ABC RN interview
HAMISHMACDONALD: Steve Ciobo, good morning.
STEVENCIOBO: Good morning. How are you?
HAMISH MACDONALD: Very well. Thankyou. The China relationship is being buffeted by a whole range of issues rightnow, from foreign interference laws, a potential ban on Huawei, Chinesemilitary build up in the South China Seas. What can you say and do to fix thisrelationship?
STEVEN CIOBO: Well I thinkinbuilt in your question is the assertion that the relationship is broken,which clearly is not the case. If you look at our trade investment relationshipwith China it's a very broad and deep relationship. It's a relationship that'sgoing from strength to strength and we see it across a range of products. Now,that's not to say that there aren't occasions where Australia and China havedifferent points of view, but we approach those different points of viewsmindful of each other's sovereignty, respectful of each other's differentpositions, and Australia's been consistent in terms of putting our viewclearly, and I think that that ultimately means that we will continue, both ofus, China and Australia, to be invested in a more prosperous, stable, andpeaceful region.
HAMISH MACDONALD: The NationalPresident of this Australia China Business Council though, John Brumby, isgoing to use his speech to say that the relationship needs reset and repair toreturn to a position of mutual trust, respect, and friendship. It doesn't soundlike the business community thinks this relationship is functioning in the waythat it should.
STEVEN CIOBO: Well, look,that's not my assessment, frankly. I respect that John can have that view butthat certainly is not my assessment. Someone who, I think has made somethinglike 12 or 13 trips to China over the past couple of years, I find that thewelcome, the reception we get in China is positive. Now, as I said, I'm notgoing to pretend that there aren't some differences, but broadly speaking, interms of the relationship, it's very strong.
HAMISH MACDONALD: How can you saythe reception is positive when you were the first Australian minister to visitthis year and your request to meet your Chinese counterpart was declined?
STEVEN CIOBO: Well, no, let'scharacterise it accurately. I was in China in September, October last year,together with the Treasurer, for the Strategic Economic Dialogue. I went againonly a matter a month or so ago. I didn't go to Beijing I went to Shanghai,where I met with the Mayor of Shanghai. Now in our system, a mayor has adifferent connotation to the Chinese system, where the mayor is a much moresenior person in terms of the Chinese bureaucracy. And I'll be going again thisNovember, when I lead a large number of Australian businesses to the ChinaInternational Import Expo.
HAMISH MACDONALD: Did you ask tomeet your counterpart during that most recent trip?
STEVEN CIOBO: If or not, Ilooked for an opportunity if I was going to Beijing, to say would our diariesalign, and unfortunately they didn't. But nonetheless, you cannot simply waveyour hand away and dismiss the fact that I had the chance to meet with, as Isaid, a very senior, the second most senior person in the Shanghai region. Now,you know-
HAMISH MACDONALD: It must bedisappointing though as Trade Minister that you can't get a meeting with yourcounterpart in China, given, as you say-
STEVEN CIOBO: You making anassertion doesn't make it a fact-
HAMISH MACDONALD: well, you justtold me that you did inquire if whether it was possible and it wasn't.
STEVEN CIOBO: I said, look, Idon't frankly see a lot of value in this back and forth between you and I aboutthis. You've asked me to characterise the nature of the relationship withChina, I've done that. On any measure, on any measure, if you look at therelationship, in terms of the volume of trade, the value of trade, theengagement that we have, we saw the Foreign Minister, meeting with her counterpartWang Yi, that was a very cordial and warm discussion as well. You know, so Iappreciate you wanna characterise it as being broken, to use your words, youwanna characterize it as being a poor relationship, that is not mycharacterisation.
HAMISH MACDONALD: We've been told bysome Australian mining companies, right in the middle of billion dollarcontract negotiations with Chinese steel mill–smelters, that they're worriedthose contracts won't be signed. They say the viability of their businesses dependson common sense diplomacy prevailing. Do you have a vision of how ourdiplomatic relationship with China could work in a better way than it is rightnow?
STEVEN CIOBO: Well I believethat what's important is that we maintain open and regular dialogue. The fact,as I said, that I've had the chance to visit multiple times, the fact that weengage in the number of different international fora, including for example,Julie's meeting with her counterpart, no doubt the Prime Minister will meetwith the President at the various G20 and other meetings that take place. Sothere are regular opportunities for discussion, I think that's important. Itruly believe that regular discussion to iron out where there are differencesof view, and to reinforce where there are mutually beneficial outcomes from aconsistent approach in relation to different issues, is good for Australia,good for China, and good for the region.
HAMISH MACDONALD: Julie Bishop hasgiven a pretty frank interview to Fairfax, she said that the Government isconcerned about China's spending spree throughout the Pacific, which couldleave, in her words, small islands states trapped into unsustainable debtoutcomes, which would be detrimental to their long-term sovereignty. Do youshare those concerns?
STEVEN CIOBO: My view inrelation to the South Pacific, and I had the opportunity, in a previousportfolio, to have direct, you know, oversight of Australia's relationship inthe Pacific, so I have a reasonably good understanding of it. When you movethroughout the South Pacific and you have the chance to visit a number of theseisland nations, is to understand that for many of them they face reallysignificant challenges about development, economic development, and economicsustainability. Many are very small economies, and so they're looking for apartner in their development, someone who will ensure that they can, basically,reach their maximum potential, in a sustainable way. That's the point theForeign Minister was making, that is at the core of Australia's aid programwith respect to the South Pacific, and we see ourselves, and continue to putout, that we are a natural partner for all of these countries in the SouthPacific.
HAMISH MACDONALD: So you do haveconcerns about the sustainability of the Chinese debt arrangement?
STEVEN CIOBO: Well, look,ultimately questions around sustainability are questions for those nationsthemselves. They're the ones that need to make determinations about the bestfinancing approach for new infrastructure in their countries, they're able toassess whether or not they can repay debts or loans that are made for thefinancing of infrastructure. We make the point that, as Australia, we want toensure that they are able to develop new infrastructure in a sustainable way,and that's where Australia sees itself, as a natural partner for these islands.
HAMISH MACDONALD: I want to ask youabout the broader global trade environment. Donald Trump appears to be prettyhell bent on some kind of trade war or something akin to it with China, the UShas slapped 25 per cent tariffs on $50 billion worth of Chinese goods, Beijing'snow responded in kind. If this escalates, the impacts obviously will be felthere in Australia. Is your government modelling the economic consequences of atrade war type scenario?
STEVEN CIOBO: Well, I can'tspeak to what other Government departments are doing, you best direct thatquestion to the Treasurer because he might be familiar with what the Treasuryis up to, but in terms of the Department of Foreign Affairs and Trade, we'realways looking at the permutations and combinations of what might transpire.Now clearly, and I've made this point previously, the escalation of tariffs,retaliatory tariffs, none of this is good for global growth. Ideally, we wouldsee these countries resolve these disputes in the WTO. Let's never forget thatall a tariff does is transfer wealth from the community to the government. It'seffectively a big tax on whatever the good is that's coming into that country.So, ultimately, there will be no winners from increasing tariff wars around theworld, whether it's the US and Mexico, the US and Canada, the US and China, orthe US and Europe. The consumers ultimately are the ones who of course have topay the extra levies.
HAMISH MACDONALD: Do you see a bitof commentary suggesting that Australia might actually benefit from this tradedispute if, for example, China decided to take on more agricultural exportsfrom us, in your view is that possible, given all of the analysis that suggestsa massive financial hit and job losses in Australia if there were a trade war?
STEVEN CIOBO: Well I mean, thisis it, it is possible, that we would see a stimulatory impact in China, whichof course would flow across to Australia. We've witnessed that previously, wesaw it during the GFC. Ultimately, it goes to the core of some of the faults, andI'd use that phrase, fault, of modelling. Because, ultimately, all modellingis, is a best guess based on certain assumptions, and if you change theassumptions then obviously you can get a radically different outcome. Now withrespect to anything that may happen between China and the United States, youmake a series of assumptions, you say, okay, well if the USA did X then Chinawould possibly do Y and what's the impact of Y? Now that goes to why I'm loatheto put too much stock or faith in terms of so called modelling in relation tothis. What matters more comprehensively is remaining alert to what's happening,and then responding in a way that ensures that you can maximise theopportunity, or mitigate the risk, in relation to any particular activity thathappens.
HAMISH MACDONALD: You've beenmeeting with European Trade Commissioner Cecilia Malmström to formally launchnegotiations for a free trade agreement. Given the troubled waters with China,the complexity of that relationship, obviously the possibility of a trade warbetween Beijing and Washington, do we have any other option but to pursuebetter trade arrangements with Europe?
STEVEN CIOBO: Well, Europe is avery significant market, our second largest trading partner, it's worth roughlyA$23 trillion. It's a critical market for Australia, and it's one where,frankly, we've needed to revisit our trade relationship for a matter ofdecades. We have the chance now, but this is another part of the puzzle, thatthe Coalition is rolling out with respect to our most ambitious andcomprehensive trade agenda that the nation's ever faced. You know, we haveeither underway or have settled now, free trade agreements with our top tentrading partners, we've got trade negotiations underway with the EU, in time,with the UK, once they exit the EU, negotiations underway with Indonesia, withHong Kong, of course, we recently concluded the TPP-11, we did Singapore, Peru,and you know, the Asian trifecta.
HAMISH MACDONALD: But just on theEuropeans, agriculture, obviously, is going to be the sticking point, it almostalways is when it comes to them doing free trade deals. Will this agreement beworth the paper it's written on if the Europeans don't agree to remove pretty stifftariffs on a whole range of products from beef to sheep meat, sugar, cheese,and rice?
STEVEN CIOBO: Well, I'veindicated that we must have better access to the European market onagriculture. You know, frankly, if we don't achieve that then it's not a goodtrade deal. So the key to a good trade deal, and again I've made this pointrepeatedly because I think it's a really important point to make, is that thesearen't about wins, and losses, this is about producing a win-win outcome. Now,Australia wants better agricultural access into Europe because frankly, wedon't have it, and in fact, with the nation, of a population of 25 million, weimport more agriculture products from Europe, than they do with 500 millionfrom Australia. So that really speaks to the imbalance in the relationship. Butyou know, it's much more than just agriculture though. The big opportunities inrelation to services, in particular financial, education, services, bigopportunities to driving further investment between the European Union andAustralia. These are the big shifts in the relationship that if we actually areable to maximise that opportunity, it'll drive economic growth and drive jobsand ultimately, this is about driving jobs for Australians.
HAMISH MACDONALD: Let's get seriousthough, about the agriculture question. How are you going to convince theEuropeans to do that? I mean, given that imbalance that you've just described,given the power that nation states have within Europe to influence thesenegotiations, and beyond that, the regional governments, which often hold upthese whole processes because they want to hang on to those tariffs.
STEVEN CIOBO: Well, ourapproach in relation to this is to focus on, this gets technical, but to focuson the core competency of the European Commission, and by that what I mean isthat we will negotiate with the EU, so that it is only in relation to thoseareas that the EU has control over. Which goes to the second part of yourquestion about some of the regional governments and whether they can impact onit. But, ultimately, look, it comes back to this, a trade deal produces awin-win outcome. Australia is a significant market in its own right, we're alsoa critical staging point for an Asia growth strategy, and that's you know, anarea of particular interest for a number of European businesses. So that's whatwe can offer, in terms of our negotiations and discussions. But we'll engagewith the Europeans to, as I said, build on a range of areas, not just agricultural,and I truly believe that we'll be able to include a high quality deal, we dothis, and I do this as Trade Minister, on a regular basis with countries allaround the world, and this will be no different.
HAMISH MACDONALD: Steve Ciobo,thank you.
STEVEN CIOBO: Good to speak toyou.