The Hindu Business Line : `Sensitive products must not be used as trade barriers'

Trade is vital to the economy of Australia, a country of continental dimensions blessed with rich natural resources. With a small population of just 20 million, the country is not a very attractive destination for manufacturing investment and, therefore, has to import most manufactured goods. It is, of course, a critical supplier of such resources as gold, coal, iron ore, copper, uranium and natural gas, in addition to wheat, wool and meat.

The position of Trade Minister in the Australian government is, therefore, an important one. Mr Warren Truss, the current incumbent, is a farmer from Queensland; he took over the portfolio just over a month ago. He may be new on the job but he fielded questions on a range of issues with panache, during an interview in Canberra, earlier this month.

He appeared worried about the drought in his country, described as the worst in living memory and likely to affect the wheat crop this year. Strangely enough, as we emerged out of his office in the Parliament complex after the interview, it began to rain!

Excerpts from the interview:

The India-Australia trade is valued at A$10 billion and is heavily tipped in favour of Australia mainly because of its mineral exports. What are the prospects for a better balance?

You are right about the trade balance being overwhelmingly affected by our gold and coal exports. But gold is something that you are importing and adding value to enormously , thereby creating jobs in India. The same with coal, which you use to power your industry and export manufactured goods to other parts of the world. But I think that increasingly Australia is recognising the wide range of goods manufactured in India; you have the advantage of a large labour pool and very competitive prices and that give you the advantage to export manufactured goods. But you face competition from countries that have similar advantages, such as China. The kind of goods India is good at, China is also good at. So you will need to compete with China, Japan and Indonesia in this market to supply to Australia.

In the context of the WTO, you mentioned that developing countries have to make some concessions. So, what exactly are you looking for?

It will be important that developing countries don't have such extensive lists of special products or products that are reserved... I appreciate the fact that every country has sensitivities and that other countries have to acknowledge them, but sensitive products should not be used as a de facto trade barrier just as Europe might use its quota systems or the US its subsidies. It is one thing to ask another set of countries to open up markets and to support those who argue that markets should be opened up, but then you cannot, at the same time, say that your own market will remain closed.

What kind of a role do you see for Australia in ensuring energy security in the Asia-Pacific region and what is your position on uranium supplies to India, assuming that the Indo-US deal goes through the required clearances?

We are aware of India's interest in uranium and we are also aware of our requirements in relation to the nuclear non-proliferation treaty, and that is an issue that creates a barrier to selling uranium to India. We'll have to talk those issues through because we have significant deposits of uranium. We are already a major energy supplier to Japan and China and, our biggest or second biggest export to India, depending on what the prices are at that time, is energy.

In that context, the global warming debate and our working together to deal with global warming issues is particularly important. We look forward to cooperating with India in endeavouring to look beyond Kyoto (Protocol) in order to address the climate change issue. It is very important that all countries are effectively engaged in a global effort to sort the issue out before it causes irreversible damage.

But, then Australia has not signed the Kyoto Protocol...

Australia has not signed the Kyoto Protocol because of the concern that some of the biggest potential emitters in the future, not to speak particularly of China but India as well, have no obligations under it, technically. Australia accounts for only 1.6 per cent of the total global emissions and to focus on our efforts when we have China next door which will account for 25 per cent of global emissions very soon is clearly not going to be very effective. If we turn off all our power stations today, it will only take China nine months to catch up on the emissions that we save! So, everyone has a role to play in this issue.

You mentioned about the adverse reaction in Australia to the loss of call centre jobs to India. What impact will that have on the movement of services between the two countries?

Yes, there is some public resistance in Australia to offshore call centres. New customers are still continuing to go to India every week. Only last week there was news of a large bank outsourcing a lot of data processing work to India. It is happening more and more , and I think confidence will grow as the years go by. I suppose there are two barriers — one is the natural aversion that every country has over the movement of jobs to other countries, and the second, security concerns over privacy of data when it is transmitted around the world. How do you assure customers that their private financial data are not being revealed to the world. So it will take time for public confidence to build on that.

There are also some other issues relating to offshore call centres — not knowing the culture of the customer that he is dealing with or the customer's use of language that is not particularly familiar to another English speaking country. But as more and more people do, the less and less the problems will get.

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