ABC 612 interview

  • Transcript, E&OE
Subjects: TPP-11, US tariffs, trade agenda.
12 March 2018

STEVE AUSTIN: Back from South America, where eleven countries including Australia, last week signed the Trans-Pacific Partnership trade pact. The revised TPP removes almost all import tariffs for member countries, including on seafood, wine, and cotton wool, but what's in it for Queensland? For many years the sugar industry here has been waiting for some sort of trade benefit out of many of our trade agreements, well, Trade Minister Steven Ciobo is my guest. Minister Steven Ciobo, good afternoon to you.

STEVEN CIOBO: Good afternoon Steve, great to be with you.

STEVE AUSTIN: What's in the Trans-Pacific Partnership, specifically for Queensland?

STEVEN CIOBO: Well, there's quite a number of things actually. The TPP will see the elimination of 98% of tariffs across the eleven countries that are involved and Steve, that represents economic activity worth $13.7 trillion. So you get an idea about the size of the markets that we're talking about but specifically for Queensland, we have big beef producers for example Steve, we will see now, because of the TPP-11, we have brand new free trade agreements with Mexico and Canada, as part of this TPP. We will see the elimination of Canadian beef tariffs within 10 years. That's terrific news. Currently there is a tariff of 26.5 per cent, which will go down to zero. Great news for Queensland beef farmers. Likewise, the elimination-

STEVE AUSTIN: Do we have a big potential trade possibility with Canada? I thought most of our export beef went to Asian countries?

STEVEN CIOBO: What we're doing is opening up more markets, Steve.


STEVEN CIOBO: That's the benefit of this. If you're a beef producer in Queensland, then obviously the more markets we open, the more opportunities you have to be able to export your beef for premium price, or alternatively to sell within Queensland for a price. It all comes down to giving maximum opportunity for producers. Whether it's beef or widgets, whatever it is, the more opportunities we open, the more you can sell abroad, which means that you'll need to employ more Queenslanders, or indeed more Australians, to be able to keep up with the demand.

STEVE AUSTIN: What do the other countries who signed get from us? In other words, what have we dropped, got rid of, to get this deal at their end? What are we doing in our end?

STEVEN CIOBO: We've got relatively low levels of tariffs, Steve. There was a decision taken many years ago, to unilaterally reduce Australia's tariff rates under the previous Labor Government. We sit on average with round about a 5% tariff rate. What we've now done under the TPP is reduce that tariff rate, it'll eventually reach down to 0 and moves across different product lines. What that ultimately means for Australian and Queensland consumers as well, as well as businesses, is that they get cheaper business inputs. We know Steve, for example, when it comes to consumer goods, we have seen a reduction, a real reduction in terms of actual prices of consumer goods declining. And one of the reasons they're declining is because we are reducing the import taxes, the tariffs on those goods.

STEVE AUSTIN: My guest is Federal Trade Minister, Steven Ciobo, this is ABC Radio Brisbane, so what about sugar, in particular? I know our sugar growers often feel they lose out in many of the trade agreements. That never quite gets there when it comes particularly to one of their biggest competitors, Brazil, Steve Ciobo, when it comes to sugar. What's in it for sugar growers?

STEVEN CIOBO: Well, look, sugar is an incredibly difficult market because sugar interests are all around the world Steve, so it is the bane of a Trade Minister's life to be honest, to deal with sugar. And I was pleased recently that we got a good outcome with Indonesia, even though we don't have an FTA in place, we're only in negotiations. We got a really good outcome on sugar with Indonesia, but specifically under the Trans-Pacific Partnership, we will see for example, the elimination of Japan's tariff as well as further reductions on the Levy on what they call 'high polarity' sugar, which is going into Japan. We'll also see again under the TPP 11, the elimination of Canada's tariffs on refined sugar within 5 years, as well as the guaranteed 7 per cent quota of Mexico's imports of sugar by volume. So all of these are good outcomes for Queensland's sugar growers.

STEVE AUSTIN: But we didn't get any benefit with South America for sugar growers?

STEVEN CIOBO: Well, South America in terms of Chile and Peru, we have in place now a free trade agreement with Peru, which we put in place. We just concluded that probably about 2 months ago, Steve, and that for the very first time, is giving sugar growers across Australia, but obviously many of them in Queensland, giving them a quota into Peru. A brand new market for sugar growers from Australia.

STEVE AUSTIN: Non-agricultural industries, in other words, manufacturing, what benefits are there for non-agricultural companies here in Queensland? Can you give me an example?

STEVEN CIOBO: Yeah, sure, well Steve what we put is a lot of emphasis on what we can do in relation to goods. It's what they call goods more generally, and the benefit of opening up extra export markets for goods manufacturers is that we can actually then, of course, in the same way we can with agriculture, increase the volumes of those items going overseas. Now, a lot of what Australia does, in what we call 'high-value-add', is advanced manufacturing, but we've also got benefits that have flowed in relation to, for example, medicaments exports. Again, with Mexico, with whom we now have a brand new free trade agreement under the Trans-Pacific Partnership, we will see within 10 years the elimination of medicaments tariffs. We will also see-

STEVE AUSTIN: What's a medicaments tariff? Sorry.

STEVEN CIOBO: It's a type, sorry, it's manufactured medical aids and we also have big exports in actual drugs themselves. And I'm not talking about illicit drugs, Steve, obviously, I'm talking about pharmaceutical drugs. Which is another benefit, another sector that will benefit as a result of the TPP. In addition, Steve, we have for example, under the TPP automotive parts to Vietnam. We will see tariff elimination there within 10 years. And that's important because that's another supply chain for our supplies when it comes to automotive parts. Now, obviously, given the Australian car industry was less and less competitive each and every year, we still have a number of producers of car parts and they can tap into those global value chains, including important car manufacturing countries like Mexico and like Vietnam, and be more cost competitive because of the elimination of tariffs.

STEVE AUSTIN: My guest is Federal Trade Minister, Steven Ciobo; this is ABC Radio Brisbane. How many free trade agreements do we have in place now, Steve Ciobo, of recent time. Can you recall off the top of your head, can you give me a list? Because we've got quite a number of them now.

STEVEN CIOBO: We do, Steve. We have an incredibly active trade agenda now under my stewardship as Trade Minister because I want to continue to open up more markets for Australia. I want to continue to diversify our interest but since the Coalition came to power, we've concluded free trade agreements with Korea, with Japan, with China, with Peru. We updated what we call our comprehensive strategic partnership with Singapore. And we've also now got a negotiation currently, a free trade agreement with what I call the Pacific Alliance Countries, which are Chile, Mexico, Colombia, and Peru. We've got negotiations underway currently with Indonesia, with India, with Hong Kong and I'm hopeful in the very near future, that we'll commence negotiations with the European Union. When the UK exits the European Union, we'll commence negotiations with the European Union. Plus, we've got another major regional trade agreement that I'm working on, called The Regional Comprehensive Economic Partnership. There's all these acronyms Steve, a lot of long, complicated titles in trade but basically that's the ASEAN countries plus six, including Japan, New Zealand, Australia, China, India, all of these are about diversifying Australia's markets that we can export to, to make sure that we have as much opportunity for Australian exporters as possible.

STEVE AUSTIN: I ask this because in a political sense, in terms of Government, it's an achievement to sign things like Trans-Pacific Partnership is a big achievement but people at the grassroots often don't feel it and there's a lot of scepticism amongst the population about free trade agreements and what they actually deliver for Australians. I know the AMWU, the Australian Manufacturing Workers' Union, put out a statement last week essentially condemning the Trans-Pacific Partnership. And I just wonder why you think there's this disparity why governments try and get these things locked away, and they're a real achievement when you get it, but the grassroots of Australians don't see the benefit or don't feel the benefits of the free trade agreements.

STEVEN CIOBO: I think there's a couple of reasons for that, Steve. And look, I acknowledge that there's a certain percentage of the population that thinks that free trade or liberalized trade is in some way a bad outcome and look, I don't agree with that point of view but I certainly understand that that's a view that they hold sincerely. But the simple fact is that as a nation you cannot get rich by only selling to yourself. I mean, if you want to take that to the extreme, you could say, "Well, you know, Queensland should only sell to Queensland and we should have tariffs on good that are coming from New South Wales." Or, "The Eastern Seaboard should only deal with Eastern Seaboard and we should have tariffs on products coming from the West." I mean, you know, or maybe, "Australia shouldn't have free trade with New Zealand. We should have tariff barriers between New Zealand." Or you could take it out another layer and say, "Well, we shouldn't have free trade with China," or, "We shouldn't have free trade with the United States." Simple fact is Steve, is that trade is good and the reason why trade is good is because it boosts economic activity and it grows jobs. And if you look at, for example, just the trade data for Queensland, in the last 12 months in 2017 versus 2016, we have seen, globally, two-way goods trade from Queensland to the rest of the world, grew by 22.2 per cent. The total value of exports grew by 25.8 per cent and that matters Steve, because if you're growing exports by that quantity, nearly double, a quarter, 25 per cent growth, then guess what? You need to employ people to be able to meet that demand. And that's part of the reason why under this Government, we have seen over the last 12 months, the number of full time jobs created grow by 403,000 or I should say the number of jobs growth of 403,000, 75 per cent of those 403,000 were full time jobs.

STEVE AUSTIN: I appreciate you coming on. Thank you very much.

STEVEN CIOBO: Good to speak to you Steve.

STEVE AUSTIN: Federal Trade Minister, Steve Ciobo.

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