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Unofficial Transcript of the Press Conference at the G20 Trade Ministers' Meeting

The Honourable Andrew Robb, Minister for Trade and Investment of the Commonwealth of Australia
and Ildefonso Guajardo Villareal, Secretary for the Economy, Mexico

Unofficial transcription by Madeline Koch,
co-editor, G20 Australia Summit: Brisbane, forthcoming from Newsdesk Media
[Responsibility for typos rest with the author. Facts should be checked with the Official Transcript.]
Sydney, July 19, 2014

Robb: Thank you…
I have the pleasure of having the minister of trade of Mexico join me, Ildefonso Guajardo Villarreal. Mexico chaired the first meeting of the G20 trade ministers two years ago. I have the privilege of chairing of the second. The minister of trade of Turkey this afternoon announced that next year when they host the G20 they will have a trade ministers' meeting. The precedent that you have established has taken hold, and so it should. The G20 is fundamentally about the economic performance of the 20 countries that represent 80% of global GDP, and trade growth is very much contributed to, along with lots of other issues, by trade issues.

Firstly we had the opportunity to hear from the senior people involved in the B20, Richard Goyder and Andrew Mackenzie, and they reported to the 20 trade ministers the conclusions they had reached yesterday and the four principle recommendations they made. We had some discussion on that. We then moved into the rest of the morning, which was devoted to discussing the various trade packages that had been put on the table by the 20 countries. These packages are designed to be a subset of the packages that each G20 leader will take to the table at Brisbane in November. The finance ministers in February set an increasing growth target of 2% of unilateral actions to be taken by each country. Each country is deciding what it can do domestically in its own country to promote greater trade than would occur with their regular policy settings.

Some of our colleagues put in very ambitious programs, which were in many cases original, a lot of original policy issues particular to their countries. Others were not so ambitious. We spent the morning getting those ministers who had put on the table ambitious and effective trade-related domestic policy issues to talk about those things, to hopefully encourage the other trade ministers over the next few months — so as Michael Froman from the United States said, they could look in the cupboard again to see what they can do to lift their own performance. There was a strong commitment to this objective by the G20. I've found in the nine months I've been responsible for trade and investment since we formed the new government, as I've travelled the world and discussed the prospect of having growth and trade and investment at centre stage, that it's so consistent with what countries feel is necessary. So many are facing fiscal consolidation, paying debt, they need to live within their means, growth has slowed, and to maintain economic growth and reduce unemployment they need big injections of private sector activity, and in many cases that means money coming from outside to replace cuts in spending. It was a common theme as we went around the table.

Over lunch, there were presentations by the OECD and interventions from around the room about global value chains. There's agreement that the trading world has changed fundamentally because of the growth of global value chains. Just 15-20 years ago 20% of all the outputs of different countries went into another product. Now it is close to 70% according to the OECD. In many cases individual components or the development of components are going backwards and forwards many times across the same border or different countries. We had reports — in a small Ford Motor vehicle, 42 countries contribute to the final product. There's an enormous growth in trade. The conclusion was reached in the past that trade ministers and countries focused on increasing exports, but now imports are just as important as exports. Much of our industries in many cases are importing products that go out on the exporting market. [To take an example, with Germany] we have surplus of $9 billion, with $11 billion exports from Germany to Australia and $2 billion the other way. But there's a $350 billion surplus with Germany. [Ed. note: Check figures!] So much of Australia's production is going back and forward and ending up in German final products and that distorts the trade figures. Trade facilitation is so important. Customs — with the increased rate of transfer of products it makes a huge difference how trade facilitation makes it efficient to get across the border.

The last session was on the future of the world trading system. We talked about the [many] bilateral, plurilateral, multilateral agreements in negotiation. There was a reaffirmation of the power of the multilateral agreement and of the importance of the Bali outcome and the need to get that program of trade facilitation, and the nine other measures it introduced, and meet the timetable if we are to restore confidence in the WTO and breathe life into other elements of the Bali package. It was an interesting discussion. We didn't reach too many conclusions but it was interesting on the importance of the bilaterals, multilaterals, plurilaterals and the rest of the laterals. Very interesting.

I want to recognize the leadership of Andrew Robb for taking back trade to the centre of the group. In Puerto Vallarta two years ago we started putting trade on the main agenda. Growth is basically very closely related to trade and investment. Today we can count on the efforts we have been doing together to have a clear vision on the actions we have to take to facilitate trade. Today we shared a common view on the kind of efforts we can do domestically to get a much better environment for trade. This morning I shared with my colleagues that even a country as open as Mexico still has a lot of homework to do to have domestic reforms to help small and medium-sized businesses to take advantage of the access that we're getting to global markets. We learn from each other. I do believe the policies we put together will change things in years to come.

Q: Based on the packages of reforms, do you agree with PM Abbott's assessment that some countries are falling short?

Robb: There's no doubt we agreed today that some countries had fallen short. Some have done a very good job and have worked very hard, but we are still — if you look at the total package, not just trade and investment but other elements being considered, it's still around the 1% mark, and we have to get to 2%. There is a lot still to do, and not just on the trade side. There is still a lot of room for initiatives. For Australia, for example, take coastal shipping deregulation. Today the head of BHP Billiton said they have a magnesium mine in the tip of the north of Australia that is processed in Tasmania, and that adds $63/ton. [Ed. Note: Check figures]. There's a great complexity taking place, and the actions of one country can feed a higher price into the rest of the world. It has become very evident, and there are things we can all do specific to our countries to improve the situation.

Q: Any recognition of MH17?
Robb: Almost everyone at some stage expressed deep condolences, prefaced their comments. Obviously many of the countries represented around the table also had victims there. But there wasn't then a discussion about the significance of that. There were general discussions about how particular events can impact on trade. For the short term or longer term, the 9/11s, the global financial crisis, whatever — there are things that can set back change. But it wasn't relating to the downing of that aircraft. There was a sombre mood, I think, in regard to that terrible event, and it did affect the mood in the room for a bit, but we had a job to do and we got on with it.

Q: If there are short-term political actions to the downing of MH17, how will the G20 deal with the fallout?
Robb: It's still early days. The priority at the moment as the PM said today is gaining immediate and safe access to the crash site so the remains of the deceased can be recovered. We are seeking binding Security Council resolution for an investigation. The PM met with the Russian trade representative last night, I met with him this afternoon, and we made requests for Russia to give an unequivocal commitment to facilitate these objectives. All countries responding to those objectives will determine how this issue plays out in the broader geopolitical scene. Let's focus on the immediate needs and then work out [the details].

Q: Were there some countries that will hold up Bali before the July 31 deadline?
Robb: We did have a couple of countries concerned about the other elements in addition to trade facilitation. There are nine elements to the Bali decision and timetables were set for each one. Every country there reaffirmed their commitment to all nine being completed. We certainly reached a decision as a priority over the next nine days to seek a satisfactory solution to the concerns that a couple of countries have with the pace of these measures, the pace of attending to these other measures. There was no dissent on the significance, importance and timetable that is laid out in the agreement that everyone signed.

Q: Any movement from the Indian delegation? Will there be a renegotiation on food security?
Robb: It's not a question of any renegotiation. Everyone including India recommitted publicly to the package. It was and has been from — some of the African nations had a concern about whether they had the wherewithal, the expertise and the funds to properly implement the trade facilitation package. There was an announcement of a new facility that will be made available. The U.S. confirmed there's been a big [effort] on helping developing countries with trade facilitation and that level of commitment is ongoing. The minister for the EU said $400 million has been put aside. Australia put $1 million on top of the $6 million we put in the World Bank. So assurances were given to the WTO that no country will be left behind in terms of their needs to implement this at the speed they wish to. Developing countries have a different time table. The developed countries are expected to implement this immediately and the developing countries will be helped with the funding and expertise. There is work to be done to satisfy India and other countries. The Africans, I think, have been properly attended to. There was a strong resolution around the table that India's issues too with food security would, should and will be addressed as decided previously. I think India will be satisfied they won't be left behind.

Q: Did other developed countries give other funds?
Robb: Yes. It's not for me to announce their contributions, but quite a few others have committed today and in the last few days. [Do you mean] the facility that the director general announced? The World Bank has one, which is ongoing. It's in addition to that. The facility will be coordinated by the WTO. It's not a fund. They will be like brokers. Where there's a need they'll go and find countries that have offered support, like Australia. If it's technical assistance or funds, that'll happen. So the developing countries have the comfort, confidence that these things will be attended to. The director general has given his assurance.

Q: What was the response to India's concerns?
Robb: It's a bit hard to go a lot further. India has said for some days that they were concerned that one of their principal concerns, the food security issue, which was very much a part of the Bali package, would not be attended to properly. The deadline for that is, in fact, 2017 and in a technical sense is somewhat open ended. So the capacity to adopt those food security measures exists and if it isn't resolved by 2017, which every one thinks it will be, then [something will be worked out]. Everyone around the table gave a country commitment that they expected every one of the measures to be properly implemented. India said they remained fully committed to the [agreement] and the timetable and expressed concern that their issue would be addressed. Discussions will continue. The group agreed that the first priority was to properly address that concern over the next nine days, and the life will go on and that measure will go into effect on the 31st, and many countries said they would implement it on the 31st, including South Africa, China and many others.

Q: Is it possible for a host country to ban or block a leader coming to the summit or do you have to get the agreement of the other countries?
Robb: I might have to let Ildefonso answer. I'm not familiar enough with the rules of the G20. I think it's a hypothetical.

Q: The PM hinted that's a possibility. Is it?
Robb: I'm not familiar with the rules. Usually in these situations, the actions of any group is a matter for the majority of the group to deal with and common sense prevails.

Guajardo: The advantage of the group is to maintain a dialogue and anyone missing from the group is a loss [for the group].

Robb: Every G20 member was there today.

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