ABC Radio, Radio National

  • Transcript, E&OE
Subjects: Trans-Pacific Partnership; Regional Comprehensive Economic Partnership (RCEP); Chinese Investment.
20 September 2016

FRAN KELLY: Australia's Trade Minister, Steve Ciobo, joins us from Hong Kong this morning. Minister, thanks very much for joining us.

STEVEN CIOBO: Good morning.

FRAN KELLY: Prime Minister Malcolm Turnbull has indicated overnight from New York that if the Congress doesn't ratify the TPP in the so called lame duck period before Barack Obama leaves office in January, there is no plan B, so eight years in the making, is this agreement basically dead in the water?

STEVEN CIOBO: Well as I've indicated, I remain cautiously optimistic about the prospects of the TPP being ratified by Congress. Ultimately it's a decision for the Congress. The advice that I've had from those who, let's call them students of congressional politics, indicate that the lame duck session does hold a chance for the TPP to be ratified, but ultimately we won't know until after that lame duck session has passed.

FRAN KELLY: It's pretty hard to see how that would happen, given both presidential candidates are now quite fiercely opposed to it. Neither Trump nor Clinton would support the agreement. I'm wondering what you base your confidence on actually, because the Senate Majority Leader, Mitch McConnell has indicated he won't bring it to a vote.

STEVEN CIOBO: Confidence is different to cautiously optimistic, but ultimately it comes down to a couple of things.

FRAN KELLY: It's true.

STEVEN CIOBO: Ultimately it comes down to a couple of things. The first is that the Obama Administration is politically very committed to seeking the passage of the ratification through the US Congress so they're working diligently toward that outcome. And it will require some Republican support. Now, I recognise that there are a number of Republicans in the Congress who have indicated that they're not supportive of it. I've spoken with others who are supportive of it. Now ultimately, what comes to pass, whether or not it's a, for example, a Trump victory or a Clinton victory, will have a bearing upon, I think, ultimately what the US Congress does and where the Republicans go, and obviously what the Democrats do.

FRAN KELLY: No trade deal is perfect, but how has this one ended up such a pariah in the US and in other parts and with some here in this country on the left and the right? Is it because of the lack of transparency around these deals, that's allowed people and fear and conspiracy theories to grow?

STEVEN CIOBO: No, I mean, I reject the notion that there's been secrecy in relation to this. For example, in the Australian Parliament –

FRAN KELLY: Well we couldn't see it for a long time.

STEVEN CIOBO: Yeah, but there's nothing unusual about that. Let's be realistic about how these trade agreements work. One, while a trade agreement is actually being negotiated, there is broad stakeholder consultation. And the reason that all the information is not disclosed during a negotiation is because it entirely defeats the purpose of a negotiation. Now here's the crucial point though: Once an agreement has been reached it then goes, in Australia's case, it goes to the Parliament. And the Joint Standing Committee on Treaties will look at that, they look at all of the text of the treaty to have a full public open inquiry into it. Stakeholders can comment, NGOs can comment, interested third parties can comment, I mean it's all available. There's absolutely nothing secret about that aspect once an agreement has been signed. Now bear in mind, signing an agreement does not in any way, shape, or form make it binding. That's why you have the ratification process. So I just reject entirely the notion that these things are done in secret because they're not. And while they're being negotiated, there is very broad stakeholder engagement and consultation because that, of course, is what ultimately drives our nation's negotiating position.

FRAN KELLY: Some believe, a lot of people believe, that these big deals like this is mega-multilaterals, basically only end up benefiting multinationals by opening up new inexpensive labour markets to the detriment to workers in their home countries. That's the line Donald Trump has been arguing and that line I think probably being politically exploited by both presidential candidates in this election. Is there some truth in that?

STEVEN CIOBO: Well that's not my view. My view about free trade agreements is that they ultimately work in the best interest of our nation. Now if you look at, for example, the way in which Australia has been able to capitalise on the world-class market preferential access that we've been able to negotiate under both the Korea-Australia Free Trade Agreement, the Japan-Australia Economic Partnership Agreement, which is a free trade agreement, and the China-Australia Free Trade Agreement. Now I've had the opportunity to travel across Australia to meet with small to medium size businesses who are capitalising on this opportunity. The increases that we've seen, for example, in agribusiness products, beef, table grapes, as well as wine exports, moving into those markets now because they have preferential access is delivering a big economic dividend to our country.

FRAN KELLY: Some US lawmakers are calling for the TPP to be renegotiated. If that's what it took to get it through would Australia be open to changing the deal if it was to mean saving the TPP, in particularly in the area including biologic patents is the area usually put, where Australia's got a pretty good deal really under the current agreement?

STEVEN CIOBO: Well look there's certainly no scope or appetite whatsoever for us to renegotiate on biologics, we have a very firm position on that and that's not changing. But look, Fran, I don't see an opportunity for this to be renegotiated. The agreement has been negotiated now, it's been struck. It's now up to each of the 12 member states to move through the ratification process. If the US doesn't ratify, then basically the TPP is dead in the water for the foreseeable future. So we really only have the shot in the locker, that is the lame duck session. Now as I indicated to you at the outset, I'm being told to be cautiously optimistic about its prospects through the Congress and we'll just have to wait and see what happens.

FRAN KELLY: You are listening to RN Breakfast. It's 12 past 8[AM]. Federal Trade Minister, Steve Ciobo, is our guest. The Prime Minister sees the deal very much in strategic terms and he's been talking about commerce and trade as "powerful as ships and planes". Given there is a rival trade block being put together by China, the Regional Comprehensive Economic Partnership, what could happen to global security do you think if the US effectively shuns the region by abandoning the partnership and the two other regional powers, China and India, are tied together through this alternative, RCEP?

STEVEN CIOBO: Well Australia is well-placed with respect to the Regional Comprehensive Economic Partnership, or RCEP as it's called. We are a negotiating party in RCEP. I'm obviously pursuing Australia's national interest under RCEP as well. I mean Fran, this is a big, multination trading block as well. If we're able to get the agreement over the line and we want it to be a high-quality comprehensive agreement, that's going to be good for Australia, it'll be good for Australian exports, and ultimately, this is an agreement that potentially embraces more than 30 per cent of global GDP and more than 50 per cent of the world's population with, of course, China and India being members of it. Our interests are being well-served by us being a participant in the negotiations and, I hope, in an agreement.

FRAN KELLY: Speaking of China, you're in Hong Kong to reassure Chinese investors their money is still welcome. This follows the Government's recent decision to knock back the Chinese bid for Ausgrid in New South Wales. I understand you flagged some revised foreign investment guidelines. Are you talking about changing guidelines or just making them clearer?

STEVEN CIOBO: What I indicated yesterday is that Australia will continue, and I stress, continue, to maintain a non-discriminatory approach with respect to foreign investment. Foreign investment into Australia is important for the Australian economy. It's important because it enables Australia to have access to the capital that drives our economy, which ultimately, of course, helps to drive employment in Australia. If you look at, for example, Boeing. Boeing has set up their research and development centre, their largest one outside of the United States, they've set that up in Australia. They're engaged in high-quality, advanced manufacturing in relation to Boeing aircraft, they've got a whole research and development division that's operating in Australia, it employs over a thousand people. This is a kind of very positive economic benefit that flows from foreign investment into our country. It's a great example of why we want to see it continue and it's part of the reason why Australia has enjoyed 25 years of continuous economic growth so that we are actually the envy of developed economies around the world.

FRAN KELLY: There is another example, CIC Capital, China Sovereign Wealth Funds, tipped in $2 billion of the $9.7 billion. Huge winning bid for the Port of Melbourne. Given the Ausgrid decision, why is it appropriate for China to hold such a significant stake in our busiest port?

STEVEN CIOBO: Well it's important that we recognise the different infrastructure that's available across the Australian economy. In this particular case you've got a multiple – and when I say a multiple, I'm talking about obviously the price that's been able to be achieved by the Victorian Government or in the case of private sector failed, by the private sector. These big prices ultimately are great for Australian governments and indeed for the Australian economy because tax payers are the ones who win from this. They win because they're seeing assets that are recycled, that is, that are sold, to whether it's domestic or international - in this case it's a combination of both - able to then use that money to reduce debt or to recycle into new assets which help to drive our economy as well. That is precisely the objective behind the Federal Government's asset recycling initiative, it's to move money from assets that are very mature and actually then reinvest those billions of dollars into new assets, new productive assets in state and in the national economy.

FRAN KELLY: Steve Ciobo, thanks very much for joining us.

STEVEN CIOBO: My pleasure. Thank you.

FRAN KELLY: Steve Ciobo's the Minister for Trade, Tourism, and Investment joining us from Hong Kong this morning.

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