ABC RN Breakfast interview
HAMISHMACDONALD: I spoke with him a short time ago.
STEVEN CIOBO: Good to bewith you Hamish.
HAMISH MACDONALD: As we heard just there from Steven Kirchner, the Directorof the United States Studies Center, he says we do need to be worried aboutthese trade wars spiralling out of control. How concerned are you at thispoint?
STEVEN CIOBO: I'm concerned, but I'm not alarmed, to use the cliché. Thefact is that, of course, we need to be vigilant in terms of watching conditionson the trade front. Australia's a trading nation. But this is precisely thereason why the Turnbull Coalition Government is focused very strongly onopening up market opportunities. We did that, of course, most recently, interms of the comprehensive TPP-11. This has opened up a lot of new marketexport opportunities for Australian producers. And that's great news in termsof helping to ensure that we have a more diversified approach when it comes totrade, which helps to safeguard our economic growth and our jobs.
HAMISH MACDONALD: Sure, but I suppose the question, ultimately, is whetherthat more diversified approach, and indeed the broader global economic outlookis enough to absorb the turmoil that is unfolding. Because other countriesaffected by the US tariff rules are imposing retaliatory measures. And thatwill have impact, undoubtedly.
STEVEN CIOBO: Well, Hamish, you're effectively asking me how long is apiece of string? What I can say is, from a policy perspective, it's been theTurnbull Coalition that's delivered the exemption for Australian steel andaluminium with the Trump Administration; it's been the Turnbull Coalition thatpressed on with the TPP-11 even when the Labor Party said that we should beretreating, and in fact, Bill Shorten described it as a vanity project; it'sbeen the Coalition that's delivered, of course, free trade agreements withJapan, with China, and with South Korea and, as you know, I'm pursuing the mostambitious trade agenda in Australia's history. We have trade negotiationsunderway with Indonesia, Hong Kong, Pacific Alliance countries, the RegionalComprehensive Economic Partnership. We've commenced negotiations with the EU.Shortly we'll commence negotiations with the UK and with India. So, you know,it just speaks to a very full dance card, which is all about thatdiversification.
HAMISH MACDONALD: This question is much more specific than how long is a pieceof string? Ultimately it comes down to whether or not you believe that all ofthose activities that you're pursuing is going to be enough to counter theturmoil that the broader trading environment is facing. Do you actually believethat that's the case?
STEVEN CIOBO: Look I do. And we've seen, basically, a third ofAustralia's economic growth being driven by growth and exports. You don't haveto go very far, whether it's in terms of the manufacturing sector, theagricultural sector, the services sector, to speak to Australian businessesthat will speak of the success they're having because we've been able to getthem preferential market access into export markets. Now, fundamentally, thisis being driven by the fact that we know that access to these markets, thatgrowth in Australian exports drives economic growth in Australia and helps todrive employment, and those employment opportunities mean that Australians canbe more confident about their future.
HAMISH MACDONALD: You're in the UK at a pretty interesting time it must besaid. It's always been the case that a free trade agreement would not likely bepossible if the UK stayed in the European Union's customs union. The CustomsBill to remove Britain was passed in the last few hours after a deal with ToryEuro-skeptics. There are significant amendments though, where does that leavethe prospect of an FTA between Australia and the UK post Brexit?
STEVEN CIOBO: Well, I met with Liam Fox this afternoon my time, inLondon, we had a very good discussion and both of us remain absolutelycommitted to a comprehensive, high quality FTA between the UK and Australia,that has been our focus and in fact, that's the reason why Australia was thefirst country with which the UK formed a working group to deliver preciselyupon this ambition. So, we remain steadfastly committed to working through thatprocess, but obviously, and understandably, the UK's number one priority is thearrangements that they will have formally exiting the EU, so we've gotta letthat work through before we're able to comprehensively delve into ournegotiations.
HAMISH MACDONALD: And do you acknowledge that a softer version of Brexit,the Theresa May Chequers plan, where there is no customs union but perhaps a commonrule book between the EU and the UK, might in fact make it harder for Australiato set up any kind of meaningful FTA?
STEVEN CIOBO: Well, there's nothing inconsistent about the Chequersstatement, or indeed, the White Paper that would be an inhibitor on the abilityto do a high quality FTA between Australia and the UK-
HAMISH MACDONALD: There'sa lot of Tory Brexiteers think it would.
STEVEN CIOBO: Well, I think it all comes down to where you wanna takethe projection. I am, frankly, not that interested in crystal ball-gazing, myfocus is on dealing with the lay of the land, and that's why I was over herespeaking with Secretary Fox, my counterpart, it's precisely the reason why I'mlooking very closely at the language. But I think we need to be realistic. Itis perfectly understandable that the UK is going to seek to do the best dealthat they can with the EU, it's a massive market right on their doorstop andrealistically that is going to preoccupy their focus and attention. Once theyhave worked out ultimately, and bear in mind it's a negotiation as well, sothese things aren't fixed, once they work out ultimately what that shape willbe, that is then when Australia can engage in a substantive way, in acomprehensive way, beyond the sort of scoping that we've been having here, theambition discussions that we've been having so far.
HAMISH MACDONALD: But how then would Australia be able to trade moreagricultural goods with the UK, if the UK ends up with a common rule book withthe European Union on goods? I mean it's hard to really understand how thatcould happen.
STEVEN CIOBO: Well, you're blending two separate issues there. The rulebook on goods, in terms of rules of origin, is separate to agricultural marketaccess. Look, ultimately, what I want to do, as I said, is put in place a highquality comprehensive deal between Australia and the UK, I said to Liam Fox-
HAMISH MACDONALD: Of course you do, but let's be a bit specific about this,I mean these are lovely statements that you're making about the potentialthere, but let's talk specifics. How would you get this access for Australianbusinesses into the UK market if there is this softer Brexit model?
STEVEN CIOBO: Yeah, but Hamish, what you're wanting to talk about areassumptions and crystal ball-gazing. And, frankly, I don't see any value indoing that. What I made very clear to you, is that we will assess the lay ofthe land once the UK has reached their final position with the EU, that's whatthen will be necessary precursor for us to make that decision.
HAMISH MACDONALD: If that's just crystal ball-gazing, what are you actuallytalking to Liam Fox about? Because his views on this are very well known.
STEVEN CIOBO: Well, for example, if they had indicated that off the backof the Chequers arrangement, the Chequers statement, that they had reached aview that they were going to be part of a customs union, well then obviouslythat would make things much more difficult, but that is not the situation, soclearly there's a lot of benefit to be gained from ensuring that we're bothwalking in the same direction in terms of our ambition. At the end of the day,we both want to have a high quality, comprehensive deal, that's whatAustralia's committed to, that's what the UK is working toward, but they have anegotiation that they need to undertake, with respect to the EU, and as I'vemade the point repeatedly now, that's understandable that, that would preoccupytheir focus and their attention in the short term.
HAMISH MACDONALD: Formal negotiations on any deal can't start before the UKdoes actually leave the European Union, which is due next March if everythinggoes to plan. If a deal is done, what would be the rollout, who would be thebig winners from Australia's point of view?
STEVEN CIOBO: Well, again, I think we're getting a little ahead ofourselves. I don't, and I have refrained from ever making specific commentaryabout which sectors will be winners or who won't be, because obviously thatwould be determined by the nature of the deal. But if we do a comprehensive,high quality deal, the focus of that will be ensuring that we get a win-winoutcome. The biggest mistake a lot of people make with respect to trade deals,is to think that it's a zero-sum game. They think well if one side wins in onearea, then the other side must lose in that area. And that's simply not what agood trade deal is about. A good trade deal means that we have better marketaccess to each other's markets that boosts our opportunity to drive goodsexports, it boosts our opportunity with respect to services exports and itboosts opportunity for investment into each other's economies, which helps todrive economic growth and employment.
HAMISH MACDONALD: Obviously, the prospect of no deal on Brexit is live atthe moment, given the complicated political situation that exists for theBritish Government right now. Do you have a view on what no deal would mean, interms of the broader trading environment?
STEVEN CIOBO: Well, that's a difficult question to answer. The reasonbeing because if there was no deal, what would that actually manifestly meanfor the UK? Would that mean that there was a continuation of the customs unionor would it mean that you have what is effectively a hard Brexit, where youactually would have no market access for the UK, this is the point. There's somuch speculation about what might happen because clearly, politically, thingsare quite fluid in the UK, and this is what they need to work through. ButAustralia is a good friend, a good partner, we have, as I said, a shared levelof ambition about what we would be able to achieve together, so I wanna be aconstructive player in that process, not someone who's getting in the way with idlespeculation about what may or may not happen.
HAMISH MACDONALD: Sure. We heard at the start of this conversation, youknow, a very long list of all the things that you and the Australian Governmentare pursuing in terms of opening up trade. As you travel around the world andlook at, I suppose, the general trajectory of things, do you actually thinkwe're entering a period where things are going to be much more difficult forcountries that want more open trade?
STEVEN CIOBO: This is an interesting question and my experience in termsof the many conversations that I've had is that, while we are seeing a rise ofprotectionist sentiment in certain quarters, I've been quite buoyed actually,that there's been a reaction to that in other quarters, that says we're goingto double-down in terms of liberalising market access, and that's presenting arich vein for Australia. That is in part a key reason why, under the Coalition,we've pursued the TPP-11 and ultimately achieved success in terms ofmaintaining that agreement. It's also the reason why I've been able to now havenegotiations underway with the EU, it's what lay behind the negotiations we'rehaving with the Pacific Alliance countries, likewise we haven't yet concludedbut we're getting close, on Indonesia and Hong Kong, all of this being drivenby a view among a number of countries that, in the face of some of thesequarters having a more protectionist bent, we're gonna do the opposite, whichis to continue to liberalise and open up new export opportunities.
HAMISH MACDONALD: SteveCiobo, thank you.
STEVEN CIOBO: Good tospeak to you.