Singapore. We will aim to put everything in the agreement. We see it as an ambitious attempt to open trade between two countries that are very close economically, politically and socially. It is worth remembering that there are more overseas students from Singapore in Australia than from any other source and the association between our two countries go back a very long way.
We have set ourselves a deadline of completing it a year from now. We don’t want the negotiations to be interminable and we think by the time of the next APEC meeting which will be in Beijing next year will be a timely opportunity, perhaps even to sign the agreement and we both take the view that although the ideal trade route is through the multilateral fora, the ideal trade route here in our part of the world is to make certain that the APEC countries continue to move towards the Bogor goals both in relation to 2010 and 2020. There is no reason why along the way if you have a free trade opportunity between two or more countries then you shouldn’t take hold and Singapore and Australia have very similar views on this issue and the fact that we have been able to reach very quick agreement on this is evidence of the good relations that have always existed between our two countries and the very good personal relationship that I have developed with the Prime Minister of Singapore in the time that we have both held our current jobs and earlier when he was Finance Minister representing his country and I was Treasurer representing mine at the Asian Development Bank.
PRIME MINISTER GOH:
Thank you John. Australia is a very important trading and economic partner of Singapore and a decision to negotiate an FTA will enhance this relationship. In the process of negotiating itself, we will get to understand each other much better. We will be spending some months trying to understand each others’ economies and of course in the process working together a better understanding will emerge. And we expect the FTA negotiations to be concluded within the year and (inaudible) we are going to institutionalize the relationship economically between our two countries. Ties are now very good but there’s going to be this institutional framework because of the FTA agreement which we believe will be signed within twelve months. And our interest goes beyond just our two countries, we in fact are going to use this to try and promote a similar kind of FTA’s amongst other countries in APEC. And overtime we will have an APEC wide FTA and of course remain focused on the World Trade Organisation’s new round. We will try to introduce a strong language calling for a new round of trade negotiations under the WTO because at the end of the day you must have in the world a set of global rules which applies to all countries and that will be the ultimate target to have a fresh round of negotiations under WTO. And meanwhile those who can run faster should run faster, they should not be restrained by those who are not prepared to run at all.
PRIME MINISTER HOWARD:
Any questions?
JOURNALIST:
Mr Howard is this an indication then that the overall APEC progress towards free trade is not going fast enough and you need to resort to country to country trade agreements as well?
PRIME MINISTER HOWARD:
No it is not an indication of that but it’s a recognition that many, as many paths lead ,where was it, to Rome so that many paths can lead to Bogor. And if along the way you can pick up a Free Trade Agreement that mutually is beneficial then it does two things. It adds to the momentum but it also provides insurance.
JOURNALIST:
Prime Minister Howard, the meeting was postponed due to your travel delays and I notice that was discussed with the Singaporean Prime Minister at the start of your discussions this morning. Do you agree with the Australian Trade Minister that the Australian public should better provide for its leaders traveling abroad?
PRIME MINISTER HOWARD:
What was the first thing you said about it being discussed?
JOURNALIST:
It was mentioned in, just in the chat you had with the Singaporean Prime Minister this morning I believe.
PRIME MINISTER HOWARD:
Well don’t know that it sort of bulked large on the agenda Paul. I think I extended the courtesy of an apology which is the normal courtesy one person extends to another if through inadvertence you can’t keep an appointment. I have talked about VIP travel in the past on . . . I am utterly disinterested in that being an issue for discussion. I have got far more important things on my plate for Australia than the travel inconvenience I or my colleagues may have.
JOURNALIST:
Speaking about those important things Prime Minister, what chance do you now give yourself of getting a declaration out of APEC aimed at reducing world oil prices towards OPEC?
PRIME MINISTER HOWARD:
I don’t know that I ever expected to get a unanimous declaration. I was pleased that it was put on the agenda. I would be disappointed if we didn’t have a discussion which generally recognized the damage to all of our economies if high oil prices continue unchecked. As to a specific declaration I don’t think given the structure of APEC bearing in mind you have oil producing countries such as Russia and Indonesia and heavy consumers such as the United States and Japan to get a unanimous agreement about a precise approach is perhaps unrealistic but it is really 95% of the battle to have actually got the issue discussed.
JOURNALIST:
Prime Minister what sort of timeframe are you looking at in achieving the ….?
PRIME MINISTER GOH:
Well the Bogor goals set out for APEC to have this APEC-wide free trade regime by 2010 for the developed economies and 2020 for the emerging economies. So that remains on track. We are now trying to move a little faster for those who feel that this target is a little too far away and I think by 2010 we should be able to have this network of FTAs amongst the APEC countries which want to have freer trade amongst themselves so we remain on target 2010 and 2020. We can’t rush that because that has been discussed some years ago and we have all agreed on that.
PRIME MINISTER:
No, Robert Garran.
PRIME MINISTER GOH:
You be the Chairman, you just point to people.
JOURNALIST:
Which other countries are next in line for bilateral trade agreements with Singapore and also can you say which particular areas of the Australian market will get improved access to [inaudible]?
PRIME MINISTER GOH:
Yes we have concluded and signed an agreement yesterday with New Zealand. We are in the process of negotiating with Japan and Mexico and the process will start next year. We have agreed to negotiate so that’s Japan and Mexico and we possibly would explore similar discussion with Canada, I mean that’s on track, so Canada will come in. And later on we hope to do one with Chile and maybe you know with other countries in North East Asia, maybe Korea. But on track will be Canada after Mexico and Japan and of course Australia will do it simultaneously.
JOURNALIST:
And the Australian market?
PRIME MINISTER GOH:
Australian market we hope to have a high quality, high standard FTA. By that I mean everything can be discussed and it should be as free as possible. For example, in the area of government procurements if it can have an FTA then of course Australian companies will be free to tender for government projects in Singapore and we can decide on the content [inaudible]. Anything over $A100,000 should be open to bidding for the Australians. And we should open up opportunities for Australian professionals – your architects, your lawyers if our legal regimes are compatible and they can practice in Singapore which I think can be done for Australian lawyers, accountants and I would not exclude journalists.
JOURNALIST:
Mr Howard you meet the Indonesian President this afternoon. What will you be discussing?
PRIME MINISTER HOWARD:
The whole gamut of the bilateral relationship - as has been the case on the two previous occasions when we have met. He requested the meeting on this occasion and I happily acceded and it will be an open agenda and I will talk about domestic conditions in Indonesia. I’ll talk about the bilateral relationship. We’ll touch on East Timor. We’ll talk about oil prices. There will be nothing excluded. As always it will be an enlivened discussion. He’s an interesting interlocutor.
JOURNALIST:
A question to both prime ministers - do you regard now Malaysia as an impediment to free trade as the Malaysian Trade Minister [inaudible] evident to free trade voting in the context of APEC and the next WTO round whenever that starts?
PRIME MINISTER HOWARD:
You were looking at my colleague weren’t you?
JOURNALIST:
Both.
PRIME MINISTER GOH:
No I think Malaysia depends on trade for its prosperity. If you relate trade as a percentage of GDP, Malaysia is one of the countries that has a higher trade component. So if you analyse Malaysia then you must go for freer trade. What it wants I believe is time for itself to get certain sectors to grow a little faster, to become a little stronger if he opens up his economy to free competition. So I would not regard Malaysia as an impediment. I regard it as one that wants to move a little slower in order to protect its own interests. But Malaysia will not be able to stop others like Australia and Singapore from running faster. So that’s the beauty of the FTAs on a bilateral basis.
PRIME MINISTER HOWARD:
Can I just add to that? I agree with it and add the point that if you look at what has happened to different countries in this and other parts of the world that have taken different paths. Some the more open path, others the more closed paths. If you’ve looked at what’s happened to their growth, their poverty levels and the like you will see that those that have taken the more open path are wealthier, stronger and are better able to look after their citizens. And the whole debate about globalisation, not only here but around the world, still suffers from an incredible unwillingness of far too many people to recognise the living standards dividend that comes out of globalisation. And I’ve had drawn to my attention a study by the Australian Department of Foreign Affairs and Trade on this which demonstrates quite dramatically, it draws in part on recent analysis by the World Bank, but it demonstrates quite dramatically that the countries that have gone down the open route have done a better service for their citizens than those that have gone down the closed route. Yet strangely enough this kind of attitude doesn’t seem to filter through to the streets of Seattle or Melbourne. It seems to be quite the reverse. I think one of the things that all of us have to do, whether we’re the Prime Minister of Australia or Singapore, or the President of the United States – currently or in the future – we really do have to work a lot harder in driving this point home because there’s a huge disconnect between the popular hostility to openness of trade and globalisation and what in reality is the truth? And we have a lot of work to do on that front because the truth is a very good story.
JOURNALIST:
On that point Prime Minister, what about the residual tariff regime in Australia, I’m thinking of broadly sensitive industries like TCF. What does this mean for that residual regime, particularly in relation to this current round of negotiations and in further [inaudible]?
PRIME MINISTER HOWARD:
Well we, as you know in both TCF and motors have brought tariffs down very sharply from where they were, apart from them the general rate is about 5% which is meaningless to many countries. We have a fixed trajectory in relation to both of those. Both the TCF and the motorcars and we’re going to adhere to that, but I can’t imagine that they are the sorts of things that are going to bulk particularly large in upcoming discussions. But what you’ve got to remember about Australia is that we have gone down a long way, we’ve come down a heck of a long way and our general tariff levels are minuscule. We have two peaks, much lower peaks than they were before, and there is a predetermined phase out of those, or further wind down of those, that is utterly consistent with the Bogor Declarations. I guess the other point that we have to make as an agricultural exporter is that the subsidy levels per head flowing to agricultural producers from Japan, the US and the EU, have in fact risen over recent years, whereas in the case of Australia they’ve remained static or fallen and that remains a point of very considerable aggravation.
Can I make one other point? That if all of the OECD countries removed their protection barriers against developing countries that would be thirteen times more valuable than eliminating all of the debt burden of those countries. So perhaps instead of seeing those signs I see around Sydney eliminate the debt by 2000 perhaps they should say eliminate the tariff by 2000.
JOURNALIST:
Mr Howard . . .
PRIME MINISTER:
Mr O’Leary said that was the last question.
JOURNALIST:
Mr Howard can we just have one from the New Zealand perspective?
PRIME MINISTER HOWARD:
Yes certainly.
JOURNALIST:
We signed a free trade agreement with Prime Minister Goh yesterday. I’m just wondering how New Zealand is going to be affected given that we have a free trade agreement with Australia – is this going to be a tri-lateral agreement if you do sign up next year?
PRIME MINISTER GOH:
Well I think we have to examine the contents and of course I hope that a bilateral agreement with New Zealand, one with Australia since they have one with New Zealand, could lead to a tri-lateral arrangement for the three of us. And of course I hope we can extend to a few other countries as well.
PRIME MINISTER HOWARD:
I will take one from Alison and then we’ll finish it at that.
JOURNALIST:
Thanks Prime Minister your Treasurer has unveiled a bigger than expected budget surplus. Will all of that money be dedicated towards retiring debt and the roads package? Or do you have any other plans for that money?
PRIME MINISTER HOWARD:
Well he has unveiled a larger than expected surplus. It just shows how well the economy is growing and how well it’s being managed by the Government. I have said that that extra surplus does give us a capacity to put more money into road funding and we’ll specify the details of that soon. I don’t want to make any further comment about the rest. Self evidently we are very keen to retire debt. We inherited a mortgage of $96 billion from Mr Beazley and we’re very happy to have been in a position of repaying almost $53 billion dollars of that by the end of this financial year.
Thank you.
PRIME MINISTER GOH:
Thank you.
[Ends]