PAULINE CHIOU: Steven Ciobo is Minister for Trade and Investment for Australia, and he joins us live from Washington DC. Minister Ciobo, thank you very much for joining us. Good evening to you. I'm sure you're following the twists and turns in the presidential campaign very closely, and you do know that Trump wants to rip up every trade deal that the US has hammered out so far. Hillary Clinton has, in the past, supported the TPP, but now she's backpedaled a little bit, saying that she wants to see a higher standard. Are you concerned that the TPP may not get ratified by the US congress?
STEVEN CIOBO: Look, that is a concern, Pauline, but by the same token, I'm cautiously optimistic that we will see the TPP ratified by the United States. I mean, clearly for all 12 countries concerned, the Trans-Pacific Partnership represents a really good opportunity. For all nations to have a regional trading block, that means less red tape, less compliance with respect to actually being able to trade in goods and services across the TPP. It's also a very modern framework. It includes elements to deal with the digital economy, financial services, so on and so forth, so very hopeful that notwithstanding some of the comments that have been made we will see the US congress ratify the TPP.
PAULINE CHIOU: Okay. So you are optimistic. It is interesting to note that there are reports that Donald Trump, according to the New York Times, is going to be naming Governor Mike Pence as his VP, running mate, and we do know that Pence has in the past, been in favor of TPP, so that could bode for a change. You have been meeting with politicians there on Capitol Hill. You met with Senator Orrin Hatch, and he has been very resistant to Australia's demand for a five-year trade exclusivity, data exclusivity on pharmaceuticals. What kind of progress did you make in your conversation with him?
STEVEN CIOBO: Well, it's not that it's an Australian demand. The agreement that was reached under the TPP is for there to be eight years data exclusivity, or five years plus other methods. Look, Australia has a really strong health system. We've got strong public health system, we've got good incentives in place, as well, that provide a commercial return for those pharmaceuticals, especially around new drugs around biologics, for example. The meeting with the Senator Hatch was an opportunity for us to sit down, to talk through the agreement that's been reached, for him to raise the concerns that he has in relation to an extended period around data exclusivity, and for me to highlight from an Australian perspective, that we actually effectively have a very strong patent system, and shelf life for those that have new drugs entering into the marketplace. We had a good conversation, a lot of goodwill on all sides, and as I said, I remain cautiously optimistic that we will see the TPP ratified, I hope.
PAULINE CHIOU: Steve, I want to turn our attention to the South China Sea, because China has been thumbing their nose at the ruling from the UN tribunal, saying that the whole ruling and the investigation has been a farce. This matters to Australia, because more than 60 per cent of exports from Australia goes through the South China Sea. What is your message to China?
STEVEN CIOBO: Well, it's not just important to Australia. I mean, of course it is important to Australia, but it's also important, I think, not only for the region, but globally, as well. I mean, we want to ensure that when it comes to the UN Convention on the Law of the Sea, that countries respect the framework of rules that apply under that convention. Australia's position has been clear and consistent. We have always said that we are not going to take sides with respect to the dispute in relation to territorial claims, and we recognise that there is disputed territory. What we have fervently said, and what we are consistent about is that countries should respect the Freedom of Overflight rules, Freedom of Navigation rules, as they apply under the UN Convention on the Law of the Sea. We certainly encourage all parties to respect the decision of the Permanent Court of Arbitration, that tribunal decision that's been made now is one that should be the full and final decision in relation to the matter, and we encourage all parties to have an ongoing commitment to peace, and stability, and a rules framework that can apply.
PAULINE CHIOU: That echoes the same message coming out of the US and many other Western allies. We're going to get China GDP numbers later on today. Steve, there's a question about whether or not they'll even hit the lower range of their growth target of 6.5 per cent to 7 per cent. What's your chief concern in terms of Australia/China trade relations?
STEVEN CIOBO: Well, look China is for Australia as it is for many countries, our biggest trading partner. Two-way trade between Australia and China is worth around $155 billion, so we're very invested, not just in China, but throughout the region. We're also very focused, though, on the transitioning of the Australian economy. We're moving away from being overly reliant on resource exports and energy exports. Increasingly, we're focused on the services side of the economy, some 75 per cent of our economy. What we'd like to see, of course, is that China does have a soft landing. We want to see that there's ongoing growth throughout the China domestic economy, as it also deals with the transition towards consumption-based growth, and we think that should happen.
PAULINE CHIOU: Steven Ciobo, thank you very much for joining us from DC there. Minister of Trade and Investment in Australia.
STEVEN CIOBO: Pleasure.
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