Sky News interview

DAVID SPEERS: Well, the TradeMinister, Steve Ciobo, joins me now. A very good afternoon to you. Thanks forjoining us.

STEVEN CIOBO: Good to be with you.

DAVID SPEERS: So should Parmesancheese only be called Parmesan cheese if it comes from that part of Italy?

STEVEN CIOBO: Well, that's what theEuropeans would like, and that's what they'll come into these negotiationsasking for. Obviously, David, no surprises, the Australian dairy industry isn'tvery keen on that idea, but-

DAVID SPEERS: Just tell us, we producea fair bit of Parmesan cheese in Australia?

STEVEN CIOBO: Yeah. I mean perhaps thebest way to think about geographic indicators that I think most Australians arefamiliar with, is the split between Champagne and sparkling wine.

DAVID SPEERS: And we've accepted that,right?

STEVEN CIOBO: Yeah. A number of yearsago, I couldn't actually tell you the exact date, but many years ago, theEuropeans said Champagne can only come from the Champagne region, and a dealwas done between Australia and the European Union at that stage, so nowChampagne designates, it's what they call a geographic indicator, that comesfrom the Champagne region, and in Australia we have sparkling wine.

DAVID SPEERS: Very good sparklingwine.

STEVEN CIOBO: Some superb, world class sparkling wine.

DAVID SPEERS: We can't call itChampagne, so we've accepted that in Australia. Should we also accept Parmesancheese will have to be called what? Something else. What do we call them?

STEVEN CIOBO: David, we will be negotiating all of these things aspart of a-

DAVID SPEERS: I'm wondering what you,though, as the Minister, what position will you take? Will you say-

STEVEN CIOBO: I'm not going to rollover. I'm not going to roll over on geographic indicators easily. You know, wewould need to be getting something very substantial in return from the EuropeanUnion for us to look at geographical indicators in any meaningful way. So we'vegot to sit down and have this negotiation. Clearly-

DAVID SPEERS: And what are the cheese people saying to you?

STEVEN CIOBO: Well, the dairyindustry, there's two things happening. So we've got the Australian dairyindustry, which, of course, is very invested in a whole range of brands thatthey've built up, and I am deeply respectful and deeply mindful of theirsituation, of course. But the second thing that's happening, David, is you'vegot the European Union, for example, that's going into third country markets.So, you know, I'm not going to name a particular country, but they go intoanother country, and they'll say to that country, "Let's do a tradedeal," and as a part of the trade deal that the European Union does withthat country, they'll say, "You can only call it ..." to use yourexample, "Parmesan cheese, if it comes from the Parma region in Europe."And generally, if that other country has no industry in dairy, they'll agree toit. Now, that, of course, presents challenges for an exporting nation likeAustralia because-

DAVID SPEERS: We're selling to that third country.

STEVEN CIOBO: Correct, because eitherway, we could end up being restricted in our ability to use that name becauseof the deal that the European Union and that other country have done. So thisis all part of the mix, they will take into account-

DAVID SPEERS: Is there an issue thatif you do give ground on this, then it's prosciutto, then it's Greek yogurt,then it's, you know. Where does it end?

STEVEN CIOBO: There's nothing newabout this, David. This has been around for some time. The European Union hasbeen, what you would say, offensively aggressive, or, I should say, aggressiveon offensive interests, rather than-

DAVID SPEERS: Offensively aggressive? They weren't that bad werethey?

STEVEN CIOBO: I should say aggressive on offensiveinterests in relation to geographic indicators for some time. But Australia, also, we are aggressive in our offensive interests, andthat includes, for example, enhanced and increased agricultural access into theEuropean Union. So there's gonna be challenges on both sides of the fence. It'snot all one-way traffic. But ultimately, David, you do these deals because theydrive economic growth, and they drive jobs.

DAVID SPEERS: Sure. But just listeningto you there, you want to take a tough stand on this, it's clear, and you'reclearly saying that to the dairy industry here, that you'll fight hard on this,but you're not ruling out giving ground if it means a good deal with Europe.And let's face it, what is it? $23 trillion economy-

STEVEN CIOBO: $23 trillion.

DAVID SPEERS: 500 million people. It'sour second-biggest trading. There's a lot at stake here. You're not ruling outgiving ground on this.

STEVEN CIOBO: This is a massivemarket. Any good deal requires a bit of give and take and we've got to look atultimately, where we arrive at but I can guarantee you one thing David, we willabsolutely be working in lock step, hand in glove, with industry to make surethat they are part of the negotiations and discussions all the way through.

DAVID SPEERS: What would you call Parmesan cheese?

STEVEN CIOBO: You're the one making the assertion on Parmesancheese.

DAVID SPEERS: Hard cheese? I was justwondering. Now, what the Europeans clearly want something in any trade deal aswell, could we see for example cheaper BMW's? What are we gonna get out of it?

STEVEN CIOBO: Well, this is, I mean, all part of the upside-

DAVID SPEERS: How can we exploit it?

STEVEN CIOBO: -in relation to thesetrade deals, I mean not only do you have the wins that are gained as aconsequence of increased exports but you also reduce your input costs. Nowthose input costs, you know, economic term, but basically saying, for consumersit could mean good become cheaper and for businesses it can mean that theirinputs become cheaper as well. All of that gets fed through and you know whatDavid? There'll be examples of where you'll have an input, an import, that'scoming into Australia, which Australia is then adding value to andre-exporting. And so by reducing the tariff rate, you're actually makingAustralian exports more competitive again as part of that global value chain orthe supply chain.

DAVID SPEERS: There's also localproducers here who'll be worried about cheaper European goods hitting themarket here and I heard the EU Trade Commissioner today talking, for example,about she wants better access for European motor equipment, machinery,chemicals, processed food and services. Are we going to see more, or cheaper,European chemicals on the Australian market?

STEVEN CIOBO: Only to the extent thatyou'd have a situation where you'd have a tariff in place. Now where there'stariffs in place, we'll look at reducing tariffs. Because, David, all tariffsare, all they are, is taxation of the population, a transfer of wealth from thegeneral population to the government. That's what a tariff is, and-

DAVID SPEERS: It's not so much tariffsthough when it comes to Australia, is it? She was referring more to governmentprocurement rules, for example.

STEVEN CIOBO: Well, you know, that'sall about value for money for Australian taxpayers. We've gotta look at all ofthis in the mix. The fact is David, that when you do these trade deals, youproduce win-win outcomes. Now that's not to say that there are only gains,obviously in any trade deal there will be areas of the economy that are subjectto more competition and more intense competition, but you know what, I actuallythink competition is a good thing. Australia is a very open economy. We're aneconomy that has thrived off the back of competition and you know, the PrimeMinister and I, and indeed, the Coalition, we are very firmly of the view, thatwhen it comes to competition, Australian businesses are among the best in theworld. We can take the fight up on competition all day long, every day, and wintime and time again.

DAVID SPEERS: The debate around tradehas been a fascinating one the last couple of years, as you and I havediscussed many times. You know, Trump won the election, promising to get out ofthe TPP and take a tougher line with China, and all of that. Then we saw thatthe TPP-11 was actually signed and sealed and that was some encouraging news.Now, however, we've got Trump and China ratcheting up trade war again. Howworried are you about that?

STEVEN CIOBO: Well, there's alwaysnaysayers on trade. There's no clearer example of that, David, than theAustralian Labor Party. I mean, Labor kept dragging their feet on the TPP allthe way through and you know, when it really mattered, when the rubber washitting the road at the end, Bill Shorten wanted to pack up his bat and balland go home. He called it a vanity project of the Prime Minister's. And let'snot forget David, even on China, China-Australia Free Trade Agreement, whichhas seen, you know, an extraordinary surge of Australian exports to China.Labor called it a dud deal. It's just madness. There's always been thenaysayers, but I believe that any fair-minded Australian can look over the lastthree or four years, can see the extraordinary results we've had in terms ofexports, but even more important than just exports, the fact that, that growthin exports is driving economic growth here in Australia and even moreimportantly than that, driving jobs for Australians. That's what this is allabout.

DAVID SPEERS: And have all those problemsyou spoke about a week or so ago, when it comes to China, the wine sales, etcetera, have they been ironed out now? Is everything running smoothly again?

STEVEN CIOBO: As far as I'm aware,having spoken with a number of businesses that are in this space and theindustry more broadly, yeah, I certainly know and I mean, I'll talk aboutTreasury Wine Estates, 'cause that's been the one in the headlines. From what Iunderstand, their issues are sorted out, the containers that had extraquestions asked of them about their certificates of origin, and you know, haveall been approved and I understand they're moving.

DAVID SPEERS: So you're not aware ofany Australian businesses having trouble selling in China right now?

STEVEN CIOBO: You know, thismorning, thismorning I sat down with the Australia-China Chamber of Commerce. And I asked,you know, significant business people, in many respects, the top of the apexwhen it comes to Australia-China relations in the business community, tell me,"Who, not the rumor. Who, here is having problem, which of you members arehaving problems?" And it's very fair to say, with only a couple ofisolated examples, the reality is that everyone else was saying, "Therelationship is strong. It's going very well." They're seeing strong growthin trade numbers, strong interest in investment and it's two-way, David. That'sChina to Australia as well as Australia to China.

DAVID SPEERS: What were the isolated examples?

STEVEN CIOBO: Well, they'rethings that we'refamiliar with. We've seen, and bear in mind too that frankly, these arehistorical now. We saw, for example, the situation with respect to wine andthat was one of the members that people spoke of, and then there was thesuggestion-

DAVID SPEERS: You're saying that that one's fixed now?

STEVEN CIOBO: Well, certainly withrespect to TWE, it is and that's the one that's been in the media, but lookDavid, I mean, two points in relation is, the first is that there are always,from time to time, irritants in any trade relationship. So when I say thatwe've dealt with that, that's not to say that there will never be any issuesagain in the future. You know what? There will be, and you know what? Thathappens all the time in trade relationships. So that's the first point. Thesecond point is, that in relation to the trade relationships, we have to remainactive and positive on it, and so I watch this, I'm talking to business, Iengage with industry you know, on an almost daily basis through my office, tofind out off them, what's happening, get a feel for the tempo of trade andrespond accordingly.

DAVID SPEERS: Steve Ciobo, Trade Minister. Thanks very much forjoining us-

STEVEN CIOBO: Good with you.

DAVID SPEERS: And good luck with those EU trade negotiations-

STEVEN CIOBO: Thank you.