Angie Lau: Andrew Robb, let’s talk about the health of the Australian economy first and foremost; we’ve just heard that unemployment came in at 6.2 per cent, with lost jobs 13,900 full time jobs; 8,000 gained in terms of part-time jobs. It’s still very tepid as you make that transition from mining to what?
Andrew Robb: We are seeing a very significant transition and it’s going very much into services; 75 per cent of our GDP is services; nine out of ten jobs are in services. A big part of our future is the export of services, and we’re starting to see eight per cent growth in tourism, four per cent growth in high-end manufacturing; we are seeing the transition. We’ve had 350,000 new jobs created in the last two years, and compared to places like Canada and Brazil, who are also major resource and energy countries – who are now in recession – we’re still amongst the highest growth rates in the developed world, so we’re really trying to get things in better shape and transition quickly.
The economy is holding up well; business confidence is really climbing and we’re hopeful that we can stabilise things. There’s a very high participation rate, so if that was lower, that 6.2 per cent figure would be closer to having a five in front of it, so there’s quite good signs out of Australia. We are a very open economy; we’ve had 25 years of uninterrupted economic growth and we seem to have sailed through a lot of the shocks to the system.
Angie Lau: The shocks are there; China being critical to you in Australia. Signing some trade deals though might loosen things up; how is the China-Australia Free Trade Agreement going to off-set that?
Andrew Robb: What we’re seeing with the China deal, which will come into force by the end of the year – we have to go through our parliamentary process which is coming to a conclusion – but what we’ll see is a massive increase in the opportunities for our services.
In the Free Trade Agreement, China has given Australia access and concessions that no other country has got, which will benefit health services, education services, all sorts of engineering services etcetera.
Angie Lau: Are you still confident about that despite the China slow-down that we’re seeing?
Andrew Robb: There’s no doubt about it; China, very deliberately and sensibly, has to move to a consumer-based economy. It has to move to a services-based economy because that’s where the jobs are; there’s still a lot of people pouring out of rural areas – they know that and because we’ve got a small population, with world class services, they can see what works and what doesn’t with us, without being swamped.
Angie Lau: You’ve been a very busy trade minister these past couple of years; closing out on four trade deals, and you were really hard-pressed on the biologic pharmaceuticals clause before the TPP was signed; wasn’t sure that we were going to quite get there, but indeed that’s the case. Will the challenges remain, not only in the United States where Hillary Clinton was for it and now is against it, but now you’re seeing the exact same push back from the opposition in Australia, how difficult of a job do you think it is for you to get it through?
Andrew Robb: In Australia it’s been very well received; in fact, in most of the TPP countries – 12 of them of course – from what I know, there’s been a great reception. In the US, there’s a lot of politics floating around there. In the end, you’ll hear all sorts of ups and downs about what will happen but in the end, it’s such a significant deal; 40 per cent of the world’s GDP is covered by this – a third of the world’s trade – with one set of rules in prospect in customs rules, all sorts of electronic commerce rules; it will massively improve efficiency and lower the cost of doing business, and I think you’ll find that in the end, the TPP has to pass.
The TPP is going to set the scene for the 21st Century in terms of the way deals are struck, and together with our Free Trade Agreements with China, Japan and Korea, we have got the bridge we hope, from a resources and energy boom, to a more diversified economy in Australia.
Angie Lau: We all like to think that we are friends across this globe of ours, but of course there are geo-political issues afoot and we heard criticism of Julie Bishop’s comments on the South China Sea as being neither responsible nor constructive from China. You are very much in bed economically with China, how much of that is going to impose political pressure on the global stage?
Andrew Robb: On that issue, we’re not taking sides; that’s the bottom line. We wouldn’t participate in any surveillance or other activities the US might have talked about, but nearly three quarters of our trade moves through the South China Sea, so I think it’s quite legitimate for us to have a view on the need to make sure that we’ve got passage, but we’re not taking sides in what happens between China and the other countries in the region around that issue.
Angie Lau: Is there push back though amongst voters, amongst opposition that perhaps Australia needs to be firm when it comes to its relationship with China?
Andrew Robb: We’ve got our interests and China has its interests and sometimes they’ll differ, and in many cases they’re identical; our relationship has never been better and this Free Trade Agreement is the best that China has done with any developed country in the world. They’re our biggest trading partner with $150 billion in two-way trade between us, so I think the linkages that this trade agreement will develop are important; we’ve got 140,000 Chinese students studying in Australia and think of the linkages that’s developed and the long-term relationships; these intangibles are very much a part of building trust between countries, and in the end, life is about trust.
Angie Lau: There are a lot of opportunities in China no doubt but the bloom is off the rose a little bit at least for one of the country’s largest insurers; IAG said that despite making in-roads and trying to figure out what their opportunities are in China, they’ve decided not to pursue further investment in China; what does it say about your overall strategy?
Andrew Robb: I was there four weeks ago with 35 CEOs and the sense of anticipation around the FTA, especially around services is huge. Financial services now are bigger than the resources sector in Australia; it’s our biggest contributor to GDP and the anticipation by so many financial services companies and the opportunities being provided are huge.
There are major deals in prospect that are taking place now in anticipation of this deal going through; in the health care area, in private hospitals, in aged care facilities, in education, in skills training, in so many different areas, architecture, you name it.
Angie Lau: Good to diversify though, and you’ve often said that the EU is your missing link; where are you on this. You were saying that they are open to a negotiation with Australia?
Andrew Robb: Well they’ve just said yesterday that we’re on the list for the next five years to conclude a trade agreement with the EU.
Angie Lau: What will that look like?
Andrew Robb: For Australia, there will of course be an agricultural component, and that’s true of the China deal – we have spectacular opportunities with clean, green healthy food – but again there will be a big investment component; Europe’s still a very big investor in Australia. There will be a major services component, things like high-end manufacturing and the global supply chain; Australia’s very competitive across the board, we’re a very highly specialised, highly skilled, knowledge-based economy, and that will be reflected in an EU agreement, but at the moment, the first priority for us is India.
Angie Lau: So what is happening in India?
Andrew Robb: I’ve been back eight or nine times.
Angie Lau: Have you talked to Modi? And what are you talking about?
Andrew Robb: Every time; we talk about the trade and investment agreement with India; it’s well advanced and will be a high quality deal. India’s probably 20 years behind China, but it’s on the way.
Angie Lau: Is it going to look like what we’re seeing in the TPP and ChAFTA in terms of agriculture, or is it taking on a different component?
Andrew Robb: It’s more in the China mould; we got a great deal with China in terms of agriculture, but India doesn’t need cheap lettuce; it needs our expertise.
Prime Minister Modi says to me, we need access to your expertise to help us realise our great potential in India; what he meant was, access to our skills training, our education, our health services, our engineering services and our water management services.
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