Leader of the Opposition

28 March 1991

[  '  COMMONWEALTH 1 PARLIAMENTARY LIBRARY  I MICAH

TRANSCRIPT OF DR JOHN HENSON, LEADER OF THE OPPOSITION  PRESS CONFERENCE  70 PHILLIP STREET, SYDNEY

E & ÃÂ E - PROOF COPY ONLY

SUBJECT: Taiwan Trip; Trade possibilities between Australia  .  and Taiwan; US Bases;  Disclosure of Political

Donations; Advertising Ban.

H e w s o n :

I've called this press conference to report to you on a very  successful 3-day visit to Taiwan. I had the privilege of :   leading a very senior business delegation and political ‘   delegation to Taiwan to investigate the potential trade and

investment opportunities that I believed existed between  Australia and Taiwan, within of course the Government's  existing diplomatic constraints on that relationship.

I've come home absolutely convinced that opportunities have  gone begging for Australia in relation to trade and investment  relations with Taiwan,, simply because the Government has got  no idea how to pursue our best interests under existing  diplomatic constraints.  As far as I'm concerned there's  potential for us in trade across the board in agriculture, in  mining of course - we already have some presence in that  market, value-added in both, in other manufacturing and, of

course, importantly in services.  I had the opportunity of  having very high level discussions with both government  officials and the business community which have led us to that  view.

I also believe that there can be some significant progress in  the near term provided the Government'  s prepared to

appropriately follow through on some of the discussions that  we've had.

For example I think it's possible that we can resume wheat  sales to Taiwan. They haven't taken place since 1978. I  think that the restrictions that presently exist on Australian  beef access to that market, and those restrictions are of two

types - involuntary quotas, if you like, and customs duty  differentials in favour of the United States. I believe that  we can look for some easing of those restrictions in the near  term.

I also believe that we can look for some easing of

restrictions on fresh fruit exports to Taiwan, particularly  apples in the near term. Parliament House, Canberra, A.C.T. 2600 Phone 77 4022 . . . /  2

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I also think that there's tremendous scope for Australian  companies to get some of the business in relation to a very  large tender infrastructure programme.  Tens of billions of  dollars of infrastructure investment will take place under the  Sixth Development Plan in Taiwan and we've had an assurance  there that of course, the tendering process on that will be  done on a quality and price basis, which is encouraging for a

lot of Australian companies who could participate in that. I  think there are something like 800 separate projects to take  place under that infrastructure development.

I also think that as a result of the establishment of the  direct air link, that the tourist potential from Taiwan to  Australia is tremendous. I think recently we've taken about  30,000 tourists from Taiwan.  I think it's possible that we  would take maybe up to 10 times that amount in the next few

years as a result of that direct air link and appropriate  promotion of Australia as a tourist destination in Taiwan.

I also believe it's important that we look at other areas as :   others have done.  For example, it's been put to me that maybe r  it is possible under appropriate arrangements to look at the  exportation of uranium to Taiwan and I think that's another  area where there is tremendous potential.

We had a unique opportunity really, to put our case directly.  I raised a lot of direct concerns about discrimination as I  saw it in trade, our trade access if you like, in beef and  fresh fruits, viz a viz the trade access the United States  gets in Taiwan, and we had the opportunity for very senior

level business discussions on their attitudes to investing in  Australia. It was the same old story, in effect, that you get  around Asia all the time that they're very concerned about

investing and manufacturing in Australia because of labour  market problems, union pressures, inefficient waterfront,  inefficient infrastructure. There should be a much greater  sense of urgency obviously in Australia in dealing with all

those infrastructure pressures which represent major cost  disadvantages on our industry and of course a major

disincentive for foreigners to invest in our industry.

So, I think it was a pathbreaking trip. It's opened up a lot  of opportunities and I would urge the Government to follow  through so that we don't have a situation where a lot of  opportunities that do exist go begging.

Jrnlst:

what trading opportunities existing for Taiwan here?

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Hewson:

I think Taiwan has potential...I've obviously focused on it  from our side, but from their side there is a lot of

potential. Look, I had the privilege of handing over a piece  of sophisticated medical equipment while I was there which was  designed in the University of Melbourne and developed in  Australia by one of our leading professors, Professor Crock.

I donated that on their behalf to the largest hospital in  Asia, located in Taipei, which was designed by Australian  architects, Stevenson Turner. There's a good example of  tremendous benefit to Taiwan from two pieces of Australian

trade activity - one, what we'd call a brain-based

manufacturing product, a very specialised piece of equipment  in relation to cataract operations and trauma cases, and of  course the design of a very sophisticated hospital by world  standards, done by Australian architects.  There's two-way  benefits in trade. There's two-way benefits in investment and

I believe of course, there are two-way benefits in cultural  exchanges.  And all this can take place within the existing l  diplomatic constraints of a One-China policy. -

Jrnlst:

We already have, in financial terras, more trade with Taiwan  than we do with China.  How much more financial potential do  you think there is?

Hewson:

I don't look at it in comparison with China. Ã¢ÂÂ The way I think  we should conduct our foreign economic relations is to look at  it in a very hard-headed, self-interested way and exploit  opportunities across the board. Now, we've got tremendous

opportunities with mainland China and there's more to be done  there - a point we made last year after a trip to China.

Equally, there's a tremendous amount of scope in relation to  Taiwan. Taiwan has the advantage of being one of the fastest  growing countries in the region and they've made phenomenal  progress in the course of the 1980 's in particular. We  visited one industrial park, for example, where that one park

accounts for about 4% of the world's output of computer chips.  Now there's a tremendous industrial base in development that's  taken place. They offer opportunities that haven't been  exploited, but equally there are opportunities in all the

Chinas.

Jrnlsti

Can you give it a financial figure?

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Hewsoni

No, we didn't try to quantify it, but look, there's no doubt  that in the specific cases that I mentioned that I think we  could see improvement in the course of the next few months or  this year, relating to wheat sales, to beef access, to apple

access, to tourism as a result of the direct air link.

They're very real benefits that can take place in the near  term. How much we, down the track, can exploit those

opportunities is up to our industry and up to the follow-  through of our Government.

Jrnlsti

Do you not think the Government's recent - well in December -  they appointed an unofficial trade commissioner to Taiwan - is  acknowledgement of what you're saying?

Hews on:

We were led to believe in Taipei that the reason all that was  accelerated was because of the pressure the Opposition put on  the Government here. That was announced, for example, at a  very senior level business reception. The point was made that

the recent steps in relation to Australia-Taiwan relations  were accelerated because of the lead we provided, and the  pressure we put on the Government.  X have no doubt that the

air link agreement was signed while we were there as a result  of Government pressure. In fact, I think the Hawke Government  tried to get it done before I got there. ^We were led to

believe that was the case. I'm not going to score points  about that. All I want to say is that I'm pleased it's

happened and we'll continue to provide the lead and if there's  the appropriate follow-up, there's tremendous potential in the  very near tern in the areas that I've identified. I've  focused particularly today on some of those agricultural

developments because our rural sector is in its worst crisis  in 60 years.  We need to have a massive effort across the  board to open up markets to get better access to improve our  export of agricultural products.  We are among the most  efficient agricultural producers in the world, but we often

find our access restricted for a lot of reasons.  I use the  example of wheat. Effectively we've been frozen out of the  Taiwan market since 1978. In terms of beef - well, there are  two types of quotas.  There's a so-called voluntary - it's

definitely an involuntary quota put on our beef producers in  terms of shins and shanks and in terms of top-grade beef.   Well, we suffer a customs duty differential against us. Our  beef is subject to about $1.50, whereas US beef is $1.00. So,

we put a very strong case against that sort of discrimination  which effectively limits our access in two major exports, beef

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and wheat, to the Taiwan market. X think Government, in these  circumstances, has to make every effort to open up markets Ã¢ÂÂ¦   We've done it at GATT. I congratulate what the Government's

done through the Cairns Group in relation to GATT. They've  got to sustain that pressure. I've recently proposed a trade  mission to the United States to ensure that our post-Gulf War  market share is preserved and that US subsidies to agriculture  didn't continue to be to the detriment of Australian

exporters.  I think there is a need for a similar trip to  Europe to put that view. I believe there is a need for a

similar mission to the Gulf and Neil Blewett did go there, but  I think there's a lot more to be done. No stone should be  left unturned at this time to open up markets and break down  barriers and discrimination that exist as a result of the  policies of Governments in other countries which freeze out

our producers.

Jrnlsti

Resuming wheat sales to Taiwan - when will that happen?

Hewsont

Look, I don't know. But, we've been led to believe that if  there's appropriate followÃ¢ÂÂ¢through there, that could take  place from around the middle of this year. But, don't hold me  to a date because.. .we put the case very strongly to their  Foreign Affairs Minister and their Economic Minister and they,  we know, phoned the Flour Millers Association who acknowledged

that our pressure had been drawn to their attention.  On the  basis of that we were led to believe that maybe there wouldn't  be any restrictions much beyond the middle of the year which  would open that market up for us. We were very encourage by

that, although there's no explicit commitment, and we are in  Opposition, not Government. But there's no doubt in my mind  that if the Government puts appropriate pressure now, and

there's appropriate follow-through that we can resume wheat  sales to Taiwan, which has got to be a major first step.

Jrnlst:

...inaudible...

Hewson i

Look, I don't know. We didn't get into the detail of that.  There are some numbers floating around but it's better that I  don't advocated a particular number. I just think the  opportunity is the important thing and that if our producers

take advantage of that, there's tremendous scope.

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J m l s t :

Will a Coalition Government sell Uranium to Taiwan?

Hewsont

What I've said on uranium is, I think that it's worth

investigating whether it's possible. As you know, there are a  lot of restraints on international uranium trade in relation  to international agreements and of course, the South Pacific  nuclear-free zone agreement and so on, are other constraints  on us per se. But, others do do it. The Americans export  uranium to Taiwan. The French do. And there's a very strong  rumour that the Canadians, who had previously been in much the

same position as ourselves, have decided to open up uranium  trade to Taiwan.  I think it's worth investigating whether it  can be done. I'm not saying that we will do but there's

certainly a strong case, I think, for looking at whether it  can be done and whether in effect, they can meet the very  strict conditions, as they do in relation to the United States  and whether in fact that can be done. It is a very

complicated process because of those overlapping treaties, so  it needs to be investigated.  I can't put it any stronger than  that, but I don't start with a disposition against it. I  start with a disposition in favour of doing it, provided it  can be done on the terms that, say the United states presently  does it in relation to Taiwan. That's what's got to be

investigated.

Jrnlsti

Do you welcome the prospect of an end to the 3 mine uranium  policy?

Hewson:

Yes, we've called for it for some time. Even the Prime

Minister in his wisdom has said it's an illogical policy. We  couldn't agree more and they ought to just scrap it. I hear  some crazy suggestions that maybe they could partially scrap  it, about three and a half mines or some stupidity. It's a

clear cut, straightforward decision in current circumstances  and that is that they just ought to scrap the three mines  policy altogether and open up the opportunity for further  trade in that area. We've got all the restrictions that exist

as I said, on safeguards and other things, but the policy of  restricting it to three mines is illogical and nonsensical and  ought to be scrapped. I know it's a major issue for the

Government. I know that it divides the left wing from the  rest, but it's a unique opportunity for the Prime Minister to  show a bit of leadership. Given the magnitude of our trade  crisis it's the least he can do in current circumstances.

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Jrnlst:

Do you see uranium as a commodity that's price is going to  increase?

Hews on:

Look, that's not for me to judge. I know that in recent times  the international price of uranium has fallen significantly.  But what I'm concerned is creating the circumstances in which  individual companies make those decisions. They've got to  determine the trading potential. It's just an illogical

government restriction to have a 3 mines restriction. I think  one of the big things you learn from visiting a country like  Taiwan is that they have put an enormous amount of weight on  creating the right environment for the business community to  get on and exploit trade and development. That's what it's

about in Australia - building that sort of environment. A  restriction like a three mine uranium restriction, a very  cynical political decision to block Wesley Vale or Coronation  Hill, even though they'll meet the toughest environmental

standards going, isn't creating the right business

environment. In fact, it's been directly detrimental to that  environment. We do have a lot to learn from the attitudes of  others with whom we have to compete, not only in the Asia-  Pacific region but of course, internationally as well.

Jrnlst:

Don't you think it's better that Australia sells uranium to  those countries that have signed the Treaty rather than  negotiating bilaterally?

Hewson:

Look, I'm not pre-judging it. I'm simply saying that I  understand that in effect Taiwan does satisfy those conditions  and is audited by the International Atomic Energy Agency, and  satisfies the United States that it meets the toughest  conditions. If it can be done for the United States, and if

it is about to happen for Canada, I think it's worth

investigating whether in fact the same sort of approach can be  used in relation to exports from Australia. As I say, I don't  downplay the difficulty there because we have insisted in the  past on bilateral agreements. We've insisted in the past on

the significance of the South Pacific Nuclear-Free Zone  Treaty. They're two additional constraints that don't apply  to some other countries. Nevertheless, let's see what can be  done. I think it's just one area - I'm not overplaying it -  which in the medium to longer term we should investigate. In

the near term, if the Government focuses on wheat and apples  and beef access, they'll make a significant start.

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Jrnlsti

On another subject, Tim Fischer has said that US bases should  not be ruled out when ...inaudible... Do you agree with that?

Hewson:

My position on the record is that I don't make any linkage.  I've said that for quite some time. I'm aware that Tim has  apparently made some remarks along those lines in a show  that's to go to air tonight, 1 think. I've never supported a

linkage and I can't foresee the circumstances in which there  would be a linkage. That's been my position on the record for  quite some time.

Jrnlsti

Do you support full disclosure of donations to political  parties?

Hewson:

Well, I've said quite clearly, and it seems that some in the  media have real difficulty understanding what I've said. I've  said it very clearly, that my disposition is of course, in  favour of disclosure. But, in the past there's been a lot of

concern about the potential for intimidation and inequity and  so I've said that I would need to see the legislation. Look,  my disposition is there. I know the past and the difficulty  that has existed in the past and they are very-real concerns -

issues of intimidation or potential intimidation should be a  very real concern. Inequity between the parties and others  involved in the process is another real concern. So, let's  see what the Government's got in mind. I, however, would urge  you to continue to focus on the ban. A ban on political

advertising, even exempting charities, is the single most  important breach of free-speech in this country. If our  democratic process stands for anything, it stands for opposing

bans like that and all Australians ought to get out and march  in the street. When a desperate Government tries to change  the rules and move the goalpost to its advantage in the run-up  to the next election - it's a ludicrous proposition.

Thank you.

