Bloomberg, Daybreak

  • Transcript, E&OE
Subjects: Trans-Pacific Partnership; a FTA with the European Union; Non-Tariff Barriers.
02 May 2017

HASLINDA AMIN: Minister Ciobo, good to have you with us.

STEVEN CIOBO: Great to be with you.

HASLINDA AMIN: Why are you so optimistic? I mean there's division within the remaining members of TPP, yet you say it is still possible.

STEVEN CIOBO: Look I think that it absolutely is possible. I think it's also good if it happens. Fundamentally what we need to do is capture the benefits that were agreed under the TPP. We were disappointed but it wasn't unexpected when the USA withdrew. Obviously there's been question marks now about what countries might do, but we met recently in Vina del Mar in Chile. We had a conversation and the 11 of us decided to keep all these options alive. We'll come together again around APEC. We'll have the conversation in Hanoi. A chance for us to canvas this ground, to look at what that might look like. Fundamentally if Japan takes the view that they think TPP 11 or TPP 12 minus one can happen then that's a good outcome.

HASLINDA AMIN: Vietnam has come out to say and it was clear that it says terror-free access to the US is the only reason why it wants to be part of TPP. Without it there is no TPP and it's not agreeable to it. What indications did you get from Vietnam at that meeting in the country?

STEVEN CIOBO: They're open to, as I said, keeping all options on the table. We want to look at what's going to be the best-

HASLINDA AMIN: What is swaying it one way or another?

STEVEN CIOBO: Beg your pardon?

HASLINDA AMIN: What is swaying it one way or another?

STEVEN CIOBO: Look, I mean from Australia's perspective we want to achieve a good outcome and TPP can do that for us. It may be that in the fullness of time it doesn't get up, but by the same token a lot of people have been saying that TPP is dead – well it's not dead. What we need to do is just keep working through this process, see if we can put in place what is a comprehensive, modern trade agreement that in it contains a goods chapter, services chapter, investments chapter, digital economy - all of these benefits. And we don't want to let that go because especially for small to medium sized exporters having one common set of rules in a regional trading block like this is really important.

HASLINDA AMIN: Is there a timeframe?

STEVEN CIOBO: Well, there's not technically a timeframe, but there also is.

HASLINDA AMIN: Why not? It lacks the urgency then without a timeframe?

STEVEN CIOBO: Well, what it comes down to under the original TPP agreement it needed to happen basically by February next year. So February next year becomes the 24 month window. We're basically 12 months into a two year process. Now that would not necessarily have carriage under a TPP 11, but by the same token I think if we are to make it happen it needs to happen before then to remain within that original window that was envisaged. So we'll just wait and see.

HASLINDA AMIN: Some say that perhaps you guys are also waiting for the Congress to change its mind. That's a long way down. Is that something-

STEVEN CIOBO: No. I mean I don't think that there's any realistic proposition that the TPP would happen inside the US inside the next 12 months. I really don't. I mean President Trump made it clear that he would be withdrawing from the TPP. The USA has done that. As I said disappointing, but not unexpected but there's still a lot of gains there that we should try to hold on to.

HASLINDA AMIN: And no chance that the US will change its mind. I mean President Trump has-

STEVEN CIOBO: I don't participate in the US system -

HASLINDA AMIN: You must have had some discussions.

STEVEN CIOBO: I think it's such a small chance that we might as well not worry about it.

HASLINDA AMIN: Is there a chance of a renegotiation of the TPP terms to make it more acceptable for those who are quite hesitant right now.

STEVEN CIOBO: Look I don't think so. I mean if we tried to start unpicking certain threads we run the risk of the whole thing falling apart again. The fact is that all 12 countries and now 11 countries - all 11 countries are at the line. We've got agreement. Now certainly not having United States in there changes the equation, the matrix that some people have, and some countries have adopted, but by the same token we're all at the starting line. Everyone's there. We've got agreement. And so what it comes down to is domestic ratification and the will for this to happen. Now I think that there's a lot of benefit from it. I know New Zealand thinks the same thing. Canada thinks the same thing. If Japan - and they have been ventilating that they're open to a TPP 11 - I mean, if Japan was there, then we probably get Mexico and we know that the Peruvians and the Chileans are on board as well, so I think that it's possible to get this deal.

HASLINDA AMIN: Who's taking the lead?

STEVEN CIOBO: I think it's a consensus effort. I mean people are looking to, as I said, to capture the benefits. We don't want to let them slip through our fingers. You know, Japan's got a very important role to play. Mexico has an important role to play. And Mexico, understandably is also focus on renegotiations around the North American Free Trade Agreement. So these things start to crisscross with each other, but ultimately comes down to the fact that we can achieve a good outcome here with a little bit, with the application of effort.

HASLINDA AMIN: There's been a flurry of activities when it comes to the EU in Asia, including in Australia, why do you think that is the case?

STEVEN CIOBO: Well, I think Europe needs to chase growth and I'm currently in the process of – we've now concluded a scoping study with the European Union. That scoping study was an important precursor to the formal commencement of negotiations with the European Union on FTA. I want that to happen. I think there is a lot of benefit for Europe, a lot of benefit for Australia. Europe is our second - taken as a whole - our second largest trading partner – a source of a lot of Australia's investment stock, and a destination for investment stock as well so we want to try to do a deal there as quickly as we can.

HASLINDA AMIN: How much and how far are non-tariff barriers pretty much rising in Asia.

STEVEN CIOBO: With non-tariff barriers, it's not confined to Asia. We're seeing, unfortunately, an increase on non-tariff barriers all around the world. These are the antithesis to economic growth. The more barriers that we have, the more interruptions and distortions that we have in trade, the harder it becomes. We've seen unfortunately a bit of an explosion around non-tariff barriers. This is the issue that exporters talked to me about the most. We're putting a lot of focus on it, I had really warm and constructive discussions with my new Chinese counterpart recently in Australia to focus on what we can do to break down these non-tariff barriers, so I'm really focused on, as much as we can, removing these barriers because we know that trade drives growth and trade drives jobs.

HASLINDA AMIN: Alright Minister, we have to leave it there. Steven Ciobo, Australia's Trade Minister joining us here at Milken Institute Global Conference.

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