Sky News Business interview

  • Transcript, E&OE
EU FTA, foreign interference laws, China trade, Huawei
20 June 2018

HELEN DALEY: I'm now joined byAustralia's Trade Minister, Steven Ciobo, who's live from our Canberra studio.Minister Ciobo, thanks very much for joining me, great to talk to you again.

STEVEN CIOBO: Likewise Helen.

HELEN DALEY: Let's talk the EU FTAnegotiations, they've begun this week. You want to secure much better accessfor, particularly Australian food and agriculture, as well as advancedmanufacturers. But let's stick with the food and agriculture because theseareas have long been a real sticking point for Australian producers, Australianfarmer exporters. How much freer do you actually, realistically, expect the EUto be in things like dairy and beef and some of those agricultural productsthat they protect so jealousy?

STEVEN CIOBO: Well, ultimately, thiswill be at the core of the negotiation. I mean, if you look at it in terms ofrelativities, Australia, with a population of 25 million people, imports around$4.9 billion worth of agricultural products from Europe. Europe, with itspopulation of 500 million people, imports around $3.6 billion of agriculturalproducts from Australia, so that really, in, you know, in one statistic sums upthe imbalance in the relationship between Australia and Europe. I've beenpursuing the commencement of negotiations for an FTA for some time now. I'mdelighted to have this opportunity, I intend to work, you know, very closelywith the Europeans in negotiating a good outcome because you don't get theseopportunities very often, to be able to secure much better market access forAustralian exporters.

HELEN DALEY: Well, it isinteresting, I mean, obviously, the EU is a massive market that we couldtap into but some of the things that you're looking for out of a win-wintrade agreement are things like, you know, more Australian exports of almonds.Now, we already export some and to, you know, sort of highly-advanced cables.With respect, these seem sort of smaller products and services. Are we reallyhoping to gain a lot just from those sorts of things?

STEVEN CIOBO: Well, no, it's notabout picking one or two particular good or products, Helen, it's about what wecan do overall in terms of the framework. Now, you know, we will have a vastmajority of areas where we'll be relatively straightforward in doing this deal,the Europeans, like Australia, are a really mature, developed economy, so we'llbe able to do a whole bunch of things together in relation to services, inrelation to investment. Where there will be some challenges though, is in whatis one of our primary offensive interests, which is in relation to agricultureand likewise, for the Europeans, one of their primary offensive interests willbe around what they call geographic indicators. And so they will bepursuing geographic indicators and we'll be pursuing agriculture and somewherein there we'll be able to negotiate a win-win outcome.

HELEN DALEY: Yeah, what aregeographic indicators?

STEVEN CIOBO: Probably the best wayto think about it, Helen, is to look at what Australia did a number of years ago.You would know and many Australians would be familiar that Champagne as a term,only applies to-

HELEN DALEY: Oh, yes, I see. Yes.

STEVEN CIOBO: Yeah, Champagne thatcomes from the Champagne region -

HELEN DALEY: Products-


HELEN DALEY: - that only come from aparticular region. Same with Parmigiana or something like that?

STEVEN CIOBO: Yeah, exactly, producedfrom that region-

HELEN DALEY: Prosecco, yeah.

STEVEN CIOBO: And yeah, so theEuropeans are very forward-leaning on geographic indicators-


STEVEN CIOBO: And, you know, that'snot something that I'm certainly not about to walk away from the millions ofdollars that Australian businesses have invested in creating brands and logosfor their businesses, so we'll just have to see where we get to, in terms ofnegotiations around agricultural market access and what we can do aroundgeographic indicators. But again, I make the point that that is going to be thehardest part of this deal -


STEVEN CIOBO: But the actual valuefrom this deal is much, much broader than any one particular or two particularproducts. It's about what we can do together on services, on advancedmanufacturing, what we can do in terms of driving investment.

HELEN DALEY: But when you say, sothey are the challenges and true, they are going to be very big potentialstumbling blocks for this but you talk about professional services, financialservices, education, those sorts of things, as well as the advancedmanufacturers, Europe is very good at those proficiencies. They produce a lotalready. I mean, beyond the fringes, what would they buy from us that theydon't do themselves? You said we're both highly developed, westernized, sortof, economies?

STEVEN CIOBO: Well, if you look atwhat we're doing for example around in particular, defence exports, MinisterPyne and I, you know, are both working to boost Australia's profile I terms ofdefence exports, and that's not about sharps or ammunitions, that's about theindustry. Now, we are in the process of having done this deal with the French,with DCNS, to purchase you know, submarines-


STEVEN CIOBO: And develop submarineshere in Australia-

HELEN DALEY: A huge amount of moneywe are spending with a French company.

STEVEN CIOBO: Well, and what we'redoing though, is we're spending that in Australia as well, because we'rebringing together the French industrial base, as well as their supply chains towork with the Australian industry because what we're going to do is shareknowledge-


STEVEN CIOBO: Share approaches, share talent. I mean, that is the key and, as youknow, Helen, these days there truly are global supply chains, global valuechains. We want Australia to be a critical part of that for the Europeans. Imean, and it's not just about the submarines, we've done a similar thing with Rheinmetall in relation tothe new vehicles that the defence is going to have so-


STEVEN CIOBO: This is all part andparcel of vision about driving advanced manufacturing in Australia as well.

HELEN DALEY: Alright. Well, in away, the public could be excused for thinking, 'well, you know, why pursuethese FTAs when there are strong sides, the two biggest economies, China andthe United States, may be slapping, you know, increased tariffs on each other'sgoods and we might all get drawn into that particular fray. It is throwing, hasbeen throwing markets into some turmoil. How serious do you think this tradewar, or at least a tit for tat war of words at the moment, how serious is it?

STEVEN CIOBO: Well, in many respects,Helen, the fact that this is happening reinforces why the Government's approachabout driving as many of these trade deals, trade agreements as we can is theright strategy. We have the most-

HELEN DALEY: But they'll all be fornaught, if there are massive tariffs imposed by these big economies?

STEVEN CIOBO: No, no they won't be.No, no, they won't be because, take for example at the moment, as you know werecently concluded the TPP-11, the Trans-Pacific Partnership 11 agreement, thatsees Australia join with ten other countries for a large regional free tradebloc, now that's great news for Australian exporters. And of course, there usedto be a TPP-12 but the country that walked away from that deal was the UnitedStates. Now, to give you one case in point, our exports of beef to Japan underthe TPP-11, when it comes into effect, will be much more competitively priced,we'll be getting our beef tariff down to 9 per cent or thereabouts, whereas theAmericans, for their beef, will still be sitting in the mid-thirties, in termsof the tariff, so that's a massive price advantage for Australian beefexporters, but again I'm sort of loathe to keep coming back to agriculturebecause there's so much more to our economy than just agriculture, but I justsight that as one example-


STEVEN CIOBO: Of where we get a bigdifferential that opens up between what we're able to access the market at,versus what those who sit outside of that trading bloc-


STEVEN CIOBO: Are able to access themarket at.

HELEN DALEY: Well, you know, as longas we can then use that advantage by selling more beef-

STEVEN CIOBO: Absolutely. Yep.

HELEN DALEY: Can I turn to the, youknow, Australia has its own tensions with China at the moment, partly they'vearisen over the Government pushing the foreign interference laws with Chinarightly or wrongly, taking some offence at. Now, yourself and the PrimeMinister have really tried to dismiss these tensions. Yesterday, the PrimeMinister kept blaming the media, saying, you know, essentially, it's a littlebit of a beat up. Yet many Chinese are asking questions about this, they'reworried about this. Do you concede that there is this tension at the moment?And that it is perhaps, having a spillover, we'll particularly say that thereis trade tension on the diplomatic political front?

STEVEN CIOBO: Well, I've never beendismissive of some of the tensions, in fact I've openly acknowledged onnumerous occasions that yes, there are differences in a range of areas. What Ihave sought to do though, Helen, is to give a sense of proportionality aboutthe whole thing and my point really comes back to, I mean, take one of theproducts that's been at the focus of a lot of media commentary, that isAustralian wine.


STEVEN CIOBO: Now, if you look atwhat's happened with wine exports from this country, three or four years ago,we had around $211 million worth of exports, today we're sitting over $1billion worth of wine exports from Australia to China-

HELEN DALEY: Yeah but Minister, doyou-

STEVEN CIOBO: Do from $211 million toa billion, so-

HELEN DALEY: Excuse me. Minister, doyou concede though that their point, the Wine Federation people's point is thatthe product, yes, the business has improved enormously, but there is thisslowdown of products. Maybe it's through customs, but that that's a practicalretaliation by the Chinese for this diplomatic tension that is between our twonations?

STEVEN CIOBO: Well, the ChineseGovernment said absolutely that's not what it's about and they are actingwithin their rights to verify paperwork in relation to wine exports and I'llalso note that, when this matter was raised with me by, you know, one companyin particular who I spoke to the CEO in relation to this, I raised it when Iwent to China several days later and those matters have been resolved. Nowagain, that's not to say that that will be the case forever but what it doessay is that the Chinese Government responded in an incredibly timely andefficient way to the concerns that I raised. You know what, Helen, and this isthe point the Prime Minister was making as well, there is a bit of apreoccupation at the moment in relation to seeing every time, you know, thereis hold up on the border or a shipment is questioned, 'oh, this is a sign of a relationshipthat's gone pear-shaped'. Well, that's absurd. We have these kinds ofinterferences and delays as a normal and regular part of all of our dealingswith markets all across the world. So my point again is not to dismiss-

HELEN DALEY: The wine industry'swrong?

STEVEN CIOBO: No. No, let me, I'mexplicitly saying exactly this point. That's not to dismiss concerns thatpeople have raised, but it absolutely is to give a sense of proportion aboutwhat's going on and I'm sorry, I will not stand by and have people talk downour wine industry and say, you know, this is a relationship that's pear-shapedbecause there was some wine that, instead of taking two weeks to get throughcustoms took four weeks or five weeks to get through customs. When you go from$211 million to over $1 billion of exports, that's a sign of a relationshipthat's working well-


STEVEN CIOBO: A Government that'sworking closely with the Chinese Government, that's what that's a sign of.

HELEN DALEY: Minister, there isanother issue that's been, certainly, weighing on the Australian Government atthe moment, you still have to collectively make a decision. Are you supportiveof the Chinese telco giant Huawei being excluded, essentially, from involvementin Australia's 5G process, because of the warnings that we understand have comefrom our domestic intelligence agencies about Huawei's links to the ChineseGovernment?

STEVEN CIOBO: Well, I'm certainly notgoing to get into matters of national security Helen, you'll understand why.All I can say is that this isn't something that I've looked at, at this stage.I know there's lots of frenzy about whether it is or is not going to getassessed, when the time comes all I can say to you in general terms is, ofcourse, the Cabinet, the National Security Committee, will look at thesematters and judge them on their facts and they'll make a decision consistentwith Australia's national interest.

HELEN DALEY: Alright. So thenational interest and national security concerns should come before trade?

STEVEN CIOBO: Well, they're notmutually exclusive. National interest embraces all aspects, national security,economy, all of those things are obviously part of the assessment criteria forlooking at what is in our national interest.

HELEN DALEY: Alright. MinisterSteven Ciobo, Trade Minister, thank you so much for making time today.

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