Sky News Business Interview

  • Transcript, E&OE
Subjects: TPP-11, tariffs, US delegation, investment, trade.
23 February 2018

TICKY FULLERTON: Minister Ciobo, great to catch you now. A lot of interest in Washington around gun control, you're about trade and investment. What do you want out of this high-level visit?

STEVEN CIOBO: Well this will be an opportunity for us to continue to broaden and deepen the trade and investment relationship between Australia and the United States. The US is the biggest source of foreign investment into Australia, we have a very strong trade relationship, a strong investment relationship and this is the most senior delegation from Australia to come to the United States. Every state Premier and Territory Chief Minister, with the exception of South Australia and Tasmania, a number of key CEOs and chairmen of Australian businesses with operations here in the US as well, are all focused on what we can do to continue to drive this relationship even further.

TICKY FULLERTON: Now just focusing on agri-foods and farming and food opportunities for a moment and the TPP-11 which Australia and Japan has pushed, minus the US, presumably there is some talk about that in Washington. What will that deliver for Australian agri-food and farmers, in particular?

STEVEN CIOBO: Well the TPP-11 agreement is a really big win for the Australian agricultural sector. One of the great outcomes that we've been able to achieve is to further accelerate the reductions in tariffs in a number of key markets, including for example, Japan. Now we've secured some very good outcomes under the Japan-Australia Economic Partnership Agreement, let's just call it an FTA between Australia and Japan. What we've now done with the TPP-11 is accelerated the declines in those tariffs which are still there, and the benefit for our ag sector is it means our exports of agricultural products, in particular for example beef, are even more competitive than they were before. Plus, now that the United States is actually outside of the TPP-11 agreement, and they're one of our biggest competitors, especially in the beef market for example, we are even more competitive than we were before.

TICKY FULLERTON: Right. So I mean it is quite a big bloc – 13 per cent of global GDP as I understand. There are a few changes from the original TPP with the US, are there any other upsides for Australia as a recut?

STEVEN CIOBO: Well the changes around the TP11 generally, were limited to changes with respect to offensive interests from the United States. One of the great pre-conditions that we were able to meet was the commitment by the eleven of us to not change the market access agreement that was already in place under the original Trans-Pacific Partnership deal. So, what this means ultimately for Australia's ag sector, and bear in mind we're talking about $49 billion worth of agricultural exports for Australia, we will continue to have the best-in-class when it comes to the market opportunities and access that we have into, what is under TPP-11, $13.7 trillion dollars' worth of economic activity. That builds on top of the work that we've done for example, with the Korea-Australia Free Trade Agreement, and the China-Australia Free Trade Agreement, which again sees the agricultural sector, particularly, well served. We've got some great results. Look at for example, the fact that now China is our biggest export market for Australian wine, that's driving jobs and really creating employment here in Australia as we ship more of those exports into markets like China. You know, table grapes, there's a multitude of different products that you could point to.

TICKY FULLERTON: Okay. Just going back to TPP for a moment, are there any consequences, what are the consequences of the US re-joining the TPP? You said earlier 'hope' is a word, do you have any thoughts on timing for when it will happen?

STEVEN CIOBO: Ultimately this is a decision for the United States. Australia was disappointed, but not surprised, when President Trump took the decision to withdraw from the Trans-Pacific Partnership. I mean he did foreshadow it before the election and then ultimately, executed that commitment that he made to the American people so we were disappointed. But look, ultimately, if the US decides to come back, that's a decision for the United States. Australia was not going to waste any time. Together with Japan, Australia and Japan really led the charge, in many respects, in making sure we were able to retain the all the benefits of the TPP-11 so we are pressing on. You know, I may add, Ticky, that if the Australian Labor Party was in power as a government, you know, they were saying to us, 'walk away from this deal, this deal is dead in the water,' this is the same Australian Labor Party who declared the China-Australia Free Trade Agreement a 'dud deal'. I mean the fact is, these are driving economic growth in Australia, they're driving jobs, we've got tremendous growth in the agricultural sector, and this is because of these agreements that we've been putting in place.

TICKY FULLERTON: Okay, now in the meantime, America is also pursuing bilateral trade agreements with those countries. Could that be to Australia's disadvantage? Do you worry it'll nullify some of the TPP-11 benefits?

STEVEN CIOBO: To be honest, I don't. We will keep a watching brief on this but Australia is really at the forefront of these deals. You know, as an economy, we are really benefitting from the fact that, under the Coalition, we've been able to now put in place a number of really significant deals. Ticky, you'll know as well, I've put a lot of focus on Latin America more recently. I mean, we're doing some great work obviously, with respect to South Korea, China and Japan, now the TPP-11. What I'm putting a lot of focus on as well, is what we can do around Latin America. Latin America has a number of countries with really high levels of economic growth, big domestic populations, a large appetite to be able to secure you know, new sources of proteins, new sources of pulses, new sources of broad agri-crops, all these sorts of things. Australia is well placed to be able to take advantage of some of this opportunity, especially with some of the friction between the United States and say, for example, Mexico. I want to be able to make sure that we are exploiting to the maximum, the opportunity that is creating for Australia.

TICKY FULLERTON: Have you heard anything about, we hear anyway, that US farmers are actually very cross that they're not going to be part of this TPP because of markets like Japan?

STEVEN CIOBO: Well look, I've heard reports that there are sectors of the US agricultural lobby that are you know, upset because they don't have the same preferential market access that Australia has. Ultimately, that's for the US to determine. That's domestic US politics and I'll leave it to them to sort out that process. What I will consistently do though, is stand up for Australia, stand up for Australian interests and make sure that we are giving our agricultural sector, not exclusively but across the board, all Australian exporters, services and goods, maximum opportunity to be as competitive as possible in new and growing markets.

TICKY FULLERTON: How much does it help you in your mission Minister, that actually, so much of Australian farming, it's supportted very little?

STEVEN CIOBO: This is I believe, one of the key points of difference between Australia and a number of other countries. I particularly get this question when I'm in Europe. People say to me, 'why is it that Australia is so embracing of trade agreements and in particular, liberalising free trade agreements?' in many respects, I do put it down to a cultural difference. We export two-thirds of the food we produce. In Australia, the agricultural sector appreciates that we need access to overseas markets in order to drive their living standards, in order to drive prosperity. It underpins a lot of region and rural prosperity in Australia. That market access into key markets-

TICKY FULLERTON: Can I just ask you about China? The Prime Minister has said on this visit you do not describe China as a threat. Are there concerns about escalating tensions and a trade war brewing? I'm particularly thinking about putting tariffs on aluminium and steel, and whether that'll affect Australian exports in the US?

STEVEN CIOBO: In the current trade environment, there are a lot of people running around breathlessly saying, you know 'this is going to cause a trade war, or that's going to cause a trade war.' You know, my engagement with my counterpart in the United States, US Trade Representative Lighthizer is really constructive. We speak regularly, we have a great working relationship. You know, the US is not all about protectionism. They make the point repeatedly, they're about free trade but they're also about making sure they stand up for US interests. Well, that's the same thing I do, Ticky. I stand up for Australia's interests so there's a lot of common ground there where we can work together. You know, ultimately, I think the world knows, I don't think it's even controversial to say this, if we did have a trade war, there would be a recession and there would be higher levels of poverty. Nobody wants that so we're all invested in making sure we retain, you know, as much trade as possible.

TICKY FULLERTON: One on tax reform. The Prime Minister is obviously praising the tax reforms, [inaudible] saying it'll add 1% to GDP, 70% of the tax cuts will go to workers. How do you get the message back here, that message?

STEVEN CIOBO: I think it's important that we just continue to be strong advocates about why reduced levels of taxation are good for the Australian economy. You know in many respects, Ticky, it should be relatively uncontroversial, making Australia's tax burden lighter leads to more investment. More investment means more economic growth. More economic growth means more jobs for Australians, it's that straight forward. Ultimately, as well, if businesses are in a stronger position to be able drive more investment back into the business or to return stronger dividends back to shareholders, well let's not lose sight of the fact that shareholders, you know it's not just about Toorak or Vaucluse or something like that, shareholders in Australian businesses are mums and dads who have superannuation accounts. They are the ones who invest in their superannuation, the superannuation funds, the retail funds, the industry funds; they invest in the share market. Ultimately, this is good for everyday Australians who are benefitting from a strengthened corporate sector.

TICKY FULLERTON: It's Friday night dinner, forty Governors. On the food side from us, you've got Anthony Pratt, you've Michael Chaney from Wesfarmers. How important is it to bend the ears of Governors around agri-food and infrastructure?

STEVEN CIOBO: I think there's a tremendous amount of opportunity, you know, I commend the work that our Ambassador, Joe Hockey has done in getting Australia at the table. For Australia to be the selected international partner for the National Governors' Association in the US, is really a big coup. This is giving direct access to around forty or so Governors, in our equivalent, Premiers of states, here in the US, great access, the ability to talk about opportunities for collaboration around in particular, infrastructure. This is going to be an important, extra ballast to our trade and investment relationship.

TICKY FULLERTON: Minister it's great to be able to catch you in Washington, have a great night.

STEVEN CIOBO: Thanks Ticky.

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