STEVEN CIOBO: Welcome, I'd particularly like to welcome New Zealand's Trade Minister, Todd McClay - it's good to have Todd here. We've had the opportunity to come together and have very fruitful and very productive discussions reflecting the strength of the relationship between Australia and New Zealand. We've had the opportunity to reflect on the fact that Australia and New Zealand share an outlook in many respects with regard to trade and investment. Minister McClay and I work very closely together in a range of different international fora, advancing the interests of liberalised trade and liberalised investment; recognising that that's a good outcome for Australia, and of course, on Todd's behalf, for New Zealand.
We've had the chance today to canvas our bilateral relationship. To canvas the work that we're doing together on the TPP 11, as well as, for example, the work that we're doing together on the Pacific Alliance. We also have cause to discuss the recent announcement by the Queensland State Labor Premier of her so-called Queensland first procurement policy. A policy that I've described repeatedly as a reckless policy. A policy that potentially could put Queensland, and therefore Australia, in breach of our international obligations. A policy that the Queensland Premier herself has said will see her not be bound by international trade commitments that she herself has made.
We have productive, and I think, fruitful discussions around that to try to find a way forward. Suffice to say that in the absence of any clarity from the Queensland Labor Premier, it's difficult. Fortunately though, there is very strong goodwill between Minister McClay and I, very strong goodwill between Australia and New Zealand, and we are both determined to make sure that neither country is a loser as a consequence of this policy.
So, with those few remarks I'd like to invite Mr McClay to make some introductory remarks as well before going to questions.
TODD MCCLAY: Well, Steve, thank you and I would like to thank you for giving me the time to come over at short notice to have a conversation about something that's extremely important to the New Zealand Government. The Closer Economic Relations Agreement is the bedrock of the two economies working well together. There are many, many Australian companies that provide goods and services to the New Zealand Government that create jobs for New Zealanders. Just as there are New Zealand companies who are here creating jobs in Australia. And the reason it works so well together is that we have mutual respect and we understand that where you reduce barriers - not create them - businesses do what we need them to do best which is to go about building an economy.
The New Zealand Government, in the strongest possible terms, has expressed our concern about the development in Queensland and overall what that means for the relationship. I've asked my officials to do some work and found over the last couple of years, Queensland companies have provided more than $100 million worth of goods and services to the New Zealand Government through government procurement contracts and I'm sure many more deliver services to councils throughout New Zealand. And equally, there are New Zealand companies that play an important constructive role in delivering services in Australia. We believe the bedrock of the agreement is that we need to ensure that Australian companies in New Zealand are treated fairly - which is the same as New Zealand companies - and we expect New Zealand companies to be treated fairly, the same as Australian companies are in all of Australia, and in this case, in Queensland.
I've agreed with Steve that we need to find ways to promote the relationship more and to take this forward and have said that I want our officials to meet over the coming days and weeks to talk more about how we can ensure that the very best that Australia and New Zealand has to offer each other can be put forward. This is an important relationship and we want to ensure that it remains an important relationship, not only for the government but for the businesses involved. This is about creating certainty for New Zealand and Australian businesses, and any barriers in the way of government procurement and the agreement we have in place creates greater uncertainty and it makes it difficult for businesses to make good decisions around investment.
JOURNALIST: Ministers, if Annastacia Palaszczuk refuses to back down, what's the likelihood of a trade war between Brisbane and Wellington?
TODD MCCLAY: Well, I'm not sure I would say a trade war between Brisbane and Wellington. But look, we take our obligations extremely seriously and what we all need to understand is when you have an obligation and agreement and it works well, when one party doesn't meet that obligation pressure comes on the other to make decisions that are not good for those economies. So I think constructively we have to find a way forward. Under CER, we have committed to treating the businesses on each side of the Tasman the same. And so I ask Steve to have his officials, as mine will, look at what the remedies could be under CER to make sure that this relationship continues to go forward.
JOURNALIST: If the Queensland Government is in breach of the GPA, would you consider legal action against the Commonwealth, and in what form would that be?
TODD MCCLAY: Well, one of the questions that we have to ask is around the opportunities that all parties have under this agreement that I think was put in place in 1991. So, certainly what we're looking at is how we can strengthen it. What we need to do is make sure that our businesses are treated the same. A job created by a New Zealand company under one of these contracts in Queensland has exactly the same value as a Queensland company creating a job in Christchurch for a New Zealander. The very best way to grow an economy and to create jobs is to be outward looking and to come to New Zealand and other countries and find more work for your country's companies, not to close the door on others doing work for you.
STEVEN CIOBO: Let me just, sorry, I just want to be clear about something there too from an Australian perspective. I am not, as Australia's Trade Minister, going to allow a Queensland Labor Premier to destroy the hard work that we have done to try to grow export markets, not only for Queensland exporters but for Australian exporters. This is more than the Australia-New Zealand relationship. Certainly, Minister McClay and I have had important conversations, but potentially, this could put us in breach of agreements we have with Chile, with Japan, with the United States, with Korea, with New Zealand; and in short order, possibly in breach of the deal that we just did under the Comprehensive Strategic Partnership with Singapore. There is potential for retaliatory action from each of those countries.
The Queensland Labor Premier either is completely reckless and doesn't appreciate what it is that her Government is doing, or has approached this from a complete sense of naivety. The fact is when a Queensland Labor Premier stands up and says and I'll quote her; in an Australian first, cabinet has agreed the State Government will no longer be constrained or bound by free trade agreements. That is an unacceptable statement. I'm Australia's Trade Minister. It's my job to make sure that this government stands up for the export opportunities we've created and also to honour the commitments that we've made. So I'm saying once again to the Queensland Premier, she needs to back down on this reckless policy. Yes the New Zealand relationship is very critical to this, but it's more than that. It's also the commitments and relationships we have as I said with Chile, Japan, the United States, Korea, New Zealand, and in time Singapore.
JOURNALIST: So apart from New Zealand, has any other country raised questions or asked…
STEVEN CIOBO: Yes.
JOURNALIST: Which ones and what have they…
STEVEN CIOBO: Well I'm not going to provide the detail breakdown of other governments that have approached us. What I am going to say though is New Zealand was the first, but I have had queries - the Government has had queries from another government in response to this policy and we know that there is some chatter for lack of better phrase, from other governments as well.
JOURNALIST: What are their queries though, what are they actually saying?
STEVEN CIOBO: Well they want to know how this Queensland Government policy is going to impact on our commitments under not only government procurement but the implications for the free trade agreements that are in place. I would like to know the answer to that too. That's why I wrote over a week ago now to the Queensland Premier, requesting the Queensland Premier urgently provide me advice about how she intends this policy to operate and how she intends to honour commitments or indeed whether the Queensland Labor Government intends to walk away from these commitments. After eight days, I've got a Queensland Labor Premier that's willing to put out a press release but isn't willing to respond to the Australian Trade Minister with a straight answer.
JOURNALIST: Again, so can I just ask - would you consider retaliatory action if the Queensland Premier doesn't back down?
TODD MCCLAY: Well the New Zealand Government is taking this extremely seriously and we're not ruling anything out at this time but I think most constructively a formal conversation, a dialogue, with the Australian Federal Government around CER and the rights and obligations we have is probably something we need to consider. Our officials will get together and talk about that over the next couple of days.
JOURNALIST: Will you be going to Brisbane to have discussions with the Premier on this trip?
TODD MCCLAY: I've asked - no, not on this trip, but I've asked our officials here and the high commission as well as our consul general in Sydney to be in touch. I understand they have already. They'll start a conversation about exactly what's been proposed. But again, I expressed the New Zealand Government's extreme concern of the impact that this has not only upon the businesses that have invested in Queensland and are providing very high quality services but overall on the relationship.
JOURNALIST: Minister Ciobo have you sought advice about whether there's anything the Federal Government can do to sort of override these sorts of things? I mean is there a constitutional sort of question that we're going to get here if Queensland's doing these sorts of things that put us in beach of our obligations?
STEVEN CIOBO: I have sought legal advice and received legal advice from the Department of Foreign Affairs and Trade and we're looking at what the implications of that are. I'm obviously not going to be releasing that advice publicly, but what I would say is this - and the reason why this matters is because in a Queensland context, if you're a farmer on the Atherton Tablelands, if you grow mangoes around Central Queensland, if you're a beef producer in Western Queensland, all of these regions of Queensland rely on export markets to drive the economy and to create employment. These exports are all being jeopardised potentially by this policy. And so I say to all of Queensland's agricultural sector, I say to the IT services, companies in Brisbane, I say to the large government procurement contractors as well, all of this work that they do offshore and Todd made it clear it's around $100 million worth of work in New Zealand alone, is being jeopardised by a policy that the Queensland Premier is trying to dress up as being good for Queensland. Queensland first is Queensland last full stop.
JOURNALIST: Is this sort of the inevitable sort of conclusions of where the world has been going when it comes to trade? We've had America first, here we've had Australia first with what the government's doing…Well with things around with workers and things like that. I mean we are reaching the point where premiers are saying Queensland first, do we have Victoria first, Tasmania first - I mean is this the natural conclusion of where the world has been going?
STEVEN CIOBO: Not at all. Todd and I have reinforced that both Australia and New Zealand are outward looking, keen to continue the great strides we've made around liberalising trade and liberalising investment. Make no mistake, if you look at Australia's economic growth, more than half of that economic growth last year came from growth in exports. We've put a lot of work into opening up export markets for Australia. And that's why I repeat again, I am not going to see that increased market access that we've had for Australian exporters jeopardised by a reckless state Labor premier who's trying to make herself a hero when in fact all she's doing is jeopardising the future of her state and indeed Australia's exporters.
JOURNALIST: Is this also a warning to Victoria, South Australia and WA, don't replicate this policy? Is this a broad shot warning here?
STEVEN CIOBO: Well it's pretty clear that any other government that would go down in terms of adopting this reckless course of action would again just exacerbate the problem.
JOURNALIST: What extent do you think Pauline Hanson is to blame for Annastacia Palaszczuk decisions to go down this path?
STEVEN CIOBO: Look, I'm not going to run commentary on others. What I'm going to do is hold the Premier accountable for her statements and for the way in which she has completely disregarded a commitment she's made. But most importantly because of short sightedness of the Premier's vision here which is actually directly jeopardising Queensland exports and indeed Australian exporters.
JOURNALIST: Bill Shorten has said that he would pursue a policy of Australia first in jobs and procurement, question to both ministers, do you think that this could - this sort of policy could put us in breach of international trade agreements and including with New Zealand.
TODD MCCLAY: We'd have to look at the detail but I think the simple answer is more than likely. You see New Zealand companies are not asking me to protect them from competition, they're asking me to go overseas and help them be more competitive. The New Zealand economy grows through us doing, you know, a very good job in a number of areas. And I spend almost all of my year overseas opening up doors, reducing barriers so we can have a level playing field. New Zealand and Australia stand on the same platform internationally when we talk about the benefits of trade. In Australia, New Zealand, the WTO, and other areas, are listened to when we talk about the need to, you know reduce the barriers that make it difficult for our businesses to do the things that we need them to do. As New Zealand's Trade Minister it's important I have the backing of New Zealand when I go overseas to tell other countries they should be more like us. Putting up artificial barriers or building walls doesn't achieve that.
STEVEN CIOBO: Might I say that Bill Shorten and the Labor Party at a Federal level, need to make it clear where they stand on this issue. They simply cannot condone this Premier's policy and Bill Shorten needs to joins with the Government and make it clear that we will not stand idly by while a reckless policy like this is instituted. The Labor Party is incredibly silent on trade policy. They never say much about it and when they do they typically get the calls wrong. They got the call wrong on TPP and I'm saying to Bill Shorten don't get the call wrong on this as well. Condemn this reckless policy for what it is, and I await and indeed would welcome the Australian Federal Labor Party making it clear that this state Labor policy is a bad policy.
JOURNALIST: Just on Trump and trade, Trump has been using trade with China as a bargaining chip in some of these North Korean negotiations or at any rate discussions, how helpful is this? And does this - considering the impact that a trade war could have on Australia and how helpful - yeah, how helpful is this? Question to both Ministers.
TODD MCCLAY: Well look, I think what's most helpful to economies is when we allow our business community to get on without government's putting restrictions in place. It's very much the fundamental principal behind TPP. It's the work that Australia and New Zealand are doing together around the TPP idea of continuing to have high quality rules across the Asia Pacific that our businesses can depend upon. So ultimately and as far as what's happening in that part of the world, the focus of New Zealand is how we can make sure that New Zealanders can do well around the world.
STEVEN CIOBO: All I'll add is that the Productivity Commission of course recently concluded their study into the implications of a trade war and we saw that their projections were that there would be a recession. We saw their projections about the impact on unemployment. The increase that we would see in unemployment. So it's very clear that we need to work constructively together to maintain economic growth and to drive employment by rejecting protectionism.
JOURNALIST: Just on TPP - what's next for you two gentlemen in terms of pursuing that agenda and do you think that a deal is possible with the remaining countries?
TODD MCCLAY: Well look it's very important that we put hard work in. TPP was negotiated over many years. It's a very high quality agreement that will deliver significantly for all of the countries that are involved. Whilst it's disappointing, it's not surprising that the US have signalled they don't want to continue but Minister Ciobo and I were at a meeting of TPP 11 ministers in Vietnam a short while ago where a declaration was agree amongst all of the countries that we want to put the benefits of TPP in place and we've set up a process forward for how that might happen, leading up to a leaders meeting in November of this year.
You know, there are two parts to TPP that remain important. There is the economic value or benefit to each country, and each country will have to do an assessment of what that mean without the US's involvement. I've seen some international independent studies done that show that significant value remains for all of the countries concern. But what we shouldn't overlook is the strategic value of a common set of rules that are very high quality across the Asia Pacific and it's imperative for countries like New Zealand and Australia that those rules in and around Asia Pacific because again, that gives absolutely certainly to our business and it helps us grow our economies through freer and fairer trade.
STEVEN CIOBO: All I'll add on TPP11 is Australia, New Zealand and Japan have led the charge on the TPP11. We're very committed to the benefits of TTP11 being held within a successful negotiated outcome. And so we're all putting our shoulder to the wheel. The next round of officials meetings will be here in Australia in Sydney, and we are very commitment to making sure we can secure this TPP 11 agreement we hope.
JOURNALIST: When will those meetings be?
STEVEN CIOBO: They're coming up in several weeks.
TODD MCCLAY: I am optimistic that we can land a deal of the TPP 11 but there's still a lot of hard work to do and that's why we've set up this process forward leading up to November when our officials do the detailed work. It's important for each country to make a decision based upon, you know, consideration of both the opportunities and what would be lost if TPP didn't go ahead. But I remain optimistic that the 11 countries are committed to finding a way through.
JOURNALIST: Thank you.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555