Trade Minister Don Farrells backs new US trade deal, reveals why America and China are out of TPP

China’s bid to join one of the world’s biggest free trade deals has been slapped down by the Albanese government, who also concedes the US is unlikely to rejoin.

EXCLUSIVE

China’s bid to join one of the world’s biggest free trade deals has been slapped down by Trade Minister Don Farrell, who also concedes the United States is unlikely to rejoin the lucrative bloc.

Senator Farrell made a flying visit to the US this month for the first in-person talks on the Biden administration’s Indo-Pacific Economic Framework – its alternative to the Trans-Pacific Partnership after Donald Trump pulled the US out of the pact.

In an exclusive interview, the Trade Minister said America’s place in the TPP was “not going to be resurrected any time soon” and the IPEF was a “good alternative” featuring eight of Australia’s top 10 trading partners.

But while China is now lobbying to be included in the TPP, Senator Farrell said that would not be possible until Beijing honoured its “existing obligations to free and fair trade”.

“We’ve currently got two disputes with China, one in relation to barley and the other in relation to wine,” he said.

“Actions have to match your words.”

US President Joe Biden and Chinese President Xi Jinping, neither country is likely to join the TPP. Pictures: Agencies

Senator Farrell has invited ministers involved in IPEF – representing more than 40 per cent of the global economy including India, Japan and Korea – to hold their next in-person talks in Adelaide in January.

He said it was important for the US to “re-engage economically in our region” on issues including diversifying supply chains away from China, upping investment in the net zero transition and bolstering anti-corruption and tax evasion measures.

The US has not offered to negotiate tariff cuts, prompting former president George W. Bush’s trade adviser Daniel M. Price to warn IPEF was “vaguely defined by sound bites” and “simply not enough” to dispel doubts about America’s commitment to the region.

But Senator Farrell said he was confident “the Americans will put things on the table … to keep those countries satisfied that it’s an agreement worth entering into”.

He suggested IPEF could drive crucial investment to help Australia take advantage of its preferred status to supply critical minerals to the US for its electric vehicle revolution.

Australian Trade Minister Don Farrell meets with Commerce Secretary Gina Raimondo in Washington on August 10, 2022. Photo by Yuri Gripas

Asked if he would prefer the US rejoined the TPP: Senator Farrell said: “I’ve survived this long in politics by being realistic … Anybody who looks back at that 2016 election will know that, for the moment anyway, the Americans aren’t going to revisit the TPP.”

He said no single agreement would “solve every single trade problem”, and that diversification away from China was vital.

“That’s the great paradox of our relationship with China. We’re actually increasing the volume of trade, even at a time when we’re suffering trading blockages with China,” Senator Farrell said.

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Originally published as Trade Minister Don Farrells backs new US trade deal, reveals why America and China are out of TPP