HELEN DALEY: I’m now joined by Australia’s Trade Minister, Steven Ciobo, who’s live from our Canberra studio. Minister Ciobo, thanks very much for joining me, great to talk to you again.
STEVEN CIOBO: Likewise Helen.
HELEN DALEY: Let’s talk the EU FTA negotiations, they’ve begun this week. You want to secure much better access for, particularly Australian food and agriculture, as well as advanced manufacturers. But let’s stick with the food and agriculture because these areas have long been a real sticking point for Australian producers, Australian farmer exporters. How much freer do you actually, realistically, expect the EU to be in things like dairy and beef and some of those agricultural products that they protect so jealousy?
STEVEN CIOBO: Well, ultimately, this will be at the core of the negotiation. I mean, if you look at it in terms of relativities, Australia, with a population of 25 million people, imports around $4.9 billion worth of agricultural products from Europe. Europe, with its population of 500 million people, imports around $3.6 billion of agricultural products from Australia, so that really, in, you know, in one statistic sums up the imbalance in the relationship between Australia and Europe. I’ve been pursuing the commencement of negotiations for an FTA for some time now. I’m delighted to have this opportunity, I intend to work, you know, very closely with the Europeans in negotiating a good outcome because you don’t get these opportunities very often, to be able to secure much better market access for Australian exporters.
HELEN DALEY: Well, it is interesting, I mean, obviously, the EU is a massive market that we could tap into but some of the things that you’re looking for out of a win-win trade agreement are things like, you know, more Australian exports of almonds. Now, we already export some and to, you know, sort of highly-advanced cables. With respect, these seem sort of smaller products and services. Are we really hoping to gain a lot just from those sorts of things?
STEVEN CIOBO: Well, no, it’s not about picking one or two particular good or products, Helen, it’s about what we can do overall in terms of the framework. Now, you know, we will have a vast majority of areas where we’ll be relatively straightforward in doing this deal, the Europeans, like Australia, are a really mature, developed economy, so we’ll be able to do a whole bunch of things together in relation to services, in relation to investment. Where there will be some challenges though, is in what is one of our primary offensive interests, which is in relation to agriculture and likewise, for the Europeans, one of their primary offensive interests will be around what they call geographic indicators. And so they will be pursuing geographic indicators and we’ll be pursuing agriculture and somewhere in there we’ll be able to negotiate a win-win outcome.
HELEN DALEY: Yeah, what are geographic indicators?
STEVEN CIOBO: Probably the best way to think about it, Helen, is to look at what Australia did a number of years ago. You would know and many Australians would be familiar that Champagne as a term, only applies to-
HELEN DALEY: Oh, yes, I see. Yes.
STEVEN CIOBO: Yeah, Champagne that comes from the Champagne region -
HELEN DALEY: Products-
STEVEN CIOBO: Whereas-
HELEN DALEY: - that only come from a particular region. Same with Parmigiana or something like that?
STEVEN CIOBO: Yeah, exactly, produced from that region-
HELEN DALEY: Prosecco, yeah.
STEVEN CIOBO: And yeah, so the Europeans are very forward-leaning on geographic indicators-
HELEN DALEY: Yes.
STEVEN CIOBO: And, you know, that’s not something that I’m certainly not about to walk away from the millions of dollars that Australian businesses have invested in creating brands and logos for their businesses, so we’ll just have to see where we get to, in terms of negotiations around agricultural market access and what we can do around geographic indicators. But again, I make the point that that is going to be the hardest part of this deal -
HELEN DALEY: Yeah.
STEVEN CIOBO: But the actual value from this deal is much, much broader than any one particular or two particular products. It’s about what we can do together on services, on advanced manufacturing, what we can do in terms of driving investment.
HELEN DALEY: But when you say, so they are the challenges and true, they are going to be very big potential stumbling blocks for this but you talk about professional services, financial services, education, those sorts of things, as well as the advanced manufacturers, Europe is very good at those proficiencies. They produce a lot already. I mean, beyond the fringes, what would they buy from us that they don’t do themselves? You said we’re both highly developed, westernized, sort of, economies?
STEVEN CIOBO: Well, if you look at what we’re doing for example around in particular, defence exports, Minister Pyne and I, you know, are both working to boost Australia’s profile I terms of defence exports, and that’s not about sharps or ammunitions, that’s about the industry. Now, we are in the process of having done this deal with the French, with DCNS, to purchase you know, submarines-
HELEN DALEY: Yeah.
STEVEN CIOBO: And develop submarines here in Australia-
HELEN DALEY: A huge amount of money we are spending with a French company.
STEVEN CIOBO: Well, and what we’re doing though, is we’re spending that in Australia as well, because we’re bringing together the French industrial base, as well as their supply chains to work with the Australian industry because what we’re going to do is share knowledge-
HELEN DALEY: Yeah.
STEVEN CIOBO: Share approaches, share talent. I mean, that is the key and, as you know, Helen, these days there truly are global supply chains, global value chains. We want Australia to be a critical part of that for the Europeans. I mean, and it’s not just about the submarines, we’ve done a similar thing with Rheinmetall in relation to the new vehicles that the defence is going to have so-
HELEN DALEY: Yep.
STEVEN CIOBO: This is all part and parcel of vision about driving advanced manufacturing in Australia as well.
HELEN DALEY: Alright. Well, in a way, the public could be excused for thinking, ‘well, you know, why pursue these FTAs when there are strong sides, the two biggest economies, China and the United States, may be slapping, you know, increased tariffs on each other’s goods and we might all get drawn into that particular fray. It is throwing, has been throwing markets into some turmoil. How serious do you think this trade war, or at least a tit for tat war of words at the moment, how serious is it?
STEVEN CIOBO: Well, in many respects, Helen, the fact that this is happening reinforces why the Government’s approach about driving as many of these trade deals, trade agreements as we can is the right strategy. We have the most-
HELEN DALEY: But they’ll all be for naught, if there are massive tariffs imposed by these big economies?
STEVEN CIOBO: No, no they won’t be. No, no, they won’t be because, take for example at the moment, as you know we recently concluded the TPP-11, the Trans-Pacific Partnership 11 agreement, that sees Australia join with ten other countries for a large regional free trade bloc, now that’s great news for Australian exporters. And of course, there used to be a TPP-12 but the country that walked away from that deal was the United States. Now, to give you one case in point, our exports of beef to Japan under the TPP-11, when it comes into effect, will be much more competitively priced, we’ll be getting our beef tariff down to 9 per cent or thereabouts, whereas the Americans, for their beef, will still be sitting in the mid-thirties, in terms of the tariff, so that’s a massive price advantage for Australian beef exporters, but again I’m sort of loathe to keep coming back to agriculture because there’s so much more to our economy than just agriculture, but I just sight that as one example-
HELEN DALEY: Yeah.
STEVEN CIOBO: Of where we get a big differential that opens up between what we’re able to access the market at, versus what those who sit outside of that trading bloc-
HELEN DALEY: Alright.
STEVEN CIOBO: Are able to access the market at.
HELEN DALEY: Well, you know, as long as we can then use that advantage by selling more beef-
STEVEN CIOBO: Absolutely. Yep.
HELEN DALEY: Can I turn to the, you know, Australia has its own tensions with China at the moment, partly they’ve arisen over the Government pushing the foreign interference laws with China rightly or wrongly, taking some offence at. Now, yourself and the Prime Minister have really tried to dismiss these tensions. Yesterday, the Prime Minister kept blaming the media, saying, you know, essentially, it’s a little bit of a beat up. Yet many Chinese are asking questions about this, they’re worried about this. Do you concede that there is this tension at the moment? And that it is perhaps, having a spillover, we’ll particularly say that there is trade tension on the diplomatic political front?
STEVEN CIOBO: Well, I’ve never been dismissive of some of the tensions, in fact I’ve openly acknowledged on numerous occasions that yes, there are differences in a range of areas. What I have sought to do though, Helen, is to give a sense of proportionality about the whole thing and my point really comes back to, I mean, take one of the products that’s been at the focus of a lot of media commentary, that is Australian wine.
HELEN DALEY: Yep.
STEVEN CIOBO: Now, if you look at what’s happened with wine exports from this country, three or four years ago, we had around $211 million worth of exports, today we’re sitting over $1 billion worth of wine exports from Australia to China-
HELEN DALEY: Yeah but Minister, do you-
STEVEN CIOBO: Do from $211 million to a billion, so-
HELEN DALEY: Excuse me. Minister, do you concede though that their point, the Wine Federation people’s point is that the product, yes, the business has improved enormously, but there is this slowdown of products. Maybe it’s through customs, but that that’s a practical retaliation by the Chinese for this diplomatic tension that is between our two nations?
STEVEN CIOBO: Well, the Chinese Government said absolutely that’s not what it’s about and they are acting within their rights to verify paperwork in relation to wine exports and I’ll also note that, when this matter was raised with me by, you know, one company in particular who I spoke to the CEO in relation to this, I raised it when I went to China several days later and those matters have been resolved. Now again, that’s not to say that that will be the case forever but what it does say is that the Chinese Government responded in an incredibly timely and efficient way to the concerns that I raised. You know what, Helen, and this is the point the Prime Minister was making as well, there is a bit of a preoccupation at the moment in relation to seeing every time, you know, there is hold up on the border or a shipment is questioned, ‘oh, this is a sign of a relationship that’s gone pear-shaped’. Well, that’s absurd. We have these kinds of interferences and delays as a normal and regular part of all of our dealings with markets all across the world. So my point again is not to dismiss-
HELEN DALEY: The wine industry’s wrong?
STEVEN CIOBO: No. No, let me, I’m explicitly saying exactly this point. That’s not to dismiss concerns that people have raised, but it absolutely is to give a sense of proportion about what’s going on and I’m sorry, I will not stand by and have people talk down our wine industry and say, you know, this is a relationship that’s pear-shaped because there was some wine that, instead of taking two weeks to get through customs took four weeks or five weeks to get through customs. When you go from $211 million to over $1 billion of exports, that’s a sign of a relationship that’s working well-
HELEN DALEY: Alright.
STEVEN CIOBO: A Government that’s working closely with the Chinese Government, that’s what that’s a sign of.
HELEN DALEY: Minister, there is another issue that’s been, certainly, weighing on the Australian Government at the moment, you still have to collectively make a decision. Are you supportive of the Chinese telco giant Huawei being excluded, essentially, from involvement in Australia’s 5G process, because of the warnings that we understand have come from our domestic intelligence agencies about Huawei’s links to the Chinese Government?
STEVEN CIOBO: Well, I’m certainly not going to get into matters of national security Helen, you’ll understand why. All I can say is that this isn’t something that I’ve looked at, at this stage. I know there’s lots of frenzy about whether it is or is not going to get assessed, when the time comes all I can say to you in general terms is, of course, the Cabinet, the National Security Committee, will look at these matters and judge them on their facts and they’ll make a decision consistent with Australia’s national interest.
HELEN DALEY: Alright. So the national interest and national security concerns should come before trade?
STEVEN CIOBO: Well, they’re not mutually exclusive. National interest embraces all aspects, national security, economy, all of those things are obviously part of the assessment criteria for looking at what is in our national interest.
HELEN DALEY: Alright. Minister Steven Ciobo, Trade Minister, thank you so much for making time today.
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