ABC RN interview

  • Transcript, E&OE
Subjects: OECD, EUFTA, US-Iran relations, China trade, China relations.
30 May 2018

PATRICIA KARVELAS: Our own Trade Minister Steve Ciobo is in Paris, and I caught up with him a short time ago. Steve Ciobo, welcome to the program.

STEVEN CIOBO: Good to be with you.

PATRICIA KARVELAS: This summit is about strengthening multilateralism in trade. If the US is going in the opposite direction, is there a sense that the global free trade movement is under threat?

STEVEN CIOBO: Well, clearly there are challenges there. I'm not going to pretend otherwise, but having said that, Patricia, one of the aspects that's buoyed me recently has been perhaps best encapsulated by Einstein's comment about for every action, there is an equal and opposite reaction. And what I mean is that, as these challenges have emerged with respect to trade and multilateralism, we've also seen a rallying of other nations to actually reinforce the value of these same principles.

PATRICIA KARVELAS: You're leading WTO efforts to revitalize negotiations in agriculture, services, and digital trade. What are you trying to achieve for Australia, and where have you got to?

STEVEN CIOBO: Well, Patricia, this is the most forward-leaning agenda for trade liberalization that Australia has ever had. We currently have free trade agreement negotiations either underway or shortly about to commence with Indonesia, Hong Kong, Mexico, Colombia, Chile, and Peru, as well as the EU, the UK, India, and, in time, we hope to conclude a deal between ASEAN countries plus six others, including China, India, Australia, New Zealand. We are very forward-learning. What this is all about is creating opportunities for Australian businesses to export. If we can export more competitively than other competing nations, that's going to make sure we can drive our economy and create jobs. And that is, at the core, what this is about.

PATRICIA KARVELAS: Australia-EU free trade talks are due to start soon, as you know. You've been meeting business leaders in France. What do you see as the big opportunities of a free trade deal?

STEVEN CIOBO: Well, again, if we reduce the barriers to trade, we will drive more trade, more jobs, more growth. That's what it really is about between Australia and Europe. Having said that, if you actually look at the trade relationship between Australia and the EU, there is a difference, because we actually see an imbalance there. Now that imbalance is a consequence of what is now decades-old trading arrangements between the two of us, which sees the Europeans, frankly, have a stronger advantage with respect to Australia. Now, this is something I want to correct. I want to get that more level again, and that will make sure that Australian businesses are much better placed into the future when it comes to our trading relationship.

PATRICIA KARVELAS: Britain is the biggest destination for Australian exports to Europe. Given it's leaving the EU, what countries should Australia be focusing on as alternative markets?

STEVEN CIOBO: As an alternative to the UK, are you asking, or as an alternative to the EU?

PATRICIA KARVELAS: As an alternative to the UK.

STEVEN CIOBO: I think, actually, with the UK leaving the EU, it creates an opportunity in its own right. As I mentioned, we are going to look at doing a free trade agreement with the UK once they formally exit the EU. It's a big market in its own right. It creates tremendous potential. And as I also mentioned, I want to make sure that we can correct the imbalance between Australia and the EU in terms of our trade relationship. The UK's exit will create that opportunity, but what I want to make sure that we do, Patricia, is have diversified interests. That's why I've started pushing to Latin America. It's why, obviously, the Prime Minister and I are very keen to conclude this deal with Indonesia. And I want to make sure that we can boost the relationship with the EU. Now, if we do that, we'll be covering off on many of the major economic theaters of activity, and that's going to be good news for our economy.

PATRICIA KARVELAS: The withdrawal of the US from the Iran deal means companies that continue to do business with Iran could be barred from doing business in the US. Will that affect Australian business?

STEVEN CIOBO: Well, this is not a new situation. We have had this challenge for some time. Iran historically was quite a big export market for Australia. What we've seen, though, is with the various sanctions as well as autonomous sanctions Australia has put in place, that trade between Australia and Iran has declined significantly. In the main, it's because most businesses that did want to do trade actually have a lot of difficulty getting paid because most banks, not all, but most banks won't have dealings with Iranian businesses. So, look, those challenges have been there for quite a number of years now. They're not new, and they do present some significant hurdles for businesses to overcome-

PATRICIA KARVELAS: But with the lifting of the sanctions, weren't they eased? Isn't this going to get harder again?

STEVEN CIOBO: No, not really. Because, and I led a trade delegation to Iran a year or two ago to explore opportunities, it's just hard because the US Treasury has maintained a number of initiatives to essentially prevent financial transactions taking place with Iran, and that has remained in place. So, for that reason, it's not a massive change in the situation.

PATRICIA KARVELAS: If we can just turn to China and those tensions which have been ongoing, why haven't we seen the bilateral trade increase with China that the free trade deal was supposed to deliver? Is the US-China trade war impacting on us, or is it a symptom of problems in the US-China bilateral relationship?

STEVEN CIOBO: Well, Patricia, to be honest, your question couldn't be more wrong. We have seen tremendous growth in terms of our bilateral trading relationship. This year, our two-way terms of trade, $175 billion. A year ago, it was around $150 billion. We're talking massive increases in Australia's exports-

PATRICIA KARVELAS: But beef exports fell nearly 14 per cent last year after China banned imports from six Australian networks over what it said were labelling issues. There have been issues, Treasury Wine Estates, which we talked about just last week-


PATRICIA KARVELAS: There are issues there.

STEVEN CIOBO: No, but you hit the nail on the head. What we are seeing, in terms of aggregate levels, is big increases in Australia's exports to China. I'm talking massive increases. Now, we have had the odd irritant which has happened, including exactly as you outlined, six beef processors who were, for a while, prevented from exporting to China because of labelling issues on Australia's side. We resolved that very quickly with China, and that trade has resumed. There will be opportunities to expand that trade further in the future. Likewise, in terms of Treasury Wine Estates, that was raised with me last week, we've been pursuing that. And since then, we've had some success at getting a number of the paperwork issues through the China system, so that's also very beneficial.

PATRICIA KARVELAS: You say some success. What needs to still happen?

STEVEN CIOBO: We need to make sure that we get the balance of the certificates dealt with, and we need to make sure we get that stock moving from the port. That's what I'm focused on doing.

PATRICIA KARVELAS: How are you going to do it?

STEVEN CIOBO: Well, I continue to have regular conversations with our Beijing post. We have, of course, ongoing discussions with Chinese officials, and I've raised this issue as well directly with political counterparts. So, I'm confident that we'll continue to see, and we have already seen, progress being made, and I want to make sure that we effectively smooth out these kinds of trade irritants.

PATRICIA KARVELAS: As Trade Minister, how do you reconcile the almost competing interests of your colleagues on foreign policy and security when it comes to China? Because you know, we're not going to beat around the bush, there are clearly tensions in terms of the security arrangement, the foreign policy arrangement, and our natural dependence and need to grow that trading relationship.

STEVEN CIOBO: Well, this is a statement that is absolutely correct. You know, I think what matters is to have open and clear communication with China. I think China recognizes, and I've never pretended otherwise, that Australia does have some clear differences in terms of our policy positions between Australia and China, but we also do with other countries as well. What matters is that we're consistent. What matters is that Australia's position is well enunciated. But we also need to be respectful of each other's sovereignty and respectful that each of us can have a different point of view without that necessarily impeding on our trade or investment relationship.

PATRICIA KARVELAS: At the G20 in Argentina last week, the Chinese Foreign Minister told your colleague, Julie Bishop, that Australia needed to 'take off its coloured glasses'. What do you take that to mean?

STEVEN CIOBO: We've heard this language from China before. It goes to China's view that Australia's foreign policy is overly dependent, or reliant, or supportive of US foreign policy. Australia has, I believe, a very pragmatic way of being consistent over a long period of time now, with respect to issues in our region. China and Australia are both committed, I believe, to a stable, prosperous, and peaceful region. I absolutely think that working together, we can achieve that outcome. And when I talk about pragmatism, we work very closely with, of course, China, Japan, Korea, as well as our ally, the United States. I believe ultimately, if we continue to apply best efforts and maintain open dialogue, we will ensure that we have a peaceful, stable, and prosperous region.

PATRICIA KARVELAS: If good trade is dependent on us deferring to China on strategic issues, who wins?

STEVEN CIOBO: Well, I don't think it is dependent on that. Good trade is dependent upon open communication and being respectful of each other's position. That ultimately is what anchors a mature bilateral relationship between Australia and any country, whether it's Japan, Korea, China, or the United States, for example.

PATRICIA KARVELAS: But, do you need to acknowledge that this is now, it's not just a low-level tension? These aims are clearly at times at odds with each other.

STEVEN CIOBO: That's not new. We've had that situation-

PATRICIA KARVELAS: It is. What we're hearing, actually, some of the rhetoric we're hearing out of China, including from the Foreign Minister is new, this is not the same as what we've heard historically. Things have changed.

STEVEN CIOBO: I don't agree with you. I think that the relationship bilaterally between Australia and China has ebbed and flowed for quite some time now. Certainly, Australia's position, with respect to the South China Sea, has been consistently enunciated by the Foreign Minister, by the Defence Minister. I'm Trade and Investment Minister. I want to make sure that we have a smooth flow of trade between Australia and China, and other countries as well.

PATRICIA KARVELAS: Does that mean your job's a bit different, the things that you have to say are a bit different to what some of your colleagues have to say?

STEVEN CIOBO: It's not about the things that I have to say. It's about the nature of the relationship. And as I said, I don't believe it follows that because there are challenges in one aspect, that that automatically means that there will be difficulties in the other.

PATRICIA KARVELAS: And yet we are seeing exactly that. You say that it doesn't follow, yet we've seen that borne out in real life, time, over the last few weeks.

STEVEN CIOBO: Well, Patricia, what we've seen is incredible growth in Australia's trade with China. What we've seen is China opening up large portions of its economy to Australian investment. We've seen, for example, Meat and Livestock Australia are saying that in the first quarter, they were estimating Australia's volumes of exports of meat, of those products, is up 27 per cent. We've seen wine exports now to China, notwithstanding the challenges that Treasury Wine Estates is facing, grow by more than 100 per cent. Massive growth. I think this is the point I was making when you and I last spoke. It's very easy to focus in on some of the irritants and some of the challenges in those irritants, but what I do as Trade Minister is look at the broader picture. The broader picture is a very positive story.

PATRICIA KARVELAS: Steve Ciobo, thank you so much for coming on.

STEVEN CIOBO: Good to speak to you. Have a great day.

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