Barrie Cassidy: Simon Birmingham, good morning, welcome.

Simon Birmingham: Morning, Barrie, great to be with you.

Barrie Cassidy: When do you expect the free trade agreement with Indonesia to be signed?

Simon Birmingham: Well, I hope, Barrie, that it will be signed in the coming months. There were some translation issues still being dealt with last week in terms of the Bahasa version of the text. We'll get all of those finalised and then, when it suits both countries, we'll get on and get it signed, because it is clearly an agreement that is of benefit to both countries in terms of the flow of trade, the flow of investment, creating more opportunities for Australian exporters, creating more opportunity for economic development within Indonesia.

Barrie Cassidy: I don't think it's been lost in translation. The problem seems to be the embassy issue and the Indonesians have made that clear.

Simon Birmingham: Well, Barrie, as I say, it will be signed when both parties are ready to do so. We don't conflate the two issues. We will address the embassy issue and we'll do so through proper process. I heard your intro piece. You know, just last week Bill Shorten was criticising a lack of process, now he's saying we should abandon all process. What the Government is doing is precisely what Scott Morrison said he'd do, which is to consult leaders through the summit season. We'll then, of course, bring together the expert advice of our senior officials, and we'll have a proper Cabinet decision at the end of that process.

Barrie Cassidy: Do you think the Indonesians are bluffing when they link the two?

Simon Birmingham: I think Indonesia recognises the real economic benefits of the trade agreement that we've negotiated and I hope and trust we'll see it signed and fully implemented. We understand the concerns that Indonesia has in relation to the embassy issue is a quite separate matter. And of course Australia will make our foreign policy decisions based purely on Australia's national interest, but judging, as we would, it against our values as a nation, ensuring it's consistent with our understanding of Security Council decisions through the United Nations. These are all important factors that we'll consider. Ultimately, our national interests, our processes, will inform our decisions. But we hope and trust that will also see the trade agreement signed and delivered because of those mutual benefits to both Australia and Indonesia. And Indonesia's growth and economic empowerment is so critical in terms of ensuring a stronger region, stronger ASEAN nations and the balance that exists strategically within our region.

Barrie Cassidy: Are you prepared, though, to take the diplomatic and economic consequences that might come from a decision to change the embassy in Israel?

Simon Birmingham: We will consider Australia's national interest in the final decision and that means having a look at all the different factors that are at play. Of course we will do it, as the Prime Minister has said, mindful of whether it contributes positively towards achieving a two-state solution. That is the number one objective in terms of decisions as they relate to the Middle East. We'll do it mindful of UN Security Council resolutions and ensuring we're working within the framework of those resolutions. They're important considerations, but so too are all of the overall economic, security and other implications. That's why we're having a proper process, that is why Scott Morrison is openly engaging with world leaders to hear their opinions. It's why our senior officials will bring together the expert evidence, and it’s why, in the end, it will be a proper Cabinet decision fully informed by all of those factors.

Barrie Cassidy: Senator Fierravanti-Wells, in that Guardian interview that we mentioned earlier, said she supports moving the embassy and she's not afraid of the commercial impacts. Is that something you think you'd have public support for? That you would take the decision on an embassy that has no, really, material value, little influence, probably, on Middle East policy, and yet you're prepared to wear commercial impacts from that decision?

Simon Birmingham: We should and we will, as a government, consider all of the implications in relation to the embassy decision…

Barrie Cassidy: Including commercial impacts?

Simon Birmingham: All of the implications. Its security implications, economic implications. When we say it will be determined in Australia's national interest that's what we mean. Australia's national interest. And of course it's in our national interest to see the two-state solution progress. We all know that for decades, now, there has basically been intransigence and little progress towards achieving that two-state solution between Israel and Palestine. If decisions or a process that can flag how you might see embassy relocation settled can help advance that, well then that's great. But we have to consider that against the UN Security Council resolutions and making sure we work within the framework of those. And yes, we consider it overall against our values as a nation and our national interest as a nation. And our national interest is, of course, an interwoven network of complex factors: security factors, economic factors, strategic factors, and we have to bring all those together. Which is why we shouldn't take Bill Shorten's advice and just throw the process out the window and make a decision tomorrow. We should do as the Prime Minister said: complete the process, take the next few weeks and then we'll make a fully informed decision.

Barrie Cassidy: And before Christmas, presumably.

Simon Birmingham: That's what the Prime Minister's committed to.

Barrie Cassidy: He's also said repeatedly, though, that Australia will not be dictated to on its foreign policy. You've said pretty much that this morning as well. But because he's framed it in those terms, isn't he locking himself into a decision now to actually support the moving of the embassy?

Simon Birmingham: We won't be dictated to in our foreign policy, nor will we be reactive to the statements of any particular world leader or anybody else, for that matter. This has to be a decision based purely on the national interest. And so in that sense, yes, others will have opinions and they're free to voice their opinions on the way through. That’s, one of Australia's core values is the belief in free speech and people can exercise their right to it. However, we will make our decision based on Australia's national interest, the criteria that I outlined before. We won't be bullied into a decision by any other nation. But nor should we or will we be reactive to the comments of any other nation in the decision we make. It has to come down to our national interest, to the advancement of the two-state solution to ensuring that we work within the framework of those UN Security Council resolutions, and that in the national interest we assess all of those complex, interwoven factors.

Barrie Cassidy: On trade more broadly, the Prime Minister yesterday spoke against this tit-for-tat protectionist policy, the threats of a trade war and so on, and he said that's in nobody's interests. Is that a repudiation of Donald Trump's approach?

Simon Birmingham: Well, we have had a consistent policy and commentary for some time now that we don't support unilateral tariff increases. We do see those as undermining the way in which global trading rules work. Just as we don't support those who pursue subsidies in ways that undermine the free or competitive trading environment, or those who might apply policies that undermine intellectual property rights or the like either. So, we've been consistent there, and yes, we have been critical of the US in terms of those unilateral tariff decisions. We urge more dialogue between the US and China and we've been encouraged by some of the recent signs that suggest there has been, between President Xi and Donald Trump, increasing levels of dialogue, and we hope that will continue in the G20. And we hope, importantly, that that will head off the threatened increase in further tariffs on the first of January. Because all of those protectionist instincts, all of those increases to tariffs that occur, of course, are a potential dampener to global economic growth and that has repercussions for us and every other country.

Barrie Cassidy: You say that you have been critical of the United States, but the comment yesterday where he was expressing concerns about protectionism, and yet about four days before that in the interview with The Australian he said that he didn't agree with the protectionist interpretation of the US approach. The two don't seem to sit that comfortably together

Simon Birmingham: Look, I looked closely at the Prime Minister's comments, both in his speech yesterday and the interview with The Australian. The interview with The Australian was about the long-term ambitions and approach of the US. And I do still believe, from my dialogue with US officials and others, that they want to see an open trading environment, that they believe in trade liberalisation. Their disputes are real disputes with some genuine concerns about the approaches of other nations. What we don't agree with are some of their short-term tactics in response to those long-term ambitions. So, their short-term tactics are protectionist in instinct because they're increasing tariffs and that's a protectionist measure. But I think in the long term they hope, and we saw this in relation to the agreement they struck with Mexico and Canada, is that ultimately they laid down arms, they walked away from threats and they struck a new trade deal that ensures trade continues in that North American bloc. We hope the same will happen in relation to China. There's a deadline of the first of January. We hope the parties discuss at the G20 and through other fora to ensure we don't see that escalation further of tariffs at the first of January and that we can see, indeed, the parties work to continue the type of trade liberalisation and market access that has, over the last decade or two, lifted hundreds of millions of people out of poverty and increased incomes right across the world. That's what we've seen and achieved from global free trade and that's why it's worth fighting for and it's why Australia takes such a strong and consistent approach at APEC, at the G20 and in defence of global trading rules and openness.

Barrie Cassidy: Just finally, on Brexit, and I won't ask you the impossible question about how all that will end. But in the meantime, while this is being played out, what approach do you take in terms of trading separately with the EU and Britain?

Simon Birmingham: Well, ours is very much a belt and braces approach, Barrie. And that is that we already have free trade agreement negotiations underway with the EU, we've established a trade working group with the UK, we are ready for pretty much any possibility that arises. We have been replicating text from some of our market access agreements with the EU, so that if need be we could bring those into effect with the UK quite quickly should there be an abrupt, perhaps no deal Brexit. Equally, we'll deal with whatever scenario. If trade policy for the UK is to be determined still in Brussels rather than London, well, our EU trade negotiations will take care of it. If it's to be determined more in London then we're ready come March 30, the key date next year, to kick-start fully trade negotiations with the UK separately whilst continuing our work on the EU agreement.

Barrie Cassidy: All right, thanks for your time this morning, appreciate it.

Simon Birmingham: Thank you Barrie.

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