HAIDI LUN: Australia posted a record trade surplus in December, we had that rebound in commodity prices, of course, being a major part of that. But headwinds are on the horizon when it comes to trade in the form of the US withdrawal from the TPP, and President Trump's threats of a border tax in imports. Joining us now to talk about all of this from Canberra is Steven Ciobo, who is Australia's Minister for Trade, Tourism and Investment. Minister, great to have you. We had this bipartisan resolution from US Congress over the last couple of days really reaffirming the relationship between Australia and the US and the commitment to these ties. But we have a President who has demonstrated in the early days, a willingness to act unilaterally. So how much of a concern is there that this sort of volatility and negativity is now sort of tied up in the trade relationship between the US and Australia?
STEVEN CIOBO: Well the trade relationship between Australia and the US is very strong. We run a trade deficit to the United States. But look, part of the reason we run a trade deficit is we, of course, bring in, for example, Caterpillar equipment which powers our resources exports. We bring in Boeing Aircraft which, of course, powers our tourism industry. I've consistently made the point that what we're focused on is not whether we have a deficit or a surplus but how we're utilising the imports and the exports that we have to make sure we keep growth in the Australian economy.
HAIDI LUN: Minister, I want to talk about the TPP because President Trump has kept true to his word. He said that he would withdraw the US from the TPP on his first day in office, and he has signed the order to do that. You have said in the past that a TPP without the US is still feasible, but my concern is, is it relevant and do you then try to bring China into that?
STEVEN CIOBO: Well it absolutely is relevant. What it comes down to is this, there were a lot of hard fought gains that were achieved through intense negotiations over many years, in relation to the TPP. I don't want, and I know a number of other countries don't want to let those gains slip through our fingers. That's why I put a focus on whether or not we could have for example, a TPP 12 minus one. In other words, the TPP less the United States, given the US doesn't want to be part of it. We'll be having a meeting in Chile in March of this year to canvas all of the options. I'll just reinforce though, that the benefits of the TPP are numerous. They are not only numerous, but there's also enhanced benefits for small and medium sized businesses. You get, of course, lower barriers to trade, you get lower compliance across that TPP network. And I think it's really important that we try to capture those gains.
HAIDI LUN: What about the legality of it though? Because as it's written now, it stipulates that you need 85 per cent of member GDP for it to actually be legal. So will it there be some redrafting of the wording?
STEVEN CIOBO: Well look, by definition, there would need to be some minor tweaking. I mean, it really comes down to where, ultimately, we end up. If we can get in-principle agreement that we want to take this TPP agreement forward without the United States, well that's a relatively straightforward process. We could make minor changes to the text to allow for the exclusion of the United States and still get the TPP into place. Alternatively, if there was going to be a more substantial redrafting around some of the agreed points, well that's obviously a whole separate issue that we'd need to deal with. At this stage, I'm pursuing a minimalist approach, which would be to say let's keep the gains that we achieved under the TPP, and let's apply it to as many member states as possible that are willing to sign up on those terms, less the United States.
BETTY LIU: Minister, as we know, and as you know very well, trade deals can take years, years, years to put together. So if I were to read between the lines a little bit on what you're saying on TPP, do you hold some hope that even if, for this Administration TPP is not going to be a pursuit that they're going to take, that perhaps if negotiations take long enough that it might outlast our current Administration?
STEVEN CIOBO: I think you've probably gone one bridge too far there. Let me speak in very plain terms. What we're looking for is whether or not we can entice, encourage, support a multitude of the original TPP countries to keep what we've already achieved through negotiation. Now, I've had discussions with Canada, with Mexico, with Japan, with Malaysia, with Singapore, with New Zealand, for example, most recently in Davos at the World Economic Forum. It's hoped that we might be able to achieve agreement whereby we could have, and I'm not going to rattle off any particular countries indicating their support or otherwise, but if we were able to do something with Canada, Mexico, Peru, Chile, New Zealand, Singapore and Japan for example, well that would be a great outcome. We've just got to see where it goes.
BETTY LIU: Minister, earlier today we heard from the newly confirmed Secretary of State, Rex Tillerson, saying that the US is going to work with many foreign governments, including Australia, Japan and South Korea. Certainly, people read into that saying he's trying to repair maybe with Australia the relations that were damaged by that phone call between Donald Trump and Malcolm Turnbull. Do you believe this is an Administration you can work with?
STEVEN CIOBO: Look, absolutely. Our Ambassador in the United States, Joe Hockey, has done an outstanding job at maintaining strong, open lines of communication with the new Trump Administration. Our Foreign Minister, Julie Bishop has had a number of conversations now with Vice President Pence. Of course, our Prime Minister has spoken to the President. And we have officials that are communicating all the time as well. I'm very confident that the long term nature of the friendship between Australia and the United States will continue.
BETTY LIU: But was it damaged by that phone call?
STEVEN CIOBO: Not at all.
BETTY LIU: Not at all? Despite the reaction here and his strong comments? Not at all?
STEVEN CIOBO: Well look, we are focused on making sure that we pursue good outcomes for Australia. We had a deal with the US Administration. The Prime Minister made it clear that we expected that deal to be honoured. I think it's a sign of a healthy, mature relationship that, frankly, the Prime Minister and the President can have a robust, let's call it a robust conversation, and that doesn't have an impact on the long-term friendship, the fact that we're allies, the fact that we have long standing defence ties, trade ties, economic ties. We're very focused on making sure that we honour, for the long term, the very strong bonds that exist between the United States and Australia.
HAIDI LUN: Minister, there's been a lot of talk about potentially China occupying this vacuum that would be left by a retreating, more isolationist United States, and part of that is to do with trade. I know that Julie Bishop did meet with her Chinese counterpart, the Foreign Minister Wang Yi, last night, and he actually expressed some reluctance about the TPP, about these higher standards. Saying that, you know, essentially for China to be involved it would have to be at a level of comfort. It is better to lower the standards, and is that something that you would be considering in order to have access to the Chinese market?
STEVEN CIOBO: Look, in many respects these are questions that are probably best answered after March. The reason I say that is because in March we'll have the opportunity in Chile to meet and discuss, as the TPP countries, what we see as the pathway forward. But let’s be clear. The TPP agreement, which was, you know, hard fought negotiated over many years, contains a large number of very good outcomes. These are outcomes that we should not let slip through our fingers. Outcomes that ultimately provide benefits to all countries. Now if we can achieve agreement among a large number of the original TPP countries to keep that agreement in place - to ratify that agreement, and even if that means without the United States, well that's a good outcome. We should reach for that agreement to come into effect with as many countries as possible less the United States given obviously the US does not want to be part of it, because that's still a very good outcome for all of those countries that have signed up to it.
HAIDI LUN: You know, Foreign Minister Wang Yi also last night, when he spoke expressed a very strong stance against protectionism. Is that also Australia's stance, given that there has been domestic discontent over foreign investment, over, you know, the foreign purchases of Australian assets? Is that something that Australia should be taking a stronger position on, particularly as now China would become even more important with diminishing trade ties with the likes of perhaps the UK and the US as this sort of populism wave becomes stronger?
STEVEN CIOBO: Well Australia is unapologetically pro-free and liberalised trade. We recognise that trade deals have helped to propel our country's economy. They've helped to provide jobs to Australians. It's one of the reasons why we're in our 26th consecutive year of economic growth. I mean Australia has not had a recession for what is coming into now our 26th year. Part of the reason, and I'm not saying it's the sole reason, but part of the reason is because of our commitment to liberalising trade deals. We've just put in place liberalised trade deals with Japan, with South Korea, and with China. China is, of course, our major trading partner. We have an excellent trading relationship with China and I warmly welcome the President's comments at the World Economic Forum that they were going to open up their doors to even further liberalised trade. I warmly welcome opportunities to engage further with China. I make the point consistently that for any business whether they’re European, American, or others who are looking at an Asia play, that Australia is a logical platform for launching into, for example, the China market because of our preferential market deals. I’m also continuing to pursue further deals. We have in train right now, negotiations with Indonesia with a view to try and open up and liberalise the trade relationship between Australia and Indonesia and a number of other countries as well. So we are very forward leaning on trade.
HAIDI LUN: Alright. Thank you so much, Australian Trade, Tourism and Investment Minister, Steve Ciobo there for us in Canberra.
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