Rishaad Salamat: Joining us now is Australia’s Trade Minister Andrew Robb; Andrew thank you very much for joining us. 

Andrew Robb: It’s great to be here.

Rishaad Salamat: You just came back from Kuala Lumpur, there’s a regional deal in prospect there; what is it and when do you sign it?

Andrew Robb: Well it’s a regional co-operation agreement, or another free trade-type agreement.  It involves all the ASEAN countries; China, India, Japan, Korea, Australia and New Zealand.  So it’s a comprehensive group, it’s a huge mix of cultures and living styles, and it will be of enormous benefit.  If we can seal this possibly next year – we’ll get to substantive conclusion by the end of the year, and I think final conclusion next year – it will create far more seamless trade, right across a very big part of Asia.

Rishaad Salamat: So why are so many unions against it?

Andrew Robb: Well the unions in Australia are against the free trade deal we’ve done with China; a bi-lateral.  They’ll get on to this other deal later I suspect.  For some reason, some of our unions have always been anti-trade; they’ve got this view that if you engage with the rest of the world, somehow or other our own workers miss out.  Well the fact is that we’re into our 25th year of uninterrupted economic growth; we’ve got the highest growth in the developed world at the moment, and a lot of it is because we engage so heavily with the rest of the world.

Rishaad Salamat: Well that said, your boss Prime Minister Tony Abbott is saying, well these guys are xenophobes.

Andrew Robb: Well they are running a campaign – you’ve got to look at the context in Australia; there’s a big inquiry going on into corruption and rorts and thuggery in some of our unions, including the ones that are running this campaign.  Daily in the papers they are getting bad press.

Rishaad Salamat: So you’re saying it’s a deflection?

Andrew Robb: It is a diversion of the biggest order, and they didn’t complain about the Japanese agreement, they didn’t complain about the Korean free trade deal we did last year either.  But they’re complaining about China and we’re saying you’re just playing off peoples’ fears about a very big country.

Rishaad Salamat: Well perhaps they do have a point, I mean aren’t you becoming over-dependent on China?  You are the most dependent developed country in the world.  Should you be putting all your eggs in one basket?

Andrew Robb: No we shouldn’t and that’s why we completed a deal with Korea, that’s why I completed a deal with Japan last year.  China is very important to us, but we’re such a small number of people; 23 million people while there’s 1.2 billion in China.  We are not fundamental to their whole economy; we are really in many ways, providing the premium end of some of the food stuffs and other services.  But we’re doing a deal with India at the present time which I’m negotiating; we’re not going to put all our eggs in one basket.  The US is still very important to us and of course Europe, so you’re correct, they are getting bigger for us, but eight out of our ten markets are in the region now – our biggest markets.

Rishaad Salamat: Well China again we’ve seen what’s happened; are you worried about what’s going on there, because a severe downturn could be a severe downturn for Australia as a result?

Andrew Robb: Well look, all the major commentators for months now have been predicting that there will be a correction in China, so it happens and everyone runs around as though something unexpected has occurred.  They’ve all been predicting it.  It’s still 40 per cent higher, the Shanghai Stock Exchange, than it was a year ago, so let’s get things into perspective.  Secondly the exchange is still a very small part of the Chinese economy, so the real economy…

Rishaad Salamat: Which is what I’m referring to; I’m not just talking about the stock meltdown.

Andrew Robb: Well it’s the expectations; people fear that the real economy is – and it is slowing down to some extent – but this is the nature of a growth economy.  There will be road bumps, and this is a road bump; what it will do for Australia ironically, is encourage more and more Chinese investment into safe havens like Australia, so at a time when we’re looking for foreign capital – which we need in big doses to keep lifting all that we do up to world standard – the Chinese will have an encouragement to move money down into Australia.

Rishaad Salamat: Now, how would you describe the state of the Aussie economy; it’s a difficult one to read, there are so many different moving parts going in opposite directions.

Andrew Robb: Well as I said, 25th year of uninterrupted economic growth, no other part of the developed world has been in that position.  We’ve just had a huge mining and energy boom, which was of great benefit…

Rishaad Salamat: We’ve just had it is the point, in the past tense.

Andrew Robb: We’ve always had an economy based heavily on resources and energy, and agriculture; they are cyclical.  We’ve had 200 years of getting used to cyclical activity and you look at the economy, there’s been a very quick and rapid movement of capital and labour into other sectors.  Our services sector – 75 per cent of our GDP is services, and yet makes up only 17 per cent of our exports.  The next big move in Australia will be – you’ll see right across the region – rapid growth of our services capability, often in combination with big companies right across the region.

Rishaad Salamat: Minister let’s move on to this other trade deal on the table.  The talks in Hawaii on the Trans-Pacific Partnership Agreement, the TPP, fell apart.  There was hope there could be a handshake, it hasn’t happened.  I think you were quoted on the 13th saying if there isn’t a handshake in the next few days, in your 40 years of experience in doing deals, there’s not going to be one.  Do you stand by that?

Andrew Robb:  I’m not sure if you’ve got me absolutely right there, but I was – and still am – optimistic, we are that close.  We’re 98 per cent of the way there, but there are two big issues that are really more to do with the NAFTA countries and Japan.  If they get resolved in the next, well whenever they get resolved, we would be two days away – two days of negotiations – from finishing; we’re that close.  But there are two quite substantive issues, one on autos and one on dairy, involving not all of us, but some of the big countries.

Rishaad Salamat: But this is your quote: ‘I do think that if we could at least shake on it, it’s formal implementation, the 12 countries could take whatever time is necessary…if we don’t shake on it the chances are, in my experience with deals with business and government over nearly 40 years, is that the chances are it will fall apart.’ And I suppose during an electoral cycle in the US that’s also key to this.

Andrew Robb: I’ve said this in the negotiation, if we don’t wrap this up – we are that close – and I know from business and politics, you can have the corks almost popping on the champagne, and something unexpected occurs and the deal falls apart and you don’t get back to it, so we’ve got to nail this now while we’re nearly there.

Rishaad Salamat: Minister polls are showing that you are (the government) deeply unpopular, particularly the Prime Minister Tony Abbott; is it time to ditch him?

Andrew Robb: No it’s not.  No.  The thing is we’ve got a plan that’s working.  We’ve got an economy that’s got the growth rate equal or higher than any other in the developed world.  We’ve got an economy in transition, more into services, and I think as we get to sell that in the rundown to the election, you’ll see our stocks improve.

Rishaad Salamat: Andrew Robb thank you so much for joining us.  

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