Sky News, AM Agenda

KIERAN GILBERT: First this morning we're live to Washington, the Trade Minister Steve Ciobo joins us. Mr Ciobo, thanks for your time, you've met with your US counterpart. What's the mood like in terms of the Trans-Pacific Partnership arrangement that deal with a dozen nations, including Australia and the United States? Because Mitch McConnell, the leading Republican in the Congress believes that it's now looking very unlikely that this will go through Congress during the Obama administration. Does that signal the death knell of the TPP?

STEVEN CIOBO: No, it doesn't signal the death knell. I would say that the prevailing mood from the Obama administration is one of quiet optimism. Certainly, there are a number of elements where it's recognised that the United States is in a unique position, together with the 12 countries that have joined the TPP, in terms of signing onto the agreement to be able to influence a great trading block, one that's going to help to drive economic growth, help revive better job opportunities for Australians. That's part of the reason, of course, why we signed up to it. So there's quiet optimism that they'll still be able to have passage of the Trans-Pacific Partnership through the US Congress.

KIERAN GILBERT: What are you picking up more broadly in Washington beyond the Obama administration because even some of those running, like Hillary Clinton for the presumptive Democratic nominee, hasn't been overly positive about it?

STEVEN CIOBO: Well, I think the important point, Kieran, is that we're obviously in the United States they're well and truly into election season. There are presidential, or presumptive presidential candidates, for the Republicans and Democrats, there's a lot of colour and movement, and frankly, a lot of heat around discussions and trade has been part of the focus of the presidential campaign, so a lot is being said. I think from my perspective, as Australia's Trade Minister, I am here to try to cut through some of the rhetoric and actually focus on where the pieces lay. As I said, I use the words, "cautiously optimistic" about how things are placed in terms of the politics of the Congress with respect to, hopefully, passage and domestic ratification in the United States of the Trans-Pacific Partnership.

KIERAN GILBERT: Now, so you're – just to wrap up on the TPP – you're confident that this will still come to fruition, this pillar of trade policy not just of the Coalition Government, but this goes back to the former Labor government, as well.

STEVEN CIOBO: Well, there's a lot at stake Kieran. The fact is that regional agreements like these are very hard fought and won. To actually have 12 countries come together, to agree on a common set of rules, to agree on all the benefits that will flow from reduced compliance, from reduced tariffs, from better ability to trade and engage, not just around agricultural products but also around services, investment, the digital economy. This is a multi-faceted deal. It's going to be very good for Australia. That's part of the reason why the Coalition is very focused on the processes that we have domestically about ratifying the TPP, and we want it to happen. There's a lot of people in the United States that want it to happen, as well.

KIERAN GILBERT: Now, I want to ask you about the fallout of the China, South China Sea ruling at The Hague. Has there been much reaction in the United States because it's not just Australia with which China is such an important trading partner, the economic ties between Beijing and Washington, between the US and China, also significant in the modern age. So, what's the reaction been from the trade perspective to the potential fallout of that ruling at The Hague.

STEVEN CIOBO: We're all watching China's reaction. We're all watching and, of course, encouraging China to be respectful of the decision that's been made by the arbitral tribunal. Obviously, the PCA, that's the Permanent Court of Arbitration, has made this decision in accordance with United Nations Convention on the Law of the Sea. Australia's never taken sides with respect to the disputed territory. We recognise that there are contested claims with respect to sovereignty. We also recognise that this decision deals with maritime rights not with sovereignty claims. So we reinforce Australia's strong urging that all parties recognise this decision and act in accordance with the decision in a way that's conducive to a more stable and peaceful region, which is, after all, what we're all focused on and I would recognise that the United States has basically said the same type of thing.

KIERAN GILBERT: This morning, Stephen Conroy said that we shouldn't just be all talk and no support for the international rules-based system. He is calling for a Freedom of Navigation exercise in the wake of that ruling.

STEVEN CIOBO: Well, the Australian Navy have been engaged in Freedom of Navigation exercises. Likewise, in terms of Freedom of Overflight, the Australian Navy and Australian Forces, generally, of course, encourage, as I said, all parties to abide by the UN Convention on the Law of the Sea. I mean, this is a major trade route, something like 40 per cent of global tonnage of trade travels through the South China sea. It's a crucial part –

KIERAN GILBERT: Conroy's calling for it explicitly within the 12 kilometer nautical mile-the 12 nautical mile zone of these reclaimed territories. He wants it done explicitly. He made that call in the wake of the ruling, just hours after it.

STEVEN CIOBO: Well, look, I think that there's only one hothead really in Australia at the moment and that seems to be Stephen Conroy. I think the Labor Party should be a little more mature in terms of their approach around this issue. Australia has been calm, cool, and collected under the Coalition. We've made our position consistently. We've made our position clear, and that is that we support the prevalence and the UN Convention on the Law of the Sea as being the framework that should apply. We've called on all parties to respect the decision. We make it clear that we support the right to Freedom of Navigation and Freedom of Overflight. We will continue to be consistently supportive of that position.

KIERAN GILBERT: Theresa May has become the new British Prime Minister – Boris Johnson, the new foreign secretary. Some quite a bit of reaction in the UK to that, but do you now – is this one of your tasks for the next 12 months to try and get the ball rolling for a UK-Australia free trade deal?

STEVEN CIOBO: Well, there can't be an Australia-UK free trade agreement until such time as the UK formally exits the European Union. Having said that, that doesn't mean that we can't have conversations about Рin parallel with their exit Рabout what it might look like. I actually, last week, took the opportunity to speak with Sajid Javid from the UK about opportunities between Australia and the UK. I'd also stress, of course, Kieran, that we're currently undertaking a scoping study, with respect to a possible Australia-European Union free trade agreement. That remains a key part of the focus for Australia. I had conversations not long before the elections announced with my European counterpart, Trade Commissioner Cecilia Malmstr̦m. We'll be continuing those. There are tremendous export opportunities for Australia with the European Union, and, of course, we've got strong historical ties to the UK, as well.

KIERAN GILBERT: In terms of the broader trade agenda, do you have some work ahead of you to try and convince and reassure the electorate that this is the right path given the rise in protectionist candidates in the Upper House, the One Nation group also the Xenophon group?

STEVEN CIOBO: Well, I do think it's important that we continue to be strong advocates about the many benefits that flow from free trade. Kieran, if you look at the last 20 or 30 years, I mean, there could not be a clearer picture that's been painted about the economic benefits that flow - the higher living standards, improved national prosperity, from free and liberalised trade. Those countries that try and do the opposite, those that try to roll down the protectionist shutters, that take a view that the best way that we insulate Australian industry, and, in particular, they'll often claim that it's about manufacturing, is by turning our backs to the world. You know, we see countries that do that and what happens with those countries is that they get, unfortunately, lower levels of economic growth, reduced job opportunities, and they are actually, in a much – in a materially worse state of economic growth than those countries that actually engage with the world. I'm not deaf to the concerns that some Australians have about the forces of globalisation and what that might mean. I'm not deaf to that at all, but we need to make sure we reinforce the many benefits of flow from free and liberalised trade.

KIERAN GILBERT: Now, Kevin Andrews has made some remarks last night on Sky News, one in relation to Tony Abbott returning to the frontbench. He believes it would be an important olive branch to conservatives.

STEVEN CIOBO: Well, the Coalition and the Liberal Party is very focused on delivering, you know, the best team possible. The Prime Minister has made it clear that the team that he took to the election is the team he'd see carrying on post-election. There will be some personnel changes, obviously. There's been people like Wyatt Roy and Peter Hendy who unfortunately lost their seats at the election, but look, as a government, I'm not going to get too caught up in discussing who should be going where. We're very focused on what we've just been re-elected to do, which is to govern in Australia's national interests. We're blessed to have, frankly, a team of people on the frontbench and the backbench who are not only strong advocates for their seats, not only strong advocate in the Senate but also people with a strong policy focus as well.

KIERAN GILBERT: Does Tony Abbott have more to contribute though in terms of more than just a backbencher?

STEVEN CIOBO: Well look that's a decision, in many respects, for the Prime Minister and Tony Abbott. Ultimately, I think it's – there's only so many spots available. Tony Abbott has been Prime Minister of Australia. The decision, with respect to the team, shouldn't be one where we're constantly changing personnel. We've got a strong unified team; we're very focused on the –

KIERAN GILBERT: So, that's a no.

STEVEN CIOBO: - task that we've just elected, or I should say re-elected to do. Well, no, I'm saying that we've got a strong, focused team that have just been re-elected and have a job ahead of them. That's what I am focused upon doing.

KIERAN GILBERT: Kevin Andrews says that the superannuation, the policy, was the biggest issue that was raised with him during the election campaign. Do you agree with that assessment?

STEVEN CIOBO: Well, I'm not in a position to assess whether or not that was the single biggest issue that was raised with Kevin Andrews. What I can do –

KIERAN GILBERT: In terms of issues raised with you?

STEVEN CIOBO: Well, no, I mean, look, there are other issues that people raised with me. Of course, one of the clear issues that people raised was their concern off the back of Labor's Mediscare campaign, a complete and total fabrication, where some people were concerned that they were going to see an erosion of Medicare. This is precisely the reason why we need push back against Labor's lies with respect to Medicare. These are issues people spoke to me about, healthcare, they spoke to me about economic growth –

KIERAN GILBERT: So super's a beat up?

STEVEN CIOBO: They spoke to me about employment prospects. Look people raised superannuation but it certainly was not the biggest issue.

KIERAN GILBERT: And so do you think also the Government needs to be serious about considering the fact that this is the policy you took to the people just ten days ago, as well, before there's any significant change to it?

STEVEN CIOBO: Well, Kieran, we have just taken a suite of policies to the Australian people. We were just re-elected and we are mindful, though, clearly, the Australian people also did deliver us a message. We are respectful of that. We are cognisant of what that message is, but we also have a mandate off the back of having been re-elected to government to implement policies that the Government took to the election, policies which are consistent with our approach to make sure that our financial future is one that is sustainable. Unfortunately, the Labor Party don't seem to be too concerned about sustainability when it comes to finances. They're willing to put the next generation of Australians in more and more debt. We're going to be a bit more mature with our approach and make sure that we implement policies consistent with what we just took to the Australian people.

KIERAN GILBERT: Trade Minister, Steve Ciobo, live from Washington. I appreciate your time, thank you.