Doorstop interview - Sydney

  • Transcript, E&OE
Subjects: US tariffs, TPP-11, PACER Plus, Queensland procurement.
02 March 2018

STEVEN CIOBO: Thank you all for coming along this afternoon. Obviously, in the last 24 hours, we've seen an announcement by the President of the United States about the imposition of tariffs on steel and aluminium into the USA marketplace. This announcement is disappointing. It's an announcement that would indicate the imposition of a tariff of 25 per cent on imports of steel into the United States and 10 per cent on the imports of aluminium into the United States. As you'd all be aware, we have been pursuing this issue amidst rumours about a possible imposition of action like this for some time. Only last week, the Prime Minister and I had the opportunity to raise this matter directly with the President and other senior members of the Trump Administration to indicate that Australia's view is that there should be an exemption for Australian steel and aluminium products. An imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs. Australia's interests in the North American market in both steel and aluminium represent around $274 million for steel and $276 million for aluminium. BlueScope, which has operations on the West Coast of the United States, employs around 3,000 people locally in California and Washington state, and their activities would potentially be affected. Now, at this point in time, we don't have clarity from the Administration about whether or not an exemption will be in place for Australia and whether or not this will be a unilateral imposition of tariffs across the board. I've put a call through to Secretary Ross, US Commerce Secretary, and have requested for he and I to be able to speak as soon as possible to go through the detail of this announcement. So we will continue to be strong advocates for Australian interests. We will continue to engage with the US Administration, not only in terms of the work that we've done up until this point, but also the work that will come very intensively over the days ahead, until such time as we see the detail around the President's announcement. I've spoken a number of times with our Ambassador in the United States Joe Hockey today and in past days to speak about what might take place and what the implications of this may continue to be, but you can be assured that we will continue to pursue, with great vigour, Australia's interests with respect to this announcement. Happy to take questions.

JOURNALIST: When you were in the US last week and you pushed this idea of exemptions for Australia, what was the response that you had from the US Administration?

STEVEN CIOBO: The issue of exemptions was raised previously in discussions between the Prime Minister and the President at the G20 last year. We have maintained the view that the commitment that we sought and that we believe was provided was for an exemption, as of G20 last year. But irrespective, we will continue to pursue Australia's interests in relation to this.

JOURNALIST: These exemptions wouldn't exactly endear you to the rest of our trading partners would it, namely China?

STEVEN CIOBO: Well, you know, my objective is to stand up for Australia's interests. The Prime Minister's objectives are to stand up for Australia's national interests. That's what we're focused on, and that will continue to be the reason why we pursue an exemption for Australia's steel and aluminium interests. Let's also not lose sight of the fact that our steel and aluminium exports to the United States only account for a very small percentage of the US import market. In terms of Australia's steel exports, they account for about 0.8 per cent, aluminium for about 1.5 per cent of the US market, so they're very modest.

JOURNALIST: So is it your understanding at the moment that [inaudible] Australia will most likely be exempt?

STEVEN CIOBO: At this point in time, unfortunately, we do not have clarity from the White House about whether or not there's an exemption in place for Australian steel and aluminium, and that's part of the reason why, as I indicated, I've requested a phone call with US Secretary Ross to pursue this, and our Ambassador Joe Hockey is engaging with large numbers of White House staff to seek further clarity about exactly what the implications of this announcement will be.

JOURNALIST: The truth is that the steel and the aluminium is pretty small [inaudible]. Are you as Trade Minister concerned about a global trade war?

STEVEN CIOBO: Well, my concern remains that, off the back of actions like this, we could see retaliatory measures that are put in place by other major economies. That is in no one's interests. Let's be very clear. Myself, the Prime Minister have said over and over again, if we see a breakout of action and reaction from major economies, the only thing that will arise from that will be a slowdown in economic growth, and over time, if it got bad enough, ultimately we could see, for example, a recession, and we know the consequent impact of that. As a Government, we have continued to pursue opening up markets for Australian exporters because we know more market access means more economic growth and more jobs, and indeed, that's part of what lay behind this Government's achievement of 403,000 jobs, 75 per cent of which are full-time, that we've achieved over the past twelve months.

JOURNALIST: The Prime Minister spoke quite a bit all about the special relationship that Australia holds with the US and our ability to gain access at the highest levels. Is this situation testing that relationship?

STEVEN CIOBO: Well, you saw last week a very strong bond between the United States and Australia. You saw the Prime Minister, myself, other members of the delegation, having the opportunity to meet directly with the President and with members of the President's Cabinet. All of us focused on making sure we can continue to drive the relationship, both trade and investment, between Australia and the United States. This announcement has been speculated about for some time. We have done much work to try to ensure that we can quarantine or mitigate the impact on Australia's exports as much as possible. Ultimately, though, we need to wait for the detail to emerge from the White House. Once we have that detail, we'll be in a position to determine exactly what the impact will be.

JOURNALIST: Is this to a certain extent, almost flying in the fact of suggestions by Steve Mnuchin that [inaudible] the United States would be open to re-joining the Trans-Pacific Partnership, yeah?

STEVEN CIOBO: Well, unfortunately we still just don't have clarity in terms of the detail from out of the United States about whether this will be a unilateral tariff imposed on everybody, or whether there may be exemptions. We will certainly be arguing very forcefully for exemptions for Australia's steel and aluminium exporters, but ultimately, we need to wait for the detail, and that's why both I, the Ambassador, and the Prime Minister are actively engaged around this issue, not only over the past several months, but also of course, going forward intensively over the next couple of days.

JOURNALIST: There seems so many different messages from the US and even the Trump Administration about trade over three months in particular. Is it fair to say that there's essentially no clearance in the heart of US trade policy and economic policy at the moment?

STEVEN CIOBO: Well, I'm not going to provide a running commentary on US trade policy. What I will say is that, as a Government, we have pursued more liberalised trade investment because we know it grows the economy, and we know it grows jobs. I will also say that, if we do see trade sanctions put in place and retaliatory action from other major economies, that will dampen economic growth. The consequences of that are never good for anybody. So, we just need to see how this plays out over the 48, 72 hours or longer, and we'll be monitoring the situation very closely and staying in very regular contact with our Ambassador, as well as other senior members of the White House Administration.

JOURNALIST: You've obviously had close talks with these US officials. How likely is it, do you think, that they will introduce these exemptions for Australia?

STEVEN CIOBO: Well, I'm not going to crystal ball gaze or speculate about percentages about what might happen or what might not happen. My focus is to deal with the terrain as it is in front of us. We've seen the announcement from the President overnight. What I want to make sure we do is put our best foot forward and take every opportunity to press the case about why Australia should be exempt and to work closely, hand in glove, with industry to minimise any potential impact on Australian workers and on Australian exports. Like I said, I took the opportunity to speak with the CEO of BlueScope this morning and to discuss with him the potential impact of this in terms of their operations right here in Australia, as well as in North America, and I intend to continue to stand up strongly for Australia's interests.

JOURNALIST: The Australian Industry Group said it's basically a full-blown conclusion is that we wouldn't be exempt and described this as very damaging for Australian steel. Given that you said this is a disappointing announcement, would it be fair to say you feel the same?

STEVEN CIOBO: Well, we just need to wait for the details to come out of the White House about whether or not Australia will be captured in this announcement by the President. We remain focused on trying to seek an exemption for Australian steel and aluminium. In the fullness of time, we'll see whether or not the President has decided it's a unilateral tariff, or whether there will be exemptions. Certainly, if it's a unilateral tariff, then we can expect to see that that will have an impact on a number of economies. The impact on Australian steel exports and Australian aluminium exports will be there. It won't be anywhere near as pronounced as it is for other countries, but that notwithstanding, there's still an impact there, and that's why I've been speaking with industry to try to mitigate that impact.

JOURNALIST: I know Australia simply hasn't done this for years, but would Australia contemplate retaliatory measures, or [inaudible] risk of that spiral towards protectionism?

STEVEN CIOBO: Well, again, I'm not going to start to speculate about what might happen. That's why I say it's important to focus on the actual terrain, once we see the detail emanate from the US Administration. But certainly, the very worst thing that could happen would be to see action and retaliatory action across economies because that will simply lead to a slowdown in one.

JOURNALIST: Is Australia working at [inaudible] an organization, is this whole situation going to affect any other country [inaudible] the US, or is this very much a question between Australia and the US?

STEVEN CIOBO: We've seen commentary now from a number of countries in response to the President's announcement. Suffice to say that there is of course, concern that's being expressed by a number of major exporters, including, for example, Canada and Mexico, so we'll continue to monitor the situation, but ultimately, I'm Australia's Trade Minister, and my focus is on making sure that we stand up for Australia's interests when it comes to US operations and US exports.

JOURNALIST: Just quickly on and New Zealand and the PACER Plus agreement, have you got any sense recently whether countries such as PNG and others could be willing to actually join the PACER Plus agreement? New Zealand is still sceptical about that happening [inaudible].

STEVEN CIOBO: I was really pleased last year to conclude the PACER Plus Agreement. It is a trade and development agreement, a very important one that will operate across the Pacific, and Australia and New Zealand in particular, Minister Todd McClay and I worked hand-in-glove together to put in place a framework that we know will be good for all countries that have signed up. I took the opportunity in January when I spoke with Prime Minister O'Neill to urge him and encourage him to reconsider PNGs involvement in PACER Plus. I remain hopeful that PNG will look at it. He undertook to me that PNG would re-examine whether PACER Plus provided a pathway for them, and so we continue to have open and good discussions with PNG around that.

JOURNALIST: [inaudible]

STEVEN CIOBO: You know, I can't really add to the answer I've already given. We're having constructive engagement with Papua New Guinea on PACER Plus. I'm hopeful we'll be able to have them join us at the table.

JOURNALIST: Minister Ciobo, have you spoken to your New Zealand counterparts today regarding Queensland government's procurement policies? Has that issue been put to bed?

STEVEN CIOBO: So, Minister Parker hasn't raised that issue with me. I most recently wrote to the Queensland Premier on the 15th of this month, again seeking clarification from the Queensland Premier in terms of whether the Queensland Government will comply with their international trade obligations. Unfortunately, we continue to have no clarity from the Queensland Government, although I do note the Queensland Premier wrote recently to the Prime Minister and indicated that Queensland would comply with their trade obligations, so I'm taking that as a good sign, and I suspect that's why Minister Parker did not raise it with me.

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