CNN, Quest Means Business

  • Transcript, E&OE
Subjects: Trade with China; Donald Trump; Trans-Pacific Partnership (TPP); an FTA with UK post-Brexit.
18 January 2017

RICHARD QUEST: China is Australia's largest trading partner and the Australian Trade Minister, Steven Ciobo joins me now. Minister, how very good to see you. Thank you.

STEVEN CIOBO: Great to see you, Richard.

RICHARD QUEST: So we've got this fascinating situation, President Xi here yesterday, talks about free trade and Wilbur Ross, today, basically says, "Yeah, we're in favour of free trade, perhaps the Chinese should practise it".

STEVEN CIOBO: Well, I mean look from an Australian perspective, we, of course, wanted to make sure that we are icons when it comes to free trade. We're a very trade exposed nation. We've done very well off the back of free trade. We want to make sure that that continues to be the prevailing global sentiment.

RICHARD QUEST: But do you find the Chinese to be free traders or is there a healthy or an unhealthy dose of protectionism? The sort of thing that Donald Trump's talking about.

STEVEN CIOBO: Well no one's pure. No one's pure around the world. What we find, though, is that China has been very willing to engage in trade with Australia. We, of course, have always historically found the United States a terrific trade partner with us, and we want that to continue.

RICHARD QUEST: On the United States, TPP is dead. Can you accept it is dead and it's not coming back?

STEVEN CIOBO: No, absolutely not. I mean the simple fact is-


STEVEN CIOBO: Well, because the TPP is such an important document, not only in terms of its trade implications but also because of its strategic implications. What I would encourage President-elect Trump to do, what we'd really encourage the Americans to do, is to consider that there may be aspects of the TPP that they don't like, but this is not a deal to be junked. This is a deal that should continue because it's going to be good for all 12 countries.

RICHARD QUEST: Why ... I can understand, you put a lot of political capital into TPP. You and New Zealand's, everyone put political capital in. And you were shafted when the US decided at the last moment to ditch it.

STEVEN CIOBO: Well I'll just make the point again. We believe that this is a strategically important and trade important document. A trade deal that's going to be doing great things for all 12 countries. Now I recognise that President-elect Trump had it as part of his mandate to say that he wants to see the TPP changed. Well, we can work with America on that.

RICHARD QUEST: If the US doesn't come on board, would you proceed with a TPP minus US?

STEVEN CIOBO: Well look that's going to be plan B.


STEVEN CIOBO: Our preference is, we're 11 months into a 24 month process. If the Americans say they want more time, and I know that there's a number of senior congressional Republican leaders who want it - that's our first preference. But if we can't get it, well then we've got to look at plan B.



RICHARD QUEST: Now, clearly, the moment the Brits can do a deal, whether during the Brexit process if they're allowed or immediately after, they're going to be knocking on your door. In Australia, your Prime Minister has already made clear that you're very welcome and open to doing a quick deal.

STEVEN CIOBO: Absolutely, for sure. We want to make sure that we can do a deal with the UK. We're currently having discussions with the UK, looking at what the arrangements might be, scoping out what we could do in terms of a free trade agreement. So we're very keen to conclude one, liberalising trade deals between the UK and Australia as soon as possible after they exit the EU.

RICHARD QUEST: Do you envisage that sort of deal would be difficult? Because obviously there's also, the Canadians have done a deal with the EU and have prioritised that.


RICHARD QUEST: New Zealand is scoping out their deal with the EU, and they probably would prioritise that over the UK. Where would you stand on this?

STEVEN CIOBO: We can walk and chew gum at the same time. The fact is that we're more advanced in terms of the discussions that we've been having with the European Union. We are nearly finished a scoping study, and I'd hoped that we'll commence formal negotiations around the middle of this year. Likewise, though, we're going to be having conversations with the UK.

RICHARD QUEST: The rise of protectionism. In fact, even saying that I can feel your trade hackles rise because it's a pejorative way of putting that, but there is now a feeling that globalisation has not provided the benefits for all. You have to agree with that.

STEVEN CIOBO: Certainly I respect the fact that there are constituencies out there who feel globalisation has not served them well. I absolutely respect that point of view, but that makes it more incumbent upon people like me to be stronger advocates about the benefits of free trade. The fact is, protectionism-

RICHARD QUEST: Free trade isn't fair trade always though, is it?

STEVEN CIOBO: That's the case. But what we know is, Australia has enjoyed 26 years of continuous economic growth. The reason why we've enjoyed 26 years of continuous economic growth is because we've been willing to embrace the benefits of competition of open trade, of subjecting marketplaces to competition. The fact is that protectionism, in whatever form it takes, does nothing except consign you to lower living standards in the future and ultimately destroys jobs, doesn't create them.

RICHARD QUEST: Now, sir, choose your pen, a red or a green? What colour would you like?

STEVEN CIOBO: I'll go green.

RICHARD QUEST: You're going to go green. These are the issues. This is our new, cleaner chart from earlier. You can either write something extra or just go with these, but where on the chart are you in terms of uncertainty? You keep telling me how uncertain everything is, so how uncertain?

STEVEN CIOBO: There is a higher degree of uncertainty now, but I'm going to say that it's trending down. I think when the new administration takes place, I'm going to put us ... I'm going to go with the collective around about here, but ... trending that way.

RICHARD QUEST: Fascinating. Thank you very much, sir.


RICHARD QUEST: Good to see you, Minister.

STEVEN CIOBO: Thank you.



RICHARD QUEST: Thank you very much.

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