Bloomberg TV, Asia Edge
YVONNE MAN: Exports fell one per cent on the previous month while imports jumped two per cent. Now this all comes as the RBA meets to consider an interest rate cut. That decision due in a bit over an hour or so. Joining us now to talk a little bit more about this is Australia's Trade Minister, Steven Ciobo, who joins us live from our Jakarta bureau. Minister Ciobo, really great to have you here. I just want to get your initial reaction to these trade figures. I mean, this deficit, a big miss, a one billion dollar miss. What's your view on that?
STEVEN CIOBO: Well what we're seeing happening, Yvonne, of course is the Australian domestic economy is continuing to power ahead, but we also see the story with still a lower commodity prices being persistent and the Australian Dollar continuing to sit around that 75 US cent level. So this is consistent with that internal domestic demand in Australia, but also consistent with the ongoing price corrections that we've seen when it comes to the resources and commodity sector.
YVONNE MAN: Well perfect segue as to why you are in Jakarta, obviously in talks with the Indonesian Government to work on a free trade agreement between your two countries. I mean, what can we expect to see that will be signed and what remain sticking points?
STEVEN CIOBO: Well Australia and Indonesia are very focused on what we hope we can achieve over the next 12 to 18 months, which is a successful negotiation of a comprehensive economic partnership agreement. Look, there's a lot of complementarities that exists between Australia and Indonesia. I had the chance to meet this morning with Indonesia's Trade Minister, Minister Lukita and he and I canvassed a wide range of issues, but we're both very committed to securing an agreement over the next 18 months. We're both very committed for it to be as comprehensive a trade agreement as possible. We see it embracing eCommerce services, what we can do in terms of agriculture, agri-business and also driving investment between our two economies as well.
YVONNE MAN: You know, we just came off from the US election, the Democratic National Convention as well as the Republican one, it just seems like we're getting more controversy when it comes to free trade deals, particularly with the TPP. We saw, of course, Donald Trump is opposed to it, some controversy the last week about how Hilary Clinton might be flip flopping to possibly support this pact, but how concerned are you about the political mood we see in the US right now when it comes to free trade generally?
STEVEN CIOBO: Well I am concerned that we're increasingly seeing around the world examples of pro-protectionist forces and pro-protectionist politics. That's a real problem. I think it's a problem because all that will succeed in doing is eroding national prosperity for all of the countries concerned. The policy orthodoxy over the last 30 years has delivered us improved living standards; it's delivered us outcomes, especially in an Australian context, which has seen us have 25 years of continuous economic growth. Now that's not exclusively because of free and liberalised trade, but that is a very key component of why Australia's enjoyed 25 years of continuous economic growth. So we want to make sure that we engage with the world, we're outward looking and open to engaging with the world and driving those investment flows as well.
YVONNE MAN: Well of course you know, in the US they have this so called lame duck window now to try to get this TPP passed, but what happens if it doesn't get through then? How disastrous could it be, particularly in this region here in Asia?
STEVEN CIOBO: Well it's difficult for me to speculate about what might happen with the US Congress. I was there a couple of weeks ago and had the chance to meet with a number of Congressmen while I was in Washington. The consensus is that the focus for the US Congress will be upon ratification of the Trans-Pacific Partnership in that lame duck session. Certainly Australia is very hopeful that the US will be able to achieve that through their Congress but ultimately we've got to see what happens. We've got to see whether or not the US Congress is able to achieve that. If they aren't, I do think that will be a significant missed opportunity. I do think that that will lead to a worse outcome for not only all 12 countries involved in the TPP, but also for the United States because they won't be in a position to see the rules that have been agreed between all 12 TPP participant countries coming into force.
YVONNE MAN: Minister, please stay with us here. We're going to go to a short break here. We'll have more with the Australian Trade Minister Steven Ciobo. This is Bloomberg. [Break]I wanted to continue on with this conversation as we look post Brexit. I wanted to get your take on whether you've been in conversations with your British counterparts yet when it comes to talking about potential trade deals. We've heard from Theresa May and her government saying they wanted to get some things signed with Australia as soon as possible. Have they approached you?
STEVEN CIOBO: Well look I had the conversation with Sajid Javid and I've got a call scheduled with Secretary Fox to talk about the relationship between Australia and the UK. I mean obviously there's strong historical bonds there. The two have worked together in a historical context, and we continue to enjoy a really warm relationship. I understand, and indeed Australia shares, the aspiration to be able to do something with the United Kingdom. What that looks like we'll obviously have some conversations about. I'm also in the process of negotiations and discussions around a scoping study with the European Union on a possible European Union Australia Free Trade Agreement. So I intend to pursue both of these with vigour. This is going to be good for Australia, good for the EU and good for the UK if we can achieve a successful outcome.
YVONNE MAN: How realistic is it right now to actually be even talking deals with the UK, I mean should we, should Australia be waiting until they actually get some of this political uncertainty out of the way? Actually trigger Article 50 first, before any discussions can start? I mean, how realistic is that?
STEVEN CIOBO: Well there's certainly a process that the UK needs to go through, I mean the presentation of Article 50 is obviously the formal commencement of those discussions around the exit of the UK from the European Union. Look I think that probably we can have conversations in parallel. I'm certainly intending to travel to Europe later this year to have conversations not only with Cecilia Malmstr̦m Рthe EU trade commissioner Рbut also with Secretary Fox in his capacity as now Minister for International Trade. I want to make sure that we can initiate conversations with them. At the same time I pursue, you know, in good faith, the very good conversations I've enjoyed with the European Union over the past several months because we're very focused on achieving a positive outcome for Australia, and indeed the EU, around those discussions as well.
YVONNE MAN: Minister back at home in Australia, the country did also experience its own type of protectionism, I guess you could say. And it looks like some law-makers that are protectionists are going to be joining this Senate, reflecting some public concern here about some globalisation as well as foreign direct investment. Should investors be concerned?
STEVEN CIOBO: Well look I don't think investors should be concerned. But of course there is a constituency that does hold a view that they've been alienated by globalisation. That just reinforces in my view the importance of people, like myself and others, being strong advocates about why investment and why free and liberalised trade actually produces national prosperity, improves job opportunities and ultimately leads to Australia being in a stronger position. I made the point to you earlier – Australia's had 25 years of continuous economic growth. Now that's not exclusively because of free and liberalised trade, but in large part, part of the reason we've been able to have such a prolonged period of continuous economic growth is because we've been willing to engage with the world, to drive investment and ultimately know that improves Australia's economic growth and underscores job opportunities for Australians into the future.
YVONNE MAN: Minister really great to have you. Appreciate your insight. Steven Ciobo joining us live from Jakarta – the Australian Minster for Trade and Investment.