Bloomberg Markets Asia

  • Transcript, E&OE
Subjects: National Accounts; Indonesia-Australia Comprehensive Economic Partnership Agreement; Trans-Pacific Partnership; Regional Comprehensive Economic Partnership; Theresa May.
07 December 2016

RISH SALAMAT: Let's have a look at the country's economic prospects. We're going to do so with the Minister of Trade and Investment, Steven Ciobo, he joins us from Jakarta where he's having talks on a trade deal with Indonesia. First of all, very quick reaction to that number and, of course, your colleague, Mr Morrison didn't want to use the 'R' word, but if you get another quarter like that, well you'll have no choice but to. So what was your reaction?

STEVEN CIOBO: Look, the number's obviously disappointing. We have put a strong focus as a government on making sure we're doing all that we can to boost Australia's economic growth. And, of course, trade export deals are a key part of that, and that's why as a Coalition, we've focused on locking in to place very high quality trade deals between Australia, South Korea, China and Japan. So, the number is down. It's now what we would expect as ideal, but our annualised growth rate still sits above the OECD average, and in fact is the second highest out of the G7.

HAIDI LUN: Minister, how much are you banking on this recovery in commodity prices to be the next driver, and in terms of the rally that we're seeing, is it durable? How much are you hoping that this is going to carry through to 2017?

STEVEN CIOBO: Well, we're not forecasting it in. It's not a key driver in terms of the government numbers. Treasury has made not a forecast, but an assumption with respect to commodity prices. Now obviously, the stronger the commodity prices are the better that that is for Australia. We've never pretended otherwise. But what we're also very focused on as a government is making sure that we continue the diversification of the Australian economy. We want to particularly drive non-mining related investment into the Australian economy. We've seen really good numbers around, for example, education exports, services exports, tourism exports and those are all of course key drivers for Australian jobs.

HAIDI LUN: I want to move on to the free-trade arena as we have been talking about the last few times that we've spoken. Has, I guess, the sentiment, the focus shifted from TPP now on to getting a better deal out of RCEP?

STEVEN CIOBO: Well I won't say the focus has shifted. We can walk and chew gum at the same time so-to-speak. What I'm focused on as Australia's Trade Minister, is continuing to build on the strong bilateral deals that we've been able to cement over the past couple of years. Now Indonesia, of course is one of Australia's very close neighbours. Population of 250 million, of which there's roughly 50 million middleclass Indonesians, and that's anticipated to keep growing. So, putting in place an ambitious, high quality, comprehensive trade deal with Indonesia is going to be good for Australian export growth. It's going to be good for Indonesia as well and it goes to the sentiment that exists with respect to these trade deals, which is you want a win-win outcome and not a win-lose outcome and that's what I'm focused on.

RISH SALAMAT: Minister, that's just it. Do you need to have a multilateral trade deal if you are actually doing these individual deals with all these countries that you just mentioned? So you know, was there any point in TPP if you could do these individually?

STEVEN CIOBO: Well, of course, multilateral trade deals remain the Holy Grail. They do produce the best outcomes because you get consistency across the board. But you know we've also got to be realistic about the challenge of multilateral trade deals. They are very difficult to secure. Australia's strategy has been pretty pragmatic. We pursue multilateral, we pursue plurilateral, we'll pursue regional and we'll pursue bilateral. We're not going to be left waiting to achieve an outcome on a bilateral sense while we pursue a regional, or a plurilateral, or a multilateral trade deal. So I'm going to continue to pursue the best deals that I can for Australia, whether it's bilaterally or multilaterally.

HAIDI LUN: Minister, I believe that Australia currently has seven trade deal negotiations that are on foot. What are the priorities for the country now in terms of trade?

STEVEN CIOBO: Well, this deal with Indonesia is my number one priority. It's the area that I've put most focus and time. I'm here in Indonesia, in Jakarta for three days as part of ongoing discussions. I met with Trade Minister Lukita from Indonesia in Lima, Peru for APEC. We met in Sydney only a couple of weeks before that, so we've got a very high level of engagement. We're both very focused on trying to deliver a successful and high quality trade deal between Indonesia and Australia basically by the middle to end of next year. That's our top priority, but we're also pursuing trade deals with the European Union. Our negotiators are engaged in the Regional Comprehensive Economic Partnership. Of course, we're waiting to see ultimately what the outcome is with respect to the Trans-Pacific Partnership, so we've got a number of different pokers in different fires.

RISH SALAMAT: Well let's just get to RCEP here. Of course you're there in Indonesia, there progress being made with regard to that in Indonesia. What are the sticking points for this at the moment?

STEVEN CIOBO: Look, as a general rule I don't provide running commentary on trade negotiations. What I would say about Australia's predisposition entering into RCEP is that we want a comprehensive, high-quality trade deal. We're very forward leaning on the benefits that flow from free and liberalised trade. We think that a high level of ambition in respect of services, investment and goods yields the best outcome, but we're pragmatic. We recognise that there are challenges at a domestic level for different countries involved in the negotiations, so while Australia's forward leaning we also want to get a good quality deal.

HAIDI LUN: Minister, you've said previously that you would still push for ratification of TPP given the negotiations that have been put into this deal. It's unlikely that that ratification threshold among the different parties is going to be reached, so will you still be pushing for it domestically?

STEVEN CIOBO: Well, I think we need to give the Americans time. Certainly, it would appear that it's less likely than likely at this point in time, but you know we're only nine months into a 24 month process with respect to the Trans-Pacific Partnership. I think it's important that the Americans have time to consider all the pros and cons of ratification of the TPP. Ultimately, Australia will continue to pursue our domestic processes. New Zealand's doing that. Singapore's doing that. Japan's doing that. So I just think we've got to give it time. It's too early to call it a day. There are a lot of big benefits that will flow from the TPP if we do reach the threshold that you refer to and I'm hopeful that we will get there.

RISH SALAMAT: A very quick one, Minister. Has Theresa May been on the phone to you asking if you've got any experienced negotiators that she can use?

STEVEN CIOBO: I beat the PM to the punch and made the offer on Australia's behalf when I met with Secretary of State Liam Fox. I've indicated, given Australia and the UK's long friendship, our longstanding ties, the fact that we're big investors in each other's countries, we are focused on what we can do to provide them some support if they'd like it from Australia. But we're also going to have some preliminary discussions about possibly looking at an FTA with the UK once the UK formally exits the European Union but, we just have to give it time.

RISH SALAMAT: Thanks for joining us. Steven Ciobo there, the Trade and Investment Minister there.


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