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RISH SALAMAT: Well, more now on that APEC Summit which took place in the Peruvian capital of Lima. It wrapped up with impassioned calls for greater global trade. Australia's Minister for Trade and Investment, Steven Ciobo, is just back indeed from Lima and he joins us. I guess, let's start things off here Minister with a sense of what the atmosphere was like for indeed, free trade advocates like yourself when perhaps there's a certain gentleman in the US who's not there, but casting a shadow over proceedings?
STEVEN CIOBO: Well the atmosphere was very positive. The fact is that it's created an opportunity now for those of us that were at Lima and indeed more broadly to really focus on highlighting and being strong advocates about the benefits of free and liberalised trade. We saw effectively a doubling down so to speak, of sentiment about the need in an economically-challenged world to continue strong advocacy to make sure that wherever possible we can reduce tariff and non-tariff barriers to trade and to promote the many advantages that flow in terms of economic growth, but also job opportunities that are a direct consequence of more liberalised trade.
RISH SALAMAT: Steven, you say that and you say you're doubling down on it, is that because you can feel the winds of protectionism?
STEVEN CIOBO: Well really it's a consequence of there being, it would appear, a growing sentiment that says protectionism is the way forward. We've got to make it very clear that protectionism does nothing except erode future living standards, make it very clear that protectionism will simply entrench a downward spiral where we see less economic growth and fewer job opportunities.
RISH SALAMAT: Well absolutely and one of the reasons we say that is because of Donald Trump's election. He said he was going to get rid of TPP or throw it in the waste paper bin of history. Do you think that this is really something that he's going to perhaps renegotiate in a way, I suppose? Are we going to get a different type of relationship with the US?
STEVEN CIOBO: Well I think the jury's still out. From Australia's perspective, we're going to continue to pursue trade agreements that are good for Australia, good for Australian workers, good for Australian wages and assist, of course, with our budget situation. Now that's a sentiment that I've seen expressed by a number of leaders around the world. From Australia's perspective, we want to engage in quality trade agreements that are producing commercially meaningful outcomes that are helping to boost our exports, when we saw, for example, earlier this year where Australia's growth was in many respects underpinned by strong exports and increases in both volumes and values. So, you know, that is the future for us and that's what we're focused on.
RISH SALAMAT: Well, there was a lot of talk about other free trade agreements, led by of course China here. Do you think China's stepping into the void that perhaps the US is vacating for the time being at least?
STEVEN CIOBO: Well the Trans-Pacific Partnership is an important agreement, but it is only one agreement among a multitude of others. Australia is involved in negotiations around the Regional Comprehensive Economic Partnership, or what's called RCEP. That RCEP includes, of course, India and China, more than 50 per cent of the world's population and more than 30 per cent of global GDP, so there's opportunity to do an agreement there if we can negotiate an important and commercially meaningful outcome. Likewise we're pursuing opportunities around a Trade in Services Agreement, around Environmental Goods Agreement, as well as a number of bilateral options with the UK in due course, with the European Union, with India and with Indonesia. There is a lot of focus on what we can do to boost the prospects for trade. China's indicated a willingness to keep pursuing discussions around the Free Trade Area for Asia Pacific and that was again another topic of discussion in Lima.
RISH SALAMAT: Well absolutely free trade in China, but again, parts of the legal structure, transparency is always a problem there and of course we've got these Crown Resort employees being arrested there as well. Does that worry you and, you know, where we are legally speaking when dealing with China?
STEVEN CIOBO: Well, of course, China will need to continue opening itself up to the world. I noticed over the weekend that President Xi Jinping made comments that indicated that there's a desire on the part of the Chinese Government to make sure they continue to open themselves up to the world. The future for many developed economies, of course, lay in contestability of services. Services trade is a key part of the future growth trajectory for Australia. I'm looking at doing deals that aren't just good for us in traditional markets like resources or agriculture, but also providing opportunities for Australian services exports and this from an economy that's 75 per cent services based and, of course, four out of five jobs are services related. We'll be looking at working alongside countries like China and indeed, any country that's willing to open up the contestability of those services and investment marketplaces.
RISH SALAMAT: Well absolutely, you know, and what are you doing at the moment to get to the bottom of why these Crown Resort employees, and three of them are Australians, of course, why they've been arrested here? They've been arrested but we still don't know what the charges are.
STEVEN CIOBO: Look, I've seen reports about the arrest, I'm not in a position to confirm that or otherwise. Certainly, of course, Australia always will take a strong interest in matters involving Australian citizens, but we're also mindful that this is something that's happening under Chinese law in China, and so there's limited ability for the Australian Government to intervene. We'll continue to provide consular assistance. We'll continue to look at opportunities where Australia can play a role, but fundamentally this is a sovereign issue for China involving Chinese law and so we'll be providing consular assistance, but waiting for further clarification.
RISH SALAMAT: But Minister, does it not raise any alarms with you about doing business in China here?
STEVEN CIOBO: Well, I think that the business community understands that irrespective of which jurisdiction they're operating in, they need to comply with the local laws. There's nothing unique about China in that respect. They have an expectation that businesses operating in China will comply with Chinese law, and of course, Australia has an expectation that businesses operating in Australia will comply with Australian law.
RISH SALAMAT: Let's move away from that and get back to Australia itself. How would you characterise the state of the economy?
STEVEN CIOBO: Look I think the Australian economy continues to strengthen. In many respects, the story of the past three or four years has been one that I think surprised a number of commentators. There were those who didn't have, I think, a full appreciation of not only the resilience of the Australian economy, but also the breadth and depth of the Australian economy. We've seen, of course, in recent months, a bit of a rally on some commodity prices, which will provide some support going forward, but more fundamentally than that, as a government, we're very focused on the fiscal consolidation challenge that we have. We're very focused on making sure that we're investing in the rebalancing of the economy so that we're not putting too much stock in just the resource and energy story, but also looking at what we can do to further increase opportunities around growing the services side of the economy and, in particular, as I said, the strong focus we've got on obtaining preferential market access into a number of key markets, which will provide an economic growth pathway for the Australian economy into the future as well.
RISH SALAMAT: Absolutely, fiscal consolidation is something that you're looking for, but this is endangered to some extent by wage growth being at such record low levels currently. Now that must be affecting your revenue generation here to some extent and leading to more budgetary issues.
STEVEN CIOBO: Well, again, the challenge that Australia faces is not dissimilar to the challenge that a number of country, developed economies, around the world face. We have a situation where there are difficulties around a structural deficit. We need to make sure that we put in place important savings measure, measures, I should say. As a Government we've been undertaking that task. We've achieved something like $16 billion worth of savings over the last month or so. We'll continue to put a strong focus on a sustainable pathway forward, but we've got to work within the political environment that we've been dealt with respect to the most recent election results, and some of the challenges that we have with the Senate. But we want to engage with crossbench Senators in a constructive way to achieve important reform that's going to make sure that we can continue to have, as I said, a sustainable pathway forward.
RISH SALAMAT: Just a last word, there is this danger of Australia losing the AAA rating. Does this concern you?
STEVEN CIOBO: Well, our focus is very much on making sure that we retain that. That's why as a Government, we've consistently said that we are very focused on putting through meaningful savings initiatives. We're also focused on making sure that we continue to drive economic growth. We want to make sure that we continue to provide opportunities for more Australians to secure employment. This combination of factors, we think, will work to ensure that the challenges that we have around fiscal consolidation are: one, recognised, two, achievable, and three, of course, met.
RISH SALAMAT: Steven Ciobo, thank you very much indeed for joining us there from Canberra, of course, he's the Minister for Trade and Investment.
[ends]