HAIDI LUN: On this, with Australia's Minister for Trade, Tourism and Investment, Steven Ciobo, joining us now from Canberra. Minister, great to have you with us. I'm looking at this Global Times editorial, which is a bit of I guess an extreme mouthpiece right, for Beijing? One of the things that it says, it says to punish Australia. To teach us a lesson that they should actually cut imports coming from Australia and import more from the U.S. to replace that relationship and improve that relationship instead. Is there a concern that some of these punitive moves might actually translate into policy given the fraying of the relationship?

STEVEN CIOBO: Look Haidi, none of us get particularly worked up over media, whether it's media in Australia or media in China. There's elements of it that frankly, hyperventilate about the relationship and put forward their two cents' worth. What matters is the actual high level discussions that take place. I was in China last week. I had very positive and constructive discussions with the mayor of Shanghai. I was actually in Shanghai not in Beijing, but in Shanghai is the second most senior person in that region. The discussions were positive, we focused on opportunities to continue to broaden and deepen our trade investment relationship.

HAIDI LUN: So you don't have any concerns that this tit for tat? I mean Wang Yi has come out pretty strongly even this week regarding this issue. Do you think anything diplomatically needs to be done to improve this relationship and have more ministerial visits from Australia to China?

STEVEN CIOBO: I think dialogue is critical, there's no doubt about that. We want to make sure that we continue to engage in constructive discussions on a regular basis. I certainly don't think megaphone diplomacy in a range of areas is particularly helpful. But look, having said all of that, let's also look at the nature of the relationship. Our trade and investment relationship with China, it's our most important trading partner. But our current relationship is very broad and it's very deep. And, you know, that's not the paper over the fact that there are differences of opinion in certain areas, but you know what? Like any mature relationship there will be differences of opinion. What we do is we approach those differences in a respectful way, mindful of each other's sovereignty. Then off the back of that we can continue to take forward, building off the people-to-people links that we have, this trade and investment relationship to make sure that we can continue to drive stability, peace, and prosperity in the region.

HAIDI LUN: Well, I think China's, perhaps, problem is that it sees that some of Australia's policy stances as not being respectful of what it sees as its sovereignty. I want to go to this statement from the Chinese Foreign Minister Wang Yi, saying that Australia should discard its 'traditional way of thinking, take off its tinted glasses and take a proactive approach towards China's development'. We've heard from Xi Jinping talking about this ulterior, alternative model of development that he's proposing, particularly across Asia. Is that something that Australia could get on board? What do you think he's talking about there?

STEVEN CIOBO: Well, I couldn't be certain about the exact specifics. I mean, certainly, China has said repeatedly in the recent past that they believe that Australia's policy is too beholden to the United States. Now, from Australian Government perspective, we have an independent policy that's in the best interests of Australia. That's what we do. At all steps, we look at what is going to be in Australia's national interest. What's best for the people of Australia and we engage in a pragmatic way, with allies like the United States, as well as major partners like China, as well as countries like Japan and Korea. I mean these four, just to select four, haven't always seen eye to eye in a range of areas either, but Australia is able to deal in a constructive why with all of them because we are, ultimately, pragmatic, we're straight forward, we're plain-speaking and people know where they stand. We are also very committed to multilateralism. Very committed to the importance of bodies like the World Trade Organization and very focused on a stable and peaceful and prosperous region.

HAIDI LUN: But you know Mr. Ciobo, out of those countries that you mentioned China does stand out though because you are so dependent on Chinese trade and so dependent on that country. It does tie your hands a bit, does it not? In terms of you being able to use any leverage against them?

STEVEN CIOBO: Oh well, I don't think that's actually the paradigm that we look at the relationship through. It's not assessing what we can do through the use of leverage. I don't think that's a particularly constructive way to take forward a relationship. The fact is that China is a global superpower and the United States is another major-

HAIDI LUN: But isn't that the position though?

STEVEN CIOBO: No. What it reinforces is the importance as I said of constructive dialogue. Now, we have built a really strong trade relationship, investment relationship with China. We have a free trade agreement with China that's underpinning a lot of what we do together. We were one of the first countries to join the Asian Investment Infrastructure Bank. We are willing to work with China on initiatives around the Belt Road initiative. We also of course, maintain incredibly strong ties with the United States. We're doing much together in that respect as well. Our trade and investment ties there are strong. Likewise, with Japan, likewise with Korea. So, you know, this isn't a case of being binary or being black or white. This is a case of engaging in a constructive way; all of us combined to ensure that we have a stable, peaceful and prosperous region.

BETTY LIU: Just on the U.S. China trade front though, and I'm sure you, along with all of us, of course, have been watching the back and forth and I guess the tit for tat that you're seeing between the U.S. and China. Do you think this is something that we're, is this a new paradigm, a new normal perhaps, that we're just going to have to be at peace with? Which is that we're going to be in for the long haul here on continued dialogue between U.S.-China trade, which you know, escalates on some days and deescalate and other days.

STEVEN CIOBO: Look, I think that's probably right. The fact is that the world isn't static, the world is very dynamic, and with changes of leadership, with changes of different features, with economic changes there is of course, a state of flux about what's happening at any point in time. But I do firmly believe the best way that every country can make a positive contribution to developing, as I said peace, stability and prosperity is by ensuring that we maintain open lines of communication and dialogue. That is what Australia always seeks to do. We engage, in a constructive way through the multitude of different international fora that are out there; including G20, APEC and a range of others because we are committed to this discussion. If that means that there is some volatility, well, we need to factor that in. But that's, that's not new. That's always been the case. And so you just, of course, calibrate around whatever the prevailing circumstances are at the time.

HAIDI LUN: Minister, is there a certain level of conflict within your own Cabinet that makes it hard for you to do your job, which is to promote trade, tourism? Certainly, I think that portfolio is the most vulnerable when it comes to suffering from the wrath of China if they are displeased. It seems they are displaced with Australia at the moment. I mean, for example, the likes of your Defense Minister calling China's activities in the South China Sea de-stabilizing. Does that make it harder for you to be able to push your cause?

STEVEN CIOBO: Not at all, we're all pulling in the same direction as a Government to ensure that we serve Australia's national interests and we serve the people of Australia well. My focus is upon making sure that I conserve the economic interests of the country, and that's by opening up as much as possible, trade and investment opportunities. Australia is deeply committed to having a fully diversified trade opportunity with the world. You know, I've been pursuing opportunities in Latin America. We recently signed the TPP-11. We are shortly about to commence trade negotiations with the European Union and not long thereafter with the UK. All of this is about having the full suite of market opportunities available to Australian businesses because ultimately we know the trade drives economic growth and we know that trade drives jobs. And we want to make sure that the Australian people enjoy a more prosperous future, and the best way we can help deliver on that prosperity, is to make sure we can engage in more trade.

HAIDI LUN: Australia is about to enter formal free trade negotiations with the EU. There's two other FTA's on foot with Indonesia and India. Is there a proactive push to diversify Australia's trading interests beyond being so reliant on China?

STEVEN CIOBO: We have the most ambitious trade agenda in Australia's history. You know, I have not taken a backward step about making sure we open up as many opportunities as possible. We have right now trade negotiations underway with Indonesia, with Hong Kong, with India, with the Pacifica Alliance countries of Colombia, Mexico, Chile and Peru; as well as the Regional Comprehensive Economic Partnership. Inside the next 12 months we'll also commence negotiations with the European Union and the UK as well. This is a very forward leaning trade and investment agenda. It is about making sure that we have as diversified economic interests as we possibly can. Tapping into the global growth; tapping into traditional markets as well, like the European Union; all of it built around the understanding and the knowledge that Australia is best when Australia can engage in, as much as possible, liberalised trade and investment.

HAIDI LUN: Going into those negotiations with the EU, what are you hoping to get out them, Minister? How quickly do you think they can come to a conclusion?

STEVEN CIOBO: Well I want them to conclude as efficiently as possible, but it's also got to be practicable. And what I mean by that is that I'm not about trying to do a trade deal in record amount of time if it's not a good quality trade deal. Fundamentally, a good trade deal is what I'm after and a good trade deal produces win-win outcomes; so, good for the Europeans and good for Australia. There are areas where we know that there is a trade imbalance, which has been brought about by the nature of the trading relationship and I would nominate agriculture as one example. I mean, Australia currently exports $3.6 billion worth of agricultural products to Europe but we import $4.9 billion dollars of agricultural products from Europe. Now, when you consider that we've got a population of 24 or 25 million and we're actually importing more from Europe than it is, with a population of 500 million, it really speaks to that imbalance in the relationship. We'll look at fixing some of those, getting a better balance in terms of our trade and investment relationship. That's only one small area. We've got terrific opportunities in the whole broad range of areas and most opportunity of course, will lay in the services sector.

HAIDI LUN: Just before we leave this Minister, is the threat of a trade war a realistic one to you, something that concerns you?

STEVEN CIOBO: Well, I certainly think we need to be vigilant and do all that we can to minimize or mitigate the risk of a trade war. I don't think that it's likely at this point in time. I think the United States and China have indicated a certain amount of pragmatism. They are having discussions and that's a big positive. Likewise, the US is engaging in constructive discussions with the EU and countries like Brazil for example, as well as of course the renegotiation around NAFTA. All of this is about recalibrating as I said, the nature of these relationships-

HAIDI LUN:  Minister Ciobo, we're going to have to leave it there for now; the Trade, Tourism and Investment Minister.

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