• Transcript, E&OE
Subject: Steel & aluminium US trade, China, FTAs, TPP-11, Brexit.
26 March 2018

JOURNALIST: Steven Ciobo joins us. He's Australia's Trade Minister, and Tourism and Investment portfolio as well. Nice to see you.

STEVEN CIOBO: Good to be with you.

JOURNALIST: It's interesting that Australia was given an exemption but it's only a temporary exemption, to the steel and aluminium tariffs till May, which suggests there is a conversation taking place right now. What does that conversation look like? Do you need to serve up some form of a concession to have a permanent exemption?

STEVEN CIOBO: No, not at all. The Prime Minister spoke to the President. They have a clear agreement between the two of them and it's not subject to conditions. Let's be frank, I saw some of Mr Navarro's comments which were made in broad terms about all the countries involved and said that the United States wanted a more reciprocal and fairer trade deal. We run a trade deficit with the United States, so I'm not really sure how it actually could be more reciprocal or fairer than it currently is.

JOURNALIST: Were you surprised that you even ended up in the mix given you do have that FTA with the States? This sort of suggests that an FTA, despite having open borders, an agreement in place, can be subject to political whims. The fact that you've got a President that is more trade protectionist, it changes a dynamic that should be there for the long term.

STEVEN CIOBO: You'd recall of course the background to all this, which was a Section 232 investigation by the Americans, not to be overly technical, but in essence the basis upon which they brought this forward was on national security grounds. Those national security grounds was the basis upon which the Americans said this will apply across the board. By doing that, that then meant that countries had to seek the exemption, which is obviously what we did. The conversation started. I went to the United States in June last year to commence the lobbying effort, for lack of a better term, with Secretary Ross, and that's continued from that point onwards including when the Prime Minister and the President spoke about it at the G20 in Hamburg last year.

JOURNALIST: Given the exemptions that have now been introduced for South Korea, and partial exemptions or temporary for other nations here-


JOURNALIST: -and what happened with TPP, do you get a sense, Minister, that this is Donald Trump making it up as he goes along? This is no way, is it, to deal with the trade policy of the world's largest nation?

STEVEN CIOBO: I understand your interest in asking me that question but you'll also understand, I'm not here to provide a running commentary on the President. I'm here to serve Australia's national interest, and our national interest is served best when we chase down export market opportunities and we chase down preferential market access, and that's precisely the reason why we did sign up to the TPP-11. It's precisely the reason why even once the US said they were going to withdraw, Australia especially together with Japan were really committed to that TPP-11 happening. We have the biggest trade agenda in Australia's history underway right now. I either have underway or about to commence, negotiations with Indonesia, Hong Kong, the EU, the UK, the Pacific Alliance countries. We just concluded a deal with the TPP-11, and we also now are in the throes of negotiations on what's called the Regional Comprehensive Economic Partnership, which is the ASEAN nations plus 6.

JOURNALIST: Aren't we back in a familiar narrative though, which is increasingly now looking as though it's about isolating China, and the risk for Australia is you become collateral damage as a major exporter of iron ore and other mined commodities to China?

STEVEN CIOBO: China's our biggest trading partner, but as it is for many countries around the world, it's not only Australia. 175 billion dollars in terms of two-way trade, but Australia's a pragmatic player and what I mean by that is that we adopt a position of principle in a range of different areas and we stay hard and firm to those principles. So what that means with China is that we have an excellent trading relationship, as we do with South Korea and Japan and the United States. Now from time to time we see all four of those adopting slightly different positions, but they understand where Australia comes from. We're always upfront and we don't play games about it. I think that makes a big difference.

JOURNALIST: Minister, do you recognise the US accusation that the Chinese are engaged in large-scale intellectual property theft from Western companies?

STEVEN CIOBO: I certainly know that the Americans feel very firmly that that's the case, and I think historically we've seen examples the Americans have given about why they're looking at taking the action that they're looking at taking. Australia's experience has been a little different to that. We have for example an IP counsellor that's based in our Beijing embassy. We've got a good track record of cooperation including around protection of IP with China, so Australia's experiences are slightly different. That also might be influenced by of course the difference in terms of the focus of our trade relationship, but we again are going to be very pragmatic about how we deal with this.

JOURNALIST: Could we move on from US trade, actually?

JOURNALIST: Can I just pitch one quick one in? I wanted to ask you more specifically because what you mentioned about the leadership roles Australia takes is quite clear. It's been across a number of different things, even to climate change. So if that is the case around trade, the Europeans feel as though Trump and America wants to kill the WTO, that they want to do away with this global trade system. So what do you do in that context if you're going to take a view that stands to support the existing system?


JOURNALIST: Do you throw your weight in with the Europeans and push back to try and save WTO?

STEVEN CIOBO: I guess two points in relation to this. The first is that Australia is a very big supporter of the international rules-based order. We see it as being critical to our policy orthodoxy, to global norms, and so we are very loud in our advocacy, especially for example with the WTO. The second point is that the Americans are not trying to kill off the WTO. Robert Lighthizer, my counterpart, the US Trade Representative, he has said in a number of fora including at the WTO MC11 meeting last year in Buenos Aires that from his perspective, the WTO is critical, it serves a purpose. It's not to say it's without fault, there are reforms we can make, but the Americans are supportive.

JOURNALIST: If we can park that now, I just want to get out into Brexit.


JOURNALIST: You're here, presumably the British government desperate to chat to you, desperate to get things rolling. Just what is the state of play on trade talks between Australia and Great Britain?

STEVEN CIOBO: Liam Fox and I have an excellent working relationship. He's providing great stewardship in terms of where the UK is charting its course over the next little while. We knew right from the beginning and I've said it consistently as indeed has he, that we wouldn't commence negotiations on an Australia-UK FTA until such time as the UK has formerly exited from the EU. We now have more certainty in terms of that date, we have more certainty in terms of the interim measures. So Secretary Fox and I will sit down today actually, and have the chance to run through where things are in terms of their working group that's been having some preliminary discussions.

JOURNALIST: Mr Davies, Dr Fox and Mr Johnson as well, the Foreign Secretary, they believe that something could be ready to go at the end of transition, at the end of the UK's relationship with the EU. Do you think that's implausible?

STEVEN CIOBO: I think that's a great aspiration, certainly from Australia's perspective we'd be keen to do that. It comes down to bandwidth as well though. The UK doesn't have big teams of negotiators that it's had sort of sitting there parked for the last 30 or 40 years, so understandably for the UK their focus is upon how Britain exits and negotiates the terms of its exit from the EU. That, understandably, should be number one priority, and I understand that. From my perspective though, we are working alongside them, keen to engage and ready to commence negotiations to make it as efficient and as quickly as possible.

JOURNALIST: Obviously we've got a shared cultural history, and yet when it comes down to realpolitik, if it is a question of it's the EU or it's the UK, who wins?

STEVEN CIOBO: It's never that question

JOURNALIST: Come on, give us a straight bat on this.

STEVEN CIOBO: I am giving you a straight bat, no tampering.

JOURNALIST: No ball tampering?

STEVEN CIOBO: No tampering involved.

JOURNALIST: I didn't know we were allowed to bring cricket into this.

STEVEN CIOBO: He just likes to ... it's a sore point for me, but in all seriousness, these things happen in parallel. Often people put to me, "What about the TPP-11 and RCEP, the Regional Comprehensive Economic Partnership?" Again, on the trade front these things happen in parallel. Our discussions with the EU are more advanced than they are with the UK, and that's because we commenced that process earlier. In fact I hope that we will commence formal negotiations with the EU by May this year. So that's looming large. The UK negotiations won't commence until such time as they actually exit, but those processes will happen in parallel.

JOURNALIST: Is there any opportunity to, or would you be willing to, do a faster deal with the UK, because by and large you're dealing with a single country?


JOURNALIST: You're not having to go through the leap-holes of, or through leaping over those hurdles of what Belgian farmers may or may not think about a particular part of an agreement. Would you be prepared to do the UK deal first?

STEVEN CIOBO: What I actually aim for is a high-quality deal, so we always look for a comprehensive high-quality deal. Obviously if I can do that in relatively short order, then fantastic. We did the fastest ever trade deal in our nation's history with Peru last year. We started and concluded that in four months, and we had really the template of the TPP and that's part of the reason why we were able to move through it quite quickly. My starting point on trade is for us to have as broad-based, comprehensive a trade deal as possible. If we can do that in six months or twelve months, fantastic.

JOURNALIST: Got to wrap it up.

JOURNALIST: Yeah, and we didn't get a chance to talk ball tampering.

JOURNALIST: While we're getting whipped by another southern hemisphere side at the moment, it's probably best not to get into the cricket.

JOURNALIST: We're going to scrape a draw against New Zealand.

STEVEN CIOBO: Do you think?

JOURNALIST: And by the way, I must remind ourselves that the Aussies did beat us four-nil in the Ashes.

JOURNALIST: Yeah, okay.

JOURNALIST: We're playing that one again, are we? Are we going back and ...

JOURNALIST: Minister, nice to see you, sir. Thank you very much indeed.

STEVEN CIOBO: Good to see you. Thanks.

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