HAMISH MACDONALD: I spoke with him a short time ago.
STEVEN CIOBO: Good to be with you Hamish.
HAMISH MACDONALD: As we heard just there from Steven Kirchner, the Director of the United States Studies Center, he says we do need to be worried about these trade wars spiralling out of control. How concerned are you at this point?
STEVEN CIOBO: I'm concerned, but I'm not alarmed, to use the cliché. The fact is that, of course, we need to be vigilant in terms of watching conditions on the trade front. Australia's a trading nation. But this is precisely the reason why the Turnbull Coalition Government is focused very strongly on opening up market opportunities. We did that, of course, most recently, in terms of the comprehensive TPP-11. This has opened up a lot of new market export opportunities for Australian producers. And that's great news in terms of helping to ensure that we have a more diversified approach when it comes to trade, which helps to safeguard our economic growth and our jobs.
HAMISH MACDONALD: Sure, but I suppose the question, ultimately, is whether that more diversified approach, and indeed the broader global economic outlook is enough to absorb the turmoil that is unfolding. Because other countries affected by the US tariff rules are imposing retaliatory measures. And that will have impact, undoubtedly.
STEVEN CIOBO: Well, Hamish, you're effectively asking me how long is a piece of string? What I can say is, from a policy perspective, it's been the Turnbull Coalition that's delivered the exemption for Australian steel and aluminium with the Trump Administration; it's been the Turnbull Coalition that pressed on with the TPP-11 even when the Labor Party said that we should be retreating, and in fact, Bill Shorten described it as a vanity project; it's been the Coalition that's delivered, of course, free trade agreements with Japan, with China, and with South Korea and, as you know, I'm pursuing the most ambitious trade agenda in Australia's history. We have trade negotiations underway with Indonesia, Hong Kong, Pacific Alliance countries, the Regional Comprehensive Economic Partnership. We've commenced negotiations with the EU. Shortly we'll commence negotiations with the UK and with India. So, you know, it just speaks to a very full dance card, which is all about that diversification.
HAMISH MACDONALD: This question is much more specific than how long is a piece of string? Ultimately it comes down to whether or not you believe that all of those activities that you're pursuing is going to be enough to counter the turmoil that the broader trading environment is facing. Do you actually believe that that's the case?
STEVEN CIOBO: Look I do. And we've seen, basically, a third of Australia's economic growth being driven by growth and exports. You don't have to go very far, whether it's in terms of the manufacturing sector, the agricultural sector, the services sector, to speak to Australian businesses that will speak of the success they're having because we've been able to get them preferential market access into export markets. Now, fundamentally, this is being driven by the fact that we know that access to these markets, that growth in Australian exports drives economic growth in Australia and helps to drive employment, and those employment opportunities mean that Australians can be more confident about their future.
HAMISH MACDONALD: You're in the UK at a pretty interesting time it must be said. It's always been the case that a free trade agreement would not likely be possible if the UK stayed in the European Union's customs union. The Customs Bill to remove Britain was passed in the last few hours after a deal with Tory Euro-skeptics. There are significant amendments though, where does that leave the prospect of an FTA between Australia and the UK post Brexit?
STEVEN CIOBO: Well, I met with Liam Fox this afternoon my time, in London, we had a very good discussion and both of us remain absolutely committed to a comprehensive, high quality FTA between the UK and Australia, that has been our focus and in fact, that's the reason why Australia was the first country with which the UK formed a working group to deliver precisely upon this ambition. So, we remain steadfastly committed to working through that process, but obviously, and understandably, the UK's number one priority is the arrangements that they will have formally exiting the EU, so we've gotta let that work through before we're able to comprehensively delve into our negotiations.
HAMISH MACDONALD: And do you acknowledge that a softer version of Brexit, the Theresa May Chequers plan, where there is no customs union but perhaps a common rule book between the EU and the UK, might in fact make it harder for Australia to set up any kind of meaningful FTA?
STEVEN CIOBO: Well, there's nothing inconsistent about the Chequers statement, or indeed, the White Paper that would be an inhibitor on the ability to do a high quality FTA between Australia and the UK-
HAMISH MACDONALD: There's a lot of Tory Brexiteers think it would.
STEVEN CIOBO: Well, I think it all comes down to where you wanna take the projection. I am, frankly, not that interested in crystal ball-gazing, my focus is on dealing with the lay of the land, and that's why I was over here speaking with Secretary Fox, my counterpart, it's precisely the reason why I'm looking very closely at the language. But I think we need to be realistic. It is perfectly understandable that the UK is going to seek to do the best deal that they can with the EU, it's a massive market right on their doorstop and realistically that is going to preoccupy their focus and attention. Once they have worked out ultimately, and bear in mind it's a negotiation as well, so these things aren't fixed, once they work out ultimately what that shape will be, that is then when Australia can engage in a substantive way, in a comprehensive way, beyond the sort of scoping that we've been having here, the ambition discussions that we've been having so far.
HAMISH MACDONALD: But how then would Australia be able to trade more agricultural goods with the UK, if the UK ends up with a common rule book with the European Union on goods? I mean it's hard to really understand how that could happen.
STEVEN CIOBO: Well, you're blending two separate issues there. The rule book on goods, in terms of rules of origin, is separate to agricultural market access. Look, ultimately, what I want to do, as I said, is put in place a high quality comprehensive deal between Australia and the UK, I said to Liam Fox-
HAMISH MACDONALD: Of course you do, but let's be a bit specific about this, I mean these are lovely statements that you're making about the potential there, but let's talk specifics. How would you get this access for Australian businesses into the UK market if there is this softer Brexit model?
STEVEN CIOBO: Yeah, but Hamish, what you're wanting to talk about are assumptions and crystal ball-gazing. And, frankly, I don't see any value in doing that. What I made very clear to you, is that we will assess the lay of the land once the UK has reached their final position with the EU, that's what then will be necessary precursor for us to make that decision.
HAMISH MACDONALD: If that's just crystal ball-gazing, what are you actually talking to Liam Fox about? Because his views on this are very well known.
STEVEN CIOBO: Well, for example, if they had indicated that off the back of the Chequers arrangement, the Chequers statement, that they had reached a view that they were going to be part of a customs union, well then obviously that would make things much more difficult, but that is not the situation, so clearly there's a lot of benefit to be gained from ensuring that we're both walking in the same direction in terms of our ambition. At the end of the day, we both want to have a high quality, comprehensive deal, that's what Australia's committed to, that's what the UK is working toward, but they have a negotiation that they need to undertake, with respect to the EU, and as I've made the point repeatedly now, that's understandable that, that would preoccupy their focus and their attention in the short term.
HAMISH MACDONALD: Formal negotiations on any deal can't start before the UK does actually leave the European Union, which is due next March if everything goes to plan. If a deal is done, what would be the rollout, who would be the big winners from Australia's point of view?
STEVEN CIOBO: Well, again, I think we're getting a little ahead of ourselves. I don't, and I have refrained from ever making specific commentary about which sectors will be winners or who won't be, because obviously that would be determined by the nature of the deal. But if we do a comprehensive, high quality deal, the focus of that will be ensuring that we get a win-win outcome. The biggest mistake a lot of people make with respect to trade deals, is to think that it's a zero-sum game. They think well if one side wins in one area, then the other side must lose in that area. And that's simply not what a good trade deal is about. A good trade deal means that we have better market access to each other's markets that boosts our opportunity to drive goods exports, it boosts our opportunity with respect to services exports and it boosts opportunity for investment into each other's economies, which helps to drive economic growth and employment.
HAMISH MACDONALD: Obviously, the prospect of no deal on Brexit is live at the moment, given the complicated political situation that exists for the British Government right now. Do you have a view on what no deal would mean, in terms of the broader trading environment?
STEVEN CIOBO: Well, that's a difficult question to answer. The reason being because if there was no deal, what would that actually manifestly mean for the UK? Would that mean that there was a continuation of the customs union or would it mean that you have what is effectively a hard Brexit, where you actually would have no market access for the UK, this is the point. There's so much speculation about what might happen because clearly, politically, things are quite fluid in the UK, and this is what they need to work through. But Australia is a good friend, a good partner, we have, as I said, a shared level of ambition about what we would be able to achieve together, so I wanna be a constructive player in that process, not someone who's getting in the way with idle speculation about what may or may not happen.
HAMISH MACDONALD: Sure. We heard at the start of this conversation, you know, a very long list of all the things that you and the Australian Government are pursuing in terms of opening up trade. As you travel around the world and look at, I suppose, the general trajectory of things, do you actually think we're entering a period where things are going to be much more difficult for countries that want more open trade?
STEVEN CIOBO: This is an interesting question and my experience in terms of the many conversations that I've had is that, while we are seeing a rise of protectionist sentiment in certain quarters, I've been quite buoyed actually, that there's been a reaction to that in other quarters, that says we're going to double-down in terms of liberalising market access, and that's presenting a rich vein for Australia. That is in part a key reason why, under the Coalition, we've pursued the TPP-11 and ultimately achieved success in terms of maintaining that agreement. It's also the reason why I've been able to now have negotiations underway with the EU, it's what lay behind the negotiations we're having with the Pacific Alliance countries, likewise we haven't yet concluded but we're getting close, on Indonesia and Hong Kong, all of this being driven by a view among a number of countries that, in the face of some of these quarters having a more protectionist bent, we're gonna do the opposite, which is to continue to liberalise and open up new export opportunities.
HAMISH MACDONALD: Steve Ciobo, thank you.
STEVEN CIOBO: Good to speak to you.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555