VIRGINIA TRIOLI: Now Back home Trade Minister Steve Ciobo has traveled to Washington as well, just like our very own Michael Rowland, to discuss investment opportunities and the Trans-Pacific Partnership, which as we heard this morning, looks like it's in a bit of trouble over there. Minister Steve Ciobo joins us now from the US capital. Minister, good morning. Welcome to News Breakfast.

STEVEN CIOBO: Good morning Virginia.

VIRGINIA TRIOLI: Now the Senate majority Leader Mitch McConnell has said that it's virtually impossible now to get the Trans-Pacific Partnership passed before President Obama steps down. Is that the death knell of the agreement in your view?

STEVEN CIOBO: No, look I don't think you say it's over till it's over. Certainly I remain cautiously optimistic. I'm very realistic about the chances, Virginia. But that notwithstanding, the fact is that the Trans-Pacific Partnership does represent a really concrete opportunity for Australia's national interests to be well served, for us to look at reducing the amount of red tape compliance on international trade, a regional trading block that will benefit all 12 countries that are signatories. Ideally, of course, we want the United States to ratify.

VIRGINIA TRIOLI: Well you have no agreement really without the United States. You've got a rather protectionist and potentially conservative president in the form of Donald Trump coming in there. And we've got a very negative Senate here. In the face of that, what can you actually do?

STEVEN CIOBO: Well, I'll just pull you up by saying I don't think we have a negative Senate in Australia. I mean ultimately if the Labor Party joins with the Coalition in terms of supporting the TPP, and I've got no reason to believe that they wouldn't do that, certainly the sounds from the opposition are encouraging. Then even though there might be protectionists like Nick Xenophon, for example and others, the fact is that with the Labor Party and the Coalition, hopefully we can pursue Australia's national interest with domestic ratification, in other words, with domestic enforcement of the Trans-Pacific Partnership.

VIRGINIA TRIOLI: As you say, and as we've both acknowledged, that's domestic ratification. You don't have an international agreement without everyone else. But more broadly, the vote that we've just seen in Australia seems to indicate that many people do have a problem with that internationalist point of view on free trade, as does the Brexit vote as well. You've got that much more protectionist Senate, but also I guess the general sentiment of the Senate to reflect as well. Do you think the Coalition needs to rethink its full embrace of all things free trade given that?

STEVEN CIOBO: No. What I do think we need to do though is redouble our efforts with respect to advocacy around the benefits that flow from free trade. I mean, Virginia, if you look at history, look at the last 20 or 30 years, what you see is that those countries that have embraced free and liberalised trade are materially better off. We can see results that demonstrate that countries that embrace the benefits of free trade have an extra one, to one and a half, to two per cent GDP boost as a result. Now, that drives prosperity. It drives better outcomes for Australia. It drives better employment prospects for Australia. I think what some Australians push back against isn't actually global trade agreements or trade agreements per se. I think what they see is things like automation, things like increased productivity and efficiency around manufacturing, which has meant that there's been a reduction in the amount of manufacturing jobs around the world. Particularly in developed economies like Australia. We just need to make sure that we explain and understand where Australians are coming from with respect to their concerns around manufacturing, but highlight that as a nation we're better off because we can export to more countries than ever before. That drives better living standards.

VIRGINIA TRIOLI: But this is not the first time that you and others have said that. This must be the 100th time that you've made exactly that case. Many, many Australians simply reject what you say. So if they're not shifting, do you think you and the Labor Party, maybe your philosophy needs to shift?

STEVEN CIOBO: No, I'm not going to give up. I'll say, if I've said it a hundred times, I'll say it a thousand more times, Virginia. I am not going to walk away from what history very clearly demonstrates, especially over recent decades, which is that countries that embrace free and liberalised trade are countries that are richer, are countries that are better off, are countries that offer a higher standard of living to their citizens. This is indisputable fact. These are what we see around the world. If you look at any – even in our own region. The countries that have surged and that have strong economic growth, that are creating job opportunities for their citizens, they are those countries that are turning their face towards international engagement. I mean, Virginia, I understand, and I do appreciate that some Australians feel a little alienated by a globalised world, by a world in which currency flows, people flows, trade flows are happening at a faster rate than ever before. I understand that fear.

VIRGINIA TRIOLI: Sure. Our time is tight, so I'm just going to, if I very can, if I can, just get to two very quick questions.

STEVEN CIOBO: Sure.

VIRGINIA TRIOLI: What are your anxieties at the moment though in relation to China and our trade with China, given the very precarious situation we have right now following the Hague ruling?

STEVEN CIOBO: Well, China remains our single biggest trading partner, around a $155 billion worth of two way trade. I intend-

VIRGINIA TRIOLI: You're not anticipating any push back or any sort of general retaliation in the region if we and the US engage in any monitoring activities there in the South China Sea?

STEVEN CIOBO: Well, I think the two issues are separate. I also reinforce the point that by having strong trade relations, it actually is a precursor to being able to have proper conversations around these more difficult issues as well.

VIRGINIA TRIOLI: Just finally, your thoughts on the new British Prime Minister.

STEVEN CIOBO: Well, look. I mean this is a consequence obviously of the Brexit vote. A very warm welcome to Theresa May. I think obviously they have taken that decision. I look forward to working with my counterpart in the UK over the coming months and years ahead in respect of looking at a possible trade deal with the UK. But at the same time, we of course continue to pursue a free trade agreement with the European Union.

VIRGINIA TRIOLI: Steve Ciobo, good to talk to you. Thanks so much.

STEVEN CIOBO: Thanks, Virginia.

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