PETER BEATTIE: Of course, we've got the Minister for Trade, Steven Ciobo, who's joined us; he also has tourism in his portfolio. And the Minister, I must say, is also a representative of the Gold Coast, so he's in the heart of the Commonwealth Games. So, Steven, firstly thank you for your support for the Commonwealth Games as the local member, and it's great to have you on the show.
STEVEN CIOBO: Good to be on with you both, and thanks very much. I'm looking forward to the Games. The countdown's on, as you know, Peter. It's not far away.
PETER BEATTIE: No, it's not far away. I have anxiety every morning. Steven, talking, getting past my anxiety, but getting to the issue of free trade, Steven, one of the things in theory as both Campbell and I, 'cause we've talked about it, is that there's not enough appreciation about what free trade means. And a lot of good people actually oppose it because they don't understand the benefits of it. I just wonder, can you explain to our audience what does free trade mean and what are the benefits for Australia as a country?
STEVEN CIOBO: Well, free trade, or liberalised trade, basically means removing barriers to trade, and more often than not, those barriers are tariffs, Peter. A lot of Aussies would realise that these days in Australia you can get access to pretty much anything. There's a lot of food stuffs that we have here, there's a lot of products that we have here, a lot of them have come down in price. I mean, we, for example, have seen the prices of fresh food, as well as consumer goods like TVs, and a whole range of different items declining over the years, and part of the reason they've been declining is because we've put in place these liberalised trade deals. Now, also, the other big benefit that flows from it is we can export so much more to the world. Two-thirds, two-thirds of the food that we produce here in Australia we export, so our regional and rural sector, in particular regional and rural Australia, they absolutely must have access to overseas markets, in order to be able to generate prosperity and wealth for not only their own families, but the communities in regional Australia as well, which rely on those exports.
PETER BEATTIE: So, let me ask you this, then. Does Australian business need to take more advantage of these free trade agreements? Can they do more? Should we be out there more aggressively taking advantage of these deals that the government's done?
STEVEN CIOBO: We've seen really strong growth in exports. If you look at the last calendar year, more than half of Australia's growth in GDP actually came from exports. We've put in place as a Government, we've been unapologetic about it, we've put in place really comprehensive free trade agreements with China, with Japan, with Korea. We just did one the other day with Peru, and I'm about to go and sign the Trans-Pacific Partnership, which represents 10 other countries that Australia's joined with, some $13.7 trillion, not billion, $13.7 trillion worth of economic activity, so these are really big markets and the fact is we are getting Australian produce, Australian goods, Australian services, Australian manufactured items out there into those markets and generating wealth for our country.
CAMPBELL NEWMAN: Steve, just before I ask this question, I reflected that you must be dead on your feet. I note that you've just come back from, I think, United States as well. The PM was over there, so thank you for being with us. I hope the jet lag's not too bad. But, look, what do you say to the increasing chorus of voices, we were reflecting on this just prior to you joining us, where people are sort of pitching this sort of, "Oh, it isn't working for Australia. It's hurting Australia. We've got to have fair trade not free trade," all that sort of stuff. What do you say to the critics?
STEVEN CIOBO: Sure. Well, I think you know, if you want to the extreme example, Campbell, and they want to see the difference between a country that engages with the world and a country that shuts itself off from the world, in other words a country that doesn't want to do trade with the world, look no further than the Korean Peninsula. When you've got South Korea, which is open to the world, attracts investment, exports products around the world, including Samsung and LG and Kia motor vehicles, for example, and look at how prosperous South Korea is, and then compare it to North Korea, which puts up barriers, says, "Oh, no, we're not going to deal with the world," has all sorts of sanctions imposed on them, and you can see how impoverished those people are. But there's other examples globally. I mean, you can look at, for example, in Latin America, countries like Argentina. Argentina used to be one of the richest, if not the richest country in the world on a per capita basis. They've put all these barriers in place and said, "We're only going to trade with ourselves. We want to stop imports coming into the country. We don't want to have to compete with foreign countries," and lo and behold, what happened? Their standard of living collapsed, and Argentina then became much poorer as a direct result of following those kinds of policies.
CAMPBELL NEWMAN: Well, why do you think it is, Steve, why do you think it is that this sort of anti-free trade rhetoric, though, is getting a bit of a leg-up in Australia? That's my sense of it.
STEVEN CIOBO: Sure. Well, it's not just Australia, and what I actually think it is, to answer your question really directly, is we've got this convergence right now, a convergence where we're seeing, for example, the loss of competitiveness in some manufactured items. People will often say to me, "Oh, Steve, you know we don't make cars anymore. We used to make cars. We should've kept tariffs in place, we should have kept barriers in place so that Australians can keep making cars." But what they fail to recognise is that Australians are voting with their feet, Campbell. I mean, we saw year after year, where Australians were choosing to buy cheaper imported cars over the big Australian-made cars. We saw, for example, where cars were becoming more and more and more expensive because we kept having to put taxes in place to try to shield the local industry, when all we actually need to do is make sure that we can compete. The way we compete is by making sure that those products that we can sell to the world really cheaply and you know we're really strong in resources, we're really strong in agricultural products, and increasingly, we're really strong in new services, things like lawyers, architects, a whole range of other services like that, where we can export those services to the world. That's what's creating job growth in this country, and really strong job growth.
PETER BEATTIE: Steven, as you gather, Cam and I are both strong supporters of free trade, but when we were in office, and we both had this experience, we were prevented from pursuing a tender process, which gave preference to local companies. I just wonder whether sometimes these free trade agreements go too far in limiting state and local government in a tender process. What's your view on that?
STEVEN CIOBO: Well, look, Peter, I don't think they do and here's the reason why, because there are actually a whole range of exemptions that are in place. If you're in government, for example, you can give extra weighting to businesses that are small businesses, or medium sized businesses. You can give extra weighting if you're a local council to local businesses in that local council area. What we want to achieve for taxpayers is value for money, so if there's an Aussie product, or an imported product, and the Aussie wants the same price, then you can get the Aussie product. That's not a problem. If you're a local council and you say, "Well, it's nuts. I'm not going to get a service from Singapore somewhere if we can buy it locally," again, of course, that's just common sense. So what I often see, though, is people will blame trade agreements for things that actually have nothing to do with trade agreements at all. I see it time and time again where people say, "Oh, we didn't get that contract," or, "We lost out on this deal," and then you ask them "Well, why is that?" And they say, "Oh, it was because of a trade agreement." But then when you actually dig a bit deeper, you find that it had nothing to do with a trade agreement at all.
PETER BEATTIE: Okay.
CAMPBELL NEWMAN: Do you think though that the peak business bodies, perhaps in this debate, should be more assertive about your benefits for their memberships and business and economic activity in Australia generally, or are you getting good support, do you think?
STEVEN CIOBO: Well, look, I'm certainly not pointing my finger of blame at anyone. That fact is we all have to do the heavy lifting when it comes to defending why free trade is good for Australia, but I'm really pleased because what I think makes Australia a bit unique is that, for example, the National Farmers' Federation, our peak body representing the farmers across Australia, they are the ones that are out there saying trade is good for Australia. This is creating prosperity for our country, it's creating employment for our country. If you look at just some of the details, for example, I mean, why? Our biggest export market for wine now is China. We export around $500 million worth of wine to China. If you look at beef, we export over $2 billion worth of beef to Japan. You know, this is all about driving jobs back in Australia, and the proof of the pudding is in the tasting, as they say, gentlemen. As a Government, under the Coalition, we've seen, in the last 12 months, 403,000 new jobs created here in Australia, 75 per cent of them full-time jobs. That's over 1,100 jobs a day that are being created, and the reason that we're creating these jobs is because we are growing export markets for our country.
PETER BEATTIE: Steven, the TPP, you've just been to the United States and Washington, and you're aware what the Prime Minister and the President had to say. Do you think that President Trump is going to reengage with the TPP? You said you're just about to sign, if you like, the abridged version, because the Americans are out of it. It's still important, don't get me wrong. I'm not trying to demean it. So are the Americans likely to come into the TPP? What was your view of the flavour from the President when you were in the United States?
STEVEN CIOBO: Well, I've been in politics long enough, Peter, to know not to sort of crystal ball gaze and forecast what might happen. What I will say is that certainly there's been a slight change in language around the TPP. President Trump initially indicated no interest in joining the TPP and then, more recently, both now on our visit to the United States as well as the speech that he gave in Davos in January this year, the President said, "Well, look, if it was renegotiated so it was a better deal for America, then we'd look at re-joining." So, you know, it's a slow change in language. I welcome it. I actually think that the Trans-Pacific Partnership is a really good deal not only for the USA, but for Australia and the other countries as well. And, gentlemen, I make one key point as well. A lot of people think trade is a zero-sum game, and what I mean by that is they think, well, if one country wins, another country has to lose, but that's not how it works. How it works is that you actually create win-win outcomes. So a good trade deal is good for Australia, it's good for the United States. It's good for Australia, it's good for Japan. That's how these trade deals work best.
CAMPBELL NEWMAN: Steve, would you like to just take an opportunity, 'cause often politicians don’t get enough time on these programs to really get into some detail. Do you want to just talk about, at a high level, the TPP and how you see it benefiting Australia? What are the key wins that we should get out of this?
STEVEN CIOBO: Well, there are some really big wins that come from a Trans-Pacific Partnership. First and foremost, 98 per cent of the goods under TPP will be tariff-free, which means that it won't be extra taxes on them. Now, that's great at making Australian exports much more competitive, plus we also now have access, as I said, to 10 other markets besides Australia. That's a total market size, in terms of economic activity, of over $13.5 trillion. This is going to mean that Australia could export, let's put it in concrete terms, you know we've been talking about beef. Australia can export beef now to Japan much more competitively than without the TPP. So if you look at, for example, our position compared to the United States, well, US beef going into Japan has to pay a whopping, great, big tax or a tariff on that US beef. The Australian beef goes in much more cheaply, so if you're a Japanese consumer, you're saying, "Well, where am I going to buy my steak?" the Australian beef is much more competitively priced than the US beef. That means more demand for Aussie product.
PETER BEATTIE: Steven, let me ask you the question that I get quite regularly, and the fact that I was at an event in Redcliffe on Saturday night and a local businessman came up and asked me this very question. He's in manufacturing, and what happens is he's worried that in the construction industry, for example, cheap Chinese imports, kitchens and so on like that, are forcing his company out of business. So, are there some companies that are in manufacturing for construction, are they disadvantaged, and if they're not, then how do they cope with that? How do they deal with that sort of internal, those products that are being imported?
STEVEN CIOBO: Well, the answer's it depends, Peter. What I mean by that is it depends on which space you're in. Now, I was talking before about televisions, for example. We did used to have a couple of businesses that manufactured TVs in Australia, and that's no longer the case. The reason it's no longer the case is because they weren't competitive. Australians were voting with their feet, they said, "We can get better quality TVs more cheaply from overseas," and that's what they started buying. Now, that's actually good news for Australian consumers because it means that they can get better quality products more cheaply. Now, the flip side of that coin is that if you happen to be a manufacturer who's making something that's wanted around the world, well, guess what? You can manufacture that item and now get access to export that item into overseas markets, more competitively priced, which is seeing really strong growth. Now, we've got some great examples in Australia of manufactured, in particular, what we call advanced manufacturing, where we've got Aussie businesses employing local Aussie workers, creating amazing new manufactured items which they are then exporting, and really strong growth in those areas.
PETER BEATTIE: Okay. Steven, unfortunately we're out of time, but can I thank you for your time? We intend to pursue this, and it's an issue where I think we need to have more, and I know Cam shares this view, we need to have more constructive debate about this 'cause otherwise, it’s misconceptions that will confuse people and free trade won't have the support it deserves, so thanks for being with us.
CAMPBELL NEWMAN: Thanks, Steve.
STEVEN CIOBO: Good to speak to you both. Goodnight.
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