CNBC Asia interview

INTERVIEWER: I was going to start with how the talks are going but mainly the conversation here at this meeting, ASEAN 2017, revolves around RCEP, what happens there, November - deal or no deal? What can you tell us? How confident are you?

STEVEN CIOBO: We are working towards a deal obviously, but the challenge of course is always that the meeting has not yet happened. So, there have been some background discussions but we are about to go into the meetings, so I'll probably be in a better position to answer your question at the conclusion of business today rather than before it starts. But you know, if we can do a deal, a high-quality deal, Australia's position has been consistent all along: for RCEP to work it should aim to be a high-quality comprehensive trade deal.

INTERVIEWER: And here is the thing, I mean, Australia basically has money on two horses, on RCEP as well as TPP minus the US, TPP 11 etc., and the hope is that by the same date – APEC in Hanoi in November – you will be able to have a deal on that front as well. Where are we on TPP 11?

STEVEN CIOBO: Well, I would really like TPP 11 to happen. Certainly, we are very invested in trying to make TPP 11 come into effect. There's a lot of benefits that are contained in the TPP, that if we can retain those benefits by putting in place an agreement among the remaining 11, then that would be a great outcome. There's work to be done. The fact is that we are all at the starting line now, basically. Well, actually, probably the better analogy is to say we are on the finish line because we have an agreement in place. What we are now looking at doing is seeing how far we've got to peel that back, in order to keep all 11 countries at the table. We know the US withdrawal, although it wasn't unexpected, it was disappointing, but also changed some of the metrics, especially around some of the market access stuff. So we've just got to wait and see and we've got to all work together.

INTERVIEWER: Would you be satisfied if it does end up being a deal but a deal which is smaller, shallower and of less global impact?

STEVEN CIOBO: Well, we will just have to see. I mean I would still like to keep the deal. If we can keep as much of the machinery of the TPP in place as possible, that would be a good outcome. You know, Australia, New Zealand, Japan, and Singapore are already working to try to realise this vision around the TPP. We've just got to make sure and understand that there are some implications for some of the other discussions that are happening, whether that's the re-negotiation of NAFTA between Mexico, Canada and the USA - given obviously that Mexico and Canada are still in the TPP 11. As well as implications for some of the other economies that wanted access to the US market which now they won't have so, we are working -- I mean, we have had really good discussions so far but times going to tell.

INTERVIEWER: So here is the thing, before we get to November, coming up on the 23rd of this month, New Zealand goes to the vote and there is a risk, I don't know how big the risk really is, whether it is still English or if New Zealand First comes in and backs their horse, we could have potentially a withdrawal. On the other hand, we have also got Canada. Although consultations there recently have been pretty negative on TPP, there is a risk that they could pull out as well there. What happens then?

STEVEN CIOBO: You know, life is full of risks. I don't get too concerned about 'what if, what if, what if.' I mean, we got to deal with the cards that we are dealt. And right now, there is strong will among the remaining 11 to try to get this deal done. We will see what happens with New Zealand, we'll see what happens with Canada, but on the here and now, our officials have been engaged really constructively. The conversations have been, I think, quite positive. We are getting closer to a resolution around some of the outstanding issues, but we we've just got to keep that dialogue going, keeping in mind there is the Danang timeframe of November that we're working to.

INTERVIEWER: The next question here, now I know that with regards to what's happening with North Korea that's more the Defence Minister and the Foreign Minister's bailiwick, but since you are wearing the trade hat and we are talking about a vote upcoming at the UN Security Council in New York Monday night Asia time, I thought it would be a good time to ask you about that as well. Now Australia has been at the forefront pushing for tougher, harsher sanctions on North Korea, how confident is the Government – and we are talking to a Cabinet member here – that the vote will go through?

STEVEN CIOBO: Well, obviously, Australia is not a member of the P5 and so it's a Security Council decision.Australia's position is clear though. There's no way that we can tolerate or accept North Korea's provocations. We need to send a very strong message, and the Security Council has done that with their previous resolutions. Now there's opportunity for us to look at some additional sanctions, which can be put into effect. I just think that the world has got to demonstrate consistently that we will not tolerate this kind of provocative and rogue behaviour from North Korea. And that is, fundamentally, Australia's message. And if we can use trade sanctions, investment sanctions, travel sanctions etc. to good effect, to produce hopefully a more compliant North Korea, then that will be a good outcome.

INTERVIEWER: Would it be fair to say, Australia's position on this is more "let's continue trying these sanctions", as opposed to Russia, China: "freeze for freeze".

STEVEN CIOBO: Well I think, you know, we've just got to see where China and Russia goes and P5 members … [Interview restarted]

So, Australia is not a member of the P5, so you know, we think that there is a role for the economic sanctions to have a greater effect. We will have to wait and see what ultimately China and Russia decide to do. We won't know that of course until Monday. But, you know, the problem with North Korea is unless they really feel the impact of this, there is no incentive to change behaviour. We know that the military solution's exceedingly difficult, but we need to have ongoing dialogue, but it's got to be done in a way that I think is appropriate given the outlandish actions that North Korea has engaged in.

INTERVIEWER: You know, with regards to RCEP, more RCEP but also TPP, now that the US is out, we get the sense that Australia is continuing to fly the flag in terms of global free trade to finally push in terms of RCEP for labour, environment, human rights and that kind of thing and hoping to keep that fire alive in the TPP 11 as well. Equally so, with regards to North Korea, we have had Rex Tillerson out in this part of the world not too long ago last month as well, pressuring, among other people the Thais and the Malaysians as well. We had the Philippines just days ago, deciding unilaterally that they will stop all trade with North Korea. Is Australia pressuring the remaining countries that do trade significantly with North Korea including, let us say, Thailand, to do the same?

STEVEN CIOBO: Well, fundamentally, there is no good to come in having the Korean Peninsula in this state of flux. This does no one any good. So, we need to have as much pressure being brought to bear on North Korea where it is possible to get them to change their errant behaviour. If they don't change their behaviour then we face a very significant and ongoing problem in terms of the size of the threat that North Korea poses. So, the world should look at doing whatever it can. Australia has an autonomous sanctions regime which we've put in place sanctions against North Korea. We strongly encourage, of course, other countries to put in as many as they can and deem appropriate to ensure that we get a more compliant North Korea, that is willing to listen to global consensus instead of continuing to act as a rogue nation.

INTERVIEWER: And very quickly, last one, yesterday was Founder's Day in North Korea. A lot of people had expected them to do something, fire off another missile, maybe another test, etc. Saturday came and went, nothing came to pass. Relieved?

STEVEN CIOBO: Well, of course, I mean, we did not have an escalation this time. Unfortunately, we are dealing with a pretty unpredictable regime here and we see from time to time actions are being undertaken that escalate the situation rather than deescalate the situation. That is the fundamental concern. So, yes, nothing may have happened then, but who is to know what is going to happen in the future.

INTERVIEWER: Mr. Ciobo, thank you so much.

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