BARRIE CASSIDY: Steve Ciobo, welcome.
STEVEN CIOBO: Good morning, Barrie.
BARRIE CASSIDY: So no deals?
STEVEN CIOBO: Well, I mean there’s a deal and that is that Australia’s exempt from the steel and aluminium tariffs. This is a great outcome, Barrie, and it’s one that we’ve been working on since June last year when the original section 232 investigation was announced by Secretary Ross. You might recall, I went to the United States in June last year straight off the bat of that and what we’ve been doing over the period since has been relentless advocacy about why Australia should be exempt given the strength of the bond between Australia and the United States.
BARRIE CASSIDY: So what do you think, in the end, persuaded Donald Trump to go with that?
STEVEN CIOBO: Look, I mean this is the type of thing where you don’t do it at one minute to midnight. It requires consistency, it requires calmness, it requires a methodical approach. Ultimately, we have a very healthy trade and investment relationship with the United States, especially the type that President Trump likes. And off the back of that, I think it’s understandable that the President resolved that Australia wouldn’t be subject to these tariffs.
BARRIE CASSIDY: So there’s nothing implied in terms of, for example, exercises in the South China Sea that we would do something for the United States on that front?
STEVEN CIOBO: No, Barrie, look and I’ve seen some frankly incredibly wild theories that have been emanating from all quarters, including some journalists who should know better. No, what the Prime Minister made clear yesterday and what the President’s Tweet also referred to is now the legal process internally in the United States. It is effectively just about the paperwork – for lack of a better term – that’s got to be undertaken. But look, this is a great outcome for Australia. It continues to ensure that we are well placed with respect to boosting exports, boosting trade, boosting investment; the very key drivers that make our economy strong and that create jobs for our nation.
BARRIE CASSIDY: But even if there’s nothing formal on that front, Donald Trump rarely gives anything away for nothing. Could there now be moral pressure on Australia? The next time that he comes calling and he wants a favour. For example, if he asks Australia to conduct freedom of navigation exercises in the South China Sea, we would feel more obligated now to say yes.
STEVEN CIOBO: No, I completely disagree with that, Barrie. I mean let’s break this down. We’ve got a trade investment relationship that is really healthy and strong. It’s broad-based, it’s been there since the former Howard Coalition Government put in place the Australia-US Free Trade Agreement. They’re our third largest trading partner. We have a budget deficit with the United States. In other words, they export more to us than we export to them and that’s also actually not a bad thing for our economy in this particular case, because one of the key things that we purchase off the United States are Boeing aircraft and we need Boeing aircraft to be able to drive our $40 billion tourism industry. That employs around 600,000 Australians. So, if you take into account the full context of the trade and investment relationship with the United States, you can see why this was done.
BARRIE CASSIDY: Now, a lot of countries, though, are still going to be impacted by this and by Donald Trump giving exemptions to two or three countries, will that not make the countries not included even angrier and therefore more likely to retaliate? In other words, could it make matters even worse?
STEVEN CIOBO: Well, I think, Barrie, it’s important to understand something that’s happening in terms of the global trading environment and that is that we’re in choppy waters, let’s not pretend otherwise. I see over the next 12 to 24 months that getting the settings right on trade is going to be more important than ever. What we need now are calm heads, a methodical approach, rationality when it comes to making sure that Australia is well placed when it comes to trade. And, Barrie, I’ll be honest with you; this is one of my concerns.
I mean Bill Shorten and the Australian Labor Party get all of the big calls on trade wrong. I mean they would have walked away from the Trans-Pacific Partnership. They would’ve walked away from the China-Australia Free Trade Agreement. Let’s not forget, Bill Shorten described Donald Trump as being barking mad, and yet he would claim that he’d be able to make sure that Australia’s national interest were well served. We need calm heads. We need the success and proven track record of the Coalition when it comes to trade policy, because trade policy matters for jobs.
BARRIE CASSIDY: Sure, but you say you want to get the global arrangements right. This is bad policy, isn’t it? Donald Trump’s policy is bad policy.
STEVEN CIOBO: Well, I’m not going to lecture another country about what they do on trade. What I’m going to do is make sure that I stand up-
BARRIE CASSIDY: But hang on, you say you want to get the settings right. So surely you have to argue that Donald Trump’s policy is bad policy?
STEVEN CIOBO: Well, what I argue is the benefits that flow from liberalised trade. That’s what as a Coalition Government, we have been doing. We are strong advocates for it, but we also deliver on it, Barrie. I mean it was the Coalition – as I said – that has brought about the TPP-11. We’ve seen the creation of 403,000 jobs over the last 12 months; much of the economic growth in this country being driven by exports as well. We’ve seen in a range of sectors, healthy job creation off the back of opening these export markets. That’s what I and the Prime Minister and indeed the whole government is focused on continuing to do.
BARRIE CASSIDY: But the world wants freer trade. Now, if the Europeans for example, were to take Donald Trump to the World Trade Organization on this, what would Australia’s position be? Would you support them?
STEVEN CIOBO: Well, look, we need to assess it on a case-by-case basis and we’d look at that. I mean Australia though- and Barrie, look, to give you an example with respect to the World Trade Organization. As I said, we practice what we preach. Only last December when I was in Buenos Aires for the World Trade Organization Ministerial Meeting; we championed together with Singapore and Japan, a new initiative on e-commerce. Now I was delighted when I spoke to the US Trade Representative, Ambassador Lighthizer; we got the US on board with that initiative. We got the Europeans on board with that initiative. We got 70 countries, all coming together through the WTO, on e-commerce. And we did that because we’re pragmatic. Because we actually practice what we preach and people know with the Coalition that they get a bona fide government committed to opening up export opportunities.
BARRIE CASSIDY: But when you say practice what you preach, there just seems to be a feeling of I’m alright, Jack about this. Australia takes the special deal and then if the rest of the world says: but hang on, this is bad policy for the globe, wouldn’t you then support then if they were to argue in the World Trade Organization for freer trade and to bring these tariff walls down?
STEVEN CIOBO: Well, we’ve consistently brought actions, where appropriate, to protect Australia’s national interests. I mean, Barrie, no one can say that I’ve been shy in terms of being a strong advocate for the benefits of more open investment and more open trade. Australia is a case in point – 26 years of continuous economic growth, in large part driven by our openness to trade and investment. So, of course we continue to do that and that’s a message that I deliver globally.
BARRIE CASSIDY: Both Donald Trump and Malcolm Turnbull have talked about the trade arrangements between Australia and the United States. They say it’s fair and reciprocal. How is it fair to Australia when we’re in deficit?
STEVEN CIOBO: Well, this is the point I just made earlier, Barrie. I mean yes we do run a trade deficit with the United States, but frankly I think it’s a bit of a false measure to look at everything as a trade or surplus relationship-
BARRIE CASSIDY: As Donald Trump does.
STEVEN CIOBO: The reason- well, the reason why I mentioned that a little earlier about our trade deficit. And as I said: I mean, if you look at two major exports from the US to Australia – it’s Boeing aircraft and it’s Caterpillar equipment. We need that Caterpillar equipment to extract the natural resources that we sell to the world. We need the Boeing aircraft to be able to power our tourism industry, as well as the freight that goes in the belly of aircraft. And so, this is why I think it’s important to look at in a more holistic way, to look at what’s happening with trade.
BARRIE CASSIDY: Yeah, because it just seems as if Donald Trump regards every deficit as a bad deal. In fact, if he’s in deficit with a country he says: they’re ripping America off.
STEVEN CIOBO: Well look, I mean President Trump has been forthright in his views. They’re views that he’s maintained for some time. Again, I’m not going to lecture anyone about what they should do. What I’m going to do is focus on what I know to be the case that’s good for Australia, good for driving the economy, good for creating jobs in Australia and it goes back to the point I made. When it comes to the trade environment, Barrie, it’s going to get harder, not easier. And that’s why you need a safe pair of hands at the wheel. You need a Coalition that gets the big calls on trade right, not a Labor Party that said: walk away from the TPP-11, we shouldn’t do ChAFTA, are critical of pretty every trade deal that we’ve done, and frankly, if we had that kind of approach and government today under Bill Shorten, Australia would be a poorer country, with fewer jobs as a consequence.
BARRIE CASSIDY: Yeah and on the TPP-11 and you’re just back from Chile where that was all sorted out. But what items now in Australia, what goods will be cheaper for Australian consumers as a result of this arrangement?
STEVEN CIOBO: Well, you’ll see a range of benefits, Barrie. What we’ve done through the TPP-11 is put in place Australia having much more liberalised trade – 98 per cent reduction on tariffs or removal of tariffs across the board with $13.7 trillion of economic activity. That will mean that there are cheaper input costs in terms of the Australian economy, especially on business inputs. Consumers will also benefit from that. But, importantly, Australian exporters will benefit.
BARRIE CASSIDY: But how will consumers- it’s quite clear how exporters will benefit, but how will consumers benefit?
STEVEN CIOBO: Well, Barrie, where we have- and Australia has very modest tariffs. I mean there was unilateral tariff action taken in Australia a number of years ago. Typically our tariff range sits at about five per cent. With those countries with whom we didn’t previously have a trade agreement, it’ll go from five per cent down to zero. And so that means there’ll be a slight reduction – as I said – in business input costs. But the real focus of these deals, Barrie, is what we can do in terms of export markets. That’s what drives our economy, that’s what creates jobs.
BARRIE CASSIDY: The other criticism that’s coming from Labor and the unions in particular, they’re worried about the lack of labour market testing, that companies will be able to bring in foreign workers when the workers are available here in Australia and as I understand it, I think there are six countries have now had this obligation waived.
STEVEN CIOBO: Well, a couple of points on this, Barrie. The first is that when Labor was last in government, they actually included labour market testing waivers in the agreements that the Labor Party concluded when they were in government. So apart from the fact-
BARRIE CASSIDY: But that doesn’t make them a good thing because they did it.
STEVEN CIOBO: No, no, sure. But I’m just saying: what it does highlight is their total hypocrisy on this issue. But that’s the first point. The second point is that anything that we’ve done, we’ve done on a reciprocal basis, meaning that we make it easier for Australian workers to go overseas as well. And then the third point – and this is, I think, the most important one – this doesn’t apply to unskilled or low skilled workers. This isn’t about bringing in cheap labour, who are unskilled or unqualified, to work in Australia. So let’s put that to bed straight away. What this is basically aimed at in the main, are managers, senior managers, executives who work within often multinational corporations, who need to be able to transfer between countries as part of that particular company’s operations. That’s where this applies. So it’s not about bringing in cheap labour. It’s not about unskilled labour as the unions would have you believe.
BARRIE CASSIDY: Prime Minister, we’re out of time, but thanks for your time this morning, appreciate it.
STEVEN CIOBO: Good to speak with you.
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