MATTHEW TAYLOR: Minister, welcome to CNBC this morning. What’s going to be the agenda for the G20 trade ministers meeting at the weekend?
ANDREW ROBB: The G20 Trade Ministers, the Ministers from all of those countries are coming. We are looking to see what part trade and investment, in a way, will play in the growth agenda that has been set by the G20. So we will look to fashion a package of proposals which will then go the G20 later in the year to contribute to the two per cent increased growth target that has been set by the leaders of the G20.
MATTHEW TAYLOR: There’s been a little bit concern here already at the B20 by some business leaders about protectionism in the trade environment despite the fact that we’ve seen tariffs reduced or abolished but there is still this protectionist agenda by some nations including the US and Australia. BHP Billiton making this point yesterday at the opening remarks at the B20. What are the G20 Trade Ministers saying about this and how will you look to combat those things that BHP Billiton told us?
ANDREW ROBB: What we’re looking at specifically with the G20 trade Minister’s and again with the G20 at the end of the year is looking at what each country can do with its own domestic policies unilaterally such as removing some of the non-trade barriers - introducing much better competition policy to drive innovation, getting rid of destructive, non-competitive taxes, getting regulation out of the system, getting unnecessary and onerous regulations out of the system, how do we reduce cost and make things more competitive.
So the wood is really being put on every country to nominate what they can do in their own country – not what we can do necessarily collectively, and that’s a really important step.
They will all come with a package of domestic measures and that will include the sorts of protectionist measures that still can be tackled. They can be tackled unilaterally by each country. They don’t have to wait for agreements to do these sorts of things. We’ve seen over the last thirty years in Australia that tariffs are down on average 2.7 per cent across the economy. A lot of that was done unilaterally – we didn’t wait for the rest of the world and it’s one of the reasons that we’ve had uninterrupted growth for 23 years, because we are a very open economy. We’ve got to drive it further, we’ve got to be more competitive but so does the rest of the world.
BERNIE LO: Minister, it’s Bernie in Hong Kong joining in. I’m sure viewers would be forgiven for wondering what is going on, on the free trade front here, because everybody, including yourself, is trying to come to the TPP at the same time as you are doing your own bilateral deals – Australia-South Korea, Australia-Japan, and in quick succession. If you have bi-lats like that, doesn’t that negate the need for a TPP? It becomes some sort of a politically correct banner, because you’re actually getting business done on a two-way basis.
ANDREW ROBB: No. I can understand how people are wondering how it all fits together. But, what is happening – these bi-laterals, they do lead to concessions and structural adjustment in areas that countries are not strong at. And it does lead to breaking down the political resistance between countries.
But, the TPP, if you look at all the countries involved, the 12 countries, most of them have got bi-laterals with one another, which have been beneficial. But they see an even greater benefit in setting all the rules – the new rules that are part of the bi-laterals, making those all harmonised – the one set of rules between the 12 countries – it’s 40 per cent of the world’s GDP represented by the TPP and if those 12 countries get a common set of rules and even lower protection than often what they’ve got in the bi-laterals we’re going to see far more seamless trade take place across 40 per cent of the world’s GDP.
That will increase growth and it will increase trade and investment and give sustainable jobs at a very great rate compared to what will exist if we don’t have that agreement in place.
BERNIE LO: Minister, we were recently treated to some very nice pictures of Prime Minister Abe of Japan, enjoying the sights and sounds, and speaking to Parliament right behind you in Canberra. The Chinese who are so important to your country and trade, they couldn’t have been too happy about that, so to what degree have politics infected the whole idea and concept of free trade?
ANDREW ROBB: Well look, the thing is, Australia, we have 51 per cent of our exports going to either South Korea, Japan or China. It is fundamental for us and I think for the region that we have strong relationships with each of those countries, because in the end, trade and investment and cultural links and ultimately peace, is driven, in most parts by trust. People have developed trust.
This is where the bi-laterals like Prime Minister Abe’s visit, a week of his visit, has generated enormous trust, with a lot of the big business people that came with him, and the same thing when we took 700 people to China not so long ago, and the same objective was there, to develop the linkages and the trust. So I don’t think, if you increase your friendship with one friend, it doesn’t mean that you reduce your friendship with others. We can and we must maintain and grow very strong relationships and greater trust with all these countries in the region.
MATTHEW TAYLOR: Let's talk about the China Free Trade Agreement because I know that the Prime Minister has a year-long timeframe in trying to have those negotiations well and truly underway. Where are they at right now?
ANDREW ROBB: Well, we're at what I would say is a fairly advanced stage. They've been going for nine or nearly ten years. They've stalled badly over recent years and I think we've breathed a good life back into it. In fact, I'm meeting and conversing very regularly with my counterpart, Minister Gao in China and I think we have set a framework - there's still a lot of work to be done. They're tough negotiators I've got to say, but we have set a framework, which, I think the political will is there - I think it is - we can reach a favourable agreement by the end of this year. That's the objective, and so far I think we're on track for that.
MATTHEW TAYLOR: Ok. I know that you say you're in advanced talks and I wonder if you can tell us just what areas are specifically going to feature; because we know agriculture was a big one with Japan. Will it follow the same sort of outline of what you negotiated with Japan? Or will it be completely different?
ANDREW ROBB: No, there are of course similarities. I suppose what we're good at as a country is agriculture, and resources and energy, tourism. But we're also very good at services that sit around a lot of the areas that we're good at.
The focus in Japan - it was agriculture, but what didn't get a lot of attention, but has been a huge step forward is the progress we made on services - both there and in South Korea. So again, with China, our objective is to make good progress on a number of agricultural fronts. Of course we're already providing a lot of food stuff into China and I think we can improve on that; and at the same time, services - which China needs.
China is trying to move its economy from an export focus to a domestic focus. That will rely on major growth in the services component in their economy where jobs are and Australia's got - I think - a great role to play in helping China on that journey. For their part, they're looking at the investment opportunities in Australia in particular. And they're looking for the opportunity that if they do invest, they can bring senior people to work on those projects. So labour mobility issues are another item that they are interested in.
MATTHEW TAYLOR: Right. We're out of time. We'll have to wait until the end of the year until we get those final details. Andrew Robb, we appreciate your time this morning, for what is a busy few days here in Sydney for the B20. Thank you.
ANDREW ROBB: Thank you for the opportunity.
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