Doorstop - Jakarta

  • Transcript, E&OE
Subjects: Indonesia FTA, sugar tariff reduction, TPP11, Toyota Australia, China coal exports.
20 September 2017

JOURNALIST: Why was the dealimportant? What was so necessary? I mean on the sugar front and also on thepesticides front. What was-

STEVEN CIOBO: Look, it's anearly outcome from the very constructive engagement that Indonesia andAustralia is having now on trade and investment. We announced it was somethingthat we'd look at doing with President Widodo's visit to Australia earlier thisyear. And the announcement today is the conclusion, that we've done it. So as Isaid, it's honouring our commitment to do it. The principle purpose of todaywas for Minister Lukita and I to continue our discussions on IA-CEPA.

JOURNALIST: It's been a fairlyrocky patch. You just had Indonesia take Australia to the World TradeOrganisation over paper dumping. You've now got Australia investigatingIndonesia over dumping steel rods. You've got the Chief Trade Negotiatorsaying, "Well, Indonesia only wants a good quality deal rather than a highquality deal that Australia wants. That's the biggest hurdle andexpectation."

I mean, this seems to me to suggest thatif you're looking at a deal in fast time, that it's not going to as ambitiousas originally suspected or hoped.

STEVENCIOBO: Doyou want me to comment on your assumption or? What are you asking?

JOURNALIST: Have you had tochange your expectations? Have you had to change your expectations?

STEVEN CIOBO: If you want smoothsailing, then you shouldn't be in politics. If you want smooth sailing, thenyou shouldn't be involved in international trade. There are always tradeirritants. There are always challenges. However, Minister Lukita and I have anexcellent working relationship. The trade and investment climate betweenAustralia and Indonesia continues to grow stronger. That's reflected in, one,how regularly Lukita and I are coming together to keep progressing thesediscussions. We are still ... Let's not forget that this process only fullycommenced in March last year, when I with the-then Trade Minister Tom Lembongannounced that we'd be recommencing negotiations. If we can successfullyconclude a deal, this will be the first deal Indonesia's done for over adecade. So, you know, this is a really important deal between Australia andIndonesia. If we can conclude a good quality deal, it's a real game-changer forour relationship. Given the size of the Indonesian market, given its geographicproximity to Australia, given the projections of where the Indonesian economywill be over the next one or two decades, it's critical for Australia'slong-term economic interest, as well as for Indonesia's, that we recast oureconomic relationship. And what better way to do it than through acomprehensive FTA?

JOURNALIST: Do you concedethat it might be a good quality agreement rather than a high quality agreement?

STEVEN CIOBO: I'm not going toget into the semantics. We are going to do a very good deal. Let me rephrasethat. It's my aspiration that we are going to do a very good deal that's goodfor Indonesia, good for Australia, and that reflects the aspirations of bothcountries.

JOURNALIST: Is there anyupdate on the timing of that?

STEVENCIOBO: Just,came inthis morning, so we're hoping to conclude a deal by lateNovember.

JOURNALIST: See, I thought youchanged it. Does that mean that you're closer? Did that project that you'recloser?

STEVEN CIOBO: From when Ithought from December to November? I'll leave that to you.

JOURNALIST: Interms of the sugar-

STEVEN CIOBO: You're right, youhave lost your voice.

JOURNALIST: It'sbackdown to 5 per cent. Are you confident that with the reduction of the tariffthat you'll see sugar being imported into Indonesia at the levels that it was,was back in 2014, 2015?

STEVEN CIOBO: It makes Australiacompetitive again. We saw export volumes from Australia decline considerablywhen Thailand enjoyed a 5 per cent tariff and we had an 8 per cent tariff. Inote the cane growers, I don't know if you've seen it, the cane growers put outa release today. You've seen it? So, what this does is it puts Australia backon a level playing field with competitors in our region. It's a real shot inthe arm for cane growers in Australia, but as I said this morning in the pressconference after Lukita and I met, this is a classic win-win. It's good forAustralian cane growers and exporters, and it's also good for Indonesian foodmanufacturers. A more competitive market for them, in terms of Australia andThailand means, that there's cost savings potentially for them in terms ofbusiness imports.

JOURNALIST: Are you confidentthat it will get back to the levels of 2014-

STEVEN CIOBO: No, all I'm sayingis that Australia's competitive again. We saw a decline in trade volumes offthe back of there being a tariff differential between Australia and Thailand.Now that it is back to being even, that is very reasonable to assume thatAustralian growers will recapture market share.

JOURNALIST: Is it possible toelaborate a little bit about the deal you hope to achieve in November?

STEVEN CIOBO: Well, it's myaspiration that Australia and Indonesia should be able to conclude a highquality deal, a deal that reflects the opportunities between our two nations torecast our trade investment relationship. One that takes into accountIndonesia's aspirations to continue to develop their economy. And one that seesAustralia working with Indonesia to grow it as an export market and to providecheaper and better business imports, which in turn, will also help Indonesia bemore competitive.

JOURNALIST: Right. So broader,is the deal?

STEVEN CIOBO: I'm not sure whatyou're asking.

JOURNALIST: Imean it's not a specific deal. It's just like the broader trade deal betweenAustralia and Indonesia?

STEVENCIOBO: I'msorry, I don't understand what you're asking. When you say it's not specific,it's a broader trades deal-

JOURNALIST: It's not specificto one industry, group, sector, something like that?

STEVEN CIOBO: Oh no, no, no.Absolutely not.


STEVENCIOBO: It'sa comprehensive deal. Absolutely.

JOURNALIST: What about Toyota?I think Lukita said today that's one of the things he would like to see? ToyotaIndonesia entering into Australia? Is that something that you'd welcome?

STEVEN CIOBO: Australia doesn'thave a domestic car industry. As we've seen it continue to rationalise, ofcourse our domestic car industry has been propped up by tax payers for manymany years. Australian consumers have been voting with their feet, asAustralian domestically produced vehicles kept losing more and more marketshare because Australians wanted to buy vehicles manufactured elsewhere. Thegood news is that I am very focused on trying to find opportunities for thosewho operate in the automotive supply chain to be able to find opportunities tobecome suppliers in the region. You know, there might be opportunities to dothat with Indonesia. There might be opportunities to do that with Thailand.There might be opportunities to do that with Mexico. It is an area where wehave potential. Now, in terms of Indonesia exporting to Australia, that's acommercial decision that they'll need to look at.

JOURNALIST: Can I just ask youa question?

STEVEN CIOBO: Yeah. Go for it.

JOURNALIST: Related to China.In terms of -

STEVEN CIOBO: Sorry, in terms ofwhat?



JOURNALIST: In terms of Chinatrying to boost the cost of coal-


JOURNALIST: Coal - MinisterMorrison mentioned that there were some practical issues happening. Have any ofthose been solved since the weekend?

STEVEN CIOBO: The comments thatI made in China ... I raised the discussions with my counterpart Minister Zhongbut also initially we were able to speak about the strategic economic dialogue.China made the point that they are seeking to rationalise excess output intheir coal industry, they, that is China, recognise there is internationaldemand for them to curb excess output. They hope to do so in a way thatbalances their own domestic considerations given the significance of the sectoras an employer in China. China, specifically, remarked that Australian coal isvery good quality coal, very efficient coal, and that they saw a role forAustralia's coal in terms of their domestic consumption in the years ahead. So,we'll just need to keep engaging with China and keep working with them inrelation to this issue.

JOURNALIST: Can I ask aboutthe Trans-Pacific Partnership? With the upcoming elections in New Zealand,there is supposed to be some concern that the deal could be derailed or that adeal could be postponed? What's your –

STEVEN CIOBO: Off the back ofthe New Zealand elections, you mean?

JOURNALIST: Yeah. And somepossible opposition in New Zealand to apparent terms of the TPP deal.

STEVEN CIOBO: Well, you're sortof asking what if, what if, what if.

JOURNALIST: Yeah, a littlebit.

STEVEN CIOBO: Depending on whathappens in New Zealand will dictate, obviously, the New Zealand Government'sposition going forward. I'm not going to speculate about what the electionoutcome will be. It will be what it will be. From Australia's perspective, I'vesaid consistently, it's my aspiration that we capture benefits of the TPP11.Those benefits, by consequence of the fact of the US withdrawal, have changedthe metrics of the deal. That's meant that for the 11 remaining countries,we've had to look again at what the deal will actually look like. If we canarrive at a common point, among the 11 of us, then that'll be terrific. If wecan't, well then the deal won't fly. But certainly at this point in time,Australia, New Zealand, Singapore, Japan, are working very hard to try toconclude a good quality deal.

JOURNALIST: Can you withstandanother dropout though?

STEVEN CIOBO: Let's cross thatbridge when we get to it.

JOURNALIST: You've must havecontingency plans, or there must be talk about it.

STEVEN CIOBO: Let's cross thatbridge when we get to it.

JOURNALIST: If other countriesstarted opting to possibly renegotiate the deal as it stands or go to a draftthat you might have, would there be room there for Australia to do the same?

STEVEN CIOBO: If other thecountries try to what? Renegotiate?

JOURNALIST: Start looking torenegotiate. I mean the draft of what you've got on the table-

STEVEN CIOBO: That's one thingwe're doing now. We're-

JOURNALIST: It's still prettymuch up in the air?

STEVEN CIOBO: Well, no. All 11countries are having discussions to look at how we have to recast the TPP in away that all 11 of us can agree. That's precisely the discussions that we'rehaving at the moment. If we can do that, ideally by Denang - terrific. If wecan't, we'll have to see what transpires post APEC.


JOURNALIST: What are thosenegotiations like? Can you elaborate on what you're doing? Is it like phoneconversations, conference calls, meetings, direct meetings?

STEVEN CIOBO: We've had a numberof regular meetings and obviously both on the ministerial level and also thesenior official level. The most recent meeting was among senior officials inSydney. The next coming meeting, that's coming up ... Do you remember the datesof that meeting - I don't have actual dates, but in the near future.

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