Bloomberg Singapore - Trade

Newsreader:This is Bloomberg Markets:Asia, I'm David Ingles. Officials from eleven of the original twelve TPPcountries are meeting in Sydney this week to see if the trade deal can berevived without the United States. Australia is one of those countries tryingto salvage this agreement, and to bring it back into force. Our chiefinternational correspondent for South East Asia, Haslinda Amin, has the lateston this and Has, I understand that some in Australia don't like the governmentstance when it come to this issue?

Correspondent:Well, that's right. Somecommunity groups, and it's yet to be endorsed by the parliament, so bigquestions on whether it should be pushed through and whether Australia shouldtake a hard stand on that. Let's get perspective from Steven Ciobo, Ministerfor Trade, Tourism and Investment. He joins us today. Minister Ciobo, good tosee you again.

StevenCiobo: Greatto be here.

Correspondent:On TPP, where are we in thenegotiations?

StevenCiobo: Welllook, the discussions are ongoing because what I and other ministers wanted todo is make sure that we didn't lose the benefits of the TPP. Now, when the UStook its decision to withdraw, it was disappointing but not unexpected. Nowwe've seen a rallying among the remaining eleven countries to say "Can westill do this deal? Can we get this deal over the line?" Certainly forAustralia's perspective we think there's real benefits there if we can, sowe're having the discussion.

Correspondent:The question is whether it canbe pushed through at the leader's summit in November.

StevenCiobo: Correct,correct.

Correspondent:Can it?

StevenCiobo: Well,I mean, this will come down to the work that we're doing right now. We just hada round of very successful discussions in Japan. That's now being followed by asecond round of ... actually third round of discussions in Sydney, so we'relooking at what we can do.

Correspondent:What are the stumbling blocks?

StevenCiobo: Well,what we know is that the metrics have changed. I've made this point repeatedly.With the decision by the United States to withdraw, some countries who've givenmarket access on the basis of securing access to the North American marketwould say, "Well, that's now changed because we're giving this, but we'reno longer getting that" and that's understandable, but the point is thatfor the eleven remaining countries, we're all at the starting line, we've gotan agreement in place, so what we now need to do is see can we sustain theagreement in its current form, or a slight variation thereof.

If we suddenly startunpicking all aspects of the agreement, it's going to quickly get much moredifficult.

Correspondent:So fair to assume that calls fora renegotiation, the likes of Malaysia, Vietnam. These countries have said theywill not take the deal as it stands.

StevenCiobo: Wellthe question is how you define renegotiation, and by that what I mean is thatthere's a recognition that the agreement must, by definition, must change, nowthat the United States is not in it. So we know it must change, and that's aform of renegotiation. The question is how much renegotiation. Now, Australia'sview, and I think, and I don't speak on behalf of New Zealand or Japan, but Iwould make the observation that I think that Australia, New Zealand, Japanespecially, and to a certain extent Singapore, share the view that a minimalistapproach to changing the TPP is our best course of action to give us themaximum likelihood of securing a deal.

Correspondent:So given the negotiations you'veseen so far, are you confident it can be pushed through by September? Becauseanalysts we talk to say there is no way that will happen.

StevenCiobo: Well,I certainly don't agree with the statement that there's no way that willhappen. Whether or not we'll be able to secure agreement, we'll see in thefullness of time. There are other factors which build into this, includingMexico and Canada renegotiating NAFTA, the North American Free Trade Agreement,with the US, because there are implications for NAFTA onTPP, and implications for TPP on NAFTA, so we've got to look at all that.

Correspondent:How closely are you watchingNAFTA?

StevenCiobo: We'retaking, obviously, an interest in it. There's many aspects of thatrenegotiation, as I've said, which will flow across to TPP considerations.

Correspondent:What's your take of the ultimatefor trade? Because when I spoke to the foreign minister of Singapore justyesterday, he said that is one of his key concerns, and when I spoke to APEC'sAlan Bollard, he said that chances of a trade war have increased. Your take onit?

StevenCiobo: Icertainly wouldn't say the chances of a trade war have increased. I think that'sa dramatization of the situation. We all know what the repercussions of a tradewar would be, and we know that it would plunge the world into recession. Weknow that, so that is not a logical course of action for anybody to pursue.From Australia's perspective, we've doubled down on our advocacy and commitmentto liberalizing markets. We recognize that what is policy orthodoxy for decadeshas led to prosperity. In Australia's case we've had 26 years of continuouseconomic growth. Not solely due to trade liberalization, but tradeliberalization has played a key role in that. So we need to find like-mindedcountries that will work together with us. Singapore is one of them. There's anumber of other countries, we're all working to facilitate trade, to help boosttrade and investment flows, because fundamentally that's what drivesprosperity.

Correspondent:Minister, just touching onNAFTA, because President Trump has said that a NAFTA deal is not possible.

StevenCiobo: ANAFTA deal is not possible for the US?

Correspondent:Yes.

StevenCiobo: They'rerenegotiating now.

Correspondent:So what happens if a deal is notin sight?

StevenCiobo: Look,I don't know, Australia is obviously an interested third party.

Correspondent:What implications do you see?

StevenCiobo: Australiais obviously an interested third party in terms of the NAFTA renegotiations.Ultimately it'll come down to the Canadians, the Mexicans and the US, aboutwhat that ultimately looks like. Clearly, there are implications that flow from... I've already identify that there is linkages, implications between NAFTAand TPP, so we'll likely watch. From myperspective as Australia's Trade Minister, I'm about to lead a delegation toMexico. We see big opportunities with Mexico. We've just entered and commencednegotiations with Pacific Alliance countries, including obviously Mexico, so Ithink we've got some good opportunities.

Correspondent:President Trump is speakingright now. He's actually saying that a deal is not possible. Have you been moreencouraged or more disheartened by Trump's policies so far?

StevenCiobo: Look,I'm not going to provide a commentary on President Trump.

Correspondent:What is your take on thepolicies he's adopted and the messages he's been sending?

StevenCiobo: Yeah,I'm not going to provide gratuitous commentary on the US administration.President Trump took a series of policies to the last election in the UnitedStates. He's now implementing those policies, that's consistent with what he announcedprior to the election. I'm Australia's Trade Minister. My focus is on-

Correspondent:There are implications fortrade, minister.

StevenCiobo: Ofcourse there are, of course there are. But my focus-

Correspondent:So you're not concerned by whatTrump is saying right now?

StevenCiobo: Myfocus is upon maximizing opportunities for Australia, so some doors close, somedoors open. I've had a really constructive engaging relationship with USTRLighthizer. We're seeing opportunities now for Latin America. As I've said,we've commenced negotiations with Pacific Alliance countries, Peru, Colombia,Mexico and Chile. We're in negotiations right now with Peru. We've already gota free trade agreement with Chile. We're in negotiations with Hong Kong, withIndonesia. In the fourth quarter of this year, we'll commence negotiations withthe European Union. My plate's very full, we've got a lot of opportunities thatwe're pursuing.

Correspondent:But if anti-globalizationsentiment is not the greatest to you, what is?

StevenCiobo: It'sa concern to me, but what I need to deal with is the terrain that's in front ofme. There's no point for me as a Member of Parliament ... Let's be honest, I'ma realist. There's no point me wishing and hoping that things might bedifferent to what they are. Things are what they are, so my job is to doseveral things. One, to be an advocate about the benefits of low fromliberalized trade and investment. The second thing that I need to do is to makesure that I've maximized Australia taking advantage of the opportunities, thedoors that are opening, for Australia. That's what I'm focused on.

Correspondent:Let's take a look at the freetrade agreement, or at least the hoped-for free trade agreement with India.You're heading to India pretty soon. Your predecessor has said before that hewas confident that would happen. It hasn't.

StevenCiobo: Sure.India of course is a very important market for Australia. It comes down to theway in which you look at these trade deals. I consistently make the point thatI am not about securing a deal just for the sake of securing a deal. What Iwant to do is make sure that we actually get comprehensive high-quality deals.Now, at this point in time-

Correspondent:What exactly are you looking forthat India's not giving?

StevenCiobo: Marketaccess. At this point in time, the opportunity for Australia with India is notto realize the kinds of gains ... and bear in mind this is a two-way street.This flies both ways. Looks like we're not going to be able to realize thekinds of gains that we've looked for. In our trade deals, we want well north of90% coverage. If we can't get that with India, that's unfortunate, but my focuswill be upon us doing great work together bilaterally in a range of differentsectors, to secure some good outcomes.

Correspondent:Minister Steven Ciobo, we thankyou for your time today. There you have it.