• John McDonnell

Trade minister on vital mission to Europe

Trade minister, Dan Tehan, takes off on a visit to Europe this week on a mission that is vital for Australia’s economic recovery.

Minister Tehan starts off with a meeting with the new director-general of the World Trade Organization, Ngozi Okonjo-Weala.

While he is in Geneva, Minister Tehan will explore the possibility of taking China to the WTO dispute settlement process over its excessive tariffs against Australian wine. He told Sky News' Sunday Agenda program on Sunday:

"One of the things we are very keen to do is to make sure with our trade disputes with China is that we are using every means we can to deal with them.
"Obviously the World Trade Organisation is one of those mechanisms. We are using that when it comes to barley and we are under very deep consideration now when it comes to wine, as to whether we will also refer that.

He will also seek to revive the multilateral trade negotiation process with a special focus on eliminating vaccine nationalism.

From Geneva he will fly to Berlin where he will face possibly the toughest talks of his trip.

Minister Tehan will try and enlist German support for a reinforcement of the international rules-based trade system. Australia wants the major trading countries to unite against the coercive trade actions of China, but Germany has just signed a bilateral agreement with China that consolidates the special relationship between the two countries. To put this in context, the endpoint of China’s great belt-and-road initiative to link Asia with Europe is Hamburg in Germany.

The trade minister also wants to persuade the Germans to reject the European Commission’s movement towards vaccine nationalism and to encourage them to support the conclusion of a free trade agreement between Australia and the European Union. He is likely to be more successful with these entreaties because the Germans have been traditional supporters of free trade.

From Berlin, Mr Tehan will travel to Paris where he will try and persuade the Macron government that the world needs to endorse free trade if it is to recover from the pandemic recession, telling Sky News:

"If you look what happened post-second world war, it was that trade liberalisation agenda which helped countries out of poverty to make sure developed countries continue to provide increased living standards in all countries.
"Now is not the time for us to be resorting to trade protectionism, now is not the time we need countries using harmful trade measures against other countries."

Mr Tehan will have another tough negotiation in Brussels. He wants the European Commission to stop engaging in vaccine protectionism but at the same time, he wants to finalise the Australia/EU free trade agreement before the next election. The Commission will play hardball because they always do with Australia, but Tehan has an incentive to offer: He is prepared to offer duty-free entry into Australia for all environmental goods and services, waiving a current WTO exemption for these items.

After Brussels, the minister will go to London to meet UK trade minister, Liz Truss. The free trade agreement with the Brits is almost done and dealt and it is very important that it be completed. Britain is a replacement market for Australian products like barley and wine that have been excluded from China.

If Dan Tehan achieves only half of his ambitious program, he will have made a significant contribution to Australia’s post-pandemic recovery. But given the political damage the Morrison government has suffered recently, it is essential that it is able to guarantee vaccine security for Australia between now and the election.